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ART 68-71: Rights and Obligations between Husband and Wife

ILUORIO ! "IL#$%R

&AR#O' 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 rightful custody of aperson is withheld from the one entitled thereto. lx

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

"t is a high prerogative, common-law writ, of ancient origin, the great object of which is the liberation of those who may beimprisoned without sufficient cause. "t is issued when one is deprived of liberty or is wrongfully prevented from exercisinglegal custody over another person.

The petition of #rlinda $. "lusorio is to reverse the decision of the %ourt of Appeals and its resolution dismissing theapplication for habeas corpus to have the custody of her husband, lawyer &otenciano "lusorio and enforce consortium asthe wife.

'n the other hand, the petition of &otenciano "lusorio is to annul that portion of the decision of the %ourt of Appeals giving#rlinda $. "lusorio visitation rights to her husband and to enjoin #rlinda and the %ourt of Appeals from enforcing thevisitation rights.

The undisputed facts are as follows( cslx#rlinda $alaw "lusorio is the wife of lawyer &otenciano "lusorio.

&otenciano "lusorio is about )* years of age possessed of extensive property valued at millions of pesos. +or many years,lawyer &otenciano "lusorio was %hairman of the oard and &resident of aguio %ountry %lub.

'n uly , /01, #rlinda $alaw and &otenciano "lusorio contracted matrimony and lived together for a period of thirty 2345years. "n /61, they separated from bed and board for undisclosed reasons. &otenciano lived at 7rdaneta %ondominium,

Ayala Ave., Ma8ati %ity when he was in Manila and at "lusorio &enthouse, aguio %ountry %lub when he was in aguio%ity. 'n the other hand, #rlinda lived in Antipolo %ity.

'ut of their marriage, the spouses had six 2*5 children, namely( 9amon "lusorio 2age ::5; #rlinda "lusorio ildner 2age :15;Maximo 2age :45; ylvia 2age 0/5; Marietta 2age 0)5; and hereen 2age 3/5.

'n <ecember 34, //6, upon &otenciano=s arrival from the 7nited tates, he stayed with #rlinda for about five 2:5 months

in Antipolo %ity. The children, ylvia and #rlinda 2>in5, alleged that during this time, their mother gave &otenciano anoverdose of 144 mg instead of 44 mg oloft, an antidepressant drug prescribed by his doctor in @ew or8, 7..A. As aconseBuence, &otenciano=s health deteriorated.

'n +ebruary 1:, //), #rlinda filed with the 9egional Trial %ourt, Antipolo %ity a petition for guardianship over the personand property of &otenciano "lusorio due to the latter=s advanced age, frail health, poor eyesight and impaired judgment.

'n May 3, //), after attending a corporate meeting in aguio %ity, &otenciano "lusorio did not return to Antipolo %ityand instead lived at %leveland %ondominium, Ma8ati. lxsc

'n March , ///, #rlinda filed with the %ourt of Appeals a petition for habeas corpus to have the custody of lawyer&otenciano "lusorio. he alleged that respondents refused petitioner=s demands to see and visit her husband andprohibited &otenciano from returning to Antipolo %ity.

After due hearing, on April :, ///, the %ourt of Appeals rendered decision the dispositive portion of which reads(

!CD#9#+'9#, in the light of the foregoing disBuisitions, judgment is hereby rendered(

!25 'rdering, for humanitarian consideration and upon petitioner=s manifestation, respondents #rlinda $."lusorio ildner and ylvia "lusorio-ap, the administrator of %leveland %ondominium or anywhere in itsplace, his guards and &otenciano "lusorio=s staff especially Ms. Aurora Montemayor to allow visitationrights to &otenciano "lusorio=s wife, #rlinda "lusorio and all her children, notwithstanding any list limitingvisitors thereof, under penalty of contempt in case of violation of refusal thereof; xxx

!215 '9<#9"@E that the writ of habeas corpus previously issued be recalled and the herein petition forhabeas corpus be <#@"#< <7# %'79#, as it is hereby <"M"#< for lac8 of unlawful restraint ordetention of the subject of the petition.

!' '9<#9#<.!

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

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As heretofore stated, a writ of habeas corpus extends to all cases of illegal confinement or detention, or by which therightful custody of a person is withheld from the one entitled thereto. "t is available where a person continues to beunlawfully denied of one or more of his constitutional freedoms, where there is denial of due process, where the restraintsare not merely involuntary but are unnecessary, and where a deprivation of freedom originally valid has later becomearbitrary. "t is devised as a speedy and effectual remedy to relieve persons from unlawful restraint, as the best and onlysufficient defense of personal freedom. 8smF G H

The essential object and purpose of the writ of habeas corpus is to inBuire into all manner of involuntary restraint, and torelieve a person therefrom if such restraint is il legal.

To justify the grant of the petition, the restraint of liberty must be an illegal and involuntary deprivation of freedom ofaction. The illegal restraint of liberty must be actual and effective, not merely nominal or moral.The evidence shows that there was no actual and effective detention or deprivation of lawyer &otenciano "lusorio=s libertythat would justify the issuance of the writ. The fact that lawyer &otenciano "lusorio is about )* years of age, or undermedication does not necessarily render him mentally incapacitated. oundness of mind does not hinge on age or medicalcondition but on the capacity of the individual to discern his actions.

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

The %ourt of Appeals also observed that lawyer &otenciano "lusorio did not reBuest the administrator of the %leveland%ondominium not to allow his wife and other children from seeing or visiting him. De made it clear that he did not object toseeing them.

As to lawyer &otenciano "lusorio=s mental state, the %ourt of Appeals observed that he was of sound and alert mind,having answered all the relevant Buestions to the satisfaction of the court.

eing of sound mind, he is thus possessed with the capacity to ma8e choices. "n this case, the crucial choices revolve onhis residence and the people he opts to see or live with. The choices he made may not appeal to some of his familymembers but these are choices which exclusively belong to &otenciano. De made it clear before the %ourt of Appeals thathe was not prevented from leaving his house or seeing people. Cith that declaration, and absent any true restraint on hisliberty, we have no reason to reverse the findings of the %ourt of Appeals.

Cith his full mental capacity coupled with the right of choice, &otenciano "lusorio may not be the subject of visitation rightsagainst his free choice. 'therwise, we will deprive him of his right to privacy. @eedless to say, this will run against hisfundamental constitutional right. #sF m

The %ourt of Appeals exceeded its authority when it awarded visitation rights in a petition for habeas corpus where #rlindanever even prayed for such right. The ruling is not consistent with the finding of subject=s sanity.

Chen the court ordered the grant of visitation rights, it also emphasiIed that the same shall be enforced under penalty ofcontempt in case of violation or refusal to comply. uch assertion of raw, na8ed power is unnecessary.

The %ourt of Appeals missed the fact that the case did not involve the right of a parent to visit a minor child but the right ofa wife to visit a husband. "n case the husband refuses to see his wife for private reasons, he is at liberty to do so withoutthreat of any penalty attached to the exercise of his right.

@o court is empowered as a judicial authority to compel a husband to live with his wife. %overture cannot be enforced bycompulsion 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.

WH%R%)OR%' in E. 9. @o. 3/6)/, the %ourt <"M"# the petition for lac8 of merit. @o costs.

"n E. 9. @o. 3/)4), the %ourt E9A@T the petition and nullifies the decision of the %ourt of Appeals insofar as it givesvisitation rights to respondent #rlinda $. "lusorio. @o costs.

O OR#%R%#(

ART 87: #onation between *ouses du+ing the ,a++iageARA"A ! TA"A$URA

,%$#O.A' J (:

&etitioner %irila Arcaba see8s review on certiorari of the decision of the %ourt of Appeals, which affirmed withmodification the decision of the 9egional Trial %ourt, ranch 4, <ipolog %ity, amboanga del @orte in %ivil %ase @o0:/3, declaring as void a deed of donation inter vivos (A contract which takes place by the mutual consent, of the giver,

who divests himself of the thing given in order to transmit the title of it to the donee gratuitously, and the donee, who

accepts the thing and acquires a legal title to it) executed by the late +rancisco T. %omille in her favor and its subseBuentresolution denying reconsideration.

The facts are as follows(

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'n anuary *, /:*, +rancisco %omille and his wife osima Montallana became the registered owners of >ot @o.036-A located at the corner of %alle anta 9osa 2now alintawa8 treet5 and %alle 9osario 2now 9iIal Avenue5 in <ipolog%ity, amboanga del @orte. The total area of the lot was 0) sBuare meters.After the death of osima on 'ctober 3/)4, +rancisco and his mother-in-law, uliana ustalino Montallana, executed a deed of extrajudicial partition with waiverof rights, in which the latter waived her share consisting of one-fourth 2J05 of the property to +rancisco. 'n une 16, /*+rancisco registered the lot in his name with the 9egistry of <eeds.

Daving no children to ta8e care of him after his retirement, +rancisco as8ed his niece >eticia ellosillo, the latter=scousin, >uIviminda &aghacian, and petitioner %irila Arcaba, then a widow, to ta8e care of his house, as well as the storeinside.

%onflicting testimonies were offered as to the nature of the relationship between %irila and +rancisco. >eticiaellosillo said +rancisco and %irila were lovers since they slept in the same room, while #rlinda Tabancura, another nieceof +rancisco, claimed that the latter had told her that %irila was his mistress. 'n the other hand, %irila said she was amere helper who could enter the master=s bedroom only when the old man as8ed her to and that +rancisco in any casewas too old for her. he denied they ever had sexual intercourse.

"t appears that when >eticia and >uIviminda were married, only %irila was left to ta8e care of +rancisco. %irilatestified that she was a 30-year old widow while +rancisco was a 6:-year old widower when she began wor8ing for thelatter; that he could still wal8 with her assistance at that time; and that his health eventually deteriorated and he becamebedridden. #rlinda Tabancura testified that +rancisco=s sole source of income consisted of rentals from his lot near thepublic streets. De did not pay %irila a regular cash wage as a househelper, though he provided her family with food andlodging.

'n anuary 10, //, a few months before his death, +rancisco executed an instrument denominated K<eed o<onation nter !ivos,L in which he ceded a portion of >ot 036-A, consisting of :4 sBuare meters, together with his houseto %irila, who accepted the donation in the same instrument. +rancisco left the larger portion of 1*) sBuare meters in hisname. The deed stated that the donation was being made in consideration of Kthe faithful services %irila ArcabaN hadrendered over the past ten 245 years.L The deed was notariIed by Atty. Oic T. >acaya, r. and later registered by %irila asits absolute owner.

'n 'ctober 0, //, +rancisco died without any children. "n //3, the lot which %irila received from +rancisco had amar8et value of &:6,4:.44 and an assessed value of &1),::4.44.

'n +ebruary ), //3, respondents filed a complaint against petitioner for declaration of nullity of a deed ofdonation inter vivos, recovery of possession, and damages. 9espondents, who are the decedent=s nephews and niecesand his heirs by intestate succession, alleged that %irila was the common-law wife of +rancisco and the donation inter

vivos made by +rancisco in her favor is void under Article )6 of the +amily %ode, which provides(

very donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall

be void, e#cept moderate gifts which the spouses may give each other on the occasion of any family re$oicing. %he

prohibition shall also apply to persons living together as husband and wife without a valid marriage.

'n +ebruary 1:, ///, the trial court rendered judgment in favor of respondents, holding the donation void under thisprovision of the +amily %ode. The trial court reached this conclusion based on the testimony of #rlinda Tabancura andcertain documents bearing the signature of one K%irila %omille.L The documents were 25 an application for a businesspermit to operate as real estate lessor, dated anuary ), //, with a carbon copy of the signature K%irila %omilleL; 215 asanitary permit to operate as real estate lessor with a health certificate showing the signature K%irila %omilleL in blac8in8; and 235 the death certificate of the decedent with the signature K%irila A. %omilleL written in blac8 in8. The dispositiveportion of the trial court=s decision states(

CD#9#+'9#, in view of the foregoing, judgment is rendered(

. <eclaring the <eed of <onation "nter Oivos executed by the late +rancisco %omille recorded as <oc. @o. 6; &age @o. 3;

oo8 @o. O; eries of // in the @otarial 9egister of @otary &ublic Oic T. >acaya 2Annex KAL to the %omplaint5 null andvoid;

1. 'rdering the defendant to deliver possession of the house and lot subject of the deed unto the plaintiffs within thirty 2345days after finality of this decision; and finally

3. 'rdering the defendant to pay attorney=s fees in the sum of &4,444.44.

' '9<#9#<.

&etitioner appealed to the %ourt of Appeals, which rendered on une /, 1444 the decision subject of this appeal. Asalready stated, the appeals court denied reconsideration. "ts conclusion was based on 25 the testimonies of >eticia#rlinda, and %irila; 215 the copies of documents purportedly showing %irila=s use of +rancisco=s surname; 235 a pleading inanother civil case mentioning payment of rentals to %irila as +rancisco=s common-law wife; and 205 the fact that %irila didnot receive a regular cash wage.

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&etitioner assigns the following errors as having been committed by the %ourt of Appeals(

2a5 The judgment of the %ourt of Appeals that petitioner was the common-law wife of the late +rancisco %omille is notcorrect and is a reversible error because it is based on a misapprehension of facts, and unduly brea8s the chain ofcircumstances detailed by the totality of the evidence, its findings being predicated on totally incompetent or hearsayevidence, and grounded on mere speculation, conjecture or possibility. 2alaIar v. EutierreI, 33 %9A 103 and othercases; cited in Puiason, &hilippine %ourts and their urisdictions, //3 ed., p. *405

2b5 The %ourt of Appeals erred in shifting the burden of evidence from the plaintiff to defendant. 2unyi v. 9eyes, 3/%9A :40; Puiason, id.5

2c5 The %ourt of Appeals decided the case in a way probably not in accord with law or with the applicable jurisprudence in9odrigueI v. 9odrigueI, 14 %9A /4), and >igueI v. %A, 41 &hil. :66, :)0.

The issue in this case is whether the %ourt of Appeals correctly applied Art. )6 of the +amily %ode to thecircumstances of this case. After a review of the records, we rule in the affirmative.

The general rule is that only Buestions of law may be raised in a petition for review under 9ule 0: of the 9ules of%ourt, subject only to certain exceptions( 2a5 when the conclusion is a finding grounded entirely on speculations, surmisesor conjectures; 2b5 when the inference made is manifestly mista8en, absurd, or impossible; 2c5 where there is grave abuseof discretion; 2d5 when the judgment is based on a misapprehension of facts; 2e5 when the findings of fact are conflicting;2f5 when the %ourt of Appeals, in ma8ing its findings, went beyond the issues of the case and the same are contrary to theadmissions of both appellant and appellee; 2g5 when the findings of the %ourt of Appeals are contrary to those of the trialcourt; 2h5 when the findings of fact are conclusions without citation of specific evidence on which they are based; 2i5 whenthe finding of fact of the %ourt of Appeals is premised on the supposed absence of evidence but is contradicted by the

evidence on record; and 2j5 when the %ourt of Appeals manifestly overloo8ed certain relevant facts not disputed by theparties and which, if properly considered, would justify a different conclusion. "t appearing that the %ourt of Appeals basedits findings on evidence presented by both parties, the general rule should apply.

"n &itangcor v. %an, we held that the term KcohabitationL or Kliving together as husband and wifeL means not onlyresiding under one roof, but also having repeated sexual intercourse. %ohabitation, of course, means more than sexuaintercourse, especially when one of the parties is already old and may no longer be interested in sex. At the very leastcohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man andwife, thereby holding themselves out to the public as such. ecret meetings or nights clandestinely spent together, even ioften repeated, do not constitute such 8ind of cohabitation; they are merely meretricious. "n this jurisdiction, this %ourt hasconsidered as sufficient proof of common-law relationship the stipulations between the parties, a conviction oconcubinage, or the existence of illegitimate children.

Cas %irila +rancisco=s employee or his common-law wife? %irila admitted that she and +rancisco resided under oneroof for a long time. "t is very possible that the two consummated their relationship, since %irila gave +ranciscotherapeutic massage and >eticia said they slept in the same bedroom. At the very least, their public conduct indicatedthat theirs was not just a relationship of caregiver and patient, but that of exclusive partners a8in to husband and wife.

Aside from #rlinda Tabancura=s testimony that her uncle told her that %irila was his mistress, there are otherindications that %irila and +rancisco were common-law spouses. eigfredo Tabancura presented documents apparentlysigned by %irila using the surname K%omille.L As previously stated, these are an application for a business permit tooperate as a real estate lessor, a sanitary permit to operate as real estate lessor with a health certificate, and the deathcertificate of +rancisco. These documents show that %irila saw herself as +rancisco=s common-law wife, otherwise, shewould not have used his last name. imilarly, in the answer filed by +rancisco=s lessees 2renter5 in K#rlinda Tabancura, eal. vs. Eracia Adriatico y and Antonio y,L 9T% %ivil %ase @o. 06/ 2for collection of rentals5, these lessees referred to%irila as Kthe common-law spouse of +rancisco.L +inally, the fact that %irila did not demand from +rancisco a regular cashwage is an indication that she was not simply a caregiver-employee, but +rancisco=s common law spouse. he was, afteall, entitled to a regular cash wage under the law. "t is difficult to believe that she stayed with +rancisco and served him out

of pure beneficence. Duman reason would thus lead to the conclusion that she was +rancisco=s common-law spouse.9espondents having proven by a preponderance of evidence that %irila and +rancisco lived together as husband and

wife without a valid marriage, the inescapable conclusion is that the donation made by +rancisco in favor of %irila is voidunder Art. )6 of the +amily %ode.

WH%R%)OR%, the decision of the %ourt of Appeals affirming the decision of the trial court is hereby A++"9M#<.

O OR#%R%#(

ART 1/0-1: on2ugal &a+tne+shi* of 3ains

A( on4e*t

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3(R( $o( 106150 August 50' 5/1/

)RA$IO ,UO.' R(' &etitioner,vs.%RLI$#A RA,IR%. and %LI%O ARLO' 9espondents.

< # % " " ' @

"RIO$' J.:

Ce resolve the present petition for review on certiorari filed by petitioner +rancisco MuQoI, r. 2petitioner5 to challenge thedecision and the resolution of the %ourt of Appeals 2%A5 in %A-E.9. %O @o. :61*. The %A decision set aside thedecision of the 9egional Trial %ourt 29T%5, ranch **, &asig %ity, in %ivil %ase @o. *3**:. The %A resolution denied the

petitioner=s subseBuent motion for reconsideration.+A%T7A> A%$E9'7@<

The facts of the case, gathered from the records, are briefly summariIed below.ubject of the present case is a seventy-seven 2665-sBuare meter residential house and lot located at 64 A. onifaciotreet, Mandaluyong %ity 2subject property5, covered by Transfer %ertificate of Title 2T%T5 @o. 6*:4 of the 9egistry of<eeds of Mandaluyong %ity in the name of the petitioner.

The residential lot in the subject property was previously covered by T%T @o. 016, in the name of #rlinda 9amireI,married to #liseo %arlos 2respondents5.

'n April *, /)/, #liseo, a ureau of "nternal 9evenue employee, mortgaged T%T @o. 016, with #rlinda=s consent, to theEovernment ervice "nsurance ystem 2E"5 to secure a &3*,:44.44 housing loan, payable within twenty 2145 years,through monthly salary deductions of &,*)6.**. The respondents then constructed a thirty-six 23*5-sBuare meter, two-story residential house on the lot.

'n uly 0, //3, the title to the subject property was transferred to the petitioner by virtue of a <eed of Absolute ale,dated April 34, //1, executed by #rlinda, for herself and as attorney-in-fact of #liseo, for a stated considerationof &*41,444.44.'n eptember 10, //3, the respondents filed a complaint with the 9T% 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=sname were falsified.

The respondents alleged that in April //1, the petitioner granted them a &*44,444.44 loan, to be secured by a firstmortgage on T%T @o. 016; the petitioner gave #rlinda a &144,444.44 advance to cancel the E" mortgage, and madeher sign a document purporting to be the mortgage contract; the petitioner promised to give the&041,444.44 balancewhen #rlinda surrenders T%T @o. 016 with the E" mortgage cancelled, and submits an affidavit signed by #liseostating that he waives all his rights to the subject property; with the &144,444.44 advance, #rlinda paidE" &6*,00:.16 to cancel the E" mortgage on T%T @o. 016; in May //1, #rlinda surrendered to the petitioner theclean T%T @o. 016, but returned #liseo=s affidavit, unsigned; since #liseo=s affidavit was unsigned, the petitioner refusedto give the &041,444.44 balance and to cancel the mortgage, and demanded that #rlinda return the &144,444.44advance; since #rlinda could not return the &144,444.44 advance because it had been used to pay the E" loan, thepetitioner 8ept the title; and in //3, they discovered that T%T @o. 6*:4 had been issued in the petitioner=s name,cancelling T%T @o.016 in their name.

The petitioner countered that there was a valid contract of sale. De alleged that the respondents sold the subject propertyto him after he refused their offer to mortgage the subject property because they lac8ed paying capacity and wereunwilling to pay the incidental charges; the sale was with the implied promise to repurchase within one year, during whichperiod 2from May , //1 to April 34, //35, the respondents would lease the subject property for a monthly rentalof &:44.44; when the respondents failed to repurchase the subject property within the one-year period despite notice, hecaused the transfer of title in his name on uly 0, //3; when the respondents failed to pay the monthly rentals despitedemand, he filed an ejectment case against them with the Metropolitan Trial %ourt 2MeT%5, ranch *4, Mandaluyong %ity,on eptember ), //3, or sixteen days before the filing of the 9T% case for annulment of the deed of absolute sale.

<uring the pendency of the 9T% case, or on March 1/, //:, the MeT% decided the ejectment case. "t ordered #rlindaand her family to vacate the subject property, to surrender its possession to the petitioner, and to pay the overdue rentals."n the 9T%, the respondents presented the results of the scientific examination conducted by the @ational ureau of"nvestigation of #liseo=s purported signatures in the pecial &ower of Attorney dated April 1/, //1 and the Affidavit ofwaiver of rights dated April 1/, //1, showing that they were forgeries.

The petitioner, on the other hand, introduced evidence on the paraphernal nature of the subject property since it wasregistered in #rlinda=s name; the residential lot was part of a large parcel of land owned by &edro 9amireI and +ructuosa7rcla, #rlinda=s parents; it was the subject of %ivil %ase @o. :40, a complaint for annulment of sale, before the 9T%,ranch :), &asig %ity, filed by the surviving heirs of &edro against another heir, Amado 9amireI, #rlinda=s brother; and,as a result of a compromise agreement, Amado agreed to transfer to the other compulsory heirs of &edro, including#rlinda, their rightful shares of the land.

TD# 9T% 97>"@E

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"n a <ecision dated anuary 13, //6, the 9T% dismissed the complaint. "t found that the subject property was #rlinda=sexclusive paraphernal property that was inherited from her father. "t also upheld the sale to the petitioner, even without#liseo=s consent as the deed of absolute sale bore the genuine signatures of #rlinda and the petitioner as vendor andvendee, respectively. "t concluded that the @" finding that #liseo=s signatures in the special power of attorney and in theaffidavit were forgeries was immaterial because #liseo=s consent to the sale was not necessary.The respondents elevated the case to the %A via an ordinary appeal under 9ule 0 of the 9evised 9ules of %ourt.

TD# %A 97>"@EThe %A decided the appeal on une 1:, 1441. Applying the second paragraph of Article :) of the %ivil %ode and%alimlim-%anullas v. Don. +ortun, the %A held that the subject property, originally #rlinda=s exclusive paraphernal property

became conjugal property when it was used as collateral for a housing loan that was paid through conjugal funds R#liseo=s monthly salary deductions; the subject property, therefore, cannot be validly sold or mortgaged without #liseo=sconsent, pursuant to Article 10 of the +amily %ode. Thus, the %A declared void the deed of absolute sale, and set asidethe 9T% decision.

Chen the %A denied the subseBuent motion for reconsideration, the petitioner filed the present petition for review oncertiorari under 9ule 0: of the 9evised 9ules of %ourt.

TD# &#T"T"'@

The petitioner argues that the %A misapplied the second paragraph of Article :) of the %ivil %ode and %alimlim-%anullas because the respondents admitted in the complaint that it was the petitioner who gave the money used to cancelthe E" mortgage on T%T @o. 016; Article 14 of the +amily %ode is the applicable rule, and since the value of thehouse is less than the value of the lot, then #rlinda retained ownership of the subject property. De also argues that thecontract between the parties was a sale, not a mortgage, because 2a5 #rlinda did not deny her signature in thedocument; 2b5 #rlinda agreed to sign a contract of lease over the subject property; and, 2c5 #rlinda executed a letter, dated

April 34, //1, confirming the conversion of the loan application to a deed of sale.TD# %A# +'9 TD# 9#&'@<#@T

The respondents submit that it is unnecessary to compare the respective values of the house and of the lot to determineownership of the subject property; it was acBuired during their marriage and, therefore, considered conjugal property.They also submit that the transaction between the parties was not a sale, but an eBuitable mortgage because 2a5 theyremained in possession of the subject property even after the execution of the deed of absolute sale, 2b5 they paid the//3 real property taxes due on the subject property, and 2c5 they received&144,444.44 only of the total stated priceof &*41,444.44.

TD# "7#

The issues in the present case boil down to 25 whether the subject property is paraphernal or conjugal; and, 215 whetherthe contract between the parties was a sale or an eBuitable mortgage.

'79 97>"@E

Ce deny the present &etition but for reasons other than those advanced by the %A.This %ourt is not a trier of facts. Dowever, if the inference, drawn by the %A, from the facts is manifestly mista8en, as inthe present case, we can review the evidence to allow us to arrive at the correct factual conclusions based on the record.

)i+st Issue:

&a+a*he+nal o+ on2ugal

As a general rule, all property acBuired during the marriage, whether the acBuisition 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."n the present case, clear evidence that #rlinda inherited the residential lot from her father has sufficiently rebutted thispresumption of conjugal ownership.&ursuant to Articles /1 and 4/ of the +amily %ode, properties acBuired by gratuitoustitle by either spouse, during the marriage, shall be excluded from the community property and be the exclusive propertyof each spouse. The residential lot, therefore, is #rlinda=s exclusive paraphernal property.

The %A, however, held that the residential lot became conjugal when the house was built thereon through conjugal funds,applying the second paragraph of Article :) of the %ivil %ode and %alimlim-%anullas. 7nder the second paragraph of

Article :) of the %ivil %ode, a land that originally belonged to one spouse becomes conjugal upon the construction ofimprovements thereon at the expense of the partnership. Ce applied this provision in %alimlim-%anullas, where we heldthat when the conjugal house is constructed on land belonging exclusively to the husband, the land ipso facto becomesconjugal, but the husband is entitled to reimbursement of the value of the land at the liBuidation of the conjugalpartnership.

The A 9isa**lied A+ti4le 108 of theiil ode and ali9li9-anullas

Ce cannot subscribe to the %A=s misplaced reliance on Article :) of the %ivil %ode and %alimlim-%anullas.

As the respondents were married during the effectivity of the %ivil %ode, its provisions on conjugal partnership of gains2Articles 01 to )/5 should have governed their property relations. Dowever, with the enactment of the +amily %ode on

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August 3, /)/, the %ivil %ode provisions on conjugal partnership of gains, including Article :), have been supersededby those found in the +amily %ode 2Articles 4: to 335. Article 4: of the +amily %ode states(

x x x x

The provisions of this %hapter on the %onjugal &artnership of EainsN shall also apply to conjugal partnerships of gainsalready established between spouses before the effectivity of this %ode, without prejudice to vested rights alreadyacBuired in accordance with the %ivil %ode or other laws, as provided in Article 1:*.Thus, in determining the nature of the subject property, we refer to the provisions of the +amily %ode, and not the %ivil%ode, except with respect to rights then already vested.

Article 14 of the +amily %ode, which supersedes Article :) of the %ivil %ode, 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 partnershipor through the acts or efforts of either or both spouses. 7nder this provision, when the cost of the improvement and anyresulting increase in value are more than the value of the property at the time of the improvement, the entire property ofone of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of theowner-spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the owner-spouse, li8ewise subject to reimbursement of the cost of the improvement."n the present case, we find that #liseo paid a portion only of the E" loan through monthly salary deductions. +rom Apri*, /)/ to April 34, //1, #liseo paid about &*4,6::.6*, not the entire amount of the E" housing loan plus interest,since the petitioner advanced the &6*,00:.16 paid by #rlinda to cancel the mortgage in //1. %onsideringthe &3*,:44.44 amount of the E" housing loan, it is fairly reasonable to assume that the value of the residential lot isconsiderably more than the &*4,6::.6* amount paid by #liseo through monthly salary deductions.

Thus, the subject property remained the exclusive paraphernal property of #rlinda at the time she contracted with thepetitioner; the written consent of #liseo to the transaction was not necessary. The @" finding that #liseo=s signatures inthe special power of attorney and affidavit were forgeries was immaterial.@onetheless, the 9T% and the %A apparently failed to consider the real nature of the contract between the parties.

e4ond Issue:ale o+ %;uitable ,o+tgage

urisprudence has defined an eBuitable mortgage !as one which although lac8ing in some formality, or form or words, orother reBuisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property assecurity for a debt, there being no impossibility nor anything contrary to law in this intent.!

Article *41 of the %ivil %ode enumerates the instances when a contract, regardless of its nomenclature, may bepresumed to be an eBuitable mortgage( 2a5 when the price of a sale with right to repurchase is unusually inadeBuate;2b5 when the endo+ +e9ains in *ossession as lessee o+ othe+wise< 2c5 when upon or after the expiration of the rightto repurchase another instrument extending the period of redemption or granting a new period is executed; 2d5 when the*u+4hase+ +etains fo+ hi9self a *a+t of the *u+4hase *+i4e< 2e5 when the endo+ binds hi9self to *a= the ta>es on

the thing sold< and, 2f5 in an= othe+ 4ase whe+e it 9a= be fai+l= infe++ed that the +eal intention of the *a+ties is thatthe t+ansa4tion shall se4u+e the *a=9ent of a debt o+ the *e+fo+9an4e of an= othe+ obligation. These instancesapply to a contract purporting to be an absolute sale.

+or the presumption of an eBuitable mortgage to arise under Article *41 of the %ivil %ode, two 215 reBuisites must concur2a5 that the parties entered into a contract denominated as a contract of sale; and, 2b5 that their intention was to secure anexisting debt by way of a mortgage. Any of the circumstances laid out in Article *41 of the %ivil %ode, not theconcurrence nor an overwhelming number of the enumerated circumstances, is sufficient to support the conclusion that acontract of sale is in fact an eBuitable mortgage.

ont+a4t is an e;uitable 9o+tgage

"n the present case, there are four 205 telling circumstances pointing to the existence of an eBuitable mortgage.

+irst, 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 to April 34, //3.

econd, the petitioner retained part of the !purchase price,! the petitioner gave a &144,444.44 advance to settle the E"housing loan, but refused to give the &041,444.44 balance when #rlinda failed to submit #liseo=s signed affidavit of waiverof rights.

Third, respondents paid the real property taxes on uly ), //3, despite the alleged sale on April 34, //1;payment of realproperty taxes is a usual burden attaching to ownership and when, as here, such payment is coupled with continuouspossession of the property, it constitutes evidence of great weight that the person under whose name the realty taxeswere declared has a valid and rightful claim over the land.+ourth, #rlinda secured the payment of the principal debt owed to the petitioner with the subject property. The recordsshow that the petitioner, in fact, sent #rlinda a tatement of Account showing that as of +ebruary 14, //3, sheowed &3)0,**4.44, and the daily interest, starting +ebruary 1, //3, was &*0.4. Thus, the parties clearly intended aneBuitable mortgage and not a contract of sale.

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That the petitioner advanced the sum of &144,444.44 to #rlinda is undisputed. This advance, in fact, prompted the latter totransfer the subject property to the petitioner. Thus, before the respondents can recover the subject property, they mustfirst return the amount of &144,444.44 to the petitioner, plus legal interest of 1S per annum, computed from April 34,//1.

Ce cannot sustain the ballooned obligation of &3)0,**4.44, claimed in the tatement of Account sent by thepetitioner, sans any evidence of how this amount was arrived at. Additionally, a daily interest of &*0.4 or&/,133.44 permonth for a &144,444.44 loan is patently unconscionable. Chile parties are free to stipulate on the interest to be imposedon monetary obligations, we can step in to temper the interest rates if they are unconscionable.

"n >ustan v. %A, where we established the reciprocal obligations of the parties under an eBuitable mortgage, we ordered

the reconveyance of the property to the rightful owner therein upon the payment of the loan within ninety 2/45 days fromthe finality of the decision.WH%R%)OR%, in light of all the foregoing, we hereby #%$? the present petition. The assailed decision and resolution ofthe %ourt of Appeals in %A-E.9. %O @o. :61* are A++"9M#< with the following M'<"+"%AT"'@(

. The <eed of Absolute ale dated April 34, //1 is hereby declared an eBuitable mortgage; and1. The petitioner is obligated to 9#%'@O# to the respondents the property covered by Transfer %ertificate ofTitle @o. 6*:4 of the 9egister of <eeds of Mandaluyong %ity, 7&'@ TD# &AM#@T '+ &144,444.44, with 1Slegal interest from April 34, //1, by respondents within @"@#T <A +9'M TD# +"@A>"T '+ TD"<#%""'@.

%osts against the petitioner.' '9<#9#<.

"( Liabilities of the on2ugal &a+tne+shi*

A?ALA I$!%T,%$T ! A

,ARTI$%.' J (:

7nder Article * of the %ivil %ode, what debts and obligations contracted by the husband alone are considered Kforthe benefit of the conjugal partnershipL which are chargeable against the conjugal partnership? "s a surety agreement oan accommodation contract entered into by the husband in favor of his employer within the contemplation of the saidprovision?

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

The petitioner assails the decision dated April 0, //0 of the respondent %ourt of Appeals in Kpouses Alfredo and#ncarnacion %hing vs. Ayala "nvestment and <evelopment %orporation, et. al.,L doc8eted as %A-E.9. %O @o1/*31, upholding the decision of the 9egional Trial %ourt of &asig, ranch *), which ruled that the conjugal partnershipof gains of respondents-spouses Alfredo and #ncarnacion %hing is not liable for the payment of the debts secured byrespondent-husband Alfredo %hing.

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

&hilippine looming Mills 2hereinafter referred to as &M5 obtained a &:4,344,444.44 loan from petitioner Ayala"nvestment and <evelopment %orporation 2hereinafter referred to as A"<%5. As added security for the credit line extendedto &M, respondent Alfredo %hing, #xecutive Oice &resident of &M, executed security agreements on <ecember 4/)4 and on March 14, /) ma8ing himself jointly and severally answerable with &M=s indebtedness to A"<%.

&M failed to pay the loan. Thus, on uly 34, /), A"<% filed a case for sum of money against &M andrespondent-husband Alfredo %hing with the then %ourt of +irst "nstance of 9iIal 2&asig5, ranch O""", entitled KAyala"nvestment and <evelopment %orporation vs. &hilippine looming Mills and Alfredo %hing,L doc8eted as %ivil %ase @o0111).

After trial, the court rendered judgment ordering &M and respondent-husband Alfredo %hing to jointly and severallypay A"<% the principal amount of &:4,344,444.44 with interests.

&ending appeal of the judgment in %ivil %ase @o. 0111), upon motion of A"<%, the lower court issued a writ ofexecution pending appeal. 7pon A"<%=s putting up of an &),444,444.44 bond, a writ of execution dated May 1, /)1 wasissued. Thereafter, petitioner Abelardo Magsajo, r., <eputy heriff of 9iIal and appointed sheriff in %ivil %ase @o0111), caused the issuance and service upon respondents-spouses of a notice of sheriff sale dated May 14, /)1 onthree 235 of their conjugal properties. &etitioner Magsajo then scheduled the auction sale of the properties levied.

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'n une /, /)1, private respondents filed a case of injunction against petitioners with the then %ourt of +irst"nstance of 9iIal 2&asig5, ranch """, to enjoin the auction sale alleging that petitioners cannot enforce the judgmenagainst the conjugal partnership levied on the ground that, among others, the subject loan did not redound to the benefitof the said conjugal partnership. 7pon application of private respondents, the lower court issued a temporary restrainingorder to prevent petitioner Magsajo from proceeding with the enforcement of the writ of execution and with the sale of thesaid properties at public auction.

A"<% filed a petition for certiorari before the %ourt of Appeals, Buestioning the order of the lower court enjoining thesale. 9espondent %ourt of Appeals issued a Temporary 9estraining 'rder on une 1:, /)1, enjoining the lowercourt from enforcing its 'rder of une 0, /)1, thus paving the way for the scheduled auction sale of respondents-

spouses conjugal properties.'n une 1:, /)1, the auction sale too8 place. A"<% being the only bidder, was issued a %ertificate of ale by

petitioner Magsajo, which was registered on uly 1, /)1. 7pon expiration of the redemption period, petitioner sheriffissued the final deed of sale on August 0, /)1 which was registered on August /, /)3.

"n the meantime, the respondent court, on August 0, /)1, decided %A-E.9. & @o. 0040, in this manner(

KCD#9#+'9#, the petition for certiorari in this case is granted and the challenged order of the respondentudge dated une 0, /)1 in %ivil %ase @o. 0*34/ is hereby set aside and nullified. The same petitioninsofar as it see8s to enjoin the respondent udge from proceeding with %ivil %ase @o. 0*34/ is, however,denied. @o pronouncement is here made as to costs. x x x x.L

'n eptember 3, /)3, A"<% filed a motion to dismiss the petition for injunction filed before ranch """ of the %+" of9iIal 2&asig5 on the ground that the same had become moot and academic with the consummation of the

sale. 9espondents filed their opposition to the motion arguing, among others, that where a third party who claimsownership of the property attached or levied upon, a different legal situation is presented; and that in this case, two 215 ofthe real properties are actually in the name of #ncarnacion %hing, a non-party to %ivil %ase @o. 0111).

The lower court denied the motion to dismiss. Dence, trial on the merits proceeded. &rivate respondents presentedseveral witnesses. 'n the other hand, petitioners did not present any evidence.

'n eptember ), //, the trial court promulgated its decision declaring the sale on execution null andvoid. &etitioners appealed to the respondent court, which was doc8eted as %A-E.9. %O @o. 1/*31.

'n April 0, //0, the respondent court promulgated the assailed decision, affirming the decision of the regional trialcourt. "t held that(

KThe loan procured from respondent-appellant A"<% was for the advancement and benefit of &hilippinelooming 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 * of the @ew %ivil %ode or Article 1 of the +amily %ode-suffice it to say that the two provisions are substantially the same. @evertheless, Ce agree with the trial courtthat the +amily %ode is the applicable law on the matter x x x x x x.

Article 1 of the +amily %ode provides that UThe conjugal partnership shall be liable for( x x x 215 All debts andobligations contracted during the marriage by the designated Administrator-pouse for the benefit of theconjugal partnership of gains x x x.= The burden of proof that the debt was contracted for the benefit of theconjugal partnership of gains, lies with the creditor-party litigant claiming as such. "n the case at bar,respondent-appellant A"<% failed to prove that the debt was contracted by appellee-husband, for the benefit of the conjugal partnership of gains.L

The dispositive portion of the decision reads(KCD#9#+'9#, in view of all the foregoing, judgment is hereby rendered <"M""@E the appeal. Thedecision of the 9egional Trial %ourt is A++"9M#< in toto.L

&etitioner filed a Motion for 9econsideration which was denied by the respondent court in a 9esolution dated@ovember 1), //0.

Dence, this petition for review. &etitioner contends that the Krespondent court erred in ruling that the conjugapartnership of private respondents is not liable for the obligation by the respondent-husband.L

pecifically, the errors allegedly committed by the respondent court are as follows(

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K". 9#&'@<#@T %'79T #99#< "@ 97>"@E TDAT TD# '>"EAT"'@ "@%799#< 9#&'@<#@TD7A@< <"< @'T 9#<'7@< T' TD# #@#+"T '+ TD# %'@7EA> &A9T@#9D"& '+ TD# &9"OAT#9#&'@<#@T.

"" 9#&'@<#@T %'79T #99#< "@ 97>"@E TDAT TD# A%T '+ 9#&'@<#@T D7A@< "@ #%79"@ETD# 7#%T >'A@ " @'T &A9T '+ D" "@<7T9, 7"@# '9 %A9##9 +9'M CD"%D D#7&&'9T D" +AM">.L

&etitioners in their appeal point out that there is no need to prove that actual benefit redounded to the benefit of thepartnership; all that is necessary, they say, is that the transaction was entered into for the benefit of the conjugal

partnership. Thus, petitioners aver that(KThe wordings of Article * of the %ivil %ode is very clear( for the partnership to be held liable, the husbandmust have contracted the debt Ufor the benefit of= the partnership, thus(

UArt. *. The conjugal partnership shall be liable for(

5 all debts and obligations contracted by the husband for the benefit of the conjugalpartnership x x x.=

There is a difference between the phrases( Uredounded to the benefit of = or Ubenefited from= 2on the one hand5and Ufor the benefit of= 2on the other5. The former reBuire that actual benefit must have been realiIed; the latter reBuires only that the transaction should be one which normally would produce benefit to the partnership,regardless of whether or not actual benefit accrued.L

Ce do not agree with petitioners that there is a difference between the terms Kredounded to the benefit ofL oKbenefited fromL on the one hand; and Kfor the benefit ofL on the other. They mean one and the same thing. Article *25 of the %ivil %ode and Article 1 215 of the +amily %ode are similarly worded, i.e., both use the term Kfor the benefitof.L 'n the other hand, Article 11 of the +amily %ode provides that KThe payment of personal debts by the husband orthe wife before or during the marriage shall not be charged to the conjugal partnership except insofar as they redoundedto the benefit of the family.L As can be seen, the terms are used interchangeably.

&etitioners further contend that the ruling of the respondent court runs counter to the pronouncement of this %ourt inthe case of %obb-&ereIvs. >antin, that the husband as head of the family and as administrator of the conjugal partnershipis presumed to have contracted obligations for the benefit of the family or the conjugal partnership.

%ontrary to the contention of the petitioners, the case of %obb-&ereI is not applicable in the case at bar. This %ourhas, on several instances, interpreted the term Kfor the benefit of the conjugal partnership.L

"n the cases of avier vs. 'smeQa, Abella de <iaI vs. #rlanger V Ealinger, "nc., %obb-&ereI vs. >antin and E

Tractors, "nc. vs. %ourt of Appeals, cited by the petitioners, we held that(KThe debts contracted by the husband during the marriage relation, for and in the exercise of the industry orprofession 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, li8e those of her husband=s, are liable for thepayment of the marriage expenses, cannot be excepted from the payment of such debts.L 2avier5

KThe husband, as the manager of the partnership 2Article 01, %ivil %ode5, has a right to embar8 thepartnership in an ordinary commercial enterprise for gain, and the fact that the wife may not approve of aventure does not ma8e it a private and personal one of the husband.L 2Abella de <iaI5

K<ebts contracted by the husband for and in the exercise of the industry or profession by which he contributesto the support of the family, cannot be deemed to be his exclusive and private debts.L 2%obb-&ereI5

Kx x x 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 eBually bear the indebtedness and the losses, unless hedeliberately acted to the prejudice of his family.L 2E-Tractors5

Dowever, in the cases of Ansaldo vs. heriff of Manila, +idelity "nsurance V >uIon "nsurance %o., >iberty "nsurance%orporation vs. anuelos, and >uIon urety "nc. vs. <e Earcia, cited by the respondents, we ruled that(

KThe fruits of the paraphernal property which form part of the assets of the conjugal partnership, are subject tothe payment of the debts and expenses of the spouses, but not to the payment of the personal obligations2guaranty agreements5 of the husband, unless it be proved that such obligations were productive of somebenefit to the family.L 2Ansaldo; parenthetical phrase ours.5

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KChen there is no showing that the execution of an indemnity agreement by the husband redounded to thebenefit of his family, the underta8ing is not a conjugal debt but an obligation personal to him.L 2>iberty"nsurance5

K"n the most categorical language, a conjugal partnership under Article * of the new %ivil %ode is liable onlyfor such Udebts and obligations contracted by the husband for the benefit of the conjugal partnership.= Theremust be the reBuisite showing then of some advantage which clearly accrued to the welfare of thespouses. %ertainly, to ma8e a conjugal partnership respond for a liability that should appertain to the husbandalone is to defeat and frustrate the avowed objective of the new %ivil %ode to show the utmost concern for thesolidarity and well-being of the family as a unit. The husband, therefore, is denied the power to assume

unnecessary and unwarranted ris8s to the financial stability of the conjugal partnership.L 2>uIon urety, "nc.5+rom the foregoing jurisprudential rulings of this %ourt, we can derive the following conclusions(

2A5 "f the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to beused in or for his own business or his own profession, that contract falls within the term Kx x x x obligations for the benefitof the conjugal partnership.L Dere, no actual benefit may be proved. "t is enough that the benefit to the family is apparentat the time of the signing of the contract. +rom the very nature of the contract of loan or services, the family stands tobenefit from the loan facility or services to be rendered to the business or profession of the husband. "t is immaterial, if inthe end, his business or profession fails or does not succeed. imply stated, where the husband contracts obligations onbehalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of theconjugal partnership.25 'n the other hand, if the money or services are given to another person or entity, and the husband acted only asa surety or guarantor, that contract cannot, by itself, alone be categoriIed as falling within the context of Kobligations for

the benefit of the conjugal partnership.L The contract of loan or services is clearly for the benefit of the principal debtorand not for the surety or his family. @o presumption can be inferred that, when a husband enters into a contract of suretyor accommodation agreement, it is Kfor the benefit of the conjugal partnership.L &roof must be presented to establishbenefit redounding to the conjugal partnership.

Thus, the distinction between the %obb-&ereI case, and we add, that of the three other companion cases, on theone hand, and that of Ansaldo, >iberty "nsurance and >uIon urety, is that in the former, the husband contracted theobligation for his own business; while in the latter, the husband merely acted as a surety for the loan contracted byanother for the latter=s business.

The evidence of petitioner indubitably show that co-respondent Alfredo %hing signed as surety for the &:4M loancontracted on behalf of &M. &etitioner should have adduced evidence to prove that Alfredo %hing=s acting as suretyredounded to the benefit of the conjugal partnership. The reason for this is as lucidly explained by the respondent court(

KThe loan procured from respondent-appellant A"<% was for the advancement and benefit of &hilippinelooming Mills and not for the benefit of the conjugal partnership of petitioners-appellees. &hilippinelooming Mills has a personality distinct and separate from the family of petitioners-appellees - this despitethe fact that the members of the said family happened to be stoc8holders of said corporate entity.L

x x x 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, lieswith the creditor-party litigant claiming as such. "n the case at bar, respondent-appellant A"<% failed to provethat the debt was contracted by appellee-husband, for the benefit of the conjugal partnership of gains. Chat isapparent from the facts of the case is that the judgment debt was contracted by or in the name of the%orporation &hilippine looming Mills and appellee-husband only signed as surety thereof. The debt is clearlya corporate debt and respondent-appellant=s right of recourse against appellee-husband as surety is only tothe extent of his corporate stoc8holdings. "t does not extend to the conjugal partnership of gains of the family

of petitioners-appellees. x x x x x x.L&etitioners contend that no actual benefit need accrue to the conjugal partnership. To support this contention, they

cite ustice ..>. 9eyes= authoritative opinion in the >uIon urety %ompany case(

K" concur in the result, but would li8e to ma8e of record that, in my opinion, the words Uall debts and obligationscontracted by the husband for the benefit of the conjugal partnership= used in Article * of the %ivil %ode ofthe &hilippines in describing the charges and obligations for which the conjugal partnership is liable do notreBuire that actual profit or benefit must accrue to the conjugal partnership from the husband=s transaction; butit suffices that the transaction should be one that normally would produce such benefit for thepartnership. This is the ratio behind our ruling in avier vs. 'smeQa, 30 &hil. 33*, that obligations incurred bythe husband in the practice of his profession are collectible from the conjugal partnership.L

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The aforeBuoted concurring opinion agreed with the majority decision that the conjugal partnership should not bemade liable for the surety agreement which was clearly for the benefit of a third party. uch opinion merely registered anexception to what may be construed as a sweeping statement that in all cases actual profit or benefit must accrue to theconjugal partnership. The opinion merely made it clear that no actual benefits to the family need be proved in some casessuch as in the avier case. There, the husband was the principal obligor himself. Thus, said transaction was found to beKone that would normally produce x x x benefit for the partnership.L "n the later case of E-Tractors, "nc., the husband wasalso the principal obligor - not merely the surety. This latter case, therefore, did not create any precedent. "t did not alsosupersede the >uIon urety %ompany case, nor any of the previous accommodation contract cases, where this %ourtruled that they were for the benefit of third parties.

ut it could be argued, as the petitioner suggests, that even in such 8ind of contract of accommodation, a benefit forthe family may also result, when the guarantee is in favor of the husband=s employer.

"n the case at bar, petitioner claims that the benefits the respondent family would reasonably anticipate were thefollowing(

2a5 The employment of co-respondent Alfredo %hing would be prolonged and he would be entitled to hismonthly salary of&14,444.44 for an extended length of time because of the loan he guaranteed;

2b5 The shares of stoc8 of the members of his family would appreciate if the &M could be rehabilitatedthrough the loan obtained;

2c5 Dis prestige in the corporation would be enhanced and his career would be boosted should &Msurvive because of the loan.

Dowever, these are not the benefits contemplated by Article * of the %ivil %ode. The benefits must be one directlyresulting from the loan. "t cannot merely be a by-product or a spin-off of the loan itself.

"n all our decisions involving accommodation contracts of the husband, we underscored the reBuirement that( Ktheremust be the reBuisite showing x x x of some advantage which clearly accrued to the welfare of the spousesL or Kbenefits tohis familyL or Kthat such obligations are productive of some benefit to the family.L 7nfortunately, the petition did nopresent any proof to show( 2a5 Chether or not the corporate existence of &M was prolonged and for how many monthsor years; andJor 2b5 Chether or not the &M was saved by the loan and its shares of stoc8 appreciated, if so, how muchand how substantial was the holdings of the %hing family.

uch benefits 2prospects of longer employment and probable increase in the value of stoc8s5 might have beenalready apparent or could be anticipated at the time the accommodation agreement was entered into. ut would thoseKbenefitsL Bualify the transaction as one of the Kobligations x x x for the benefit of the conjugal partnershipL? Are indirectand remote probable benefits, the ones referred to in Article * of the %ivil %ode? The %ourt of Appeals in denying the

motion for reconsideration, disposed of these Buestions in the following manner(K@o matter how one loo8s at it, the debtJcredit extended by respondents-appellants is purely a corporate debtgranted to &M, with petitioner-appellee-husband merely signing as surety. Chile such petitioner-appellee-husband, as such surety, is solidarily liable with the principal debtor A"<%, such liability under the %ivil %odeprovisions is specifically restricted by Article 11 2par. 5 of the +amily %ode, so that debts for which thehusband is liable may not be charged against conjugal partnership properties. Article 11 of the +amily %odeis explicit R UThe payment of personal debts contracted by the husband or the wife before or during themarriage shall not be charged to the conjugal partnership except insofar as they redounded to the benefit ofthe family.=

9espondents-appellants insist that the corporate debt in Buestion falls under the exception laid down in said Article 11 2par. one5. Ce do not agree. The loan procured from respondent-appellant A"<% was for the soleadvancement and benefit of &hilippine looming Mills and not for the benefit of the conjugal partnership of

petitioners-appellees.x x x appellee-husband derives salaries, dividends benefits from &hilippine looming Mills 2the debtorcorporation5, only because said husband is an employee of said &M. These salaries and benefits, are notthe Ubenefits= contemplated by Articles 1 and 11 of the +amily %ode. The Ubenefits= contemplated by theexception in Article 11 2+amily %ode5 is that benefit derived directly from the use of the loan. "n the case atbar, the loan is a corporate loan extended to &M and used by &M itself, not by petitioner-appellee-husbandor his family. The alleged benefit, if any, continuously harped by respondents-appellants, are not onlyincidental but also speculative.L

Ce agree with the respondent court. "ndeed, considering the odds involved in guaranteeing a large amount2&:4,444,444.445 of loan, the probable prolongation of employment in &M and increase in value of its stoc8s, would betoo small to Bualify the transaction as one Kfor the benefitL of the surety=s family. Oerily, no one could say, with a degree ocertainty, that the said contract is even Kproductive of some benefitsL to the conjugal partnership.

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Ce li8ewise agree with the respondent court 2and this view is not contested by the petitioners5 that the provisions ofthe +amily %ode is applicable in this case. These provisions highlight the underlying concern of the law for theconservation of the conjugal partnership; for the husband=s duty to protect and safeguard, if not augment, not to dissipateit.

This is the underlying reason why the +amily %ode clarifies that the obligations entered into by one of the spousesmust be those that redounded to the benefit of the family and that the measure of the partnership=s liability is to Kthe extentthat the family is benefited.L

These are all in 8eeping with the spirit and intent of the other provisions of the %ivil %ode which prohibits any of the

spouses to donate or convey gratuitously any part of the conjugal property. Thus, when co-respondent Alfredo %hingentered into a surety agreement he, from then on, definitely put in peril the conjugal property 2in this case, including thefamily home5 and placed it in danger of being ta8en gratuitously as in cases of donation.

"n the second assignment of error, the petitioner advances the view that acting as surety is part of the business orprofession of the respondent-husband.

This theory is new as it is novel.

The respondent court correctly observed that(

Kigning as a surety is certainly not an exercise of an industry or profession, hence the cited cases of %obb-&ereI vs. >antin; Abella de <iaI vs. #rlanger V Ealinger; E-Tractors, "nc. vs. %A do not apply in the instantcase. igning as a surety is not embar8ing in a business.L

Ce are li8ewise of the view that no matter how often an executive acted or was persuaded to act, as a surety for his ownemployer, this should not be ta8en to mean that he had thereby embar8ed in the business of suretyship or guaranty.

This is not to say, however, that we are unaware that executives are often as8ed to stand as surety for theircompany=s loan obligations. This is especially true if the corporate officials have sufficient property of their ownotherwise, their spouses= signatures are reBuired in order to bind the conjugal partnerships.

The fact that on several occasions the lending institutions did not reBuire the signature of the wife and the husbandsigned alone does not mean that being a surety became part of his profession. @either could he be presumed to haveacted for the conjugal partnership.

Article 1, paragraph 3, of the +amily %ode is emphatic that the payment of personal debts contracted by thehusband or the wife before or during the marriage shall not be charged to the conjugal partnership except to the extentthat they redounded to the benefit of the family.

Dere, the property in dispute also involves the family home. The loan is a corporate loan not a personaone. igning as a surety is certainly not an exercise of an industry or profession nor an act of administration for thebenefit of the family.

'n the basis of the facts, the rules, the law and eBuity, the assailed decision should be upheld as we now upholdit. This is, of course, without prejudice to petitioner=s right to enforce the obligation in its favor against the &M receiver inaccordance with the rehabilitation program and payment schedule approved or to be approved by the ecurities V#xchange %ommission.

WH%R%)OR%, the petition for review should be, as it is hereby, <#@"#< for lac8 of merit.

O OR#%R%#(

HI$3 ! A

ALL%O' R(' J.:

This petition for review, under 9ule 0: of the 9evised 9ules of %ourt, assails the <ecision of the %ourt of Appeals 2%A5dated @ovember 16, //: in %A-E.9. & @o. 33:):, as well as the 9esolution on April 1, //* denying the petitioners=motion for reconsideration. The impugned decision granted the private respondent=s petition for certiorari and set aside the'rders of the trial court dated <ecember :, //3 and +ebruary 6, //0 nullifying the attachment of 44,444 shares ofstoc8s of the %itycorp "nvestment &hilippines under the name of petitioner Alfredo %hing.

The following facts are undisputed(

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'n eptember 1*, /6), the &hilippine looming Mills %ompany, "nc. 2&M%"5 obtained a loan of &/,444,444.44 from the Allied an8ing %orporation 2A%5. y virtue of this loan, the &M%", through its #xecutive Oice-&resident Alfredo %hing,executed a promissory note for the said amount promising to pay on <ecember 11, /6) at an interest rate of 0S perannum. As added security for the said loan, on eptember 1), /6), Alfredo %hing, together with #milio TaQedo and%hung $iat Dua, executed a continuing guaranty with the A% binding themselves to jointly and severally guarantee thepayment of all the &M%" obligations owing the A% to the extent of &3),444,444.44. The loan was subseBuentlyrenewed on various dates, the last renewal having been made on <ecember 0, /)4.

#arlier, on <ecember 1), /6/, the A% extended another loan to the &M%" in the amount of &3,444,444.44 payable ineighteen months at *S interest per annum. As in the previous loan, the &M%", through Alfredo %hing, executed a

promissory note to evidence the loan maturing on une 1/, /). This was renewed once for a period of one month.The &M%" defaulted in the payment of all its loans. Dence, on August 1, /), the A% filed a complaint for sum ofmoney with prayer for a writ of preliminary attachment against the &M%" to collect the &1,*1,/61.)) exclusive ofinterests, penalties and other ban8 charges. "mpleaded as co-defendants in the complaint were Alfredo %hing, #milioTaQedo and %hung $iat Dua in their capacity as sureties of the &M%".

The case was doc8eted as %ivil %ase @o. 0161/ in the 9egional Trial %ourt of Manila, ranch O""". "n its application fora writ of preliminary attachment, the A% averred that the !defendants are guilty of fraud in incurring the obligations uponwhich the present action is brought in that they falsely represented themselves to be in a financial position to pay theirobligation upon maturity thereof.! "ts supporting affidavit stated, inter alia, that the !dNefendants have removed ordisposed of their properties, or areN A'7T to do so, with intent to defraud their creditors.!

'n August 1*, /), after an ex-parte hearing, the trial court issued an 'rder denying the A%=s application for a writ ofpreliminary attachment. The trial court decreed that the grounds alleged in the application and that of its supportingaffidavit !are all conclusions of fact and of law! which do not warrant the issuance of the writ prayed for. 'n motion forreconsideration, however, the trial court, in an 'rder dated eptember 0, /), reconsidered its previous order andgranted the A%=s application for a writ of preliminary attachment on a bond of &1,644,444. The order, in relevant part,stated(

Cith respect to the second ground relied upon for the grant of the writ of preliminary attachment ex-parte, which is thealleged disposal of properties by the defendants with intent to defraud creditors as provided in ec. 2e5 of 9ule :6 of the9ules of %ourt, the affidavits can only barely justify the issuance of said writ as against the defendant Alfredo %hing whohas allegedly bound himself jointly and severally to pay plaintiff the defendant corporation=s obligation to the plaintiff as asurety thereof.

CD#9#+'9#, let a writ of preliminary attachment issue as against the defendant Alfredo %hing reBuiring the sheriff ofthis %ourt to attach all the properties of said Alfredo %hing not exceeding &1,*1,/61.)1 in value, which are within the

jurisdiction of this %ourt and not exempt from execution upon, the filing by plaintiff of a bond duly approved by this %ourt inthe sum of Twelve Million even Dundred Thousand &esos 2&1,644,444.445 executed in favor of the defendant Alfredo%hing to secure the payment by plaintiff to him of all the costs which may be adjudged in his favor and all damages hemay sustain by reason of the attachment if the court shall f inally adjudge that the plaintiff was not entitled thereto.

' '9<#9#<.

7pon the A%=s posting of the reBuisite bond, the trial court issued a writ of preliminary attachment. ubseBuently,summonses were served on the defendants, save %hung $iat Dua who could not be found.

Meanwhile, on April , /)1, the &M%" and Alfredo %hing jointly filed a petition for suspension of payments with theecurities and #xchange %ommission 2#%5, doc8eted as #% %ase @o. 11:4, at the same time see8ing the &M%"=srehabilitation.

'n uly /, /)1, the #% issued an 'rder placing the &M%"=s business, including its assets and liabilities, underrehabilitation receivership, and ordered that !all actions for claims listed in chedule !A! of the petition pending before any

court or tribunal are hereby suspended in whatever stage the same may be until further orders from the %ommission.! The A% was among the &M%"=s creditors named in the said schedule.

ubseBuently, on anuary 3, /)3, the &M%" and Alfredo %hing jointly filed a Motion to <ismiss andJor motion tosuspend the proceedings in %ivil %ase @o. 0161/ invo8ing the &M%"=s pending application for suspension of payments2which %hing co-signed5 and over which the #% had already assumed jurisdiction. 'n +ebruary 0, /)3, the A% filed its'pposition thereto.

"n the meantime, on uly 1*, /)3, the deputy sheriff of the trial court levied on attachment the 44,444 common shares of%itycorp stoc8s in the name of Alfredo %hing.

Thereafter, in an 'rder dated eptember *, /)3, the trial court partially granted the aforementioned motion bysuspending the proceedings only with respect to the &M%". "t denied %hing=s motion to dismiss the complaintJor suspendthe proceedings and pointed out that &.<. @o. 6:) only concerns the activities of corporations, partnerships and

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associations and was never intended to regulate andJor control activities of individuals. Thus, it directed the individualdefendants to file their answers.

"nstead of filing an answer, %hing filed on anuary 0, /)0 a Motion to uspend &roceedings on the same ground of thependency of #% %ase @o. 11:4. This motion met the opposition from the A%.

'n anuary 14, /)0, TaQedo filed his Answer with counterclaim and cross-claim. %hing eventually filed his Answer onuly 1, /)0.

'n 'ctober 1:, /)0, long after submitting their answers, %hing filed an 'mnibus Motion, again praying for the dismissalof the complaint or suspension of the proceedings on the ground of the uly /, /)1 "njunctive 'rder issued in #% %ase

@o. 11:4. De averred that as a surety of the &M%", he must also necessarily benefit from the defenses of his principal.The A% opposed %hing=s omnibus motion.

#milio . TaQedo, thereafter, filed his own 'mnibus Motion praying for the dismissal of the complaint, arguing that the A%had !abandoned and waived! its right to proceed against the continuing guaranty by its act of resorting to preliminaryattachment.

'n <ecember 6, /)*, the A% filed a Motion to 9educe the amount of his preliminary attachment bondfrom&1,644,444 to &*,3:4,444. Alfredo %hing opposed the motion, but on April 1, /)6, the court issued an 'rdersetting the incident for further hearing on May 1), /)6 at )(34 a.m. for the parties to adduce evidence on the actual valueof the properties of Alfredo %hing levied on by the sheriff.

'n March 1, /)), the trial court issued an 'rder granting the motion of the A% and rendered the attachment bondof &*,3:4,444.

'n @ovember *, //3, #ncarnacion T. %hing, assisted by her husband Alfredo %hing, filed a Motion to et Aside the levy

on attachment. he alleged inter alia that the 44,444 shares of stoc8s levied on by the sheriff were acBuired by her andher husband during their marriage out of conjugal funds after the %itycorp "nvestment &hilippines was established in /60.+urthermore, the indebtedness covered by the continuing guarantyJcomprehensive suretyship contract executed bypetitioner Alfredo %hing for the account of &M%" did not redound to the benefit of the conjugal partnership. he, li8ewise,alleged that being the wife of Alfredo %hing, she was a third-party claimant entitled to file a motion for the release of theproperties. he attached therewith a copy of her marriage contract with Alfredo %hing.

The A% filed a comment on the motion to Buash preliminary attachment andJor motion to expunge records, contendingthat(

1. The supposed movant, #ncarnacion T. %hing, is not a party to this present case; thus, she has no personalityto file any motion before this Donorable %ourt;

1.1 aid supposed movant did not file any Motion for "ntervention pursuant to ection 1, 9ule 1 of the 9ules of%ourt;

1.3 aid Motion cannot even be construed to be in the nature of a Third-&arty %laim conformably with ec. 0,9ule :6 of the 9ules of %ourt.

3. +urthermore, assuming in gracia argumenti that the supposed movant has the reBuired personality, her Motion cannotbe acted upon by this Donorable %ourt as the above-entitled case is still in the archives and the proceedings thereon stillremains suspended. And there is no previous Motion to revive the same.

The A% also alleged that the motion was barred by prescription or by laches because the shares of stoc8s were incustodia legis.

<uring the hearing of the motion, #ncarnacion T. %hing adduced in evidence her marriage contract to Alfredo %hing toprove that they were married on anuary ), /*4; the articles of incorporation of %itycorp "nvestment &hilippines datedMay 0, /6/; and, the Eeneral "nformation heet of the corporation showing that petitioner Alfredo %hing was a memberof the oard of <irectors of the said corporation and was one of its top twenty stoc8holders.

'n <ecember 4, //3, the pouses %hing filed their 9eplyJ'pposition to the motion to expunge records. Acting on the aforementioned motion, the trial court issued on <ecember :, //3 an 'rder lifting the writ of preliminaryattachment on the shares of stoc8s and ordering the sheriff to return the said stoc8s to the petitioners. The dispositiveportion reads(

CD#9#+'9#, the instant Motion to Puash &reliminary Attachment, dated @ovember /, //3, is hereby granted. >et thewrit of preliminary attachment subject matter of said motion, be Buashed and lifted with respect to the attached 44,444common shares of stoc8 of %itycorp "nvestment &hilippines in the name of the defendant Alfredo %hing, the said shares ofstoc8 to be returned to him and his movant-spouse by <eputy heriff Apolonio A. Eolfo who effected the levy thereon onuly 1*, /)3, or by whoever may be presently in possession thereof.

' '9<#9#<.

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The plaintiff Allied an8ing %orporation filed a motion for the reconsideration of the order but denied the same on+ebruary 6, //0. The petitioner ban8 forthwith filed a petition for certiorari with the %A, doc8eted as %A-E.9. & @o.33:):, for the nullification of the said order of the court, contending that(

. The respondent udge exceeded his authority thereby acted without jurisdiction in ta8ing cogniIance of, andgranting a !Motion! filed by a complete stranger to the case.

1. The respondent udge committed a grave abuse of discretion in lifting the writ of preliminary attachment withoutany basis in fact and in law, and contrary to established jurisprudence on the matter.

'n @ovember 16, //:, the %A rendered judgment granting the petition and setting aside the assailed orders of the trial

court, thus(CD#9#+'9#, premises considered, the petition is E9A@T#<, hereby setting aside the Buestioned orders 2dated<ecember :, //3 and +ebruary 6, //05 for being null and void.

' '9<#9#<.

The %A sustained the contention of the private respondent and set aside the assailed orders. According to the %A, the9T% deprived the private respondent of its right to file a bond under ection 0, 9ule :6 of the 9ules of %ourt. Thepetitioner #ncarnacion T. %hing was not a party in the trial court; hence, she had no right of action to have the levyannulled with a motion for that purpose. Der remedy in such case was to file a separate action against the privaterespondent to nullify the levy on the 44,444 %itycorp shares of stoc8s. The court stated that even assuming that#ncarnacion T. %hing had the right to file the said motion, the same was barred by laches.

%iting Cong v. "ntermediate Appellate %ourt, the %A ruled that the presumption in Article *4 of the @ew %ivil %ode shallnot apply where, as in this case, the petitioner-spouses failed to prove the source of the money used to acBuire the shares

of stoc8. "t held that the levied shares of stoc8s belonged to Alfredo %hing, as evidenced by the fact that the said shareswere registered in the corporate boo8s of %itycorp solely under his name. Thus, according to the appellate court, the 9T%committed a grave abuse of its discretion amounting to excess or lac8 of jurisdiction in issuing the assailed orders. Thepetitioners= motion for reconsideration was denied by the %A in a 9esolution dated April 1, //*.

The petitioner-spouses filed the instant petition for review on certiorari, asserting that the 9T% did not commit any graveabuse of discretion amounting to excess or lac8 of jurisdiction in issuing the assailed orders in their favor; hence, the %Aerred in reversing the same. They aver that the source of funds in the acBuisition of the levied shares of stoc8s is not thecontrolling factor when invo8ing the presumption of the conjugal nature of stoc8s under Art. *4, and that suchpresumption subsists even if the property is registered only in the name of one of the spouses, in this case, petitioner

Alfredo %hing. According to the petitioners, the suretyship obligation was not contracted in the pursuit of the petitioner-husband=s profession or business. And, contrary to the ruling of the %A, where conjugal assets are attached in a collectionsuit on an obligation contracted by the husband, the wife should exhaust her motion to Buash in the main case and not file

a separate suit. +urthermore, the petitioners contend that under Art. 1: of the +amily %ode, the petitioner-husband=sgratuitous suretyship is null and void ab initio, and that the share of one of the spouses in the conjugal partnershipremains inchoate until the dissolution and liBuidation of the partnership.

"n its comment on the petition, the private respondent asserts that the %A correctly granted its petition for certiorarinullifying the assailed order. "t contends that the %A correctly relied on the ruling of this %ourt in Cong v. "ntermediate

Appellate %ourt. %iting %obb-&ereI v. >antin and E-Tractors, "nc. v. %ourt of Appeals, the private respondent alleges thatthe continuing guaranty and suretyship executed by petitioner Alfredo %hing in pursuit of his profession or business.+urthermore, according to the private respondent, the right of the petitioner-wife to a share in the conjugal partnershipproperty is merely inchoate before the dissolution of the partnership; as such, she had no right to file the said motion toBuash the levy on attachment of the shares of stoc8s.

The issues for resolution are as follows( 2a5 whether the petitioner-wife has the right to file the motion to Buash the levy onattachment on the 44,444 shares of stoc8s in the %itycorp "nvestment &hilippines; 2b5 whether or not the 9T% committed

a grave abuse of its discretion amounting to excess or lac8 of jurisdiction in issuing the assailed orders.'n the first issue, we agree with the petitioners that the petitioner-wife had the right to file the said motion, although shewas not a party in %ivil %ase @o. 0161/.

"n 'ng v. Tating, we held that the sheriff may attach only those properties of the defendant against whom a writ ofattachment has been issued by the court. Chen the sheriff erroneously levies on attachment and seiIes the property of athird person in which the said defendant holds no right or interest, the superior authority of the court which has authoriIedthe execution may be invo8ed by the aggrieved third person in the same case. 7pon application of the third person, thecourt shall order a summary hearing for the purpose of determining whether the sheriff has acted rightly or wrongly in theperformance of his duties in the execution of the writ of attachment, more specifically if he has indeed levied onattachment and ta8en hold of property not belonging to the plaintiff. "f so, the court may then order the sheriff to releasethe property from the erroneous levy and to return the same to the third person. "n resolving the motion of the third party,the court does not and cannot pass upon the Buestion of the title to the property with any character of f inality. "t can treat

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the matter only insofar as may be necessary to decide if the sheriff has acted correctly or not. "f the claimant=s proof doesnot persuade the court of the validity of the title, or right of possession thereto, the claim will be denied by the court. Theaggrieved third party may also avail himself of the remedy of !terceria! by executing an affidavit of his title or right ofpossession over the property levied on attachment and serving the same to the office ma8ing the levy and the adverseparty. uch party may also file an action to nullify the levy with damages resulting from the unlawful levy and seiIure,which should be a totally separate and distinct action from the former case. The above-mentioned remedies arecumulative and any one of them may be resorted to by one third-party claimant without availing of the other remedies.

"n this case, the petitioner-wife filed her motion to set aside the levy on attachment of the 44,444 shares of stoc8s in thename of petitioner-husband claiming that the said shares of stoc8s were conjugal in nature; hence, not liable for the

account of her husband under his continuing guaranty and suretyship agreement with the &M%". The petitioner-wife hadthe right to file the motion for said relief.

'n the second issue, we find and so hold that the %A erred in setting aside and reversing the orders of the 9T%. Theprivate respondent, the petitioner in the %A, was burdened to prove that the 9T% committed a grave abuse of itsdiscretion amounting to excess or lac8 of jurisdiction. The tribunal acts without jurisdiction if it does not have the legalpurpose to determine the case; there is excess of jurisdiction where the tribunal, being clothed with the power todetermine the case, oversteps its authority as determined by law. There is grave abuse of discretion where the tribunalacts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its judgment and is eBuivalent to lac8 of

jurisdiction.

"t was incumbent upon the private respondent to adduce a sufficiently strong demonstration that the 9T% actedwhimsically in total disregard of evidence material to, and even decide of, the controversy before certiorari will lie. Aspecial civil action for certiorari is a remedy designed for the correction of errors of jurisdiction and not errors of judgment.

Chen a court exercises its jurisdiction, an error committed while so engaged does not deprive it of its jurisdiction beingexercised when the error is committed.

After a comprehensive review of the records of the 9T% and of the %A, we find and so hold that the 9T% did not commitany grave abuse of its discretion amounting to excess or lac8 of jurisdiction in issuing the assailed orders.

Article *4 of the @ew %ivil %ode provides that all the properties acBuired during the marriage are presumed to belong tothe conjugal partnership, unless it be proved that it pertains exclusively to the husband, or to the wife. "nTan v. %ourt of

Appeals, we held that it is not even necessary to prove that the properties were acBuired with funds of the partnership. Aslong as the properties were acBuired by the parties during the marriage, they are presumed to be conjugal in nature. "nfact, even when the manner in which the properties were acBuired does not appear, the presumption will still apply, andthe properties will still be considered conjugal. The presumption of the conjugal nature of the properties acBuired duringthe marriage subsists in the absence of clear, satisfactory and convincing evidence to overcome the same.

"n this case, the evidence adduced by the petitioners in the 9T% is that the 44,444 shares of stoc8s in the %itycorp"nvestment &hilippines were issued to and registered in its corporate boo8s in the name of the petitioner-husband whenthe said corporation was incorporated on May 0, /6/. This was done during the subsistence of the marriage of thepetitioner-spouses. The shares of stoc8s are, thus, presumed to be the conjugal partnership property of the petitioners.The private respondent failed to adduce evidence that the petitioner-husband acBuired the stoc8s with his exclusivemoney. The barefaced fact that the shares of stoc8s were registered in the corporate boo8s of %itycorp "nvestment&hilippines solely in the name of the petitioner-husband does not constitute proof that the petitioner-husband, not theconjugal partnership, owned the same. The private respondent=s reliance on the rulings of this %ourt in Maramba v.>oIano and Associated "nsurance V urety %o., "nc. v. anIon is misplaced. "n the Maramba case, we held that wherethere is no showing as to when the property was acBuired, the fact that the title is in the wife=s name alone isdeterminative of the ownership of the property. The principle was reiterated in the Associated "nsurance case where theuncontroverted evidence showed that the shares of stoc8s were acBuired during the marriage of the petitioners.

"nstead of fortifying the contention of the respondents, the ruling of this %ourt in Cong v. "ntermediate Appellate

%ourt buttresses the case for the petitioners. "n that case, we ruled that he who claims that property acBuired by thespouses during their marriage is not conjugal partnership property but belongs to one of them as his personal property isburdened to prove the source of the money utiliIed to purchase the same. "n this case, the private respondent claimedthat the petitioner-husband acBuired the shares of stoc8s from the %itycorp "nvestment &hilippines in his own name as theowner thereof. "t was, thus, the burden of the private respondent to prove that the source of the money utiliIed in theacBuisition of the shares of stoc8s was that of the petitioner-husband alone. As held by the trial court, the privaterespondent failed to adduce evidence to prove this assertion.

The %A, li8ewise, erred in holding that by executing a continuing guaranty and suretyship agreement with the privaterespondent for the payment of the &M%" loans, the petitioner-husband was in the exercise of his profession, pursuing alegitimate business. The appellate court erred in concluding that the conjugal partnership is liable for the said account of&M%" under Article *25 of the @ew %ivil %ode.

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Article *25 of the @ew %ivil %ode 2now Article 11 and 3N of the +amily %ode of the &hilippines5 provides(

Art. *. The conjugal partnership shall be liable for(

25 All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and those contractedby the wife, also for the same purpose, in the cases where she may legally bind the partnership.

The petitioner-husband signed the continuing guaranty and suretyship agreement as security for the payment of the loanobtained by the &M%" from the private respondent in the amount of &3),444,444. "n Ayala "nvestment and <evelopment%orp. v. %ourt of Appeals, this %ourt ruled !that the signing as surety is certainly not an exercise of an industry orprofession. "t is not embar8ing in a business. @o matter how often an executive acted on or was persuaded to act as

surety for his own employer, this should not be ta8en to mean that he thereby embar8ed in the business of suretyship orguaranty.!

+or the conjugal partnership to be liable for a liability that should appertain to the husband alone, there must be a showingthat some advantages accrued to the spouses. %ertainly, to ma8e a conjugal partnership responsible for a liability thatshould appertain alone to one of the spouses is to frustrate the objective of the @ew %ivil %ode to show the utmostconcern for the solidarity and well being of the family as a unit. The husband, therefore, is denied the power to assumeunnecessary and unwarranted ris8s to the financial stability of the conjugal partnership.

"n this case, the private respondent failed to prove that the conjugal partnership of the petitioners was benefited by thepetitioner-husband=s act of executing a continuing guaranty and suretyship agreement with the private respondent for andin behalf of &M%". The contract of loan was between the private respondent and the &M%", solely for the benefit of thelatter. @o presumption can be inferred from the fact that when the petitioner-husband entered into an accommodationagreement or a contract of surety, the conjugal partnership would thereby be benefited. The private respondent was

burdened to establish that such benefit redounded to the conjugal partnership."t could be argued that the petitioner-husband was a member of the oard of <irectors of &M%" and was one of its toptwenty stoc8holders, and that the shares of stoc8s of the petitioner-husband and his family would appreciate if the &M%"could be rehabilitated through the loans obtained; that the petitioner-husband=s career would be enhanced should &M%"survive because of the infusion of fresh capital. Dowever, these are not the benefits contemplated by Article * of the@ew %ivil %ode. The benefits must be those directly resulting from the loan. They cannot merely be a by-product or aspin-off of the loan itself.

This is different from the situation where the husband borrows money or receives services to be used for his own businessor profession. "n the Ayala case, we ruled that it is such a contract that is one within the term !obligation for the benefit ofthe conjugal partnership.! Thus(

2A5 "f the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to beused in or for his own business or his own profession, that contract falls within the term !W obligations for the benefit of

the conjugal partnership.! Dere, no actual benefit may be proved. "t is enough that the benefit to the family is apparent atthe time of the signing of the contract. +rom the very nature of the contract of loan or services, the family stands to benefitfrom the loan facility or services to be rendered to the business or profession of the husband. "t is immaterial, if in the end,his business or profession fails or does not succeed. imply stated, where the husband contracts obligations on behalf ofthe family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugalpartnership.

The %ourt held in the same case that the rulings of the %ourt in %obb-&ereI and E-Tractors, "nc. are not controllingbecause the husband, in those cases, contracted the obligation for his own business. "n this case, the petitioner-husbandacted merely as a surety for the loan contracted by the &M%" from the private respondent.

"@ >"EDT '+ A>> TD# +'9#E'"@E, the petition is E9A@T#<. The <ecision and 9esolution of the %ourt of Appeals are#T A"<# A@< 9#O#9#<. The assailed orders of the 9T% are A++"9M#<.

' '9<#9#<.

)RA$IO ! 3O$.AL%

AUTRIA-,ARTI$%.' J.:

Assailed in the present petition for review on certiorari under 9ule 0: of the 9ules of %ourt is the %ourt of Appeals2%A5 <ecision dated April 34, 1446, which affirmed the 9egional Trial %ourt 29T%5 'rders dated une 0, 1443 and uly 31443, denying petitionersX motion to stop execution sale.

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&etitioners %leodia 7. +rancisco and %eamantha 7. +rancisco are the minor children of %leodualdo M. +rancisco2%leodualdo5 and Michele 7riarte +rancisco 2Michele5. "n a &artial <ecision dated @ovember 1/, 1444 rendered by the9T% of Ma8ati, ranch 00, in %ivil %ase @o. /3-11)/ for <eclaration of @ullity of Marriage, the %ompromise Agreemententered into by the estranged couple was approved. The %ompromise Agreement contained in part the followingprovisions(

6. "n their desire to manifest their genuine concern for their

children, %leodia and %eamantha, %leodualdo and Michelle have voluntarily agreed to herein set forththeir obligations, rights and responsibilities on matters relating to their childrenXs support, custody,visitation, as well as to the dissolution of their conjugal partnership of gains as follows(

2a5 Title and ownership of the conjugal property consisting of a house and lotlocated in Ayala Alabang, Muntinlupa, Metro Manila shall be transferred by way of a deedof donation to%leodia and %eamantha, as co-owners, when they reach nineteen 2/5 andeighteen 2)5 years old, respectively, subject to the following conditions( x x x

The property subject of the %ompromise Agreement is a house and lot covered by Transfer %ertificate of Title @o.

*6/46 in the name of %leodualdo M. +rancisco, married to Michele 7. +rancisco, with an area of 00 sBuare meters, andlocated in 04 Taal t(, Ayala Alabang Oillage, Muntinlupa %ity. Meanwhile, in a case for 7nlawful <etainer with &reliminary Attachment filed by spouses orge %. EonIalesand &urificacion C. EonIales 2respondents5 against Eeorgeoltan Matrai 2Matrai5 and Michele, the Metropolitan Tria

%ourt 2MeT%5 of Muntinlupa %ity, ranch )4, rendered a <ecision dated May 4, 144, ordering Matrai and Michele tovacate the premises leased to them located in 1*0 Lan@a #+ie, Ayala Alabang Oillage, Muntinlupa %ity, and to pay bac8rentals, unpaid telephone bills and attorneyXs fees.

&ending appeal with the 9T% of Muntinlupa, ranch 1:*, an order was issued granting respondentsX prayer for theexecution of the MeT% <ecision. A notice of sale by execution was then issued by the sheriff covering the real propertyunder Transfer %ertificate of Title @o. T-*6/46 in the name of %leodualdo M. +rancisco, married to Michele 7. +rancisco.

Chen petitionersX grandmother learned of the scheduled auction, she, as guardian-in-fact of petitioners, filed withthe 9T% an Affidavit of Third &arty %laim and a Oery 7rgent Motion to top ale by #xecution but this was denied in the'rder dated une 0, 1443. &etitionersX motion for reconsideration was denied per 9T% 'rder dated uly 3, 1443. &etitioners then filed a petition for certiorari with the %A.

&ending resolution by the %A, the 9T% issued an 'rder dated uly ), 144:, granting respondentsX petition for theissuance of a new certificate of title. The 9T% also issued an 'rder on +ebruary 3, 144*, granting respondentsX motionfor the issuance of a writ of possession.

'n April 34, 1446, the %A dismissed the petition, the dispositive portion of which reads( CD#9#+'9#, premises considered, the 'etition is hereby <"M"#<. The rder(s),

dated une 0, 1443 and uly 3, 1443, of the 9egional Trial %ourt of Muntinlupa %ity, r. 1:*, in %ivil%ase @o. 4-14, TA@<. %osts against the &etitioners.

' '9<#9#<. Dence, herein petition. As prayed for, the %ourt issued a temporary restraining order on uly , 1446, enjoiningrespondents, the 9T%, the 9egister of <eeds, and the heriff from implementing or enforcing the 9T% 'rder dated uly )144:, canceling T%T @o. *6/46 and 'rder dated +ebruary 3, 144*, issuing a writ of possession, until further ordersfrom the %ourt. &etitioners argue that( 25 they are the rightful owners of the property as the &artial <ecision issued by the 9T%of Ma8ati in %ivil %ase @o. /3-11)/ had already become final; 215 their parents already waived in their favor their rightsover the property; 235 the adjudged obligation of Michele in the ejectment case did not redound to the benefit of the family205 MicheleXs obligation is a joint obligation between her and Matrai, not joint and solidary. The %ourt finds that it was grave error for the 9T% to proceed with the execution, levy and sale of the subjecproperty. The power of the court in executing judgments extends only to properties un;uestionabl= belonging to the

2udg9ent debto+ alone, in the present case to those belonging to Michele and Matrai. 'ne manXs goods shall not besold for another manXs debts.

To begin with, the 9T% should not have ignored that T%T @o. *6/46 is in the name of K%leodualdo M. +ranciscomarried to Michele 7. +rancisco.L 'n its face, the title shows that the registered owner of the property is not Matrai andMichele but %leodualdo, married to Michele. This describes the civil status of %leodualdo at the time the property wasacBuired.

9ecords show that %leodualdo and Michele were married on une 1, /)*, prior to the effectivity of the +amily%ode on August 3, /)). As such, their property relations are governed by the %ivil %ode on conjugal partnership ogains.

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The %A ac8nowledged that ownership of the subject property is conjugal in nature; however, it ruled that sinceMicheleXs obligation was not proven to be a personal debt, it must be inferred that it is conjugal and redounded to thebenefit of the family, and hence, the property may be held answerable for it. The %ourt does not agree. A wife may bind the conjugal partnership only when she purchases things necessary for the support of the family, orwhen she borrows money for that purpose upon her husbandXs failure to deliver the needed sum; when administration ofthe conjugal partnership is transferred to the wife by the courts or by the husband; or when the wife gives moderatedonations for charity. +ailure to establish any of these circumstances means that the conjugal asset may not be bound toanswer for the wifeXs personal obligation. %onsidering that the foregoing circumstances are evidently not present in thiscase as the liability incurred by Michele arose from a judgment rendered in an unlawful detainercase against her and hepartner Matrai. +urthermore, even prior to the issuance of the @otice of >evy on #xecution on @ovember 1), 144, there wasalready annotated on the title the following inscription(

#ntry @o. 1330-01JT-*6/46 R @ullification of Marriage

y order of the %ourt 9T%, @%9, ranch 00, Ma8ati %ity dated uly 0, 144, which become finaland executory on 'ctober ), 144 declaring the Marriage %ontract betweenMichelle 7riarte and %leodualdo M. +rancisco, r. is null V void ab initio and title of ownership of theconjugal property consisting of the above-described property shall be transferred by way of a <eed of <onation to %leodia Michaela 7. +rancisco and %eamantha Maica 7. +rancisco, as co-owners when theyreach nineteen 2/5 and eighteen 2)5 yrs. old to the condition that%leodualdo, shallretain usufructuary rights over the property until he reaches the age of *: yrs. 'ld.

<ate of instrument R 'ct ), 144<ate of inscription R 'ct 11, 144.

This annotation should have put the 9T% and the sheriff on guard, and they should not have proceeded with the executionof the judgment debt of Michele and Matrai.

Chile the trial court has the competence to identify and to secure properties and interest therein held by the judgment debtor for the satisfaction of a money judgment rendered against him, such exercise of its authority is premisedon one important fact( that the properties levied upon, or sought to be levied upon, are properties un;uestionabl= ownedb= the 2udg9ent debto+ and are not exempt by law from execution. Also, a sheriff is not authoriIed to attach or levy onproperty not belonging to the judgment debtor, and even incurs liability if he wrongfully levies upon the property of a thirdperson. A sheriff has no authority to attach the property of any person under execution except that of the judgment debtor "t should be noted that the judgment debt for which the subject property was being made to answer was incurredby Michele and her partner, Matrai. 9espondents allege that the lease of the property in >an8a <rive redounded to the

benefit of the family. y no stretch of oneXs imagination can it be concluded that said debtJobligation was incurred for thebenefit of the conjugal partnership or that some advantage accrued to the welfare of the family. "n &A inance*orporation v. *ourt of Appeals, the %ourt ruled that the petitioner cannot enforce the obligation contractedby Augusto ulo against his conjugal properties with respondent >ily ulo because it was not established that theobligation contracted by the husband redounded to the benefit of the conjugal partnership under Article * of the %ivil%ode. The %ourt stated(

"n the present case, the obligation which the petitioner is see8ing to enforce against the conjugalproperty managed by the private respondent >ily ulo was undoubtedly contracted byAugusto ulo for hisown benefit because at the time he incurred the obligation he had already abandoned his family and hadleft their conjugal home. Corse, he made it appear that he was duly authoriIed by his wife in behalf of A V> "ndustries, to procure such loan from the petitioner. %learly, to ma8e A V > "ndustries liable now for thesaid loan would be unjust and contrary to the express provision of the %ivil %ode. 2#mphasis supplied5

imilarly in this case, Michele, who was then already living separately from %leodualdo, rented the house in >an8a

<rive for her and Matrai=s own benefit. "n fact, when they entered into the lease agreement, Michele and Matrai purportedthemselves to be husband and wife. 9espondents= bare allegation that petitioners lived with Michele on the leasedproperty is not sufficient to support the conclusion that the judgment debt against Michele and Matrai in the ejectment suitredounded to the benefit of the family of Michele and %leodualdo and petitioners. Thus, in Homeowners +avings andoan &ank v. -ailo, the %ourt stated thus(

x x x #i incumbit probatio Bui dicit, non Bui negat 2he who asserts, not he who denies, mustprove5. &etitioner=s sweeping conclusion that the loan obtained by the late Marcelino <ailo, r. to financethe construction of housing units without a doubt redounded to the benefit of his family, without adducingadeBuate proof, does not persuade this %ourt. 'ther than petitioner=s bare allegation, there is nothingfrom the records of the case to compel a finding that, indeed, the loan obtained by thelate Marcelino <ailo, r. redounded to the benefit of the family. %onseBuently, the conjugal partnershipcannot be held liable for the payment of the principal obligation.

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To hold the property in Taal t. liable for the obligations of Michele and Matrai would be going against the spirit andavowed objective of the %ivil %ode to give the utmost concern for the solidarity and well-being of the family as a unit.

"n justifying the levy against the property, the 9T% went over the %ompromise Agreement as embodied in the &artia<ecision dated @ovember 1/, 1444. 'ddly, the 9T% ruled that there was no effective transfer of ownership to thesiblings %leodia and %eamantha +rancisco. "n the same breath, the 9T% astonishingly ruled that Michele is now theowner of the property inasmuch as %leodualdo already waived his rights over the property. The %ompromise Agreemenmust not be read piece-meal but in its entirety. "t is provided therein, thus(

6. "n their desire to manifest their genuine concern for their children, %leodia and %eamantha, leodualdo and ,i4helle hae olunta+il= ag+eed to herein set forththeir obligations, rights and responsibilities on matters relating to their childrenXs support, custody,visitation, as well as to the dissolution of their conjugal partnership of gains as follows(

2a5 Title and owne+shi* of the 4on2ugal *+o*e+t= 4onsisting of a house andlot lo4ated in A=ala Alabang' ,untinlu*a' ,et+o ,anila shall be t+ansfe++ed b= wa=of a deed of donation to leodia and ea9antha' as 4o-owne+s' when the= +ea4hnineteen 1BC and eighteen 18C =ea+s old' +es*e4tiel=' sub2e4t to the following4onditions:

a.. %leodualdo shall retain usufructuary rights over the property until he reachesthe age of *: years old, with the following rights and responsibilities( x x x x 2#mphasis supplied5

+rom the foregoing, it is clear that both Michele and %leodualdo have waived their title to and ownership of thehouse and lot in Taal t. in favor of petitioners. The property should not have been levied and sold at execution sale, forlac8 of legal basis.

Oerily, the %A committed an error in sustaining the 9T% 'rders dated une 0, 1443 and uly 3, 1443. WH%R%)OR%, the petition is 3RA$T%#. The assailed %ourt of Appeals <ecision dated April 34, 1446affirming 9T% 'rders dated une 0, 1443 and uly 3, 1443, are hereby $ULLI)I%# and %T AI#%. The temporaryrestraining order issued by the %ourt per 9esolution of uly , 1446 is hereby made &%R,A$%$T.

%osts against respondents.

O OR#%R%#.

"UA#O ! $IOL

TI$3A' J.:

efore this %ourt is a petition for certiorari assailing the <ecision of the %ourt of Appeals in %A-E.9. %O @o. 0641/ and its9esolution denying the motion for reconsideration thereof.

The case stemmed from the following factual bac8drop(

'n 34 April /)0, pouses 9oberto and Oenus uado 2petitioners5 filed a complaint for damages against #rlinda @icol2#rlinda5 with "+an4h 1B of the 9egional Trial %ourt 29T%5 of acoor, %avite, doc8eted as %ivil %ase @o. )0-33. aidaction originated from #rlinda @icol=s civil liability arising from the criminal offense of slander filed against her bypetitioners.

'n * April /)6, the trial court rendered a decision ordering #rlinda to pay damages. The dispositive portion reads(

Cherefore, judgment is hereby rendered in favor of the plaintiffsN and against defendant ordering the latter to pay theformer the amount of thirty thousand 2&34,444.445 pesos as moral damages, five thousand 2&:,444.445 pesos asattorney=s fees and litigation expenses, another five thousand 2&:,444.445 pesos as exemplary damages and the cost ofsuit.

aid decision was affirmed, successively, by the %ourt of Appeals and this %ourt. "t became final and executory on :March //1.

'n 0 'ctober //1, the trial court issued a writ of execution, a portion of which provides(

@ow, therefore, you are commanded that of the goods and chattels of the defendant #rlinda @icol, or from her estates orlegal heirs, you cause the sum in the amount of forty thousand pesos 2&04,444.445, &hilippine %urrency, representing the

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moral damages, attorney=s fees and litigation expenses and exemplary damages and the cost of suit of the plaintiff asidefrom your lawful fees on this execution and do li8ewise return this writ into court within sixty 2*45 days from date, with yourproceedings endorsed hereon.

ut if sufficient personal property cannot be found whereof to satisfy this execution and lawful fees thereon, then you arecommanded that of the lands and buildings of said defendant you ma8e the said sum of money in the manner reBuired bythe 9ules of %ourt, and ma8e return of your proceedings with this writ within sixty 2*45 days from date.

+inding #rlinda @icol=s personal properties insufficient to satisfy the judgment, the <eputy heriff issued a notice of levyon real property on execution addressed to the 9egister of <eeds of %avite. The notice of levy was annotated on theTransfer %ertificate of Title @o. T-1:311.

'n 14 @ovember //1, a notice of sheriff=s sale was issued.

Two 215 days before the public auction sale on 1) anuary //3, an affidavit of third-party claim from one Arnulfo +. +ulowas received by the deputy sheriff prompting petitioners to put up a sheriff=s indemnity bond. The auction sale proceededwith petitioners as the highest bidder.

'n 0 +ebruary //3, a certificate of sale was issued in favor of petitioners.

Almost a year later on 1 +ebruary //0, 9omulo @icol 2respondent5, the husband of #rlinda @icol, filed a complaint forannulment of certificate of sale and damages with preliminary injunction against petitioners and the deputy sheriff.9espondent, as plaintiff therein, alleged that the defendants, now petitioners, connived and directly levied upon andexecute his real property without exhausting the personal properties of #rlinda @icol. 9espondent averred that there wasno proper publication and posting of the notice of sale. +urthermore, respondent claimed that his property which wasvalued at &:44,444.44 was only sold at a !very low price! of &:,*):.44, whereas the judgment obligation of #rlinda @icol

was only &04,444.44. The case was assigned to "+an4h 51 of the 9T% of "mus, %avite."n response, petitioners filed a motion to dismiss on the grounds of lac8 of jurisdiction and that they had acted on the basisof a valid writ of execution. %iting <e >eon v. alvador, petitioners claimed that respondent should have filed the casewith "+an4h 1B where the judgment originated and which issued the order of execution, writ of execution, notice of levyand notice of sheriff=s sale.

"n an 'rder dated ) April //0, the 9T% dismissed respondent=s complaint and ruled that "+an4h 1B has jurisdictionover the case, thus(

As correctly pointed out by the defendants, any flaw in the implementation of the writ of execution by the implementingsheriff must be brought before the court issuing the writ of execution. esides, there are two 215 remedies open to theplaintiff, if he feels that the property being levied on belongs to him and not to the judgment debtor. The first remedy is tofile a third-party claim. "f he fails to do this, a right is reserved to him to vindicate his claim over the property by any properaction. ut certainly, this is not the proper action reserved to the plaintiff to vindicate his claim over the property in

Buestion to be ventilated before this court. As earlier stated, this case should have been addressed to ranch /, 9T%acoor as it was that court which issued the writ of execution.

9espondent moved for reconsideration but it was denied on 1* uly //0.

'n appeal, the %ourt of Appeals reversed the trial court and held that "+an4h 51 has jurisdiction to act on the complaintfiled by appellant. The dispositive portion reads(

CD#9#+'9#, the 'rders appealed from are hereby 9#O#9#< and #T A"<#. This case is 9#MA@<#< to the9egional Trial %ourt of "mus, %avite, ranch 1 for further proceedings.

' '9<#9#<.

&etitioners= motion for reconsideration was denied on 13 August 1444. Dence, the instant petition attributing grave abuseof discretion on the part of the %ourt of Appeals.

A petition for certiorari is an extraordinary remedy that is adopted to correct errors of jurisdiction committed by the lower

court or Buasi-judicial agency, or when there is grave abuse of discretion on the part of such court or agency amounting tolac8 or excess of jurisdiction. Chere the error is not one of jurisdiction, but of law or fact which is a mista8e of judgment,the proper remedy should be appeal. "n addition, an independent action for certiorari may be availed of only when there isno appeal or any plain, speedy and adeBuate remedy in the ordinary course of law.

@owhere in the petition was it shown that the jurisdiction of the %ourt of Appeals was Buestioned. The issue devolves onwhether the husband of the judgment debtor may file an independent action to protect the conjugal property subject toexecution. The alleged error therefore is an error of judgment which is a proper subject of an appeal.

@evertheless, even if we were to treat this petition as one for review, the case should still be dismissed on substantivegrounds.

&etitioners maintain that "+an4h 1B retained jurisdiction over its judgment to the exclusion of all other co-ordinate courtsfor its execution and all incidents thereof, in line with <e >eon v. alvador. &etitioners insist that respondent, who is thehusband of the judgment debtor, is not the !third party! contemplated in ection 6 2now ection *5, 9ule 3/ of the 9ules

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of %ourt, hence a separate action need not be filed. +urthermore, petitioners assert that the obligation of the wiferedounded to the benefit of the conjugal partnership and cited authorities to the effect that the husband is liable for the tortcommitted by his wife.

9espondent on the other hand merely avers that the decision of the %ourt of Appeals is supported by substantial evidenceand in accord with law and jurisprudence.

Oerily, the Buestion of jurisdiction could be resolved through a proper interpretation of ection *, 9ule 3/ of the 9ules of%ourt, which reads(

ec. *. &roceedings where property claimed by third person.

"f the property levied on is claimed by any person other than the judgment obligor or his agent, and such person ma8es anaffidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves the sameupon the officer ma8ing the levy and a copy thereof upon the judgment obligee, the officer shall not be bound to 8eep theproperty, unless such judgment obligee, on demand of the officer, files a bond approved by the court to indemnify thethird-party claimant in a sum not less than the value of the property levied on. "n case of disagreement as to such value,the same shall be determined by the court issuing the writ of execution. @o claim for damages for the ta8ing or 8eeping ofthe property may be enforced against the bond unless the action therefor is filed within one hundred twenty 2145 daysfrom the date of the filing of the bond.

The officer shall not be liable for damages for the ta8ing or 8eeping of the property, to any third-party claimant if such bondis filed. @othing herein contained shall prevent such claimant or any third person from vindicating his claim to the propertyin a separate action, or prevent the judgment obligee from claiming damages in the same or a separate action against athird-party claimant who filed a frivolous or plainly spurious claim.

Chen the writ of execution is issued in favor of the 9epublic of the &hilippines, or any officer duly representing it, the filingof such bond shall not be reBuired, and in case the sheriff or levying officer is sued for damages as a result of the levy, heshall be represented by the olicitor Eeneral and if held liable therefor, the actual damages adjudged by the court shall bepaid by the @ational Treasurer out of such funds as may be appropriated for the purpose. 2#mphasis upplied5

Apart from the remedy of terceria available to a third-party claimant or to a stranger to the foreclosure suit against thesheriff or officer effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor, athird-party claimant may also resort to an independent separate action, the object of which is the recovery of ownership or possession of the property seiIed by the sheriff, as well as damages arising from wrongful seiIure and detention of theproperty. "f a separate action is the recourse, the third-party claimant must institute in a forum of competent jurisdiction anaction, distinct and separate from the action in which the judgment is being enforced, even before or without need of filinga claim in the court that issued the writ.awphi./w0

A third-party claim must be filed a person other than the judgment debtor or his agent. "n other words, only a stranger to

the case may file a third-party claim.This leads us to the Buestion( "s the husband, who was not a party to the suit but whose conjugal property is beingexecuted on account of the other spouse being the judgment obligor, considered a !stranger?!

"n determining whether the husband is a stranger to the suit, the character of the property must be ta8en into account. "nMariano v. %ourt of Appeals, which was later adopted in pouses %hing v. %ourt of Appeals, this %ourt held that thehusband of the judgment debtor cannot be deemed a !stranger! to the case prosecuted and adjudged against his wife foran obligation that has redounded to the benefit of the conjugal partnership. 'n the other hand, in @aguit v. %ourt of

Appeals and y v. <iscaya, the %ourt stated that a spouse is deemed a stranger to the action wherein the writ ofexecution was issued and is therefore justified in bringing an independent action to vindicate her right of ownership overhis exclusive or paraphernal property.lawphil.net

&ursuant to 1ariano however, it must further be settled whether the obligation of the judgment debtor redounded to thebenefit of the conjugal partnership or not.

&etitioners argue that the obligation of the wife arising from her criminal liability is chargeable to the conjugal partnership.Ce do not agree.

There is no dispute that contested property is conjugal in nature. Article 11 of the +amily %ode explicitly provides thatpayment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged tothe conjugal partnership except insofar as they redounded to the benefit of the family.

7nli8e in the system of absolute community where liabilities incurred by either spouse by reason of a crime or quasi2

delict is chargeable to the absolute community of property, in the absence or insufficiency of the exclusive property of thedebtor-spouse, the same advantage is not accorded in the system of conjugal partnership of gains. The conjugalpartnership of gains has no duty to ma8e advance payments for the liability of the debtor-spouse.

&arenthetically, by no stretch of imagination can it be concluded that the civil obligation arising from the crime of slandercommitted by #rlinda redounded to the benefit of the conjugal partnership.

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To reiterate, conjugal property cannot be held liable for the personal obligation contracted by one spouse, unless someadvantage or benefit is shown to have accrued to the conjugal partnership.

"n Euadalupe v. Tronco, this %ourt held that the car which was claimed by the third party complainant to be conjugalproperty was being levied upon to enforce !a judgment for support! filed by a third person, the third-party claim of the wifeis proper since the obligation which is personal to the husband is chargeable not on the conjugal property but on hisseparate property.

Dence, the filing of a separate action by respondent is proper and jurisdiction is thus vested on "+an4h 51. &etitionersfailed to show that the %ourt of Appeals committed grave abuse of discretion in remanding the case to"+an4h 51 forfurther proceedings.

WH%R%)OR%, the petition is #I,I%#. The <ecision of the %ourt of Appeals is A))IR,%#. %osts against petitioners.

' '9<#9#<.

&A$A ! H%IR O) UA$T%

A"A#' J.:

This case is about the propriety of levy and execution on conjugal properties where one of the spouses has been foundguilty of a crime and ordered to pay civil indemnities to the victimsX heirs.

The +acts and the %ase

The prosecution accused petitioner #fren &ana 2#fren5, his wife Melecia, and others of murder before the. 9egional Trial%ourt 29T%5 of urigao %ity in %riminal %ases 0131 and 0133.

'n uly /, //6 the 9T% rendered a consolidated decision acBuitting #fren of the charge for insufficiency of evidence butfinding Melecia and another person guilty as charged and sentenced them to the penalty of death. The 9T% ordered thosefound guilty to pay each of the heirs of the victims, jointly and severally, &:4,444.44 as civil indemnity, &:4,444.44 eachas moral damages, and &:4,444.44 actual damages.

'n appeal to this %ourt, it affirmed on May 10, 144 the conviction of both accused but modified the penalty to reclusion

perpetua. Cith respect to the monetary awards, the %ourt also affirmed the award of civil indemnity and moral damagesbut deleted the award for actual damages for lac8 of evidentiary basis. "n its place, however, the %ourt made an award of&:,444.44 each by way of temperate damages. "n addition, the %ourt awarded &:4,444.44 exemplary damages pervictim to be paid solidarily by them. The decision became final and executory on 'ctober , 144.

7pon motion for execution by the heirs of the deceased, on March 1, 1441 the 9T% ordered the issuance of the

writ, resulting in the levy of real properties registered in the names of #fren and Melecia. ubseBuently, a notice oflevy and a notice of sale on execution were issued.

'n April 3, 1441, petitioner #fren and his wife Melecia filed a motion to Buash the writ of execution, claiming that thelevied properties were conjugal assets, not paraphernal assets of Melecia. 'n eptember *, 1441 the 9T% denied themotion. The spouses moved for reconsideration but the 9T% denied the same on March *, 1443.

%laiming that the 9T% gravely abused its discretion in issuing the challenged orders, #fren filed a petitionfor certiorari before the %ourt of Appeals 2%A5. 'n anuary 1/, 1440 the %A dismissed the petition for failure to sufficientlyshow that the 9T% gravely abused its discretion in issuing its assailed orders. "t also denied #fren=s motion forreconsideration, prompting him to file the present petition for review on certiorari .

The Issue &+esented

The sole issue presented in this case is whether or not the %A erred in holding that the conjugal properties of spouses#fren and Melecia can be levied and executed upon for the satisfaction of Melecia=s civil liability in the murder case.

Ruling of the ou+t

To determine whether the obligation of the wife arising from her criminal liability is chargeable against the properties of themarriage, the %ourt has first to identify the spouses= property relations.

#fren claims that his marriage with Melecia falls under the regime of conjugal partnership of gains, given that they weremarried prior to the enactment of the +amily %ode and that they did not execute any prenuptial agreement.Although theheirs of the deceased victims do not dispute that it was the %ivil %ode, not the +amily %ode, which governed the marriagethey insist that it was the system of absolute community of property that applied to #fren and Melecia. The reasoninggoes(

Admittedly, the spouses were married before the effectivity of the +amily %ode. ut that fact does not prevent theapplication of ANrt. /0, last paragraph, of the +amily %ode because their property regime is precisely governed by the lawon absolute community. This finds support in Art. 1:* of the +amily %ode which states(

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!This code shall have retroactive effect in so far as it does not prejudice or impair vested or acBuired rights in accordancewith the %ivil %ode or other laws.!

@one of the spouses is dead. Therefore, no vested rights have been acBuired by each over the properties of thecommunity. Dence, the liabilities imposed on the accused-spouse may properly be charged against the community asheretofore discussed.

The 9T% applied the same reasoning as above. #fren and Melecia=s property relation was admittedly conjugal under the%ivil %ode but, since the transitory provision of the +amily %ode gave its provisions retroactive effect if no vested oracBuired rights are impaired, that property relation between the couple was changed when the +amily %ode too8 effect in/)). The latter code now prescribes in Article 6: absolute community of property for all marriages unless the partiesentered into a prenuptial agreement. As it happens, #fren and Melecia had no prenuptial agreement. The %A agreed withthis position.

oth the 9T% and the %A are in error on this point. Chile it is true that the personal sta8es of each spouse in theirconjugal assets are inchoate or unclear prior to the liBuidation of the conjugal partnership of gains and, therefore, none ofthem can be said to have acBuired vested rights in specific assets, it is evident that Article 1:* of the +amily %ode doesnot intend to reach bac8 and automatically convert into absolute community of property relation all conjugal partnershipsof gains that existed before /)) excepting only those with prenuptial agreements.

The +amily %ode itself provides in Article 6* that marriage settlements cannot be modified except prior to marriage.

Art. 6*. "n order that any modification in the marriage settlements may be valid, it must be made before the celebration ofthe marriage, subject to the provisions of Articles **, *6, 1), 3: and 3*.

%learly, therefore, the conjugal partnership of gains that governed the marriage between #fren and Melecia who were

married prior to /)) cannot be modified except before the celebration of that marriage.&ost-marriage modification of such settlements can ta8e place only where( 2a5 the absolute community or conjugalpartnership was dissolved and liBuidated upon a decree of legal separation; 2b5 the spouses who were legally separatedreconciled and agreed to revive their former property regime; 2c5 judicial separation of property had been had on theground that a spouse abandons the other without just cause or fails to comply with his obligations to the family; 2d5 therewas judicial separation of property under Article 3:; 2e5 the spouses jointly filed a petition for the voluntary dissolution oftheir absolute community or conjugal partnership of gains. @one of these circumstances exists in the case of #fren andMelecia.

Chat is more, under the conjugal partnership of gains established by Article 01 of the %ivil %ode, the husband and thewife place only the fruits of their separate property and incomes from their wor8 or industry in the common fund. Thus(

Art. 01. y means of the conjugal partnership of gains the husband and wife place in a common fund the fruits of theirseparate property and the income from their wor8 or industry, and divide eBually, 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.%onseBuently, to automatically change the marriage settlements of couples who got married under the %ivil %ode intoabsolute community of property in /)) when the +amily %ode too8 effect would be to impair their acBuired or vestedrights to such separate properties.

The 9T% cannot ta8e advantage of the spouses= loose admission that absolute community of property governed theirproperty relation since the record shows that they had been insistent that their property regime is one of conjugalpartnership of gains. @o evidence of a prenuptial agreement between them has been presented.

Chat is clear is that #fren and Melecia were married when the %ivil %ode was still the operative law on marriages. Thepresumption, absent any evidence to the contrary, is that they were married under the regime of the conjugal partnershipof gains. Article / of the %ivil %ode thus provides(

Art. /. 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. "n the absence of marriage settlements, or when thesame are void, the system of relative community or conjugal partnership of gains as established in this %ode, shall governthe property relations between husband and wife.

'f course, the +amily %ode contains terms governing conjugal partnership of gains that supersede the terms of theconjugal partnership of gains under the %ivil %ode. Article 4: of the +amily %ode states(

!x x x x

The provisions of this %hapter on the %onjugal &artnership of EainsN shall also apply to conjugal partnerships of gainsalready established between spouses before the effectivity of this %ode, without prejudice to vested rights alreadyacBuired in accordance with the %ivil %ode or other laws, as provided in Article 1:*.!

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%onseBuently, the %ourt must refer to the +amily %ode provisions in deciding whether or not the conjugal properties of#fren and Melecia may be held to answer for the civil liabilities imposed on Melecia in the murder case. "ts Article 11provides(

Art. 11. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not becharged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.

@either shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.

Dowever, the payment of personal debts contracted by either spouse before the marriage, that of fines and indemnitiesimposed 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 isbound should have no exclusive property or if it should be insufficient; but at the time of the liBuidation of the partnership,such spouse shall be charged for what has been paid for the purpose above-mentioned.

ince #fren does not dispute the 9T%=s finding that Melecia has no exclusive property of her own, the above applies. Thecivil indemnity that the decision in the murder case imposed on her may be enforced against their conjugal assets afterthe responsibilities enumerated in Article 1 of the +amily %ode have been covered.Those responsibilities are as follows(

Art. 1. The conjugal partnership shall be liable for(

25 The support of the spouse, their common children, and the legitimate children of either spouse; however, thesupport of illegitimate children shall be governed by the provisions of this %ode on upport;

215 All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefitof the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other;

235 <ebts and obligations contracted by either spouse without the consent of the other to the extent that the family

may have benefited;205 All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnershipproperty;

2:5 All taxes and expenses for mere preservation made during the marriage upon the separate property of eitherspouse;

2*5 #xpenses to enable either spouse to commence or complete a professional, vocational, or other activity forself-improvement;

265 Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;

2)5 The value of what is donated or promised by both spouses in favor of their common legitimate children for theexclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement; and

2/5 #xpenses of litigation between the spouses unless the suit is found to be groundless."f the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for theunpaid balance with their separate properties.3wphi

%ontrary to #fren=s contention, Article 1 above allows payment of the criminal indemnities imposed on his wife, Melecia,out of the partnership assets even before these are liBuidated. "ndeed, it states that such indemnities !may be enforcedagainst the partnership assets after the responsibilities enumerated in the preceding article have been covered.!45 N @oprior liBuidation of those assets is reBuired. This is not altogether unfair since Article 11 states that !at the time ofliBuidation of the partnership, such offendingN spouse shall be charged for what has been paid for the purposes above-mentioned.!

WH%R%)OR%, the %ourt A))IR, with ,O#I)IATIO$ the 9esolutions of the %ourt of Appeals in %A-E.9. & 66/)dated anuary 1/, 1440 and May 0, 1440. The 9egional Trial %ourt of urigao %ity, ranch 34, shall first ascertain that,in enforcing the writ of execution on the conjugal properties of spouses #fren and Melecia &ana for the satisfaction of the

indemnities imposed by final judgment on the latter accused in %riminal %ases 0131 and 0133, the responsibilitiesenumerated in Article 1 of the +amily %ode have been covered.

' '9<#9#<.

( Ad9inist+ation' %n2o=9ent' and #is*osition of the on2ugal &+o*e+t=a( Unde+ the iil ode

"A )I$A$% ! A

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3UTI%RR%.' R(' J.:

This is a petition for review see8ing to set aside the decision of the %ourt of Appeals which affirmed the decision of thethen %ourt of +irst "nstance of Manila, dismissing the complaint instituted by the petitioner and ordering it to pay damageson the basis of the private respondentXs counterclaim.

'n uly , /6:, private respondent Augusto ulo secured a loan from the petitioner in the amount of &:/,443.:/ asevidenced by a promissory note he signed in his own behalf and as representative of the A V > "ndustries. 9espondentulo presented an alleged special power of attorney executed by his wife, respondent >ily ulo, who manages A V >"ndustries and under whose name the said business is registered, purportedly authoriIing Augusto ulo to procure theloan and sign the promissory note. About two months prior to the loan, however, Augusto ulo had already left >ily uloand their children and had abandoned their conjugal home. Chen the obligation became due and demandable, Augustoulo failed to pay the same.

'n 'ctober 6, /6:, the petitioner filed its amended complaint against the spouses Augusto and >ily ulo on the basis ofthe promissory note. "t also prayed for the issuance of a writ of attatchment alleging that the said spouses were guilty offraud in contracting the debt upon which the action was brought and that the fraud consisted of the spousesX inducing thepetitioner to enter into a contract with them by executing a <eed of Assignment in favor of the petitioner, assigning all theirrights, titles and interests over a construction contract executed by and between the spouses and A. oriano %orporationon une /, /60 for a consideration of &*:,631.:4 when, in truth, the spouses did not have any intention of remittingthe proceeds of the said construction contract to the petitioner because despite the provisions in the <eed of Assignmentthat the spouses shall, without compensation or costs, collect and receive in trust for the petitioner all payments madeupon the construction contract and shall remit to the petitioner all collections therefrom, the said spouses failed and refuseto remit the collections and instead, misappropriated the proceeds for their own use and benefit, without the 8nowledge or

consent of the petitioner.The trial court issued the writ of attachment prayed for thereby enabling the petitioner to attach the properties of A V >"ndustries. Apparently not contented with the order, the petitioner filed another motion for the examination of attachmentdebtor, alleging that the properties attached by the sheriff were not sufficient to secure the satisfaction of any judgmentthat may be recovered by it in the case. This was li8ewise granted by the court.

&rivate respondent >ily ulo filed her answer with counterclaim, alleging that although Augusta ulo and she are husbandand wife, the former had abandoned her and their children five 2:5 months before the filing of the complaint; that they werealready separated when the promissory note was executed; that her signature in the special power of attorney was forgedbecause she had never authoriIed Augusto ulo in any capacity to transact any business for and in behalf of A V >"ndustries, which is owned by her as a single proprietor, that she never got a single centavo from the proceeds of the loanmentioned in the promissory note; and that as a result of the illegal attachment of her properties, which constituted theassets of the A V > "ndustries, the latter closed its business and was ta8en over by the new owner.

After hearing, the trial court rendered judgment dismissing the petitionerXs complaint against the private respondent >ilyulo and A V > "ndustries and ordering the petitioner to pay the respondent >ily ulo &**4,444.44 as actual damages;&:44,444.44 as unrealiIed profits; &344,444.44 as exemplary damages; &34,444.44 as and for attorneyXs fees; and topay the costs.

The petitioner appealed. The %ourt of Appeals affirmed the trial courtXs decision except for the exemplary damages whichit reduced from &344,444.44 to &:4,444.44 and the attorneyXs fees which were reduced from &34,444.44 to &14,444.44.

"n resolving the Buestion of whether or not the trial court erred in holding that the signature of respondent >ily ulo in thespecial power of attorney was forged, the %ourt of Appeals said(

The crucial issue to be determined is whether or not the signatures of the appellee >ily ulo in #xhibits and - are forged. Atty. %rispin 'rdoQa, the @otary &ublic, admitted in open court that the parties in thesubject documents did not sign their signatures in his presence. The same were already signed by thesupposed parties and their supposed witnesses at the time they were brought to him for ratification. CeBuote from the records the pertinent testimony of Atty. 'rdoQa, thus(

P. This document mar8ed as #xhibit -, when this was presented to you by thatcommon friend, une #nriBueI, it was already typewritten, it was already accomplished,all typewritten.?

A. es, sir.

P And the parties had already affixed their signatures in this document?

A. es, sir.

P. "n this document mar8ed as #xhibit although it appears here that this is anac8nowledgment, you have not stated here that the principal actually ac8nowledged thisdocument to be her voluntary act and deed?

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A This in one of those things that escaped my attention. Actually " have not gone over thesecond page. " believed it was in order " signed it. 2T@ pp. 3-0, Dearing of @ov. 1*,/6*5.

The glaring admission by the @otary &ublic that he failed to state in the ac8nowledgment portion of #xhibi- that the appellee >ily ulo ac8nowledged the said document to be her own voluntary act and deed, isa very strong and commanding circumstance to show that she did not appear personally before the said@otary &ublic and did not sign the document.

Additionally, the @otary &ublic admitted that, while une #nriBueI is admittedly a mutual friend of his andthe defendant Augusta ulo, and who is also an instrumental witness in said #xhibit -., he could notrecogniIe or tell which of the two signatures appearing therein, was the signature of this une #nriBueI.+urthermore, as the issue is one of credibility of a witness, the findings and conclusions of the trial courtbefore whom said witness, Atty. %rispin 'rdoQa, the @otary &ublic before whom the Buestioned documentwas supposedly ratified and ac8nowledged, deserve great respect and are seldom disturbed on appeal byappellate tribunals, since it is in the best and peculiar advantage of determining and observing theconduct, demeanor and deportment of a particular witness while he is testifying in court, an opportunitynot enjoyed by the appellate courts who merely have to rely on the recorded proceedings whichtranspired in the court below, and the records are bare of any circumstance of weight, which the trial courthad overloo8ed and which if duly considered, may radically affect the outcome of the case.

'n the other hand, the appellee >ily ulo, to bac8 up her claim of forgery of her signature in #xhibit -,presented in court a handwriting expert witness in the person of &olice %aptain a8al Eiron of the"ntegrated @ational &olice Training %ommand, and who is also a <ocument #xaminer of the same%ommandXs %rime >aboratory at +ort onifacio, Metro Manila. Dis experience as an examiner ofBuestioned and disputed documents, in our mind, is Buite impressive. To Bualify him as a handwritingexpert, he declared that he underwent extensive and actual studies and examination of disputed orBuestioned document, both at the @ational ureau of "nvestigation Academy and @ational ureau of"nvestigation Puestioned <ocument >aboratory, respectively, from uly /*0, up to his appointment as<ocument #xaminer in une, /6:, and, to further his experience along this line, he attended the 1/6th

Annual %onference of the American ociety of Puestioned <ocurnent #xaminers held at eattle,Cashington, in August /6, as a representative of the &hilippines, and li8ewise conducted anobservation of the present and modern trends of crime laboratories in the Cest %oast, 7..A., in /6;that he li8ewise had conducted actual tests and examination of about 44,444 documents, as reBuestedby the different courts, administrative, and governmental agencies of the Eovernment, substantialportions of which relate to actual court cases.

"n concluding that the signatures of the appellee >ily ulo, in the disputed document in Buestion 2#xh. -5, were all forgeries, and not her genuine signature, the expert witness categorically recited and specifiedin open court what he observed to be about twelve 215 glaring and material significant differences, in hiscomparison of the signatures appearing in the genuine specimen signatures of the said appellee and withthose appearing in the Buestioned document 2#xhibit -5. "ndeed, we have li8ewise seen the supposednotable differences, found in the standard or genuine signatures of the appellee which were lifted andobtained in the official files of the government, such as the ureau of "nternal 9evenue on her income taxreturns, as compared to the pretended signature of the appellee appearing in #xhibits , -. "t is alsonoteworthy to mention that the appellant did not even bother to conduct a cross-examination of thehandwriting expert witness, %apt. Eiron, neither did the appellant present another handwriting expert, atleast to counter-act or balance the appelleeXs handwriting expert.

&rescinding from the foregoing facts, we subscribe fully to the lower courtXs observations that the

signatures of the appellee >ily ulo in the Buestioned document 2#xh. -5 were forged. Dence, we findno factual basis to disagree. 2pp. 1)-34, 9ollo5

As to the petitionerXs contention that even if the signature of >ily ulo was forged or even if the attached properties wereher exclusive property, the same can be made answerable to the obligation because the said properties form part of theconjugal partnership of the spouses ulo, the appellate court held that these contentions are without merit because thereis strong preponderant evidence to show that A V > "ndustries belongs exclusively to respondent >ily ulo, namely( a5 The%ertificate of 9egistration of A V > "ndustries, issued by the ureau of %ommerce, showing that said business is a singleproprietorship, and that the registered owner thereof is only >ily ulo; b5 The MayorXs &ermit issued in favor of A V >"ndustries, by the %aloocan %ity MayorXs 'ffice showing compliance by said single proprietorship company with the %ity'rdinance governing business establishments; and c5 The pecial &ower of Attorney itself, assuming but withoutadmitting its due execution, is tangible proof that Augusto ulo has no interest whatsoever in the A V > "ndustries,

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otherwise, there would have been no necessity for the pecial &ower of Attorney if he is a part owner of said singleproprietorship.

Cith regard to the award of damages, the %ourt of Appeals affirmed the findings of the trial court that there was bad faithon the part of the petitioner as to entitle the private respondent to damages as shown not only by the fact that thepetitioner did not present the <eed of Assignment or the construction agreement or any evidence whatsoever to supportits claim of fraud on the part of the private respondent and to justify the issuance of a preliminary attachment, but also bythe following findings(

%ontinuing and elaborating further on the appellantXs mala fide actuations in securing the writ ofattachment, the lower court stated as follows(

&laintiff not satisfied with the instant case where an order for attachment has alreadybeen issued and enforced, on the strength of the same &romissory @ote 2#xhibit!A!5,utiliIing the <eed of %hattel Mortgage 2#xhibit !0!5, filed a foreclosure proceedings beforethe 'ffice of the heriff of %aloocan 2#xhibit!*!5 foreclosing the remaining propertiesfound inside the premises formerly occupied by the A V > "ndustries. A minuteexamination of #xhibit !0! will show that the contracting parties thereto, as appearing inpar. thereof, are Augusto ulo, doing business under the style of A V > "ndustries2should be A V > Elass "ndustries %orporation5, as mortgagor and A +inance%orporation as mortgagee, thus the enforcement of the %hattel Mortgage against theproperty of A V > "ndustries exclusively owned by >ily T. ulo appears to be without anyfactual or legal basis whatsoever. The chattel mortgage, #xhibit !0! and the &romissory@ote, #xhibit A, are based on one and the same obligation. &laintiff tried to enforce as it

did enforce its claim into two different modes a single obligation. Aware that defendant >ily ulo, filed a Motion to uspend &roceedings by virtue of acomplaint she filed with the %ourt of +irst "nstance of %aloocan, see8ing annulment of the&romissory @ote, the very basis of the plaintiff in filing this complaint, immediately afterthe day it filed a Motion for the "ssuance of an Alias Crit of &reliminary Attachment . ..et, inspite of the 8nowledge and the filing of this Motion to uspend &roceedings, the&laintiff still filed a Motion for the "ssuance of a Crit of Attachment dated +ebruary *,/6* before this court. To add insult to injury, plaintiff even filed a Motion for #xaminationof the Attachment <ebtor, although aware that >ily ulo had already denied participationin the execution of #xhibits !A! and !!. These incidents and actions ta8en by plaintiff, tothe thin8ing of the court, are sufficient to prove and establish the element of bad faith andmalice on the part of plaintiff which may warrant the award of damages in favor of

defendant >ily ulo. 2bid ., pp. 41-435.67re88an9:;w<"ndeed, the existence of evident bad faith on the appellantXs part in proceeding againstthe appellee >ily ulo in the present case, may li8ewise be distressed on the fact that itsofficer Mr. Abraham %o, did not even bother to demand the production of at least theduplicate original of the pecial &ower of Attorney 2#xhibit 5 and merely contendedhimself with a mere xerox copy thereof, neither did he reBuire a more specific authorityfrom the A V > "ndustries to contract the loan in Buestion, since from the very content andrecitals of the disputed document, no authority, express or implied, has been delegated orgranted to August ulo to contract a loan, especially with the appellant. 2pp. 33-30, 9ollo5

%oncerning the actual damages, the appellate court ruled that the petitioner should have presented evidence to disproveor rebut the private respondentXs claim but it remained Buiet and chose not to disturb the testimony and the evidencepresented by the private respondent to prove her claim.

"n this petition for certiorari, the petitioner raises three issues. The first issue deals with the appellate courtXs affirmance ofthe trial courtXs findings that the signature of the private respondent on the pecial &ower of Attorney was forged.

According to the petitioner, the %ourt of Appeals disregarded the direct mandate of ection 13, 9ule 31 of the 9ules of%ourt which states in part that evidence of handwriting by comparison may be made !with writings admitted or treated asgenuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge,! andthat there is no evidence on record which proves or tends to prove the genuineness of the standards used.

There is no merit in this contention.

The records show that the signatures which were used as !standards! for comparison with the alleged signature of theprivate respondent in the pecial &ower of Attorney were those from the latterXs residence certificates in the years /63,/60 and /6:, her income tax returns for the years /63 and /6: and from a document on long bond paper dated May), /66. @ot only were the signatures in the foregoing documents admitted by the private respondent as hers but most of

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the said documents were used by the private respondent in her transactions with the government. As was held in the caseof 'lymouth +aving = oan Assn. >o. 4 v. ?assing 21: @# 0)), 0/05(

Ce believe the true rule deduced from the authorities to be that the genuineness of a !standard! writingmay be established 25 by the admission of the person sought to be charged with the disputed writingmade at or for the purposes of the trial or by his testimony; 215 by witnesses who saw the standardswritten or to whom or in whose hearing the person sought to be charged ac8nowledged the writingthereof; 235 by evidence showing that the reputed writer of the standard has acBuiesced in or recogniIedthe same, or that it has been adopted and acted upon by him his business transactions or otherconcerns....

+urthermore, the judge found such signatures to be sufficient as standards. "n the case of %aylor2@harton ron = +teel *o.

v. arnshaw 2:* @.#. )::, ):*5, it was held(

Chen a writing is offered as a standard of comparison it is for the presiding judge to decide whether it isthe handwriting of the party to be charged. 7nless his finding is founded upon error of law, or uponevidence which is, as matter of law, insufficient to justify the finding, this court will not revise it uponexceptions.! 2%ostelo v. %rowell, 3/ Mass. :)), :/4, 1 @.#. *0); @uQeI v. &erry, 3 Mass, 160, 16*.5

Ce cannot find any error on the part of the trial judge in using the above documents as standards and also in givingcredence to the expert witness presented by the private respondent whose testimony the petitioner failed to rebut andwhose credibility it li8ewise failed to impeach. ut more important is the fact that the unrebutted handwriting expertXstestimony noted twelve 215 glaring and material differences in the alleged signature of the private respondent in thepecial &ower of Attorney as compared with the specimen signatures, something which the appellate court also too8 intoaccount. "n *esar v. +andiganbayan 230 %9A 4:, 315, we ruled(

Mr. Maniwang pointed to other significant divergences and distinctive characteristics between the samplesignatures and the signatures on the Buestioned chec8s in his report which the courtXs &residing ustice8ept mentioning during ManiwangXs testimony.

"n the course of his cross-examination, @" expert Tabayoyong admitted that he saw the differencesbetween the exemplars used and the Buestioned signatures but he dismissed the differences because hedid not consider them fundamental. Ce rule that significant differences are more fundamental than a fewsimilarities. A forger always strives to master some similarities.

The second issue raised by the petitioner is that while it is true that A V > "ndustries is a single proprietorship and theregistered owner thereof is private respondent >ily ulo, the said proprietorship was established during the marriage andits assets were also acBuired during the same. Therefore, it is presumed that this property forms part of the conjugalpartnership of the spouses Augusto and >ily ulo and thus, could be held liable for the obligations contracted by Augustoulo, as administrator of the partnership.

There is no dispute that A V > "ndustries was established during the marriage of Augusta and >ily ulo and therefore thesame is presumed conjugal and the fact that it was registered in the name of only one of the spouses does not destroy itsconjugal nature 2ee MendoIa v. 9eyes, 10 %9A *, *:5. Dowever, for the said property to be held liable, theobligation contracted by the husband must have redounded to the benefit of the conjugal partnership under Article * ofthe %ivil %ode. "n the present case, the obligation which the petitioner is see8ing to enforce against the conjugal propertymanaged by the private respondent >ily ulo was undoubtedly contracted by Augusto ulo for his own benefit because atthe time he incurred the obligation he had already abandoned his family and had left their conjugal home. Corse, hemade it appear that he was duly authoriIed by his wife in behalf of A V > "ndustries, to procure such loan from thepetitioner. %learly, to ma8e A V > "ndustries liable now for the said loan would be unjust and contrary to the expressprovision of the %ivil %ode. As we have ruled in u/on +urety *o., nc. v. -e racia 234 %9A , :-65(

As explained in the decision now under review( !"t is true that the husband is the administrator of theconjugal property pursuant to the provisions of Art. *3 of the new %ivil %ode. Dowever, as suchadministrator the only obligations incurred by the husband that are chargeable against the conjugalproperty are those incurred in the legitimate pursuit of his career, profession or business with the honestbelief that he is doing right for the benefit of the family. This is not true in the case at bar for we believethat the husband in acting as guarantor or surety for another in an indemnity agreement as that involvedin this case did not act for the benefit of the conjugal partnership. uch inference is more emphatic in thiscase, when no proof is presented that Oicente Earcia in acting as surety or guarantor receivedconsideration therefore, which may redound to the benefit of the conjugal partnership.2bid , pp. 0*-065.

xxx xxx xxx

xxx xxx xxx

"n the most categorical language, a conjugal partnership under that provision is liable only for such !debtsand obligations contracted by the husband for the benefit of the conjugal partnership.! There must be the

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reBuisite showing then of some advantage which clearly accrued to the welfare of the spouses. There isnone in this case.

xxx xxx xxx

Moreover, it would negate the plain object of the additional reBuirement in the present %ivil %ode that adebt contracted by the husband to bind a conjugal partnership must redound to its benefit. That is stillanother provision indicative of the solicitude and tender regard that the law manifests for the family as aunit. "ts interest is paramount; its welfare uppermost in the minds of the codifiers and legislators.

Ce, therefore, rule that the petitioner cannot enforce the obligation contracted by Augusto ulo against his conjugal

properties with respondent >ily ulo. Thus, it follows that the writ of attachment cannot issue against the said properties.+inally, the third issue assails the award of actual damages according to the petitioner, both the lower court and theappellate court overloo8ed the fact that the properties referred to are still subject to a levy on attachment. They are,therefore, still under custodia legis and thus, the assailed decision should have included a declaration as to who is entitledto the attached properties and that assuming arguendo that the attachment was erroneous, the lower court should haveordered the sheriff to return to the private respondent the attached properties instead of condemning the petitioner to paythe value thereof by way of actual damages.

"n the case of a/atin v. %waBo 21 %9A )01, )065, we ruled(

xxx xxx xxx

... "t should be observed that ec. 0 of 9ule :/, does not prescribed the remedies available to theattachment defendant in case of a wrongful attachment, but merely provides an action for recovery uponthe bond, based on the underta8ing therein made and not upon the liability arising from a tortuous act, li8e

the malicious suing out of an attachment. 7nder the first, where malice is not essential, the attachmentdefendant, is entitled to recover only the actual damages sustained by him by reason of the attachment.7nder the second, where the attachment is maliciously sued out, the damages recoverable may include acompensation for every injury to his credit, business or feed 2Tyler v. Mahoney, *) @% 136, )0 # 3*1;&ittsburg etc. : Ca8efield, etc., 3: @% 63, 06 # 1305. ...

The Buestion before us, therefore, is whether the attachment of the properties of A V > "ndustries was wrongful so as toentitle the petitioner to actual damages only or whether the said attachment was made in bad faith and with malice towarrant the award of other 8inds of damages. Moreover, if the private respondent is entitled only to actual damages, wasthe court justified in ordering the petitioner to pay for the value of the attached properties instead of ordering the return ofthe said properties to the private respondent ulo ?

oth the trial and appellate courts found that there was bad faith on the part of the petitioner in securing the writ ofattachment. Ce do not thin8 so. !An attachment may be said to be wrongful when, for instance, the plaintiff has no cause

of action, or that there is no true ground therefore, or that the plaintiff has a sufficient security other than the propertyattached, which is tantamout to saying that the plaintiff is not entitled to attachment because the reBuirements of entitlinghim to the writ are wanting. 26 %..., **05! 2p. 0), ection 0, 9ule :6, +rancisco, 9evised 9ules of %ourt5.

Although the petitioner failed to prove the ground relied upon for the issuance of the writ of attachment, this failure cannotbe eBuated with bad faith or malicious intent. The steps which were ta8en by the petitioner to ensure the security of itsclaim were premised, on the firm belief that the properties involved could be made answerable for the unpaid obligationdue it. There is no Buestion that a loan in the amount of &:/,443.:/ was borrowed from the ban8.

Ce, thus, find that the petitioner is liable only for actual damages and not for exemplary damages and attorneyXs fees.9espondent >ily ulo has manifested before this %ourt that she no longer desires the return of the attached propertiessince the said attachment caused her to close down the business. +rom that time she has become a mere employee ofthe new owner of the premises. he has grave doubts as to the running condition of the attached machineries andeBuipments considering that the attachment was effected way bac8 in /6:. he states as a matter of fact that the

petitioner has already caused the sale of the machineries for fear that they might be destroyed due to prolonged litigation.Ce, therefore, deem it just and eBuitable to allow private respondent >ily ulo to recover actual damages based on thevalue of the attached properties as proven in the trial court, in the amount of &**4,444.44. "n turn, if there are anyremaining attached properties, they should be permanently released to herein petitioner.

Ce cannot, however, sustain the award of &:44,444.44 representing unrealiIed profits because this amount was notproved or justified before the trial court. The basis of the alleged unearned profits is too speculative and conjectural toshow actual damages for a future period. The private respondent failed to present reports on the average actual profitsearned by her business and other evidence of profitability which are necessary to prove her claim for the said amount2ee E. A. Machineries, "nc. v. aptinchay, 1* %9A 6), ))5.

The judgment is therefore set aside insofar as it holds the petitioner liable for &:44,444.44 actual damages representingunrealiIed profits, &:4,444.44 for exemplary damages and &14,444.44 for attorneyXs fees. As stated earlier, the attachedproperties, should be released in favor of the petitioner.

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CD#9#+'9#, the decision of the %ourt of Appeals is hereby #T A"<# and the petitioner is ordered to pay the privaterespondent >ily ulo the amount of " D7@<9#< "T TD'7A@< &#' 2&**4,444.445 as actual damages. Theremaining properties subject of the attachment are ordered released in favor of the petitioner.

' '9<#9#<.

H%IR O) A?UT% ! A

3O$.A3A-R%?%' J.:

efore us is a petition for certiorari under 9ule 0:, as8ing this %ourt to review the decision of the %ourt of Appealsdated anuary 13, //: in %A-E.9. %O @o. 3)131, which overturned the decision of the 9egional Trial %ourt of >ucena%ity in %ivil %ase @o. /4-33.

At the outset, we note that %hristina Ayuste, the plaintiff in the lower court and the original petitioner herein, died on@ovember 1, //:. "n his %omment dated anuary 0, //) to private respondent=s Manifestation informing the %ourt of%hristina Ayuste=s death, petitioner=s counsel re-affirmed such fact of death and informed the %ourt of the names of%hristina Ayuste=s legal representatives. The claim not having been extinguished by the death of %hristina Ayuste, weordered the substitution of her heirs Marlon Ayuste and Arlaine Ayuste-u for %hristina Ayuste in our 9esolution dated

August , ///.%hristina Ayuste married 9afael Ayuste on eptember 10, /*. Although the couple resided in Manila, they

operated a machine shop in arangay "yam, >ucena %ity, which was managed by 9afael Ayuste. "n order to serve as atemporary residence for 9afael Ayuste while in >ucena, the couple purchased on August 1*, /)1 a parcel of land with anarea of )4 sBuare meters on which a residential house was built situated at ale treet, 7niversity Oillage, arrio"babang <upay, >ucena %ity from spouses &edro and Aida <avid. A deed of sale was executed and signed by the partiesand filed with the 9egister of <eeds of >ucena %ity. 'n 'ctober 13, /)3, the 9egister of <eeds of >ucena %ity issuedTransfer %ertificate of Title @o. T-01/61 in the name of K9A+A#> T. A7T#, married to %hristina Ayuste.L

'n +ebruary 16, /)6, a deed of absolute sale was executed by 9afael Ayuste in favor of private respondenwhereby the former sold the abovementioned parcel of land to the latter for &04,444, which amount 9afael Ayusteac8nowledge having received in the deed. 'n page 1 of this deed appears the signature of %hristina Ayuste below thephrase KCith my conformity.L The deed of sale was registered with the 9egister of deeds of >ucena %ity on March :, /)6

and Transfer %ertificate of Title @o. T-:440* was issued in the name of private respondent. After 9afael Ayuste=s death on 'ctober 3, /)/, %hristina Ayuste discovered, in the course of an inventory of their

properties, that the title to the land in >ucena was missing. he searched for it in the office of her husband in >ucena %ityand it was then that she learned from her employees about the sale of the house and lot by her husband to privaterespondent.

'n March 1, //4, %hristina Ayuste filed a complaint with the 9egional Trial %ourt of >ucena %ity for the annulmenof the sale, cancellation of the title issued in the name of private respondent and for the payment of moral, exemplary andactual damages. "n her complaint %hristina Ayuste alleges that her signature on the deed of sale was forged and that hehusband 9afael Ayuste sold the property without her 8nowledge and consent.

The 9egional Trial %ourt rendered its <ecision on une 14, //, the dispositive portion of which provides as follows-

CD#9#+'9#, judgment is hereby rendered as follows(

25 <eclaring null and void the <eed of Absolute ale of Douse and >ot 2#xhibit K%X5 executed by defendant andplaintiff=s husband, the deceased 9afael Ayuste, on +ebruary 16, /)6;

215 'rdering defendant Oiena Malabonga to return to plaintiff %hristina Ayuste the possession of the house and lotcovered by Transfer %ertificate of Title @o. T-:440:, now in the name of defendant Oiena Malabonga, together with the improvements thereon;

235 <irecting the 9egister of <eeds of >ucena %ity to cancel Transfer %ertificate of Title @o. T-:440* and to issue inthe name of plaintiff and her children by the late 9afael Ayuste new Transfer %ertificate of Title in lieu thereof,subject to allJany liens and encumbrances annotated on the memorandum of the title to be cancelled;

205 'rdering plaintiff %hristina Ayuste to pay the defendant Oienna Malabonga the sum of &1:),144.44 for theimprovements introduced on the lot and house as well as for maintenance of the premises; and

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2:5 'rdering defendant to pay plaintiff the amount of rents received from the premises starting March, //4 untilsuch time that she finally turns-over 2sic5 the possession of the house and lot to plaintiff, at the rate of &1,644.44per month.

Cith costs against defendant.

oth parties appealed the trial court=s decision. 'n anuary 13, //:, the %ourt of Appeals reversed the trial court=sruling by holding that %hristina Ayuste=s right to bring an action for the annulment of the sale is barred by laches becauseof her failure to file it during the existence of the marriage in accordance with article 63 of the %ivil %ode. Also, it foundprivate respondent to be entitled to the protection of a buyer in good faith and for value. The pertinent portion of the publicrespondent=s decision provides-

9ecord shows that plaintiff-appellant wife 2sic5 instituted on March 1, //4 her action for annulment of the sale executedby her husband on +ebruary 16, /)6 R long after said vendor-husband died in /)/. "t is thus clear that the action forannulment of the sale was not instituted Kduring the marriageL as reBuired by Article 63, the very provision of law whichgrants the wife the privilegeJright to have the sale executed by her husband annulled, in derogation of the suppose 2sic5vested right of the buyer. The two periods provided for in said Article 63 R Kduring the marriageL and Kwithin 4 yearsLshould concur.

Ce find no merit in plaintiff-appellant=s claim that she discovered the sale, only after her husband=s death, when she madean inventory and found out that the pertinent titles to the land subject of the sale were missing. "t is settled in this

jurisdiction that registration with the 9egister of <eeds is notice to the whole world. The Buestioned deed of sale has longbeen registered with the 9egister of <eeds of >ucena %ity R on March :, /)6- and in fact the said property wasregistered in the name of defendant-appellant under Transfer %ertificate of Title @o. T-:440*. aid T%T in the name ofdefendant-appellant is now indefeasible.

The peculiar circumstances that militates in favor of defendant-appellant buyer are as follows( The Buestioned deed ofsale was not actually without the wife=s signature signifying marital consent, so to spea8. #vidently, defendant-appellantwas led to believe by the husband-vendor that plaintiff-appellant gave her marital consent to the sale, as said husbandpresented a deed of sale supposedly pre-signed by his wife, plaintiff-appellant. <efendant-appellant is thereforeundoubtedly a buyer in good faith and for value, with vested rights eBually entitled to the protection of the law. TheBuestioned deed of sale was duly registered "n the name of defendant-appellant who was issued a Transfer %ertificate ofTitle.

xxx xxx xxx

7nli8e the statute of limitations, laches is not a mere Buestion of time but is principally a Buestion of the ineBuity onunfairness of permitting a stale right to be enforced or asserted. 2Marcelino vs. %A, 14 %9A 0005. +or failure of theplaintiff-appellant wife to institute her action for annulment of sale, while her husband-vendor was still alive as reBuired by

Article 63 of the @ew %ivil %ode, plaintiff-appellant wife=s right under Article ** of the same %ode has become stale andis now barred by laches.

"n view of the foregoing findings, Ce rule that the trial court erred in giving due course to the action for annulment ofsale. Cith the foregoing findings and resolution the other issues raised in this appeal are now moot and academic.

CD#9#+'9#, in view of all the foregoing, judgment is hereby rendered giving due course to the appeal of defendant-appellant, -anddismissing the appeal of plaintiff-appellant.

The decision dated une 14, // rendered by the 9egional Trial %ourt is 9#O#9#< and #T A"<#.

The <eed of Absolute ale executed on +ebruary 16, /)6 by and between defendant-appellant and plaintiff-appellant=shusband is declared OA>"< and "@<"@E upon the plaintiff-appellant.

oth the trial and the appellate court decisions have established that 9afael Ayuste sold conjugal property without theconsent of %hristina Ayuste, his wife. This factual finding shall not be disturbed because only Buestions of law arereviewed in an appeal under 9ule 0: of the 9ules of %ourt subject to certain well-defined exceptions none of which are

present in the instant case. The only issue which remains to be resolved is whether petitioners are entitled to theannulment of the contract of sale entered into by 9afael Ayuste without the consent of %hristina Ayuste.

&etitioners claim that since the law expressly prohibits the husband from alienating real property belonging to theconjugal partnership without his wife=s consent, the contract of sale in Buestion is a nullity pursuant to article 04/ of the%ivil %ode which provides that contracts expressly prohibited by law are inexistent and void from the beginning. "t isfurther averred by petitioners that the present action is not barred because the action to declare the nullity of a contractdoes not prescribe. +uthermore, %hristina Ayuste cannot be faulted for having brought the action only after the death ofher husband, despite the periods stated in article 63 of the %ivil %ode, since she had no 8nowledge of the sale during hislifetime as he concealed the same from her. +inally, it is contended that article ** is the relevant provision, not article63.

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7nder the %ivil %ode, although the husband is the administrator of the conjugal partnership, he cannot alienate oencumber any real property of the conjugal partnership without his wife=s consent, subject only to certain exceptionsspecified in the law. The remedy available to the wife in case her husband should dispose of their conjugal propertywithout her consent is laid down in Article 63 of the %ivil %ode which states that-

The wife may, during the marriage, and within ten years from the transaction Buestioned, as8 the courts for the annulmentof any contract of the husband entered into without her consent, when such consent is reBuired, or any act or contract ofthe husband which tends to defraud her or impair her interest in the conjugal partnership property. hould the wife fail toexercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulentlyalienated by the husband. 2emphasis supplied5

There is no ambiguity in the wording of the law. A sale of real property of the conjugal partnership made by thehusband without the consent of his wife is voidable The action for annulment must be brought during the marriage andwithin ten years from the Buestioned transaction by the wife. Chere the law spea8s in clear and categorical languangethere is no room for interpretation R there is room only for application.

"n the present case, the deed of sale was executed on +ebruary 16, /)6. 9afael Ayuste died on 'ctober 3/)/. Dowever, it was only on March 1, //4 that %hristina Ayuste filed her complaint with the lower court as8ing for theannulment of the sale. Although the action was filed within ten years from the Buestioned transaction, it was not broughduring the existence of the marriage which was dissolved upon the death of 9afael Ayuste in /)/. %learly, the action foannulment filed by %hristina Ayuste was barred for having been filed out of time.

The fact that %hristina Ayuste only learned of the sale after the death of her husband is not material. Ce affirm publicrespondent=s ruling that registration of the sale with the 9egister of <eeds constitutes a notice to the wholeworld. &recisely, the purpose of the legislature in providing a system of registration is to afford a means of publicity so thatpersons dealing with real property may search the records and thereby acBuire security against instruments the executionof which have not been revealed to them. ince the deed of sale was registered on March :, /)6, %hristina Ayuste ispresumed to have constructive notice of the sale from such date.

WH%R%)OR%, the decision of the %ourt of Appeals is A++"9M#<. @o pronouncement as to costs.

O OR#%R%#(

H%IR O) R%?% ! ,IAR%

?$AR%-A$TIA3O' J (:

7nder the regime of the %ivil %ode, the alienation or encumbrance of a conjugal real property reBuires the consent ofthe wife. The absence of such consent renders the entire transaction merely voidable and not void. The wife may, duringthe marriage and within ten years from the transaction Buestioned, bring an action for the annulment of the contractentered into by her husband without her consent.

Assailed in this petition for review on certiorari are the anuary 1*, 1444 <ecision and une /, 1444, 9esolution ofthe %ourt of Appeals in %A-E.9. @o. 1)0*0 which declared respondents as purchasers in good faith and set aside theMay 3, //4 and une 1/, //4 'rders of the 9egional Trial %ourt of PueIon %ity, ranch 4, in %ivil %ase @o. P-0)4).

The controversy stemmed from a dispute over >ot @o. 030/--1, approximately 3/* sBuare meters, previouslycovered by Transfer %ertificate of Title 2T%T5 @o. 14:00:, located in alintawa8, PueIon %ity and registered in the nameof pouses Oicente 9eyes and "gnacia Aguilar-9eyes. aid lot and the apartments built thereon were part of the spousesconjugal properties having been purchased using conjugal funds from their garments business.

Oicente and "gnacia were married in /*4, but had been separated de facto since /60. ometime in /)0, "gnacialearned that on March , /)3, Oicente sold >ot @o. 030/--1 to respondent spouses %ipriano and +lorentina Mijares for&04,444.44. As a conseBuence thereof, T%T @o. 14:00: was cancelled and T%T @o. 34*4)6 was issued on April //)3 in the name of respondent spouses. he li8ewise found out that Oicente filed a petition for administration andappointment of guardian with the Metropolitan Trial %ourt of PueIon %ity, ranch ". Oicente misrepresented therein thahis wife, "gnacia, died on March 11, /)1, and that he and their : minor children were her only heirs. 'n eptember 1//)3, the court appointed Oicente as the guardian of their minor children. ubseBuently, in its 'rder dated 'ctober 0/)3, the court authoriIed Oicente to sell the estate of "gnacia.

'n August /, /)0, "gnacia, through her counsel, sent a letter to respondent spouses demanding the return of her Yshare in the lot. +ailing to settle the matter amicably, "gnacia filed on une 0, //* a complaint for annulment of saleagainst respondent spouses. The complaint was thereafter amended to include Oicente 9eyes as one of the defendants.

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"n their answer, respondent spouses claimed that they are purchasers in good faith and that the sale was validbecause it was duly approved by the court. Oicente 9eyes, on the other hand, contended that what he sold to the spouseswas only his share in >ot @o. 030/--1, excluding the share of his wife, and that he never represented that the latter wasalready dead. De li8ewise testified that respondent spouses, through the counsel they provided him, too8 advantage of hisilliteracy by filing a petition for the issuance of letters of administration and appointment of guardian without his8nowledge.

'n +ebruary :, //4, the court a quo rendered a decision declaring the sale of >ot @o. 030/--1 void with respectto the share of "gnacia. "t held that the purchase price of the lot was &4,444.44 and ordered Oicente to return Y thereofor &::,444.44 to respondent spouses. The dispositive portion of the said decision, reads-

CD#9#+'9#, premises above considered, judgment is hereby rendered declaring the subject <eed of Absolute ale,dated March ,N /)3 signed by and between defendants Oicente 9eyes and defendant %ipriano Mijares @7>> A@<O'"< C"TD 9#&#%T T' '@#-DA>+ 2J15 '+ TD# A"< &9'&#9T;

The 9egister of <eeds of PueIon %ity is hereby ordered to cancel T%T @o. 34*4)3 2sic5 in the names of defendantspouses %ipriano Mijares and +lorentina Mijares and to issue a new T%T in the name of the plaintiff "gnacia Aguilar-9eyesas owner in fee simple of one-half 2J15 of said property and the other half in the names of defendant spouses %iprianoMijares and +lorentinaN Mijares, upon payment of the reBuired fees therefore;

aid defendant spouses Mijares are also ordered to allow plaintiff the use and exercise of rights, as well as obligations,pertinent to her one-half 2J15 ownership of the subject property;

<efendant Oicente 9eyes is hereby ordered to reimburse &::,444.44 with legal rate of interest from the execution of thesubject <eed of Absolute ale on March , /)3, to the defendant spouses %ipriano Mijares and +lorentina Mijares which

corresponds to the one-half 2J15 of the actual purchase price by the said Mijares but is annulled in this decision 2sic5;<efendant Oicente 9eyes is hereby further ordered to pay plaintiff the amount of &:4,444.44 by way of moral andexemplary damages, plus costs of this suit.

' '9<#9#<.

"gnacia filed a motion for modification of the decision praying that the sale be declared void in its entirety and that therespondents be ordered to reimburse to her the rentals they collected on the apartments built on >ot @o. 030/--1computed from March , /)3.

'n May 3, //4, the trial court modified its decision by declaring the sale void in its entirety and ordering Oicente9eyes to reimburse respondent spouses the purchase price of &4,444, thus R

CD#9#+'9#, premises considered, judgment is hereby rendered declaring the subject <eed of Absolute ale, datedMarch , /)3 signed by and between defendants Oicente 9eyes and defendant %ipriano Mijares as null and void abinitio, in view of the absence of the wife=s conformity to said transaction.

%onseBuent thereto, the 9egister of <eeds for PueIon %ity is hereby ordered to cancel T%T @o. 34*4)3 2sic5 in the nameof %ipriano Mijares and +lorentinaN Mijares and issue a new T%T in the name of the plaintiff and defendant "gnacia

Aguilar-9eyes and Oicente 9eyes as owners in fee simple, upon payment of reBuired fees therefore.

<efendant Oicente 9eyes is hereby ordered to pay the amount of one hundred ten thousand pesos 2&4,444.445 withlegal rate of interest at 1S per annum from the execution of the subject <eed of Absolute ale on March , /)3.

+urther, defendant Oicente 9eyes is ordered to pay the amount of &:4,444.44 by way of moral and exemplary damages,plus costs of this suit.

' '9<#9#<.

'n motion of "gnacia, the court issued an 'rder dated une 1/, //4 amending the dispositive portion of the May 3,//4 decision by correcting the Transfer %ertificate of Title of >ot @o. 030/--1, in the name of %ipriano Mijares and+lorentina Mijares, from T%T @o. 34*4)3 to T%T @o. 34*4)6; and directing the 9egister of <eeds of PueIon %ity to issue

a new title in the name of "gnacia Aguilar-9eyes and Oicente 9eyes. The 'rder li8ewise specified that Oicente 9eyesshould pay "gnacia Aguilar-9eyes the amount of &:4,444.44 as moral and exemplary damages.

oth "gnacia Aguilar-9eyes and respondent spouses appealed the decision to the %ourt of Appeals. &ending theappeal, "gnacia died and she was substituted by her compulsory heirs.

&etitioners contended that they are entitled to reimbursement of the rentals collected on the apartment built on >ot@o. 030/--1, while respondent spouses claimed that they are buyers in good faith. 'n anuary 1*, 1444, the %ourt o

Appeals reversed and set aside the decision of the trial court. "t ruled that notwithstanding the absence of "gnacia=sconsent to the sale, the same must be held valid in favor of respondents because they were innocent purchasers forvalue. The decretal potion of the appellate court=s decision states R

CD#9#+'9#, premises considered, the <ecision appealed from and the 'rders dated May 3, //4 and une 1/, //4,are #T A"<# and in lieu thereof a new one is rendered R

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. <eclaring the <eed of Absolute ale dated March , /)3 executed by Oicente 9eyes in favor of spouses %iprianoand +lorentinaN Mijares valid and lawful;

1. 'rdering Oicente 9eyes to pay spouses Mijares the amount of &34,444.44 as attorney=s fees and legal expenses;and

3. 'rdering Oicente 9eyes to pay spouses Mijares &:4,444.44 as moral damages.

@o pronouncement as to costs.

' '9<#9#<.

7ndaunted by the denial of their motion for reconsideration, petitioners filed the instant petition contending that the

assailed sale of >ot @o. 03/1--1 should be annulled because respondent spouses were not purchasers in good faith.The issues for resolution are as follows( 25 Chat is the status of the sale of >ot @o. 030/--1 to respondent

spouses? 215 Assuming that the sale is annullable, should it be annulled in its entirety or only with respect to the share of"gnacia? 235 Are respondent spouses purchasers in good faith?

Articles ** and 63 of the %ivil %ode, the governing laws at the time the assailed sale was contracted, provide(

Art.**. 7nless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or isconfined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership withoutthe wife=s consent. "f she refuses unreasonably to give her consent, the court may compel her to grant the sameW

Art. 63. The wife may, during the marriage and within ten years from the transaction Buestioned, as8 the courts for theannulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act orcontract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould thewife fail to exercise this right, she or her heirs after the dissolution of the marriage, may demand the value of propertyfraudulently alienated by the husband.

&ursuant to the foregoing provisions, the husband could not alienate or encumber any conjugal real property withoutthe consent, express or implied, of the wife otherwise, the contract is voidable. "ndeed, in several cases the %ourt hadruled that such alienation or encumbrance by the husband is void. The better view, however, is to consider thetransaction as merely voidable and not void. This is consistent with Article 63 of the %ivil %ode pursuant to which the wifecould, during the marriage and within 4 years from the Buestioned transaction, see8 its annulment.

"n the case of Heirs of *hristina Ayuste v. *ourt of Appeals, it was categorically held that R

There is no ambiguity in the wording of the law. A sale of real property of the conjugal partnership made by the husbandwithout the consent of his wife is voidable. The action for annulment must be brought during the marriage and within tenyears from the Buestioned transaction by the wife. Chere the law spea8s in clear and categorical language, there is noroom for interpretation Z there is room only for application.

>i8ewise, in +pouses uiang v. *ourt of Appeals, the %ourt Buoted with approval the ruling of the trial court thatunder the %ivil %ode, the encumbrance or alienation of a conjugal real property by the husband absent the wife=s consent,is voidable and not void. Thus R

W7nder Article ** of the %ivil %ode, the husband cannot generally alienate or encumber any real property of theconjugal partnership without the wife=s consent. The alienation or encumbrance if so made however is not null and void. "is merely voidable. The offended wife may bring an action to annul the said alienation or encumbrance. Thus, theprovision of Article 63 of the %ivil %ode of the &hilippines, to wit(

Art. 63. The wife may, during the marriage and within ten years from the transaction Buestioned, as8 the courts for theannulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act orcontract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould thewife fail to exercise this right, she or her heirs after the dissolution of the marriage, may demand the value of propertyfraudulently alienated by the husband.

This particular provision giving the wife ten 245 years x x x during theN marriage to annul the alienation or encumbrancewas not carried over to the +amily %ode. "t is thus clear that any alienation or encumbrance made after August 3, /))when the +amily %ode too8 effect by the husband of the conjugal partnership property without the consent of the wife isnull and voidW

"n the case at bar, there is no dispute that >ot @o. 030/--1, is a conjugal property having been purchased using theconjugal funds of the spouses during the subsistence of their marriage. "t is beyond cavil therefore that the sale of said loto respondent spouses without the 8nowledge and consent of "gnacia is voidable. Der action to annul the March , /)3sale which was filed on une 0, /)*, before her demise is perfectly within the 4 year prescriptive period under Article63 of the %ivil %ode. #ven if we rec8on the period from @ovember 1:, /6) which was the date when Oicente and therespondent spouses entered into a contract concerning >ot @o. 030/--1, "gnacia=s action would still be within theprescribed period.

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Anent the second issue, the trial court correctly annulled the voidable sale of >ot @o. 030/--1 in itsentirety. "n &ucoy v. 'aulino, a case involving the annulment of sale with assumption of mortgages executed by thehusband without the consent of the wife, it was held that the alienation or encumbrance must be annulled in its entiretyand not only insofar as the share of the wife in the conjugal property is concerned. Although the transaction in the saidcase was declared void and not merely voidable, the rationale for the annulment of the whole transaction is the same thus

R

The plain meaning attached to the plain language of the law is that the contract, in its entirety, executed by the husbandwithout the wifeXs consent, may be annulled by the wife. Dad %ongress intended to limit such annulment in so far as thecontract shall KprejudiceL the wife, such limitation should have been spelled out in the statute. "t is not the legitimate

concern of this %ourt to recast the law. As Mr. ustice ose . >. 9eyes of this %ourt and udge 9icardo %. &uno of the%ourt of +irst "nstance correctly stated, KtNhe rule 2in the first sentence of Article 635 revo8es aello vs. Oillanueva, :0&hil. 13 and %oBue vs. @avas ioca, 0: &hil. 034,L in which cases annulment was held to refer only to the extent of theone-half interest of the wifeW

The necessity to stri8e down the contract of uly :, /*3 as a whole, not merely as to the share of the wife, is not withoutits basis in the common-sense rule. To be underscored here is that upon the provisions of Articles *, *1 and *3 of the%ivil %ode, the conjugal partnership is liable for many obligations while the conjugal partnership exists. @ot only that. Theconjugal property is even subject to the payment of debts contracted by either spouse before the marriage, as those forthe payment of fines and indemnities imposed upon them after the responsibilities in Article * have been covered2Article *3, par. 35, if it turns out that the spouse who is bound thereby, Kshould have no exclusive property or if it shouldbe insufficient.L These are considerations that go beyond the mere eBuitable share of the wife in the property. These arereasons enough for the husband to be stopped from disposing of the conjugal property without the consent of the wife.

#ven more fundamental is the fact that the nullity is decreed by the %ode not on the basis of prejudice but lac8 of consentof an indispensable party to the contract under Article **.

Cith respect to the third issue, the %ourt finds that respondent spouses are not purchasers in good faith. Apurchaser in good faith is one who buys property of another, without notice that some other person has a right to, orinterest in, such property and pays full and fair price for the same, at the time of such purchase, or before he has notice ofthe claim or interest of some other persons in the property. De buys the property with the belief that the person fromwhom he receives the thing was the owner and could convey title to the property. A purchaser cannot close his eyes tofacts which should put a reasonable man on his guard and still claim he acted in good faith.

"n the instant case, there existed circumstances that should have placed respondent spouses on guard. The deathcertificate of "gnacia, shows that she died on ,a+4h 55' 1B85. The same death certificate, however, reveals that R 25 iwas issued by the 'ffice of the %ivil 9egistrar of >ubao &ampanga on ,a+4h 1/' 1B85; 215 the alleged death of "gnaciawas reported to the 'ffice of the %ivil 9egistrar on ,a+4h D' 1B85; and 235 her burial or cremation would be on ,a+4h 8

1B85. These obvious flaws in the death certificate should have prompted respondents to investigate further, especially sothat respondent +lorentina Mijares admitted on cross examination that she as8ed for the death certificate of "gnaciabecause she was suspicious that "gnacia was still alive. Moreover, respondent spouses had all the opportunity to verifythe claim of Oicente that he is a widower because it was their lawyer, Atty. 9odriguito . aet, who represented Oicente inthe special proceedings before the Metropolitan Trial %ourt.

@either can respondent spouses rely on the alleged court approval of the sale. @ote that the 'rder issued by theMetropolitan Trial %ourt of PueIon %ity, ranch ", appointing Oicente as guardian of his : minor children, as well asthe 'rder authoriIing him to sell the estate of "gnacia were issued only on eptember 1/, /)3 and 'ctober 0, /)3,respectively. 'n the other hand, the sale of the entire >ot @o. 030/--1 to respondent spouses appears to have beenmade not on March , /)3, but even as early as @ovember 1:, /6). "n the KAgreementL dated @ovember 1:, /6)Oicente in consideration of the amount of &4,444.44, sold to %ipriano Mijares >ot @o. 030/--1 on installment basis,with the first installment due on or before uly 3, /6/. This was followed by a KMemorandum of 7nderstandingL

executed on uly 34, /6/, by Oicente and %ipriano R 25 ac8nowledging %ipriano=s receipt of Oicente=s down payment inthe amount of &:4,444.44; and 215 authoriIing +lorentina Mijares to collect rentals. 'n uly 0, /), Oicente and%ipriano executed another KMemorandum of Agreement,L stating, among other, that out of the purchase price of&4,444.44 Oicente had remaining balance of &/,444.44. %learly therefore, the special proceedings before theMetropolitan Trial %ourt of PueIon %ity, ranch ", could not have been the basis of respondent spouses= claim ofgood faith because the sale of >ot @o. 030/--1 occurred prior thereto.

9espondent spouses cannot deny 8nowledge that at the time of the sale in /6), Oicente was married to "gnacia andthat the latter did not give her conformity to the sale. This is so because the /6) KAgreementL described Oicente asKmarriedL but the conformity of his wife to the sale did not appear in the deed. 'bviously, the execution of another deed osale in /)3 over the same >ot @o. 030/--1, after the alleged death of "gnacia on March 11, /)1, as well as theinstitution of the special proceedings were, intended to correct the absence of "gnacia=s consent to the sale. #venassuming that respondent spouses believed in good faith that "gnacia really died on March 11, /)1, after they purchased

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the lot, the fact remains that the sale of >ot @o. 030/--1 prior to "gnacia=s alleged demise was without her consent andtherefore subject to annulment. The 'ctober 0, /)3 order authoriIing the sale of the estate of "gnacia, could not havevalidated the sale of >ot @o. 030/--1 because said order was issued on the assumption that "gnacia was already deadand that the sale dated March , /)3 was never categorically approved in the said order.

The fact that the : minor children of Oicente represented by the latter, signed the March , /)3 deed of sale of >ot@o. 030/--1 will not estop them from assailing the validity thereof. @ot only were they too young at that time tounderstand the repercussions of the sale, they li8ewise had no right to sell the property of their mother who, when theysigned the deed, was very much alive.

"f a voidable contract is annulled, the restoration of what has been given is proper. The relationship between partiesin any contract even if subseBuently annulled must always be characteriIed and punctuated by good faith and fairdealing. Dence, for the sa8e of justice and eBuity, and in consonance with the salutary principle of non-enrichment atanother=s expense, the %ourt sustains the trial court=s order directing Oicente to refund to respondent spouses the amountof &4,444.44 which they have paid as purchase price of >ot @o. 030/--1. The court a quocorrectly found that thesubject of the sale was the entire >ot @o. 030/--1 and that the consideration thereof is not &04,444.44 as stated in theMarch , /)3 deed of sale, but &4,444.44 as evidenced by the R 25 KAgreementL dated @ovember 1:, /6) as well asthe uly 34, /6/ KMemorandum of 7nderstandingL and the uly 0, /) KMemorandum of AgreementL which served asreceipts of the installment payments made by respondent %ipriano Mijares; and 215 the receipt duly signed by Oicente9eyes ac8nowledging receipt of the amount of &4,444.44 from respondent spouses as payment of the sale of thecontroverted lot.

The trial court, however, erred in imposing 1S interest per annum on the amount due the respondents. "n astern

+hipping ines, nc. v. *ourt of Appeals , it was held that interest on obligations not constituting a loan or forbearance of

money is six percent 2*S5 annually. "f the purchase price could be established with certainty at the time of the filing of thecomplaint, the six percent 2*S5 interest should be computed from the date the complaint was filed until finality of thedecision. "n ui v. oy , involving a suit for reconveyance and annulment of title filed by the first buyer against the sellerand the second buyer, the %ourt, ruling in favor of the first buyer and annulling the second sale, ordered the seller torefund to the second buyer 2who was not a purchaser in good faith5 the purchase price of the lots. "t was held therein thathe *S interest should be computed from the date of the filing of the complaint by the first buyer. After the judgmenbecomes final and executory until the obligation is satisfied, the amount due shall earn interest at 1S per year, theinterim period being deemed eBuivalent to a forbearance of credit.

Accordingly, the amount of &4,444.44 due the respondent spouses which could be determined with certainty at thetime of the filing of the complaint shall earn *S interest per annum from une 0, /)* until the finality of this decision. "the adjudged principal and the interest 2or any part thereof5 remain unpaid thereafter, the interest rate shall be twelvepercent 21S5 per annum computed from the time the judgment becomes final and executory until it is fully satisfied.

&etitioner=s prayer for payment of rentals should be denied. 'ther than the allegation of "gnacia in her inumpaangalaysay that the apartments could be rented at &,444.44 a month, no other evidence was presented to substantiate herclaim. "n awarding rentals which are in the nature of actual damages, the %ourt cannot rely on mere assertions,speculations, conjectures or guesswor8 but must depend on competent proof and on the best evidence obtainableregarding the actual amount of loss. @one, having been presented in the case at bar, petitioner=s claim for rentals must bedenied.

Chile as a general rule, a party who has not appealed is not entitled to affirmative relief other than the ones grantedin the decision of the court below, law and jurisprudence authoriIe a tribunal to consider errors, although unassigned, ifthey involve 25 errors affecting the lower court=s jurisdiction over the subject matter, 215 plain errors not specified, and 235clerical errors. "n this case, though defendant Oicente 9eyes did not appeal, the Kplain errorL committed by the court aquo as to the award of moral and exemplary damages must be corrected. These awards cannot be lumped together aswas done by the trial court. Moral and exemplary damages are different in nature, and reBuire separate

determination. Moral damages are awarded where the claimant experienced physical suffering, mental anguish, frightserious anxiety, besmirched reputation, wounded feelings, moral shoc8, social humiliation, and similar injury as a result ofthe act complained of. The award of exemplary damages, on the other hand, is warranted when moral, temperate,liBuidated, or compensatory damages were li8ewise awarded by the court.

Dence, the trial court=s award of K&:4,444.44 by way of moral and exemplary damagesL should be modified. Oicente9eyes should be ordered to pay the amounts of &1:,444.44 as moral damages and &1:,444.44 as exemplarydamages. ince Oicente 9eyes was among the heirs substituted to the late "gnacia Aguilar-9eyes, payment of moral andexemplary damages must be made by Oicente to his children, petitioners in this case.

WH%R%)OR%, in view of all the foregoing, the petition is &A9T"A>> E9A@T#<. The anuary 1*, 1444 <ecisionand une /, 1441, 9esolution of the %ourt of Appeals in %A-E.9. @o. 1)0*0 are 9#O#9#< and #T A"<#. The May3, //4 'rder of the 9egional Trial %ourt of PueIon %ity, ranch 4, in %ivil %ase @o. P-0)4), which annulled theMarch , /)3 <eed of Absolute ale over >ot @o. 030/--1, and ordered the 9egister of <eeds of PueIon %ity to cance

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T%T @o. 34*4)6 in the name of respondent spouses %ipriano Mijares and +lorentina Mijares covering the same propertyas well as the une 1/, //4 'rder correcting the typographical errors in the order dated March , /)3, are9#"@TAT#<, with the following M'<"+"%AT"'@ R

25 The 9egister of <eeds of PueIon %ity is ordered to issue a new certificate of title over >ot @o. 030/--1, inthe name of petitioners as co-owners thereof;

215 Oicente 9eyes is ordered to reimburse the respondent spouses the amount of &4,444.44 as purchaseprice of >ot @o. 030/--1, with interest at *S per annum from une 0, /)*, until finality of this decision. After thisdecision becomes final, interest at the rate of 1S per annum on the principal and interest 2or any part thereof5 shall beimposed until full payment.

235 <efendant Oicente 9eyes is ordered to pay the heirs of the late "gnacia Aguilar-9eyes, the amounts o&1:,444.44 as moral damages and &1:,444.44 as exemplary damages.

O OR#%R%#(

&%LA?O ! &%R%.

AUTRIA-,ARTI$%.' J (:

This resolves the petition for review on certiorari see8ing the reversal of the <ecision of the %ourt of Appeals 2%Apromulgated on April 14, /// which reversed the <ecision of the 9egional Trial %ourt 29T%5 of &anabo, <avao, ranch30, in %ivil %ase @o. /-0*; and the %A 9esolution dated <ecember 6, /// denying petitioners= motion foreconsideration.

The antecedent facts as aptly narrated by the %A are as follows(

<avid &elayo 2&elayo5,by a <eed of Absolute ale executed on anuary , /)), conveyed toMel8i &ereI 2&ereI5 two parcels of agricultural land 2the lots5 situated in &anabo, <avao which areportions of >ot 0/1, %ad. 16* covered by '%T &-*)63.

>oreIa &elayo 2>oreIa5, wife of &elayo, and another one whose signature is illegible witnessed

the execution of the deed. >oreIa, however, signed only on the third page in the space provided for witnesses on account of

which &ereI= application for registration of the deed with the 'ffice of the 9egister of <eeds in Tagum,<avao was denied.

&ereI thereupon as8ed >oreIa to sign on the first and second pages of the deed but she refused,

hence, he instituted on August ), // the instant complaint for specific performance against her and her

husband &elayo 2defendants5. The defendants moved to dismiss the complaint on the ground that it stated no cause of action,

citing ection * of 9A **:* otherwise 8nown as the %omprehensive Agrarian 9eform >aw which too8effect on une 4, /)) and which provides that contracts executed prior thereto shall Kbe valid only whenregistered with the 9egister of <eeds within a period of three 235 months after the effectivity of this Act.L

The Buestioned deed having been executed on anuary 4, /)), the defendants claimed that

&ereI had at least up to eptember 4, /)) within which to register the same, but as they failed to, it isnot valid and, therefore, unenforceable.

The trial court thus dismissed the complaint. 'n appeal to this %ourt, the dismissal was set aside

and the case was remanded to the lower court for further proceedings.

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"n their Answer, the defendants claimed that as the lots were occupied illegally by some persons

against whom they filed an ejectment case, they and &ereI who is their friend and 8nown at the time asan activistJleftist, hence feared by many, just made it appear in the deed that the lots were sold to him inorder to frighten said illegal occupants, with the intentional omission of >oreIa=s signature so that thedeed could not be registered; and that the deed being simulated and bereft of consideration isvoidJinexistent.

&ereI countered that the lots were given to him by defendant &elayo in consideration of his

services as his attorney-in-fact to ma8e the necessary representation and negotiation with the illegaloccupants-defendants in the ejectment suit; and that after his relationship with defendant &elayo becamesour, the latter sent a letter to the 9egister of <eeds of Tagum reBuesting him not to entertain anytransaction concerning the lots title to which was entrusted to &ereI who misplaced and could notN locateit.

<efendant &elayo claimed in any event, in his &re-trial brief filed on March /, //*, that the

deed was without his wife >oreIa=s consent, hence, in light of Art. ** of the %ivil %ode which provides(

Article **. 7nless the wife has been declared a non compos mentis or aspendthrift, or is under civil interdiction or is confined in a leprosarium, the husbandcannot alienate or encumber any real property of the conjugal partnership without thewife=s consent . . .

it is null and void.

The trial court, finding, among others, that &ereI did not possess, nor pay the taxes on the lots,that defendant &elayo was indebted to &ereI for services rendered and, therefore, the deed could only beconsidered as evidence of debt, and that in any event, there was no marital consent to nor actualconsideration for the deed, held that the deed was null and void and accordingly rendered judgment thedispositive portion of which reads(

CD#9#+'9#, judgment is hereby rendered ordering and directing the

defendants to pay plaintiff Mel8i &ereI the sum of T#@ TD'7A@< 2&4,444.445 &esosas principal with 1S interest per annum starting from the date of filing of the complainton August , // until plaintiff is fully paid.

The defendants shall li8ewise pay to plaintiff the sum of TD9## TD'7A@<2&3,444.445 as attorney=s fees.

The court further orders that the <eed of Absolute ale, 2Annex UA=5 of thecomplaint and 2Annex U%=5 of the plaintiff=s Motion for ummary udgment is declared nulland void and without force and it is li8ewise removed as a cloud over defendants= title andproperty in suit. . . .L

The 9T% <ecision was appealed by herein respondent &ereI to the %A. &etitioners failed to file their appelleesbrief. The %A then promulgated its <ecision on April 14, /// whereby it ruled that by >orenIa=s signing as witness to theexecution of the deed, she had 8nowledge of the transaction and is deemed to have given her consent to the same; thatherein petitioners failed to adduce sufficient proof to overthrow the presumption that there was consideration for the deed

and that petitioner <avid &elayo, being a lawyer, is presumed to have acted with due care and to have signed the deedwith full 8nowledge of its contents and import. The %A reversed and set aside the 9T% <ecision, declaring as valid andenforceable the Buestioned deed of sale and ordering herein petitioner >orenIa &elayo to affix her signature on all pagesof said document.

&etitioners moved for reconsideration of the decision but the same was denied per 9esolution dated <ecember

6, ///. The %A found said motion to have been filed out of time and ruled that even putting aside technicalitypetitioners failed to present any ground bearing on the merits of the case to justify a reversal or setting aside of thedecision.

Dence, this petition for review on certiorari on the following grounds(

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. The %A erred in ignoring the specific provision of ection *, in relation to ection 0 of 9.A. @o. **:6otherwise 8nown as the %omprehensive Agrarian 9eform >aw of /)) which too8 effect on une :, /)) and whichprovides that contracts executed prior thereto shall Kbe valid only when registered with the 9egister of <eeds within aperiod of three 235 months after the effectivity of this Act.L

1. The %A erred in holding that the deed of sale was valid and considering the &4,444.44 adjudged by the

trial court as &ereI=s remuneration as the consideration for the deed of sale, instead of declaring the same as null andvoid for being fictitious or simulated and on the basis of Art. 0/, &ar. 1 of the @ew %ivil %ode which prohibits agents fromacBuiring by purchase properties from his principal under his charge.

3. The %A made a novel ruling that there was implied marital consent of the wife of petitioner <avid &elayo. 0. &etitioners should have been allowed to file their appellees= brief to ventilate their side, considering the

existence of peculiar circumstances which prevented petitioners from filing said brief. 'n the other hand, respondent points out that the %A, in resolving the first appeal doc8eted as %A-E.9. & @o.

3)644brought by respondent assailing the 9T% 'rder granting herein petitioners= motion to dismiss, already ruled thatunder 9.A. @o. **:6, the sale or transfer of private agricultural land is allowed only when the area of the land beingconveyed constitutes or is a part of, the landowner-seller retained area and when the total landholding of the purchaser-transferee, including the property sold, does not exceed five 2:5 hectares; that in this case, the land in dispute is only .3hectares and there is no proof that the transferee=s 2herein respondent5 total landholding inclusive of the subject land wilexceed : hectares, the landholding ceiling prescribed by 9.A. @o. **:6; that the failure of respondent to register theinstrument was not due to his fault or negligence but can be attributed to >orenIa=s unjustified refusal to sign two pages of

the deed despite several reBuests of respondent; and that therefore, the %A ruled that the deed of sale subject of thiscase is valid under 9.A. @o. **:6.

9espondent further maintains that the %A correctly held in its assailed <ecision that there was consideration for

the contract and that >orenIa is deemed to have given her consent to the deed of sale. 9espondent li8ewise opines that the %A was right in denying petitioners= motion for reconsideration where they

prayed that they be allowed to file their appellees= brief as their counsel failed to file the same on account of said counsel=sfailing health due to cancer of the liver. 9espondent emphasiIed that in petitioners= motion for reconsideration, they didnot even cite any errors made by the %A in its <ecision.

The issues boil down to the Buestion of whether or not the deed of sale was null and void on the following

grounds( 2a5 for not complying with the provision in 9.A. @o. **:6 that such document must be registered with the

9egister of <eeds within three months after the effectivity of said law; 2b5 for lac8 of marital consent; 2c5 for beingprohibited under Article 0/ 215 of the %ivil %ode; and 2d5 for lac8 of consideration.Ce rule against petitioners. The issue of whether or not the deed of sale is null and void under 9.A. @o. **:6, for respondent=s failure to

register said document with the 9egister of <eeds within three months after the effectivity of 9.A. @o. **:6, had beenresolved with finality by the %A in its <ecision dated @ovember 10, //0 in %A-E.9. & @o. 3)644. Derein petitioners nolonger elevated said %A <ecision to this %ourt and the same became final and executory on anuary 6, //:.

"n said decision, the %A interpreted ection 0, in relation to ection 64 of 9.A. @o. **:6, to mean thus(

. . . the proper interpretation of both sections is that under 9.A. @o. **:6, the sale or transfer of a private agricultural land is allowed only when said land area constitutes or is a part of the landowner-seller retained area and only when the total landholdings of the purchaser-transferee, including theproperty sold does not exceed five 2:5 hectares.

Aside from declaring that the failure of respondent to register the deed was not of his own fault or negligence, the %Aruled that respondent=s failure to register the deed of sale within three months after effectivity of The %omprehensive

Agrarian 9eform >aw did not invalidate the deed of sale as Kthe transaction over said property is not proscribed by 9.A@o. **:6.L

Thus, under the principle of law of the case, said ruling of the %A is now binding on petitioners. uch principlewas elucidated in *ucueco vs. *ourt of Appeals, to wit(

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>aw of the case has been defined as the opinion delivered on a former appeal. "t is a termapplied to an established rule that when an appellate court passes on a Buestion and remands the caseto the lower court for further proceedings, the Buestion there settled becomes the law of the case uponsubseBuent appeal. "t means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not , so long as the facts on which such decision was predicated continue to bethe facts of the case before the court.

&etitioners not having Buestioned the <ecision of the %A dated @ovember 10, //0 which then attained finality, the rulingthat the deed of sale subject of this case is not among the transactions deemed as invalid under 9.A. @o. **:6, is nowimmutable.

Ce agree with the %A ruling that petitioner >orenIa, by affixing her signature to the <eed of ale on the spaceprovided for witnesses, is deemed to have given her implied consent to the contract of sale.

ale is a consensual contract that is perfected by mere consent, which may either be express or implied. A wife=sconsent to the husband=s disposition of conjugal property does not always have to be explicit or set forth in any particulardocument, so long as it is shown by acts of the wife that such consent or approval was indeed given. "n the present casealthough it appears on the face of the deed of sale that >orenIa signed only as an instrumental witness, circumstancesleading to the execution of said document point to the fact that >orenIa was fully aware of the sale of their conjugalproperty and consented to the sale.

"n their &re-Trial rief, petitioners admitted that even prior to /)), they have been having serious problems,including threats to the life of petitioner <avid &elayo, due to conflicts with the illegal occupants of the property inBuestion, so that respondent, whom many feared for being a leftistJactivist, offered his help in driving out said illegaloccupants.

Duman experience tells us that a wife would surely be aware of serious problems such as threats to herhusband=s life and the reasons for such threats. As they themselves stated, petitioners= problems over the subjecproperty had been going on for Buite some time, so it is highly improbable for >orenIa not to be aware of what herhusband was doing to remedy such problems. &etitioners do not deny that >orenIa &elayo was present during theexecution of the deed of sale as her signature appears thereon. @either do they claim that >orenIa &elayo had no8nowledge whatsoever about the contents of the subject document. Thus, it is Buite certain that she 8new of the saleof their conjugal property between her husband and respondent.

7nder the rules of evidence, it is presumed that a person ta8es ordinary care of his concerns. &etitioners did noeven attempt to overcome the aforementioned presumption as no evidence was ever presented to show that >orenIa wasin any way lac8ing in her mental faculties and, hence, could not have fully understood the ramifications of signing thedeed of sale. @either did petitioners present any evidence that >orenIa had been defrauded, forced, intimidated orthreatened either by her own husband or by respondent into affixing her signature on the subject document. "f >orenIahad any objections over the conveyance of the disputed property, she could have totally refrained from having any part inthe execution of the deed of sale. "nstead, >orenIa even affixed her signature thereto.

Moreover, under Article 63, in relation to Article **, both of the @ew %ivil %ode, which was still in effect onanuary , /)) when the deed in Buestion was executed, the lac8 of marital consent to the disposition of conjugalproperty does not ma8e the contract void ab initio but merely voidable. aid provisions of law provide(

Art. **. 7nless the wife has been declared a non compos mentis or a spendthrift, or is under

civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any realproperty of the conjugal property without the wife=s consent. "f she refuses unreasonably to give her consent, the court may compel her to grant the same.

. . .

Art. 63. The wife may, during the marriage, and within ten years from the transactionBuestioned, as8 the courts for the annulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienatedby the husband.

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Dence, it has been held that the contract is valid until the court annuls the same and only upon an action brought

by the wife whose consent was not obtained. "n the present case, despite respondent=s repeated demands for >orenIa toaffix her signature on all the pages of the deed of sale, showing respondent=s insistence on enforcing said contract,>orenIa still did not file a case for annulment of the deed of sale. "t was only when respondent filed a complaint fospecific performance on August ), // when petitioners brought up >orenIa=s alleged lac8 of consent as an affirmativedefense. Thus, if the transaction was indeed entered into without >orenIa=s consent, we find it Buite puIIling why fomore than three and a half years, >orenIa did absolutely nothing to see8 the nullification of the assailed contract.

The foregoing circumstances lead the %ourt to believe that >orenIa 8new of the full import of the transaction

between respondent and her

husband; and, by affixing her signature on the deed of sale, she, in effect, signified her consent to the disposition of theirconjugal property.

Cith regard to petitioners= asseveration that the deed of sale is invalid under Article 0/, paragraph 1 of the @ew%ivil %ode, we find such argument unmeritorious. Article 0/ 215 provides(

Art. 0/. The following persons cannot acBuire by purchase, even at a public or judicial auction,

either in person or through the mediation of another(

. . .

215 Agents, the property whose administration or sale may have been entrusted to them, unlessthe consent of the principal has been given;

. . .

"n -ista$o vs. *ourt of Appeals, a landowner, "luminada Abiertas, designated one of her sons as the administratoof several parcels of her land. The landowner subseBuently executed a <eed of %ertification of ale of 7nregistered>and, conveying some of said land to her sonJadministrator. Therein, we held that(

7nder paragraph 215 of the above article, the prohibition against agents purchasing property in

their hands for sale or management is not absolute. "t does not apply if the principal consents to the saleof the property in the hands of the agent or administrator. "n this case, the deeds of sale signed by

"luminada Abiertas shows that she gave consent to the sale of the properties in favor of her son, 9ufo,who was the administrator of the properties. Thus, the consent of the principal "luminada Abiertasremoves the transaction out of the prohibition contained in Article 0/215. The above-Buoted ruling is exactly in point with this case before us. &etitioners, by signing the <eed of ale in

favor of respondent, are also deemed to have given their consent to the sale of the subject property in favor ofrespondent, thereby ma8ing the transaction an exception to the general rule that agents are prohibited from purchasingthe property of their principals.

&etitioners also argue that the %A erred in ruling that there was consideration for the sale. Ce find no error in

said appellate court=s ruling. The element of consideration for the sale is indeed present. &etitioners, in adopting the triacourt=s narration of antecedent facts in their petition, thereby admitted that they authoriIed respondent to represent themin negotiations with the KsBuattersL occupying the disputed property and, in consideration of respondent=s services, theyexecuted the subject deed of sale. Aside from such services rendered by respondent, petitioners also ac8nowledged inthe deed of sale that they received in full the amount of Ten Thousand &esos. #vidently, the consideration for the sale isrespondent=s services plus the aforementioned cash money.

&etitioners contend that the consideration stated in the deed of sale is excessively inadeBuate, indicating that the

deed of sale was merely simulated. Ce are not persuaded. 'ur ruling in &uenaventura vs. *ourt of Appeals is pertinentto wit(

. . . "ndeed, there is no reBuirement that the price be eBual to the exact value of the subject matter

of sale. . . . As we stated in Vales vs. Villa(

%ourts cannot follow one every step of his life and extricate him from badbargains, protect him from unwise investments, relieve him from one-sided contracts, or

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annul the effects of foolish acts. %ourts cannot constitute themselves guardians of persons who are not legally incompetent. %ourts operate not because one person hasbeen defeated or overcome by another, but because he has been defeated or overcome illegally . Men may do foolish things, ma8e ridiculous contracts, use miserable

judgment, and lose money by them R indeed, all they have in the world; but not for thatalone can the law intervene and restore. There must be, in addition, a violation of thelaw, the commission of what the law 8nows as an actionable wrong, before the courts areauthoriIed to lay hold of the situation and remedy it.

Oerily, in the present case, petitioners have not presented proof that there has been fraud, mista8e or undue influenceexercised upon them by respondent. "t is highly unli8ely and contrary to human experience that a layman li8erespondent would be able to defraud, exert undue influence, or in any way vitiate the consent of a lawyer li8e petitioner<avid &elayo who is expected to be more 8nowledgeable in the ways of drafting contracts and other legal transactions.

+urthermore, in their 9eply to 9espondent=s Memorandum, petitioners adopted the %A=s narration of fact thatpetitioners stated in a letter they sent to the 9egister of <eeds of Tagum that they have entrusted the titles over subjectlots to herein respondent. uch act is a clear indication that they intended to convey the subject property to hereinrespondent and the deed of sale was not merely simulated or fictitious.

>astly, petitioners claim that they were not able to fully ventilate their defense before the %A as their lawyer, whowas then suffering from cancer of the liver, failed to file their appellees= brief. Thus, in their motion for reconsideration othe %A <ecision, they prayed that they be allowed to submit such appellees= brief. The %A, in its 9esolution dated

<ecember 6, ///, stated thus(

y movant-defendant-appellee=s own information, his counsel received a copy of the decision onMay :, ///. De, therefore, had fifteen 2:5 days from said date or up to May 14, /// to file the motion.The motion, however, was sent through a private courier and, therefore, considered to have been filed onthe date of actual receipt on une 6, /// by the addressee R %ourt of Appeals, was filed beyond thereglementary period.

Technicality aside, movant has not proffered any ground bearing on the merits of the case why

the decision should be set aside.

&etitioners never denied the %A finding that their motion for reconsideration was filed beyond the fifteen-day

reglementary period. 'n that point alone, the %A is correct in denying due course to said motion. The motion havingbeen belatedly filed, the %A <ecision had then attained finality. Thus, in Abalos vs. 'hile# 1ining *orporation, we heldthat(

. . . @othing is more settled in law than that once a judgment attains finality it thereby becomesimmutable and unalterable. "t may no longer be modified in any respect, even if the modification is meantto correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether themodification is attempted to be made by the court rendering it or by the highest court of the land.

Moreover, it is pointed out by the %A that said motion did not present any defense or argument on the merits ofthe case that could have convinced the %A to reverse or modify its <ecision.

Ce have consistently held that a petitioner=s right to due process is not violated where he was able to move forreconsideration of the order or decision in Buestion. "n this case, petitioners had the opportunity to fully expound on theirdefenses through a motion for reconsideration. &etitioners did file such motion but they wasted such opportunity by failingto present therein whatever errors they believed the %A had committed in its <ecision. <efinitely, therefore, the denial opetitioners= motion for reconsideration, praying that they be allowed to file appellees= brief, did not infringe petitioners= rightto due process as any issue that petitioners wanted to raise could and should have been contained in said motion forreconsideration.

I$ !I%W O) TH% )OR%3OI$3, the petition is #%$I%# and the <ecision of the %ourt of Appeals dated April 14/// and its 9esolution dated <ecember 6, /// are hereby A))IR,%#(

' '9<#9#<.

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A3U%T% ! &$"AR&IO' J.:

The ase

E.9. @o. 64** is a petition for review assailing the <ecision promulgated on 6 'ctober 144: by the %ourt of Appeals2appellate court5 in %A-E.9. %O @o. 6*)0:. The appellate court granted the appeal filed by the &hilippine @ational an8 R>aoag ranch 2&@5. The appellate court reversed the 1/ une 144 <ecision of ranch : of the 9egional Trial %ourt of

>aoag %ity 2trial court5 in %ivil %ase @o. 6)43.The trial court declared the <eed of 9eal #state Mortgage executed by spouses ose A. 9os 29os5 and #strella Aguete2Aguete5 2collectively, petitioners5, as well as the subseBuent foreclosure proceedings, void. Aside from payment ofattorney=s fees, the trial court also ordered &@ to vacate the subject property to give way to petitioners= possession.

The )a4ts

The appellate court narrated the facts as follows(

'n anuary 3, /)3, spouses ose A. 9os and #strella Aguete filed a complaint for the annulment of the 9eal #stateMortgage and all legal proceedings ta8en thereunder against &@, >aoag ranch before the %ourt of +irst "nstance,"locos @orte doc8eted as %ivil %ase @o. 6)43.

The complaint was later amended and was raffled to the 9egional Trial %ourt, ranch :, >aoag %ity.

The averments in the complaint disclosed that plaintiff-appellee oe A. 9os obtained a loan of &:,444.44 from &@

>aoag ranch on 'ctober 0, /60 and as security for the loan, plaintiff-appellee 9os executed a real estate mortgageinvolving a parcel of land R >ot @o. /* of the %adastral urvey of >aoag, with all the improvements thereon describedunder Transfer %ertificate of Title @o. T-/*0*.

7pon maturity, the loan remained outstanding. As a result, &@ instituted extrajudicial foreclosure proceedings on themortgaged property. After the extrajudicial sale thereof, a %ertificate of ale was issued in favor of &@, >aoag as thehighest bidder. After the lapse of one 25 year without the property being redeemed, the property was consolidated andregistered in the name of &@, >aoag ranch on August 4, /6).

%laiming that she 2plaintiff-appellee #strella Aguete5 has no 8nowledge of the loan obtained by her husband nor sheconsented to the mortgage instituted on the conjugal property R a complaint was filed to annul the proceedings pertainingto the mortgage, sale and consolidation of the property R interposing the defense that her signatures affixed on thedocuments were forged and that the loan did not redound to the benefit of the family.avvphi

"n its answer, &@ prays for the dismissal of the complaint for lac8 of cause of action, and insists that it was plaintiffs-

appellees= own acts ofNomissionJconnivance that bar them from recovering the subject property on the ground of estoppel, laches, abandonmentand prescription.

The T+ial ou+tEs Ruling

'n 1/ une 144, the trial court rendered its <ecision in favor of petitioners. The trial court declared that Aguete did notsign the loan documents, did not appear before the @otary &ublic to ac8nowledge the execution of the loan documents,did not receive the loan proceeds from &@, and was not aware of the loan until &@ notified her in 0 August /6) thatshe and her family should vacate the mortgaged property because of the expiration of the redemption period. 7nder the%ivil %ode, the effective law at the time of the transaction, 9os could not encumber any real property of the conjugalpartnership without Aguete=s consent. Aguete may, during their marriage and within ten years from the transactionBuestioned, as8 the courts for the annulment of the contract her husband entered into without her consent, especially inthe present case where her consent is reBuired. The trial court, however, ruled that its decision is without prejudice to the

right of action of &@ to recover the amount of the loan and its interests from 9os.The dispositive portion reads(

CD#9#+'9#, premises considered, judgment is hereby rendered(

. <#%>A9"@E the <eed of 9eal #state Mortgage 2#xhibit !%!5 and the subseBuent foreclosure proceedingsconducted thereon @7>> and O'"<;

1. '9<#9"@E the 9egister of <eeds of the %ity of >aoag to cancel T%T @o. T-:16* in the name of defendant&@ and revert the same in the name of plaintiffs spouses oe 9os and #strella Aguete;

3. '9<#9"@E defendant to vacate and turnover the possession of the premises of the property in suit to theplaintiffs; and

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0. '9<#9"@E defendant to pay plaintiffs attorney=s fee and litigation expenses in the sum of T#@ TD'7A@<2&4,444.445 &#'.


' '9<#9#<.

&@ filed its @otice of Appeal of the trial court=s decision on 3 eptember 144 and paid the corresponding fees.&etitioners filed on the same date a motion for execution pending appeal, which &@ opposed. "n their comment to theopposition filed on 4 'ctober 144, petitioners stated that at the hearing of the motion on 3 'ctober 144, &@=s layrepresentative had no objection to the execution of judgment pending appeal. &etitioners claimed that the house on the

subject lot is dilapidated, a danger to life and limb, and should be demolished. &etitioners added that they obligedthemselves to ma8e the house habitable at a cost of not less &:4,444.44. The repair cost would accrue to &@=s benefitshould the appellate court reverse the trial court. &@ continued to oppose petitioners= motion.

"n an 'rder dated ) May 1441, the trial court found petitioners= motion for execution pending appeal improper becausepetitioners have made it clear that they were willing to wait for the appellate court=s decision. Dowever, as a court of justiceand eBuity, the trial court allowed petitioners to occupy the subject property with the condition that petitioners wouldvoluntarily vacate the premises and waive recovery of improvements introduced should &@ prevail on appeal.

The A**ellate ou+tEs Ruling

'n 6 'ctober 144:, the appellate court rendered its <ecision and granted &@=s appeal. The appellate court reversedthe trial court=s decision, and dismissed petitioners= complaint.

The appellate court stated that the trial court concluded forgery without adeBuate proof; thus it was improper for the trialcourt to rely solely on Aguete=s testimony that her signatures on the loan documents were forged. The appellate court

declared that Aguete affixed her signatures on the documents 8nowingly and with her full consent. Assuming arguendo that Aguete did not give her consent to 9os= loan, the appellate court ruled that the conjugalpartnership is still liable because the loan proceeds redounded to the benefit of the family. The records of the case revealthat the loan was used for the expansion of the family=s business. Therefore, the debt obtained is chargeable against theconjugal partnership.

&etitioners filed the present petition for review before this %ourt on / <ecember 144:.

The Issues

&etitioners assigned the following errors(

". The Donorable %ourt of Appeals erred in not giving weight to the findings and conclusions of the trial court, and inreversing and setting aside such findings and conclusions without stating specific contrary evidence;

"". The Donorable %ourt of Appeals erred in declaring the real estate mortgage valid;

""". The Donorable %ourt of Appeals erred in declaring, without basis, that the loan contracted by husband oe A. 9os withrespondent &hilippine @ational an8 R >aoag redounded to the benefit of his family, aside from the fact that such had notbeen raised by respondent in its appeal.

The ou+tEs Ruling

The petition has no merit. Ce affirm the ruling of the appellate court.

The %ivil %ode was the applicable law at the time of the mortgage. The subject property is thus considered part of theconjugal partnership of gains. The pertinent articles of the %ivil %ode provide(

Art. :3. The following are conjugal partnership property(

25 That which is acBuired by onerous title during the marriage at the expense of the common fund, whether theacBuisition be for the partnership, or for only one of the spouses;

215 That which is obtained by the industry, or wor8 or as salary of the spouses, or of either of them;

235 The fruits, rents or interest received or due during the marriage, coming from the common property or from theexclusive property of each spouse.

Art. *4. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertainsexclusively to the husband or to the wife.

Art. *. The conjugal partnership shall be liable for(

25 All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and thosecontracted by the wife, also for the same purpose, in the cases where she may legally bind the partnership;

215 Arrears or income due, during the marriage, from obligations which constitute a charge upon property of eitherspouse or of the partnership;

235 Minor repairs or for mere preservation made during the marriage upon the separate property of either thehusband or the wife; major repairs shall not be charged to the partnership;

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205 Major or minor repairs upon the conjugal partnership property;

2:5 The maintenance of the family and the education of the children of both husband and wife, and of legitimatechildren of one of the spouses;

2*5 #xpenses to permit the spouses to complete a professional, vocational or other course.

Art. **. 7nless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or isconfined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership withoutthe wife=s consent. "f she refuses unreasonably to give her consent, the court may compel her to grant the same.

Art. 63. The wife may, during the marriage, and within ten years from the transaction Buestioned, as8 the courts for the

annulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act orcontract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould thewife fail to exercise this right, she or her heirs after the dissolution of the marriage may demand the value of the propertyfraudulently alienated by the husband.

There is no doubt that the subject property was acBuired during 9os and Aguete=s marriage. 9os and Aguete weremarried on * anuary /:0, while the subject property was acBuired in /*). There is also no doubt that 9osencumbered the subject property when he mortgaged it for &:,444.44 on 13 'ctober /60. &@ >aoag does not doubtthat Aguete, as evidenced by her signature, consented to 9os= mortgage to &@ of the subject property. 'n the otherhand, Aguete denies ever having consented to the loan and also denies affixing her signature to the mortgage and loandocuments.

The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the wife.hould the husband do so, then the contract is voidable. Article 63 of the %ivil %ode allows Aguete to Buestion 9os=

encumbrance of the subject property. Dowever, the same article does not guarantee that the courts will declare theannulment of the contract. Annulment will be declared only upon a finding that the wife did not give her consent. "n thepresent case, we follow the conclusion of the appellate court and rule that Aguete gave her consent to 9os= encumbranceof the subject property.

The documents disavowed by Aguete are ac8nowledged before a notary public, hence they are public documents. #veryinstrument duly ac8nowledged and certified as provided by law may be presented in evidence without further proof, thecertificate of ac8nowledgment being prima facie evidence of the execution of the instrument or document involved. Theexecution of a document that has been ratified before a notary public cannot be disproved by the mere denial of thealleged signer. &@ was correct when it stated that petitioners= omission to present other positive evidence to substantiatetheir claim of forgery was fatal to petitioners= cause. &etitioners did not present any corroborating witness, such as ahandwriting expert, who could authoritatively declare that Aguete=s signatures were really forged.

A notariIed document carries the evidentiary weight conferred upon it with respect to its due execution, and it has in its

favor the presumption of regularity which may only be rebutted by evidence so clear, strong and convincing as to excludeall controversy as to the falsity of the certificate. Absent such, the presumption must be upheld. The burden of proof toovercome the presumption of due execution of a notarial document lies on the one contesting the same. +urthermore, anallegation of forgery must be proved by clear and convincing evidence, and whoever alleges it has the burden of provingthe same.

9os himself cannot bring action against &@, for no one can come before the courts with unclean hands.avvphi "n theirmemorandum before the trial court, petitioners themselves admitted that 9os forged Aguete=s signatures.

oe A. 9os in legal effect admitted in the complaint that the signatures of his wife in the Buestioned documents are forged,incriminating himself to criminal prosecution. "f he were alive today, he would be prosecuted for forgery. This strengthensthe testimony of his wife that her signatures on the Buestioned documents are not hers.

"n filing the complaint, it must have been a remorse of conscience for having wronged his family; in forging the signatureof his wife on the Buestioned documents; in sBuandering the &:,444.44 loan from the ban8 for himself, resulting in the

foreclosure of the conjugal property; eviction of his family therefrom; and, exposure to public contempt, embarassmentand ridicule.

The application for loan shows that the loan would be used exclusively !for additional wor8ing capitalN of buy V sell ofgarlic V virginia tobacco.! "n her testimony, Aguete confirmed that 9os engaged in such business, but claimed to beunaware whether it prospered. Aguete was also aware of loans contracted by 9os, but did not 8now where he !wasted themoney.! <ebts contracted by the husband for and in the exercise of the industry or profession by which he contributes tothe support of the family cannot be deemed to be his exclusive and private debts.

"f the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be usedin or for his own business or his own profession, that contract falls within the term !x x x x obligations for the benefit of theconjugal partnership.! Dere, no actual benefit may be proved. "t is enough that the benefit to the family is apparent at thesigning of the contract. +rom the very nature of the contract of loan or services, the family stands to benefit from the loanfacility or services to be rendered to the business or profession of the husband. "t is immaterial, if in the end, his business

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or profession fails or does not succeed. imply stated, where the husband contracts obligations on behalf of the familybusiness, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership.

+or this reason, we rule that 9os= loan from &@ redounded to the benefit of the conjugal partnership. Dence, the debt ischargeable to the conjugal partnership.

WH%R%)OR%, we #%$? the petition. The <ecision of the %ourt of Appeals in %A-E.9. %O @o. 6*)0: promulgated on 6'ctober 144: is A))IR,%#. %osts against petitioners.

O OR#%R%#.

#% L%O$ ! #% L%O$!%LAO' R(' J (:

The ase

efore us is a &etition for 9eview on %ertiorari under 9ule 0: assailing and see8ing to set aside the <ecision and9esolution dated August 16, 144) and 'ctober 14, 144), respectively, of the %ourt of Appeals 2%A5 in %A-E.9. %O @o)):6. The %A affirmed with modification the 'ctober 0, 144* <ecision in %ivil %ase @o. P40-::/: of the 9egional Tria%ourt 29T%5, ranch 11 in PueIon %ity.

The )a4ts

'n uly 14, /*:, onifacio '. <e >eon, then single, and the &eople=s Domesite and Dousing %orporation 2&DD%5

entered into a %onditional %ontract to ell for the purchase on installment of a /.34 sBuare-meter lot situatedin +airview, PueIon %ity. ubseBuently, on April 10, /*), onifacio married Anita de >eon in a civil rite officiated by theMunicipal Mayor of aragosa, @ueva #cija. To this union were born <anilo and Oilma.

+ollowing the full payment of the cost price for the lot thus purchased, &DD% executed, on une 11, /64, a +ina<eed of ale in favor of onifacio. Accordingly, Transfer %ertificate of Title 2T%T5 @o. 63*66 was issued on +ebruary 10/61 in the name of onifacio, Ksingle.L

ubseBuently, onifacio, for &h& /,444, sold the subject lot to her sister, >ita, and husband +elix 9io Tarrosa2Tarrosas5, petitioners herein. The conveying <eed of ale dated anuary 1, /60 2<eed of ale5 did not bear thewritten consent and signature of Anita.

Thereafter, or on May 13, /66, onifacio and Anita renewed their vows in a church wedding at t. ohn the aptis&arish inan uan, Manila.

'n +ebruary 1/, //*, onifacio died.

Three months later, the Tarrosas registered the <eed of ale and had T%T @o. 63*66 canceled. They secured the

issuance in their names of T%T @o. @-63/ from the PueIon %ity 9egister of <eeds.

Eetting wind of the cancellation of their father=s title and the issuance of T%T @o. @-63/, <anilo and Oilma filedon May /, 1443 a @otice of Adverse %laim before the 9egister of <eeds of PueIon %ity to protect their rights over thesubject property. Oery much later, Anita, <anilo, and Oilma filed a reconveyance suit before the 9T% in PueIon %ity. "ntheir complaint, Anita and her children alleged, among other things, that fraud attended the execution of the <eed of aleand that subseBuent acts of onifacio would show that he was still the owner of the parcel of land. "n support of theicase, they presented, inter alia, the following documents(

a. A 9eal #state Mortgage execution by onifacio in favor of spouses %esar <ian8inay and+ilomena Almero on uly 11, /66. b. A %ivil %omplaint filed by onifacio against spouses %esar <ian8inay and +ilomena

Almero on @ovember 16, /6/ for nullification of the 9eal #state Mortgage. c. The <ecision issued by the %ourt of +irst "nstance of 9iIal, PueIon %ity, promulgated on

uly 34, /)1, nullifying the 9eal #state Mortgage.

The Tarrosas, in their Answer with %ompulsory %ounterclaim, averred that the lot onifacio sold to them was hisexclusive property inasmuch as he was still single when he acBuired it from &DD%. As further alleged, they were noaware of the supposed marriage between onifacio and Anita at the time of the execution of the <eed of ale.

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After several scheduled hearings, both parties, assisted by their respective counsels, submitted a oint tipulation

of +acts with Motion, to wit(. The parties have agreed to admit the following facts( a. onifacio '. <e >eon, while still single x x x, purchased from the &DD%N through

a *onditional *ontract to +ell on uly 14, /*: a parcel of land with an area of /.34 sBuare meterssituated in +airview, PueIon %ity for &)0.61;

b. 'n April 10, /*), onifacio '. <e >eon married plaintiff Anita . <e >eon before the

Municipal Mayor of aragosa, @ueva #cija. oth parties stipulate that said marriage is valid and bindingunder the laws of the &hilippines;

c. 'n une 11, /64, onifacio '. <e >eon paid &DD%N the total amount of &,413.60 x x

x. The right of ownership over the subject parcel of land was transferred to the late onifacio '. <e >eonon une 11, /64, upon the full payment of the total priceN of &,413.60 and upon execution of the inal -eed of +ale;

d. After full payment, onifacio '. <e >eon was issued T%TN @o. 63*66 on +ebruary 10,

/61; e. 'n anuary 1, /60, onifacio '. <e >eon executed a -eed of +ale in favor of

defendants-spouses +elix 9io Tarrosa and >ita '. <e >eon disposing the parcel of land under T%T @o.

63*66 for valuable consideration amount of &/,444.44 and subscribed before Atty. alvador 9. Aguinaldo who was commissioned to notariIeN documents on said date. The parties stipulate thatthe -eed of +ale is valid and genuine. Dowever, plaintiff Anita <e >eon was not a signatory to the -eed of +ale executed on anuary 1, /60;

f. That plaintiff Anita . <e >eon and the late onifacio '. <e >eon were married in church

rites on May 13, /66 x x x; g. The late onifacio '. <e >eon died on +ebruary 1/, //* at the 7T Dospital,

#spaQa, Manila; h. The said K<eed of aleL executed on anuary 1, /60 was registered on May ), //*

before the 'ffice of the 9egister of <eeds of PueIon %ity and T%TN @o. @-63/ was issued to >ita '.

<e >eon and +elix 9io Tarrosa.

The Ruling of the T+ial ou+t

'n 'ctober 0, 144*, the 9T%, on the finding that the lot in Buestion was the conjugal property of onifacio and Anita, rendered judgment in favor of Anita and her children. The dispositive portion of the decision reads(

CD#9#+'9#, premises considered, judgment is hereby rendered in favor of plaintiffs and against

defendants in the following manner(

25 <eclaring the <eed of ale dated anuary 1, /60 executed by the late onifacio '. <e>eon in favor of defendants-spouses >ita <e >eon and +elix 9io Tarrosa void ab initio;

215 <irecting the 9egister of <eed of PueIon %ity to cancel Transfer %ertificate of Title @o. @-63/ in the name of K>ita '. <e >eon, married to +elix 9io TarrosaL and restore Transfer %ertificate of Title @o. 63**6 in the name of Konifacio '. <e >eonL;

235 'rdering the defendants-spouses to pay plaintiffs the following sums(

2a5 &1:,444.44 as moral damages;2b5 &14,444.44 as exemplary damages;2c5 &:4,444.44 as attorney=s fees plus appearance fee of &1,:44.44 per court appearance;2d5 %osts of this suit.

' '9<#9#<.

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Aggrieved, the Tarrosas appealed to the %A. As they would submit, the 9T% erred(

25 in finding for the plaintiffs-appellees by declaring that the land subject matter of the case isconjugal property;

215 in not declaring the land as the exclusive property of onifacio '. <e >eon when sold todefendant-appellants;

235 in ruling that defendant-appellants did not adduce any proof that the property was acBuiredsolely by the efforts of onifacio '. <e >eon;

205 in declaring that one-half of the conjugal assets does not vest to onifacio '. <e >eonbecause of the absence of liBuidation;

2:5 in cancelling T%T @o. @-63/ and restored T%T @o. 63*66N in the name of onifacio '.<e >eon;

2*5 in awarding moral and exemplary damages and attorney=s fees to the plaintiffs-appellees.

The Ruling of the A**ellate ou+t

'n August 16, 144), the %A rendered a decision affirmatory of that of the 9T%, save for the award of damagesattorney=s fees, and costs of suit which the appellate court ordered deleted. The fallo of the %A decision reads(

CD#9#+'9#, in view of the foregoing, the assailed decision dated 'ctober 0, 144*, of the9egional Trial %ourt, ranch 11, PueIon %ityin %ivil %ase @o. P-40-::/: is hereby A++"9M#< with

M'<"+"%AT"'@, in that the award of moral and exemplary damages as well as attorney=s fees,appearance fee and costs of suit are hereby <#>#T#<.

' '9<#9#<.

ust li8e the 9T%, the %A held that the Tarrosas failed to overthrow the legal presumption that the parcel of land indispute was conjugal. The appellate court held further that the cases they cited were inapplicable.

As to the deletion of the grant of moral and exemplary damages, the %A, in gist, held that no evidence was adducedto justify the award. ased on the same reason, it also deleted the award of attorney=s fees and costs of suit.

The Tarrosas moved but was denied reconsideration by the %A in its eBually assailed resolution of 'ctober 14,

144). Dence, they filed this petition.

The Issues

"

Chether the %AN gravely erred in concluding that the land purchased on installment by onifacio '. <e>eon before marriage although some installments were paid during the marriage is conjugal and not hisexclusive property.

""

Chether the %AN gravely erred in ruling that the oren/o, et al. vs. >icolas, et al., and Alvare/ vs.spiritu cases do not apply in the case at bar because in the latter the land involved is not a friar landunli8e in the former.

""" Chether the %AN gravely erred in affirming the decision of the trial court a Buo which ruled that petitionersdid not adduce any proof that the land was acBuired solely by the efforts of onifacio '. <e >eon.

"O

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Chether the court of appeals gravely erred in affirming the decision of the trial court which ruled that one-half 2J15 of the conjugal assets do not vest to onifacio '. <e >eon because of the absence of liBuidation.

Ou+ Ruling

The petition lac8s merit.

The ub2e4t &+o*e+t= is theon2ugal &+o*e+t= of "onifa4io and Anita

The first three issues thus raised can be summed up to the Buestion of whether or not the subject property is

conjugal.

&etitioners assert that, since onifacio purchased the lot from &DD% on installment before he married Anita, theland was onifacio=s exclusive property and not conjugal, even though some installments were paid and the title wasissued to onifacio during the marriage. "n support of their position, petitioners cite oren/o v. >icolas and Alvare/ v

spiritu.

Ce disagree.

Article *4 of the /:4 %ivil %ode, the governing provision in effect at the time onifacio and Anita contractedmarriage, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is provedthat it pertains exclusively to the husband or the wife. +or the presumption to arise, it is not, as %an v. *ourt of

Appeals teaches, even necessary to prove that the property was acBuired with funds of the partnership. 'nly proof oacBuisition during the marriage is needed to raise the presumption that the property is conjugal. "n fact, even when themanner in which the properties were acBuired does not appear, the presumption will still apply, and the properties will stillbe considered conjugal.

"n the case at bar, ownership over what was once a &DD% lot and covered by the &DD%-onifacio %onditiona

%ontract to ell was only transferred during the marriage of onifacio and Anita. "t is well settled that a conditional sale isa8in, if not eBuivalent, to a contract to sell. "n both types of contract, the efficacy or obligatory force of the vendor=sobligation to transfer title is subordinated to the happening of a future and uncertain event, usually the full payment of thepurchase price, so that if the suspensive condition does not ta8e place, the parties would stand as if the conditionaobligation had never existed. "n other words, in a contract to sell ownership is retained by the seller and is not passed tothe buyer until full payment of the price, unli8e in a contract of sale where title passes upon delivery of the thing sold.

uch is the situation obtaining in the instant case. The conditional contract to sell executed by and betweenonifacio and &DD% on uly 14, /*: provided that ownership over and title to the property will vest on onifacio onlyupon execution of the final deed of sale which, in turn, will be effected upon payment of the full purchase price, to wit(

0. Titles to the property subject of this contract remains with the %'9&'9AT"'@ and shall pass to,and be transferred in the name of the A&&>"%A@T only upon the execution of the final <eed of aleprovided for in the next succeeding paragraph. :. 7pon the full payment by the A&&>"%A@T of the price of the lot above referred to together with allthe interest due thereon, taxes and other charges, and upon his faithful compliance with all the conditionsof this contract the %'9&'9AT"'@ agrees to execute in favor of the A&&>"%A@T a final deed of sale of the aforesaid land, and the A&&>"%A@T agrees to accept said deed, as full performance by the%'9&'9AT"'@ of its covenants and underta8ings hereunder. x x x

#vidently, title to the property in Buestion only passed to onifacio after he had fully paid the purchase price onune 11, /64. This full payment, to stress, was made more than two 215 years after his marriage to Anita on April 10/*). "n net effect, the property was acBuired during the existence of the marriage; as such, ownership to the property isby law, presumed to belong to the conjugal partnership.

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uch presumption is rebuttable only with strong, clear, categorical, and convincing evidence. There must be clea

evidence of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it. &etitioners= argument that the disputed lot was onifacio=s exclusive property, since it was registered solely in his

name, is untenable. The mere registration of a property in the name of one spouse does not destroy its conjuganature. Chat is material is the ti9e when the property was acBuired.

Thus, the Buestion of whether petitioners were able to adduce proof to overthrow the presumption is a factual

issue best addressed by the trial court. As a matter of long and sound practice, factual determinations of the triacourts, especially when confirmed by the appellate court, are accorded great weight by the %ourt and, as rule, will not bedisturbed on appeal, except for the most compelling reasons. &etitioners have not, as they really cannot, rebut thepresumptive conjugal nature of the lot in Buestion. "n this regard, the %ourt notes and Buotes with approval the followingexcerpts from the trial court=s disposition(

The defendants, however, did not adduce any proof that the property in Buestion was acBuired

solely by the efforts of onifacioN. The established jurisprudence on the matter leads this %ourt to theconclusion that the property involved in this dispute is indeed the conjugal property of the deceasedonifacioN <e >eon.

"n fact, defendant even admitted that onifacioN brought into his marriage with plaintiff Anita the

said land, albeit in the concept of a possessor only as it was not yet registered in his name. The propertywas registered only in /61 during the existence of the marriage. Dowever, the absence of evidence on

the source of funding has called for the application of the presumption under Article *4 in favor of theplaintiffs.

The cases petitioners cited are without governing applicability to this case simply because they involved a lawspecifically enacted to govern the disposition of and ownership of friar lands. "n oren/o, the %ourt held that thepervading legislative intent of Act @o. 14 is Kto sell the friar lands acBuired by the Eovernment to actual settlers andoccupants of the same.L The %ourt went on further to say in Alvare/ that Kunder the +riar >ands Act of 14, the eBuitableand beneficial title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale isissued.L &lainly, the said cases are not applicable here considering that the disputed property is not friar land.

There can be no Buibbling that Anita=s conformity to the sale of the disputed lot to petitioners was never obtained orat least not formally expressed in the conveying deed. The parties admitted as much in their oint tipulation of +acts

with Motion earlier reproduced. @ot lost on the %ourt of course is the fact that petitioners went to the process ofregistering the deed after onifacio=s death in //*, some 11 years after its execution. "n the interim, petitioners couldhave had wor8Zbut did notZtowards securing Anita=s marital consent to the sale.

"t cannot be over-emphasiIed that the /:4 %ivil %ode is very explicit on the conseBuence of the husbandalienating or encumbering any real property of the conjugal partnership without the wife=s consent. To a specific point, thesale of a conjugal piece of land by the husband, as administrator, must, as a rule, be with the wife=s consent. #lse, thesale is not valid. o it is that in several cases we ruled that the sale by the husband of property belonging to the conjugapartnership without the consent of the wife is void ab initio, absent any showing that the latter is incapacitated, under civiinterdiction, or li8e causes. The nullity, as we have explained, proceeds from the fact that sale is in contravention of themandatory reBuirements of Art. ** of the %ode. ince Art. ** of the %ode reBuires the consent of the wife before thehusband may alienate or encumber any real property of the conjugal partnership, it follows that the acts or transactionsexecuted against this mandatory provision are void except when the law itself authoriIed their validity.

Accordingly, the <eed of ale executed on anuary 1, /60 between onifacio and the Tarrosas covering the&DD% lot is void.

Inte+est in the on2ugal &a+tne+shi* Is,e+el= In4hoate until Li;uidation

As a final consideration, the %ourt agrees with the %A that the sale of one-half of the conjugal property withou

liBuidation of the partnership is void. &rior to the liBuidation of the conjugal partnership, the interest of each spouse in theconjugal assets is in4hoate, a mere expectancy, which constitutes neither a legal nor an eBuitable estate, and does notripen into a title until it appears that there are assets in the community as a result of the liBuidation and settlement. Theinterest of each spouse is limited to the net remainder or Kremanente liquidoL 2haber ganancial 5 resulting from theliBuidation of the affairs of the partnership after its dissolution. Thus, the right of the husband or wife to one-half of the

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conjugal assets does not vest until the dissolution and liBuidation of the conjugal partnership, or after dissolution of themarriage, when it is finally determined that, after settlement of conjugal obligations, there are net assets left which can bedivided between the spouses or their respective heirs.

Therefore, even on the supposition that onifacio only sold his portion of the conjugal partnership, the sale is stilltheoretically void, for, as previously stated, the right of the husband or the wife to one-half of the conjugal assets does notvest until the liBuidation of the conjugal partnership.

@evertheless, this %ourt is mindful of the fact that the Tarrosas paid a valuable consideration in the amount of &h&/,444 for the property in Buestion. Thus, as a matter of fairness and eBuity, the share of onifacio after the liBuidation ofthe partnership should be liable to reimburse the amount paid by the Tarrosas. "t is a well-settled principle that no personshould unjustly enrich himself at the expense of another.

WH%R%)OR%, the petition is #%$I%#. The %A <ecision in %A-E.9. %O @o. )):6 is A))IR,%#. %osts againspetitioners.

O OR#%R%#(

H%IR O) H%R$A$#%. ! ,I$3OAL%O$AR#O-#% ATRO' J (:

This is a petition for review on certiorari of the #e4ision dated e*te9be+ 7' 5/// and Resolution dated

#e4e9be+ 5B' 5///' both of the %ourt of Appeals 2%A5, in *A2.C. *! >o. DEFG5. The %A <ecision reversed and seaside the decision of the 9egional Trial %ourt 29T%5 of PueIon %ity 2ranch /15, which ruled in favor of herein petitionersin the action for reconveyance filed by the latter in said court against the respondents. The %A 9esolution denied thepetitioners= motion for reconsideration.

The subject matter of the action is a parcel of land with an area of :14.:4 sBuare meters situated in <iliman,

PueIon %ity, described as >ot :, loc8 )/ of the subdivision plan &sd-*))46, covered by Transfer %ertificate of Title2T%T5 @o. 46:30issued on May 13, /** and registered in the name of <omingo . DernandeI, r. married to ergia ODernandeI. >ater on, said T%T @o. 46:30 was cancelled and in lieu thereof, T%T @o. 1/41 was issued in favor oMelanie Mingoa.

These are the factual antecedents of this case(

'n +ebruary , //0, a complaint was filed with the 9T% of PueIon %ity by herein petitioners, heirs of <omingoDernandeI, r., namely, spouse ergia DernandeI and their surviving children <omingo, r. and Maria >eonora Cilma,against the respondents herein, <olores %amisura, Melanie Mingoa, Atty. &laridel Mingoa, r. and all persons claimingrights under the latter, and the PueIon %ity 9egister of <eeds. The case was doc8eted as %ivil %ase @o. 4/0-/16*.

"n their complaint, the petitioners as8ed for 2a5 the annulment andJor declaration of nullity of T%T @o. 1/41

including all its derivative titles, the "rrevocable pecial &ower of Attorney 2&A5 dated +ebruary 0, /*3 in favor of<olores %amisura, the &A dated May /, /*0 in favor of &laridel Mingoa, r., and the <eed of Absolute ale of 9ea#state dated uly /, /6) executed by &laridel Mingoa, r. in favor of Melanie Mingoafor being products of forgery andfalsification; and 2b5 the reconveyance andJor issuance to them 2petitioners5 by the PueIon %ity 9egister of <eeds of thecertificate of title covering the subject property.

9espondents filed a Motion to <ismiss the complaint interposing the following grounds( the claim or demand has

been paid, waived, abandoned or otherwise extinguished; lac8 of cause of action; lac8 of jurisdiction over the person ofthe defendants or over the subject or nature of the suit; and prescription. The following were attached to said motion( a<eed of Transfer of 9ightsdated +ebruary 0, /*3 from <omingo DernandeI, r. to %amisura, the "rrevocable&A executed by the former in the latter=s favor, and a <eed of ale of 9ight in a 9esidential >and and "mprovementsTherein dated May /, /*0 executed by %amisura in favor of &laridel Mingoa, r.

"n its 'rder dated eptember , //0, the trial court denied respondents= motion to dismiss.

9espondents filed a petition for certiorari and prohibition with the %A assailing the aforementioned 'rder of deniaby the 9T%. Their initial petition was dismissed for being insufficient in form. 9espondents then re-filed their petitionwhich was doc8eted as *A2.C. +' >o. 5F5F . "n a decision dated May 1*, //:, respondents= re-filed petition wasdenied due course by the %A. Daving been filed beyond the reglementary period, respondents= subseBuent motion forreconsideration was simply noted by the %A in its 9esolution of uly 6, //:. 'n the basis of a technicality, this %ourt, in

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a 9esolution dated eptember 16, //:, dismissed respondentsX appeal which was doc8eted as .C. >o. 4I4I . &er#ntry of udgment, said 9esolution became final and executory on anuary 1, //*.

Meanwhile, respondents filed their Answer in the main case therein denying the allegations of the complaint and

averring as defenses the same grounds upon which they anchored their earlier motion to dismiss. The parties having failed to amicably settle during the scheduled pre-trial conference, the case proceeded to trial.

The evidence respectively presented by the parties is summariIed as follows(

x x x "tN appears that in the early part of /:), <omingo DernandeI, r. 2who was then a %entralan8 employee5 and his spouse ergia O. DernandeI were awarded a piece of real property by the&hilippine Domesite and Dousing %orporation 2&DD%5 by way of salary deduction. 'n 'ctober ), /*3,the petitionersN then having paid in full the entire amount of &*,)))./*, a <eed of Absolute ale of theproperty was executed by the &DD% in their favor. T%T @o. 46:30, covering the property was issued tothe petitionersN on May 13, /**. "t bears an annotation of the retention period of the property by theawardee 2i.e., restriction of any unauthoriIed sale to third persons within a certain period5. Tax paymentsdue on the property were religiously paid 2until /::5 by the petitionersN as evidenced by receipts under the petitioners=N name.

DernandeI, r. died intestate in April /)3 and it was only after his burial that his heirs found outthat T%T @o. 46:30 was already cancelled a year before 2in /)15, and in lieu thereof, T%T @o. 1/41was issued to the respondentsN. 7pon diligent inBuiry, petitionersN came to 8now that the cancellation of

T%T 2@o. 46:305 in favor of the respondents=N xxx T%T 2@o. 1/415 was based upon three sets of documents, namely, 25 "rrevocable &ower of Attorney; 215 "rrevocable pecial &ower of Attorney; and 235<eed of Absolute ale.

&etitionersN also allege that because of financial difficulties, they were only able to file acomplaint on +ebruary , //: after consulting with several lawyers.

x x x x 9espondentsN xxx on the other hand do not deny that DernandeI, r. was indeed awarded a

piece of real property by the &DD%. According to the respondentsN xxx, DernandeI, r. was awarded bythe &DD% the 9ight to &urchase the property in Buestion; however, the late DernandeI, r. failed to payall the installments due on the said property. Thus, afraid that he would forfeit his right to purchase the

property awarded to him, DernandeI, r. sold to <olores %amisura his rights for the sum of &*,:44.44 on+ebruary 0, /*3, through a deed of transfer of rights, seemingly a printed form from the&DD%. imultaneous to this, DernandeI, r. and his spouse executed an irrevocable special power of attorney, appointing <olores %amisura as their attorney-in-fact with express power to sign, execute andac8nowledge any contract of disposition, alienation and conveyance of her right over the aforesaid parcelof land.

Apparently, this special power of attorney was executed for the purpose of securing her right totransfer the property to a third person considering that there was a prohibition to dispose of the propertyby the original purchaser within one 25 year from full payment. #lse wise stated, the irrevocable power of attorney was necessary in order to enable the buyer, <olores %amisura, to sell the lot to another,&laridel Mingoa, without the need of reBuiring DernandeI, to sign a deed of conveyance.

'n May /, /*0, <olores %amisura sold her right over the said property to &laridel Mingoa for &6,444.44. %amisura then executed a similar irrevocable power of attorney and a deed of sale of right ina residential land and improvements therein in favor of &laridel Mingoa. 7pon such payment and on thestrength of the said irrevocable power of attorney, &laridel Mingoa too8 possession of the said propertyand began paying all the installments due on the property to &DD%. &laridel Mingoa further secured T%T@o. 46:30 2issued in the name of <omingo DernandeI, r.5 on May, /**. 'n uly /, /6), &laridelMingoa sold to his eldest child, Melanie Mingoa, the property in Buestion for &),444.44. T%T @o.46:30 was thus cancelled and T%T @o. 1/41 was issued in the name of Melanie Mingoa. "t is further claimed that since /** until /)1, &laridel Mingoa religiously paid all the taxes due on the said property;and that from /)3 up to the present, Melanie Mingoa paid all the property taxes due thereon aside fromhaving actual possession of the said property. 2words in brac8ets ours5

'n May /, //*, the 9T% rendered a decision in favor of the petitioners, with the following dispositive portion(

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CD#9#+'9#, premises considered, judgment is hereby rendered in favor of the plaintiffs as

follows( 5 T%T @o. 1/41 and all its derivative titles are hereby declared null and void; 15 'rdering the 9egister of <eeds of PueIon %ity to cancel T%T @o. 1/41 issued in the

name of defendant Melanie Mingoa and corresponding owner=s duplicate certificate and all its derivativetitlesN;

35 'rdering defendant Melanie Mingoa and all derivative owners to surrender owner=s duplicate

copies of transfer certificate of title to the 9egister of <eeds of PueIon %ity for cancellation upon finalityof this decision;

05 'rdering the defendants except the 9egister of <eeds of PueIon %ity to turn over to the

plaintiffs the peaceful possession of the subject property; and :5 'rdering the defendants except the 9egister of <eeds of PueIon %ity to jointly and severally

2sic5 pay the plaintiffs the sum of &4,444.44 as attorney=s feesN and to pay the costs of suit.

' '9<#9#<.

"n ruling in favor of petitioners, the trial court reasoned as follows(

The two 215 parties in the case at bar gave out conflicting versions as to who paid for the subject

property. The plaintiffs claim that they were the ones who paid the entire amount out of the conjugalfunds while it is the contention of the defendant Mingoa that the former were not able to pay. Thedefendant alleged that the right to purchase was sold to him and he was able to pay the wholeamount. The %ourt is of the opinion that petitioners= version is more credible ta8en together with thepresence of the irrevocable power of attorney which both parties admitted. "n light of the version of thedefendants, it is highly improbable that a &ower of Attorney would be constituted by the plaintiffsauthoriIing the former to sell the subject property. This is because for all intents and purposes, the land isalready the defendants= for if we are to follow their claim, they paid for the full amount of the same. "t canbe safely concluded then that the &ower of Attorney was unnecessary because the defendants, asbuyers, can compel the plaintiff-sellers to execute the transfer of the said property after the period of prohibition has lapsed. The defendants, as owners, will have the right to do whatever they want with the

land even without an "rrevocable &ower of Attorney. ince the presence of the "rrevocable &ower of Attorney is established, it is now the tas8 of this %ourt to determine the validity of the sale made by virtueof the said &ower of Attorney. As what was said earlier, the %ourt subscribes to the points raised by theplaintiffs. "t was proved during trial that the signature of the wife was falsified. Therefore, it is as if the wifenever authoriIed the agent to sell her share of the subject land, it being conjugal property. "t follows thatthe sale of half of the land is invalid. Dowever, it must be pointed out that the signature of the deceasedhusband was never contested and is therefore deemed admitted. Ce now come to the half whichbelongs to the deceased husband. The >aw on ales expressly prohibits the agent from purchasing theproperty of the principal without the latter=s consent 2Article 0/ of the %ivil %ode5. "t was establishedfrom the records that defendant &laridel Mingoa sold the subject land to his daughter Melanie. "t is nowfor the %ourt to decide whether this transaction is valid. x x x %onsidering that the sale too8 place in uly/6), it follows from simple mathematical computation that Melanie was then a minor 214 years of age5when she allegedly bought the property from her father. ince Melanie=s father is the sub-agent of thedeceased principal, he is prohibited by law from purchasing the land without the latter=s consent. Thisbeing the case, the sale is invalid for it appears that &laridel Mingoa sold the land to himself. "t should benoted that the defendants could have easily presented Melanie=s birth certificate, it being at their disposal,but they chose not to. ecause of this, this %ourt is of the belief that the presumption that evidencewillfully suppressed would be adverse if produced arises.

The trial court denied respondents= motion for reconsideration of the aforementioned decision in its 'rder of

August 11, //*.

Aggrieved, the respondents appealed to the %A, where their case was doc8eted as *A2.C. *! >oDEFG5 . Dolding that the petitioners were barred by prescription and laches to ta8e any action against the respondentsthe %A, in its herein assailed#e4ision dated e*te9be+ 7' 5///, reversed and set aside the appealed decision, therebydismissing the complaint filed by the petitioners before the trial court. "n full, the disposition reads(

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CD#9#+'9#, in view of the foregoing, the <ecision of the 9T% ranch /1, PueIon %ity, in %ivil

%ase @o. P-/0-/16*, entitled, KDeirs of <omingo DernandeI, r. vs. <olores %amisura, et. al.,L ishereby 9#O#9#< A@< #T A"<#. A new one is hereby entered, <"M""@E the complaint in %ivil%ase @o. P-/0-/16* entitled, KDeirs of <omingo DernandeI, r. vs. <olores %amisura, et. al.,L filed bythe plaintiffs-appellees before the 9T% ranch /1, PueIon %ity for lac8 of merit.

' '9<#9#<.

&etitioners= subseBuent motion for reconsideration was denied by the %A in its impugned Resolution dated

#e4e9be+ 5B' 5///(

Dence, petitioners are now before this %ourt via the present recourse. The ten 245 assigned errors set forth in thepetition all boil down to the essential issue of whether the title of the subject property in the name of respondent MelanieMingoa may still be reconveyed to the petitioners. As we see it, the resolution thereof hinges on these two pivotaBuestions( 25 whether there was a valid alienation involving the subject property; and 215 whether the action impugningthe validity of such alienation has prescribed andJor was barred by laches.

The %ourt shall deal first with the procedural issues raised by the respondents in their %omment.

Ce held in !era2*ru/ v. *alderon that(

As a general rule, only Buestions of law may be raised in a petition for review on certiorari to the

upreme %ourt. Although it has long been settled that findings of fact are conclusive upon this %ourt,there are exceptional circumstances which would reBuire us to review findings of fact of the %ourt of

Appeals, to wit(

25 the conclusion is a finding grounded entirely on speculation, surmise andconjectures; 215 the inference made is manifestly mista8en; 235 there is grave abuse of discretion; 205 the judgment is based on misapprehension of facts; 2:5 the findings of factare conflicting; 2*5 the %ourt of Appeals went beyond the issues of the case and itsfindings are contrary to the admissions of both appellant and appellees; 265 the findingsof fa4t of the ou+t of A**eals a+e 4ont+a+= to those of the t+ial 4ou+t ; 2)5 saidfindings of fact are conclusions without citation of specific evidence on which they arebased; 2/5 the facts set forth in the decision as well as in the petitioner=s main and replybriefs are not disputed by the respondents; 245 the finding of fact of the %ourt of Appeals

is premised on the supposed absence of evidence and is contradicted by evidence onrecord. 2emphasis ours5 The petition before us raises factual issues which are not proper in a petition for review under 9ule 0: of the

9ules of %ourt. Dowever, we find that one of the exceptional circumstances Bualifying a factual review by the %ourt existsthat is, the factual findings of the %A are at variance with those of the trial court. Ce shall then give due course to theinstant petition and review the factual findings of the %A.

#ven if only petitioner <omingo DernandeI, r. executed the OerificationJ%ertification against forum-shopping, thiswill not deter us from proceeding with the judicial determination of the issues in this petition. As we ratiocinated in Heirs oflarte v. ffice of the 'resident (

The general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in

a case and the signature of only one of them is insufficient. Dowever, the %ourt has also stressed that therules on forum shopping were designed to promote and facilitate the orderly administration of justice andthus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimateobjective. The rule of substantial compliance may be availed of with respect to the contents of thecertification. This is because the reBuirement of strict compliance with the provisions regarding thecertification of non-forum shopping merely underscores its mandatory nature in that the certificationcannot be altogether dispensed with or its reBuirements completely disregarded. Thus, under justifiablecircumstances, the %ourt has relaxed the rule reBuiring the submission of such certification consideringthat although it is obligatory, it is not jurisdictional.

"n H* *onstruction and -evelopment *orporation v. mily Homes +ubdivision Homeowners Association, it was held that the signature of only one of the petitioners in the certification against forum

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shopping substantially complied with rules because all the petitioners share a common interest and invo8ea common cause of action or defense. The same leniency was applied by the %ourt in *avile v. Heirs of *avile, because the lonepetitioner who executed the certification of non-forum shopping was a relative and co-owner of the other petitioners with whom he shares a common interest. x x x

x x x "n the instant case, petitioners share a common interest and defense inasmuch as theycollectively claim a right not to be dispossessed of the subject lot by virtue of their and their deceasedparents= construction of a family home and occupation thereof for more than 4 years. The commonalityof their stance to defend their alleged right over the controverted lot thus gave petitioners xxx authority toinform the %ourt of Appeals in behalf of the other petitioners that they have not commenced any action or claim involving the same issues in another court or tribunal, and that there is no other pending action or claim in another court or tribunal involving the same issues. x x x

Dere, all the petitioners are immediate relatives who share a common interest in the land sought to be reconveyed

and a common cause of action raising the same arguments in support thereof. There was sufficient basis, therefore, fo<omingo DernandeI, r. to spea8 for and in behalf of his co-petitioners when he certified that they had not filed any actionor claim in another court or tribunal involving the same issues. Thus, the OerificationJ%ertification that DernandeI, rexecuted constitutes substantial compliance under the 9ules.

Anent the contention that the petition erroneously impleaded the %A as respondent in contravention of ection02a5 of 9ule 0: of the //6 9ules of %ivil &rocedure, we shall apply our ruling in +imon v. *anlas, wherein we held that(

x x x TheN %ourt agrees that the correct procedure, as mandated by ection 0, 9ule 0: of the //6 9ulesof %ivil &rocedure, is not to implead the lower court which rendered the assailed decision. Dowever,impleading the lower court as respondent in the petition for review on certiorari does not automaticallymean the dismissal of the appeal but merely authoriIes the dismissal of the petition. esides, formaldefects in petitions are not uncommon. The %ourt has encountered previous petitions for review oncertiorari that erroneously impleaded the %A. "n those cases, the %ourt merely called the petitioners=attention to the defects and proceeded to resolve the case on their merits.

The %ourt finds no reason why it should not afford the same liberal treatment in this case. Chile

unBuestionably, the %ourt has the discretion to dismiss the appeal for being defective, sound policydictates that it is far better to dispose of cases on the merits, rather than on technicality as the latter approach may result in injustice. This is in accordance with ection *, 9ule of the //6 9ules of %ivil

&rocedure which encourages a reading of the procedural reBuirements in a manner that will help secureand not defeat justice. Ce now come to the substantive issues.

As correctly found by the appellate court, the following facts are undisputed(

. <omingo DernandeI, r. was awarded a piece of real property in /:) by the &DD% as part of thegovernment=s housing program at the time. Title over the said property was issued in /** in the name of DernandeI, r., after full payment for the property was received by the &DD%.

1. @either petitionersN nor DernandeI, r., too8 possession of the said property. 'n the other hand, the

respondentsN too8 possession of the said property in /** and are in actual and physical possessionthereof up to the present, and have made considerable improvements thereon, including a residentialhouse where they presently reside.

3. The 'wner=s <uplicate %opy of the title over the property given by the &DD% to DernandeI, r. was in

the possession of &laridel Mingoa, the latter being able to facilitate the cancellation of the said title andthe issuance ofN a new T%T xxx in the name of Melanie Mingoa.

0. The realty taxes have been paid by respondentsN, albeit in the name of DernandeI, r., but all official

receipts of tax payments are 8ept by the respondentsN.

:. +rom /** 2the time when the respondentsN were able to possess the property5 to /)3 2the time whenthe petitionersN had 8nowledge that the T%T in the name of DernandeI, r. had already been cancelled

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by the 9egistry of <eeds of PueIon %ity5 covers almost a span of 6 years; and from /)3 to //: 2thetime when the Deirs filed the original action5 is a period of another 1 years.

The &A in favor of <olores %amisura pertinently states that the latter is the lawful attorney-in-fact of <omingo

DernandeI, r., married to ergia DernandeI, to do and perform, among others, the following acts and deeds( . To sign, execute and ac8nowledge all such contracts, deeds or other instruments which may bereBuired by the &eople=s Domesite and Dousing %orporation with respect to the purchase of that certainparcel of land 8nown and designated as >ot @o. : loc8 #-)/ of the Malaya Avenue ubdivision,situated in PueIon %ity and containing an area of :14 sBuare meters, more or less, which " have acBuiredthru the %#@T9A> A@$ TA++ D'7"@E %'9&'9AT"'@; 1. To sign, execute and ac8nowledge all such contracts or other instruments which may deem necessaryor be reBuired to sign, execute and ac8nowledge for the purpose of selling, transferring, conveying,disposing of or alienating whatever rights " may have over that parcel of land mentioned above;x x x. The <eed of Transfer of 9ights, also executed by DernandeI, r. in %amisura=s favor, expressly states that the

former, in consideration of the amount of &*,:44.44, transfers his rights over the subject property to the latter. @otablysuch deed was simultaneously executed with the &A on +ebruary 0, /*3.

+rom the foregoing, the %ourt cannot but conclude that the &A executed by DernandeI, r. in respondent

%amisuraXs favor was, in reality, an alienation involving the subject property. Ce particularly note that DernandeI, r.

aside from executing said &A, li8ewise sold his rights and interests over the property awarded by the &DD% to%amisura. The %A committed no error when it ruled(

x x x Appreciating the case in its entirety, the purported &A appear to be merely a grant of authority to%amisura 2and then to &laridel Mingoa5 to sell and dispose of the subject property as well as a grant of right to purchase the said property; but in essence, such &A are disguised deeds of sale of the propertyexecuted in circumventing the retention period restriction over the said property. Oerily, the parties 8newthat the land in Buestion could not be alienated in favor of any third person within one 25 year without theapproval of the &DD%.

Daving ruled that the &A in favor of %amisura was a contract of sale, the next Buestion is whether or not such

sale was valid.

To constitute a valid contract, the %ivil %ode reBuires the concurrence of the following elements( 25 cause, 215object, and 235 consent.

The consent of <omingo DernandeI, r. to the contract is undisputed, thus, the sale of his Y share in the conjugaproperty was valid. Cith regard to the consent of his wife, ergia DernandeI, to the sale involving their conjugal propertythe trial court found that it was lac8ing because said wife=s signature on the &A was falsified. @otably, even the %Aobserved that the forgery was so blatant as to be remar8ably noticeable to the na8ed eye of an ordinary person. Davingcompared the Buestioned signature on the &A with those of the documents bearing the sample standard signature oergia DernandeI, we affirm both lower courtsX findings regarding the forgery.

Dowever, ergia=s lac8 of consent to the sale did not render the transfer of her share invalid.

&etitioners contend that such lac8 of consent on the part of ergia DernandeI rendered the &As and the deed ofsale fictitious, hence null and void in accordance with Article 04/ of the %ivil %ode. &etitioners li8ewise contend that anaction for the declaration of the non-existence of a contract under Article 04 does not prescribe.

Ce find, after meticulous review of the facts, that Articles 04/ and 04 are not applicable to the matter nowbefore us.

"t bears stressing that the subject matter herein involves conjugal property. aid property was awarded to <omingoDernandeI, r. in /:). The assailed &As were executed in /*3 and /*0. Title in the name of <omingo DernandeIr. covering the subject property was issued on May 13, /**. The sale of the property to Melanie Mingoa and theissuance of a new title in her name happened in /6). ince all these events occurred before the +amily %ode too8 effecin /)), the provisions of the @ew %ivil %ode govern these transactions. Ce Buote the applicable provisions, to wit(

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Art. *:. The husband is the administrator of the conjugal partnership.

Art. **. 7nless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any realproperty of the conjugal partnership without the wife=s consent. "f she refuses unreasonably to give her consent, the court may compel her to grant the same. x x x.

Art. 63. The wife may, du+ing the 9a++iage' and within ten =ea+s f+o9 the t+ansa4tion

;uestioned' as8 the courts for the annulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienatedby the husband. 2#mphasis ours.5

@otwithstanding the foregoing, petitioners argue that the disposition of conjugal property made by a husbandwithout the wife=s consent is null and void and the right to file an action thereon is imprescriptible, in accordancewith arcia v. *A and&ucoy v. 'aulino.

%oncededly, in the aforementioned cases of arcia and &ucoy , the contracts involving the sale of conjugal propertyby the husband without the wifeXs consent were declared null and void by this %ourt. ut even in &ucoy , we significantlyruled, in reference to Article 63, that(

The plain meaning attached to the plain language of the law is that the contract, in its entirety,

executed by the husband without the wife=s consent, 9a= be annulled b= the wife. 2emphasis ours5 "n succeeding cases, we held that alienation andJor encumbrance of conjugal property by the husband without the

wife=s consent is not null and void but merely voidable.

"n +ps. Alfredo v. +ps. &orras, we held that(

The +amily %ode, which too8 effect on 3 August /)), provides that any alienation or encumbrance made by the husband of the conjugal partnership property without the consent of the wife isvoid. Dowever, when the sale is made before the effectivity of the +amily %ode, the applicable law is the%ivil %ode.

Article 63 of the %ivil %ode provides that the disposition of conjugal property without the wifeXs

consent is not void but merely voidable. Ce li8ewise made the same holding in 'elayo v. 'ere/ (

xxx 7nderN Article 63, in relation to Article **, both of the @ew %ivil %ode, which was still ineffect on anuary , /)) when the deed in Buestion was executed, the lac8 of marital consent to thedisposition of conjugal property does not ma8e the contract void ab initio but merely voidable.

"n !era2*ru/ v. *alderon, the %ourt noted the state of jurisprudence and elucidated on the matter, thus(

"n the recent case of Heirs of gnacia Aguilar2Ceyes v. +pouses 1i$ares, we reiterated the rule

that the husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the wife, otherwise, the contract is voidable. To wit(

"ndeed, in several cases the %ourt has ruled that such alienation or encumbrance

by the husband is void. The better view, however, is to consider the transaction asmerely voidable and not void. This is 4onsistent with A+ti4le 17 of the iil ode*u+suant to whi4h the wife 4ould' du+ing the 9a++iage and within 1/ =ea+s f+o9 the;uestioned t+ansa4tion' see@ its annul9ent(

x x x >i8ewise, in the case of Heirs of *hristina Ayuste v. *ourt of Appeals, we declared that(

There is no ambiguity in the wording of the law. A sale of real property of theconjugal partnership made by the husband without the consent of his wife is

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voidable. The action for annulment must be brought during the marriage and within tenyears from the Buestioned transaction by the wife. Chere the law spea8s in clear andcategorical language, there is no room for interpretation R there is room only for application.

x x x 2#mphasis ours.5

Dere, the husband=s first act of disposition of the subject property occurred in /*3 when he executed the &A and

the <eed of Transfer of 9ights in favor of <olores %amisura. Thus, the right of action of the petitioners accrued in /*3as Article 63 of the %ivil %ode provides that the wife may file for annulment of a contract entered into by the husbandwithout her consent within ten 245 years from the transaction Buestioned. &etitioners filed the action for reconveyance in//:. #ven if we were to consider that their right of action arose when they learned of the cancellation of T%T @o46:30 and the issuance of T%T @o. 1/41 in Melanie Mingoa=s name in //3, still, twelve 215 years have lapsed sincesuch discovery, and they filed the petition beyond the period allowed by law. Moreover, when ergia DernandeI, togethewith her children, filed the action for reconveyance, the conjugal partnership of property with DernandeI, r. had alreadybeen terminated by virtue of the latterXs death on April *, /)3. %learly, therefore, petitioners= action has prescribed.

And this is as it should be, for in the same !era2*ru/ case, we further held that(

xxx 7nderN Article 63 of the @ew %ivil %ode, an action for the annulment of any contractentered into by the husband without the wife=s consent must be filed 25 during the marriage; and 215within ten years from the transaction Buestioned. Whe+e an= one of these two 4onditions is la4@ing'the a4tion will be 4onside+ed as haing been filed out of ti9e(

"n the case at bar, while respondent filed her complaint for annulment of the deed of sale on uly

), //0, i.e., within the ten-year period counted from the execution of the deed of sale of the property onune 3, /)*, the marriage between her and Avelino had already been dissolved by the death of the latter on @ovember 14, //3. "n other words, her marriage to Avelino was no longer subsisting at the time shefiled her complaint. Therefore, the civil case had already been barred by prescription. 2#mphasis ours.5 Thus, the failure of ergia DernandeI to file with the courts an action for annulment of the contract during the

marriage and within ten 245 years from the transaction necessarily barred her from Buestioning the sale of the subjectproperty to third persons.

As we held in !da. -e Camones v. Agbayani (

"n !illaranda v. !illaranda, et al ., this %ourt, through Mr. ustice Artemio O. &anganiban, ruled thatwithout the wife=s consent, the husband=s alienation or encumbrance of conjugal property prior to theeffectivity of the +amily %ode is not void, but merely voidable. Dowever, the wifeEs failu+e to file withthe 4ou+ts an a4tion fo+ annul9ent of the 4ont+a4t du+ing the 9a++iage and within ten 1/C =ea+sf+o9 the t+ansa4tion shall +ende+ the sale alid( x x x 2emphasis ours5 More than having merely prescribed, petitioners= action has li8ewise become stale, as it is barred by laches.

"n sabela *olleges v. Heirs of >ieves2%olentino, this %ourt held(

>aches means the failure or neglect for an unreasonable and unexplained length of time to do that

which, by observance of due diligence, could or should have been done earlier. "t is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to

assert his right either has abandoned or declined to assert it. >aches thus operates as a bar in eBuity. x x x

The time-honored rule anchored on public policy is that relief will be denied to a litigant whose

claim or demand has become Kstale,L or who has acBuiesced for an unreasonable length of time, or whohas not been vigilant or who has slept on his rights either by negligence, folly or inattention. "n other words, public policy reBuires, for peace of society, the discouragement of claims grown stale for non-assertion; thus laches is an impediment to the assertion or enforcement of a right which has become,under the circumstances, ineBuitable or unfair to permit.

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&ertinently, in -e la *al/ada2*ierras v. *A, we ruled that a complaint to recover the title and possession of the lotfiled 1 years after the registration of the sale is considered neglect for an unreasonably long time to assert a right to theproperty.

Dere, petitionersX unreasonably long period of inaction in asserting their purported rights over the subject propertyweighs heavily against them. Ce Buote with approval the findings of the %A that(

"t was earlier shown that there existed a period of 6 years during which time DernandeI, r. xxxnever even Buestioned the defendants-appellants possession of the property; also there was another interval of 1 years after discovering that the T%T of the property in the name of DernandeI, r. beforethe Deirs of DernandeI instituted an action for the reconveyance of the title of the property.

x x x

The fact that the MingoaXs were able to ta8e actual possession of the subject property for such along period without any form of cogniIable protest from DernandeI, r. and the plaintiffs-appelleesstrongly calls for the application of the doctrine of laches. "t is common practice in the real estate industry,an ocular inspection of the premises involved is a safeguard to the cautious and prudent purchaser usually ta8es, and should he find out that the land he intends to buy is occupied by anybody else other than the seller who is not in actual possession, it could then be incumbent upon the purchaser to verifythe extent of the occupantXs possessory rights. The plaintiffs-appellees asseverate that the award wasmade in favor of DernandeI, r. in /:); full payment made in /*3; and title issued in /**. "t wouldthus be contrary to ordinary human conduct 2and prudence dictates otherwise5 for any awardee of real

property not to visit and inspect even once, the property awarded to him and find out if there are anytransgressors in his property.

+urthermore, DernandeI, r.Xs inaction during his lifetime lends more credence to the defendants-appellants assertion that the said property was indeed sold by DernandeI, r. by way of the &As, albeitwithout the consent of his wife. xxx

"n addition, the reasons of poverty and poor health submitted by the plaintiffs-appellees could not justify the 1 years of delay in filing a complaint against the defendants-appellants. The records arebereft of any evidence to support the idea that the plaintiffs-appellees diligently asserted their rights over the said property after having 8nowledge of the cancellation of the T%T issued in DernandeIname. Moreover the %ourt seriously doubts the plausibility of this contention since what the plaintiffs-appellees are trying to impress on this %ourtXs mind is that they did not 8now anything at all except only

shortly before the death of DernandeI. To accept that not even the wife 8new of the transactions madeby DernandeI, r. nor anything about the actual possession of the defendants-appellants for such a longperiod is to 7s absurd if not fantastic.

"n sum, the rights and interests of the spouses DernandeI over the subject property were validly transferred to

respondent <olores %amisura. ince the sale of the conjugal property by DernandeI, r. was without the consent of hiswife, ergia, the same is voidable; thus, binding unless annulled. %onsidering that ergia failed to exercise her right toas8 for the annulment of the sale within the prescribed period, she is now barred from Buestioning the validitythereof. And more so, she is precluded from assailing the validity of the subseBuent transfers from %amisura to &larideMingoa and from the latter to Melanie Mingoa. Therefore, title to the subject property cannot anymore be reconveyed tothe petitioners by reason of prescription and laches. The issues of prescription and laches having been resolved, it is nolonger necessary to discuss the other issues raised in this petition.

WH%R%)OR%, the instant petition is #%$I%# and the assailed <ecision dated eptember 6, 1444 and 9esolutiondated <ecember 1/, 1444 of the %ourt of Appeals are hereby A))IR,%#.

%osts against the petitioners.

O OR#%R%#.

TH% H%IR O) &ROTAIO 3O' R( and,ARTA "AROLA' na9el=: L%O$OR'I,&LIIO' &ROTAIO' R(' A$TO$IO'"%!%RL? A$$ LORRAI$$%' TITA'O$OLAIO$' L%O$ORA andAU$IO$' all su+na9ed 3O'

3(R( $o( 10707

&resent(

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+e*+esented b=L%O$ORA "( 3O'&etitioners, -versus - %T%R L( %R!AIO and RITO "( 3O'9espondents.

%'9'@A, *.J., *hairperson,>#'@A9<'-<# %AT9',#9AM"@,<#> %AT">>', andO">>A9AMA, 9., JJ.

&romulgated( eptember 6, 14

#22222222222222222222222222222222222222222222222222222222222222222222222222222222222222222#

# % I I O $ "%RA,I$' J.:

The disposition by sale of a portion of the conjugal property by the surviving spouse without the prior liBuidation mandatedby Article 34 of the amily *ode is not necessarily void if said portion has not yet been allocated by judicial orextrajudicial partition to another heir of the deceased spouse. At any rate, the reBuirement of prior liBuidation does notprejudice vested rights.

Ante4edents

'n +ebruary 11, /6*, esus . Eaviola sold two parcels of land with a total area of 6,04 sBuare meters situated inouthern >eyte to &rotacio . Eo, r. 2&rotacio, r.5. Twenty three years later, or on March 1/, ///, &rotacio, r. executedan Affidavit of Cenunciation and @aiver , whereby he affirmed under oath that it was his father, &rotacio Eo, r. 2&rotacior.5, not he, who had purchased the two parcels of land 2the property5. 'n @ovember 1:, /)6, Marta arola Eo died. he was the wife of &rotacio, r. and mother of the petitioners. 'n<ecember 1), ///, &rotacio, r. and his son 9ito . Eo 2joined by 9itos wife <ina . Eo5 sold a portion of the propertywith an area of :,:*4 sBuare meters to #ster >. ervacio 2ervacio5 for :,*)*,6*).44.₱ 'n March 1, 144, the petitionersdemanded the return of the property, but ervacio refused to heed their demand. After barangay proceedings failed toresolve the dispute, they sued ervacio and 9ito in the 9egional Trial %ourt in Maasin %ity, outhern >eyte 29T%5 for theannulment of the sale of the property.

The petitioners averred that following &rotacio, r=s renunciation, the property became conjugal property; and that the saleof the property to ervacio without the prior liBuidation of the community property between &rotacio, r. and Marta wasnull and void.

ervacio and 9ito countered that &rotacio, r. had exclusively owned the property because he had purchased itwith his own money. 'n 'ctober 3, 1441, the 9T% declared that the property was the conjugal property of &rotacio, r. and Marta, not theexclusive property of &rotacio, r., because there were three vendors in the sale to ervacio 2namely( &rotacio, r., 9itoand <ina5; that the participation of 9ito and <ina as vendors had been by virtue of their being heirs of the late Marta; thatunder Article *4 of the *ivil *ode, the law in effect when the property was acBuired, all property acBuired by eitherspouse during the marriage was conjugal unless there was proof that the property thus acBuired pertained exclusively tothe husband or to the wife; and that &rotacio, r.s renunciation was grossly insufficient to rebut the legal presumption. @onetheless, the 9T% 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, aslong as the portion sold does not encroach upon the legitimate 2sic 5 of other heirs, it is valid. Puoting Tolentinoscommentary on the matter as authority, the 9T% opined(

"n his comment on Article 6: of the @ew %ivil %ode regarding the dissolution of the conjugal partnership,enator Arturo Tolentino, says sic N

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 thepartnership, such sale must be made in the manner and with the formalities established by the9ules of %ourt for the sale of the property of the deceased persons. Any sale, transfer,

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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 liBuidation andpartition. &ending the liBuidation, the disposition must be considered as limited only to thecontingent share or interest of the vendor in the particular property involved, but not to thecorpus 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 reBuired formality, is not however,null ab initio, for the law recogniIes their validity so long as they do not exceed the portionwhich, after liBuidation and partition, should pertain to the surviving spouse who made thecontract. underlining suppliedN

"t seems clear from these comments of enator Arturo Tolentino on the provisions of the @ew %ivil %odeand the +amily %ode 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 thecommunity property is not wholly void ab initiodespite Article 43 of the +amily %ode, and shall be valid tothe extent of what will be allotted, in the final partition, to the vendor. And rightly so, because whyinvalidate the sale by the surviving spouse of a portion of the community property that will eventually behisJher share in the final partition? &ractically there is no reason for that view and it would be absurd. @ow here, in the instant case, the :,:*4 sBuare meter portion of the 6,04 sBuare-meter conjugal lot iscertainly mush 2sic 5 less than what vendors &rotacio Eo and his son 9ito . Eo will eventually get as their share in the final partition of the property. o the sale is still valid. CD#9#+'9#, premises considered, complaint is hereby <"M"#< without pronouncement as to cost

and damages. ' '9<#9#<.

The 9T%s denial of their motion for reconsideration prompted the petitioners to appeal directly to the %ourt on a pureBuestion of law.

Issue The petitioners claim that Article 34 of the amily *ode is the applicable law; and that the sale by &rotacio, r., et al. toervacio was void for being made without prior liBuidation.

"n contrast, although they have filed separate comments, ervacio and 9ito both argue that Article 34 ofthe amily *ode was inapplicable; that the want of the liBuidation 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 notalso prejudice any rights of the petitioners as heirs, considering that what the sale disposed of was within the aliBuotportion of the property that the vendors were entitled to as heirs.

Ruling

The appeal lac8s merit.

Article 34 of the amily *ode reads(

Article 34. 7pon the termination of the marriage by death, the conjugal partnership property shallbe liBuidated in the same proceeding for the settlement of the estate of the deceased.

"f no judicial settlement proceeding is instituted, the surviving spouse shall liBuidate the conjugal

partnership property either judicially or extra-judicially within one year from the death of the deceasedspouse. "f upon the lapse of the six month period no liBuidation is made, any disposition or encumbranceinvolving the conjugal partnership property of the terminated marriage shall be void.

hould the surviving spouse contract a subseBuent marriage without compliance with the foregoing

reBuirements, a mandatory regime of complete separation of property shall govern the property relationsof the subseBuent marriage.

Article 34 is to be read in consonance with Article 4: of the amily *ode, vi/ (

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Article 4:. "n 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%hapter shall be of supplementary application.

The *+oisions of this ha*te+ shall also a**l= to 4on2ugal *a+tne+shi*s of gains al+ead=

established between s*ouses befo+e the effe4tiit= of this ode' without *+e2udi4e to ested +ightsal+ead= a4;ui+ed in a44o+dan4e with the iil ode o+ othe+ laws' as *+oided in A+ti4le 506( 2n5emphasis suppliedN "t is clear that conjugal partnership of gains established before and after the effectivity of the amily *ode are

governed by the rules found in %hapter 0 2%onjugal &artnership of Eains5 of Title "O 2&roperty 9elations etweenDusband And Cife5 of theamily *ode. Dence, any disposition of the conjugal property after the dissolution of theconjugal partnership must be made only after the liBuidation; otherwise, the disposition is void.

efore applying such rules, however, the conjugal partnership of gains must be subsisting at the time of the

effectivity of the amily *ode. There being no dispute that &rotacio, r. and Marta were married prior to the effectivity othe amily *ode on August 3, /)), their property relation was properly characteriIed as one of conjugal partnershipgoverned by the *ivil *ode. 7pon Marta=s death in /)6, the conjugal partnership was dissolved, pursuant to Article 6:25 of the *ivil *ode, and an implied ordinary co-ownership ensued among &rotacio, r. and the other heirs of Marta withrespect to her share in the assets of the conjugal partnership pending a liBuidation following its liBuidation. The ensuingimplied ordinary co-ownership was governed by Article 0/3 of the *ivil *ode, to wit(

Article 0/3. #ach 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. ut the effect of the alienation or themortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in thedivision upon the termination of the co-ownership. 23//5

&rotacio, r., 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 beingfirst done either by agreement or by judicial decree. 7ntil then, all that he had was an ideal or abstract Buota in Marta=sshare. @onetheless, a co-owner could sell his undivided share; hence, &rotacio, r. had the right to freely sell and disposeof his undivided interest, but not the interest of his co-owners. %onseBuently, the sale by &rotacio, r. and 9ito as coowners without the consent of the other co-owners was not necessarily void, for the rights of the selling co-owners werethereby effectively transferred, ma8ing the buyer 2ervacio5 a co-owner of Marta=s share. This result conforms to the well-established principle that the binding force of a contract must be recogniIed as far as it is legally possible to do so2quando res non valet ut ago, valeat quantum valere potest 5.

Article 4: of the amily *ode, supra, expressly provides that the applicability of the rules on dissolution of theconjugal partnership is without prejudice to vested rights already acBuired in accordance with the *ivil *ode or other lawsThis provision gives another reason not to declare the sale as entirely void. "ndeed, such a declaration prejudices therights of ervacio who had already acBuired the shares of &rotacio, r. and 9ito in the property subject of the sale.

"n their separate comments, the respondents aver that each of the heirs had already received a certain allotted

portion at the time of the sale, and that &rotacio, r. and 9ito sold only the portions adjudicated to and owned by themDowever, they did not present any public document on the allocation among her heirs, including themselves, of specificshares in Marta=s estate. @either did they aver that the conjugal properties had already been liBuidated and partitioned

Accordingly, pending a partition among the heirs of Marta, the efficacy of the sale, and whether the extent of the propertysold 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 &ailon2*asilao v. *ourt of Appeals, to wit(

+rom the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided

share, a sale of the enti+e *+o*e+t= b= one

4o-owne+ without the 4onsent of the othe+ 4o-owne+s is not null and oid . Dowever, only the rightsof the co-owner-seller are transferred, thereby ma8ing the buyer a co-owner of the property.

The proper action in cases li8e 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-

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owners who alienated their shares, but the <"O""'@ of the common property as if it continued to remainin the possession of the co-owners who possessed and administered it Mainit v. andoy, supraN.

Thus' it is now settled that the a**+o*+iate +e4ou+se of 4o-owne+s in 4ases whe+e thei+

4onsent we+e not se4u+ed in a sale of the enti+e *+o*e+t= as well as in a sale 9e+el= of theundiided sha+es of so9e of the 4o-owne+s is an a4tion fo+ &ARTITIO$ unde+ Rule 6B of theReised Rules of ou+t( xxx "n the meanwhile, ervacio 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 ustice &aras are explanatory of this result, vi/ (

xxx "Nf it turns out that the property alienated or mortgaged really would pertain to the share of thesurviving spouse, then said transaction is valid. "f it turns out that there really would be, after liBuidation,no more conjugal assets then the whole transaction is null and void. ut if it turns out that half of theproperty 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 thatcorresponding to the other is not. ince all these can be determined only at the time the liBuidation isover, it follows logically that a disposal made by the surviving spouse is not void ab initio. Thus, it hasbeen held that the sale of conjugal properties cannot be made by the surviving spouse without the legalreBuirements. The sale is void as to the share of the deceased spouse 2except of course as to that portionof the husbands share inherited by her as the surviving spouse5. The buyers of the property that could notbe validly sold become trustees of said portion for the benefit of the husbands other heirs, the cestui quetrust ent . aid heirs shall not be barred by prescription or by laches 2+ee *uison, et al. v. ernande/, et

al.,>-6*0, an.3, /:/.5WH%R%)OR%, we #%$? the petition for review on certiorari ; andA))IR, the decision of the 9egional

Trial %ourt.

The petitioners shall pay the costs of suit. O OR#%R%#(

b( Unde+ the )a9il= ode

3UIA$3 ! A&A$3A$I"A$' J.:

The sale of a conjugal property reBuires the consent of both the husband and the wife. The absence of the consenof one renders the sale null and void, while the vitiation thereof ma8es it merely voidable. 'nly in the latter case canratification cure the defect.

These were the principles that guided the %ourt in deciding this petition for review of the <ecision dated anuary 34//* and the 9esolution dated May 1), //*, promulgated by the %ourt of Appeals in %A-E9 %O @o. 06:), affirming the<ecision of the lower court and denying reconsideration, respectively.

'n May 1), //4, &rivate 9espondent Eilda %orpuI filed an Amended %omplaint against her husband udie %orpuIand &etitioners-pouses Antonio and >uIviminda Euiang. The said %omplaint sought the declaration of a certain deed osale, which involved the conjugal property of private respondent and her husband, null and void. The case was raffled to

the 9egional Trial %ourt of $oronadal, outh %otabato, ranch 1:. "n due course, the trial court rendered a<ecision dated eptember /, //1, disposing as follows(

KA%%'9<"@E>, judgment is rendered for the plaintiff and against the defendants,

. <eclaring both the <eed of Transfer of 9ights dated March , //4 2#xh. UA=5 and the Uamicable settlement= datedMarch *, //4 2#xh. U=5 as null and void and of no effect;

1. 9ecogniIing as lawful and valid the ownership and possession of plaintiff Eilda %orpuI over the remaining one-halfportion of >ot /, loc8 ), 2>9%5 &sd-*:04/ which has been the subject of the <eed of Transfer of 9ights 2#xh. UA=5;

3. 'rdering plaintiff Eilda %orpuI to reimburse defendants >uIviminda and Antonio Euiang the amount of @"@#TD'7A@< 2&/,444.445 &#' corresponding to the payment made by defendants Euiangs to Manuel %allejo for theunpaid balance of the account of plaintiff in favor of Manuel %allejo, and another sum of &36/.*1 representing one-half of

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the amount of realty taxes paid by defendants Euiangs on >ot /, loc8 ), 2>9%5 &sd-*:04/, both with legal intereststhereon computed from the finality of the decision.

@o pronouncement as to costs in view of the factual circumstances of the case.L

<issatisfied, petitioners-spouses filed an appeal with the %ourt of Appeals. 9espondent %ourt, in its challenged<ecision, ruled as follows(

KCD#9#+'9#, the appealed decision of the lower court in %ivil %ase @o. 140 is hereby A++"9M#< by this%ourt. @o costs considering plaintiff-appellee=s failure to file her brief, despite notice.L

9econsideration was similarly denied by the same court in its assailed 9esolution(

K+inding that the issues raised in defendants-appellants= motion for reconsideration of 'ur decision in this case of anuary 34, //*, to be a mere rehash of the same issues which Ce have already passed upon in the saiddecision, and there beingN no cogent reason to disturb the same, this %ourt 9#'>O# to <#@ the instantmotion for reconsideration for lac8 of merit.L

The facts of this case are simple. 'ver the objection of private respondent and while she was in Manila see8ingemployment, her husband sold to the petitioners-spouses one half of their conjugal property, consisting of their residenceand the lot on which it stood. The circumstances of this sale are set forth in the <ecision of 9espondent %ourt, whichBuoted from the <ecision of the trial court, as follows(

K. &laintiff Eilda %orpuI and defendant udie %orpuI are legally married spouses. They were married on<ecember 10, /*) in acolod %ity, before a judge. This is admitted by defendants-spouses Antonio and>uIviminda Euiang in their answer, and also admitted by defendant udie %orpuI when he testified in court 2tsn.

p..3, une /, //15, although the latter says that they were married in /*6. The couple have three children,namely( unie R ) years old, Darriet R 6 years of age, and odie or oji, the youngest, who was : years ofage in August, //4 when her mother testified in court.

ometime on +ebruary 0, /)3, the couple Eilda and udie %orpuI, with plaintiff-wife Eilda %orpuI as vendee,bought a 01 sB. meter lot located in arangay Een. &aulino antos 2o. 5, $oronadal, outh %otabato, andparticularly 8nown as >ot /, loc8 ), 2>9%5 &sd-*:04/ from Manuel %allejo who signed as vendor through aconditional deed of sale for a total consideration of &0,63:.44. The consideration was payable in installment,with right of cancellation in favor of vendor should vendee fail to pay three successive installments 2#xh. U1=, tsn.p. *, +ebruary 0, //45.

1. ometime on April 11, /)), the couple Eilda and udie %orpuI sold one-half portion of their >ot @o. /,loc8 ), 2>9%5 &sd-*:04/ to the defendants-spouses Antonio and >uIviminda Euiang. The latter have sincethen occupied the one-half portion andN built their house thereon 2tsn. p. 0, May 11, //15. They are thus

adjoining neighbors of the %orpuIes.3. &laintiff Eilda %orpuI left for Manila sometime in une /)/. he was trying to loo8 for wor8 abroad, intheN Middle #ast. 7nfortunately, she became a victim of an unscrupulous illegal recruiter. he was not able to goabroad. he stayed for sometime in Manila however, coming bac8 to $oronadal, outh %otabato, x x x on March, //4. &laintiff=s departure for Manila to loo8 for wor8 in the Middle #ast was with the consent of her husbandudie %orpuI 2tsn. p. *, Aug.1, //4; p. 4, ept. *, //5.

After his wife=s departure for Manila, defendant udie %orpuI seldom went home to the conjugal dwelling. Destayed most of the time at his place of wor8 at amahang @ayon uilding, a hotel, restaurant, and acooperative. <aughter Darriet %orpuI went to school at $ing=s %ollege, o. , $oronadal, outh %otabato, butshe was at the same time wor8ing as household help of, and staying at, the house of Mr. &anes. Der brotherunie was not wor8ing. Der younger sister odie 2oji5 was going to school. Der mother sometimes sent themmoney 2tsn. p. 0, ept. *, //5.

ometime in anuary //4, Darriet %orpuI learned that her father intended to sell the remaining one-half portionincluding their house, of their homelot to defendants Euiangs. he wrote a letter to her mother informingher. he Eilda %orpuIN replied that she was objecting to the sale. Darriet, however, did not inform her fatherabout this; but instead gave the letter to Mrs. >uIviminda Euiang so that she EuiangN would advise her father2tsn. pp. *-6, ept. *, //5.

0. Dowever, in the absence of his wife Eilda %orpuI, defendant udie %orpuI pushed through the sale of theremaining one-half portion of >ot /, loc8 ), 2>9%5 &sd-*:04/. 'n March , //4, he sold to defendant>uIviminda Euiang thru a document 8nown as U<eed of Transfer of 9ights= 2#xh. UA=5 the remaining one-halfportion of their lot and the house standing thereon for a total consideration of &34,444.44 of which &:,444.44was to be paid in une , //4. Transferor udie %orpuI=s children unie and Darriet signed the document aswitnesses.

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+our 205 days after March , //4 or on March :, //4, obviously to cure whatever defect in defendant udie%orpuI=s title over the lot transferred, defendant >uIviminda Euiang as vendee executed another agreementover >ot /, loc8 ), 2>9%5 &sd-*:04) 2#xh. U3=5, this time with Manuela imeneI %allejo, a widow of the originalregistered owner from whom the couple udie and Eilda %orpuI originally bought the lot 2#xh. U1=5, who signed asvendor for a consideration of &/,444.44. <efendant udie %orpuI signed as a witness to the sale 2#xh. U3-

A=5. The new sale 2#xh. U3=5 describes the lot sold as >ot ), loc8 /, 2>9%5 &sd-*:04) but it is obvious from themass of evidence that the correct lot is >ot ), loc8 /, 2>9%5 &sd-*:04/, the very lot earlier sold to the coupleEilda and udie %orpuI.

:. ometime on March , //4, plaintiff returned home. he found her children staying with other

households. 'nly unie was staying in their house. Darriet and oji were with Mr. &anes. Eilda gathered herchildren together and stayed at their house. Der husband was nowhere to be found. he was informed by herchildren that their father had a wife already.

*. +or staying in their house sold by her husband, plaintiff was complained against by defendant >uIvimindaEuiang and her husband Antonio Euiang before the arangay authorities of arangay Eeneral &aulino antos2o. 5, $oronadal, outh %otabato, for trespassing 2tsn. p. 30, Aug. 6, //45. The case was doc8eted by thebarangay authorities as arangay %ase @o. 3) for Utrespassing=. 'n March *, //4, the parties thereat signed adocument 8nown as Uamicable settlement=. "n full, the settlement provides for, to wit(

UThat respondent, Mrs. Eilda %orpuI and her three children, namely( unie, Dariet and udie to leavevoluntarily the house of Mr. and Mrs. Antonio Euiang, where they are presently boarding without anycharge, on or before April 6, //4.

+A"> @'T 7@<#9 TD# &#@A>T '+ TD# >AC.=

elieving that she had received the shorter end of the bargain, plaintiff went to the arangay %aptain ofarangay &aulino antos to Buestion her signature on the amicable settlement. he was referred however tothe 'fficer-"n-%harge at the time, a certain Mr. de la %ruI. The latter in turn told her that he could not doanything on the matter 2tsn. p. 3, Aug. 6, //45.

This particular point was not rebutted. The arangay %aptain who testified did not deny that Mrs. Eilda %orpuIapproached him for the annulment of the settlement. De merely said he forgot whether Mrs. %orpuI hadapproached him 2tsn. p. 3, ept. 1*, //45. Ce thus conclude that Mrs. %orpuI really approached thearangay %aptain for the annulment of the settlement. Annulment not having been made, plaintiff stayed put inher house and lot.

6. <efendant-spouses Euiang followed thru the amicable settlement with a motion for the execution of theamicable settlement, filing the same with the Municipal Trial %ourt of $oronadal, outh %otabato. Theproceedings areN still pending before the said court, with the filing of the instant suit.

). As a conseBuence of the sale, the spouses Euiang spent &*44.44 for the preparation of the <eed ofTransfer of 9ights, #xh. UA=;&/,444.44 as the amount they paid to Mrs. Manuela %allejo, having assumed theremaining obligation of the %orpuIes to Mrs. %allejo 2#xh. U3=5; &44.44 for the preparation of #xhibit U3=; a totalof &6:/.*1 basic tax and special educational fund on the lot; &16.:4 as the total documentary stamp tax on thevarious documents; &:3:.61 for the capital gains tax; &11.:4 as transfer tax; a standard fee of&6.44;certification fee of &:.44. These expenses particularly the taxes and other expenses towards the transfer of thetitle to the spouses Euiangs were incurred for the whole >ot /, loc8 ), 2>9%5 &sd-*:04/.L

9espondent %ourt found no reversible error in the trial court=s ruling that any alienation or encumbrance by thehusband of the conjugal property without the consent of his wife is null and void as provided under Article 10 of the+amily %ode. "t also rejected petitioners= contention that the Kamicable settlementL ratified said sale, citing Article 04/ o

the %ode which expressly bars ratification of the contracts specified therein, particularly those Kprohibited or declared voidby law.L

Dence, this petition.

"n their Memorandum, petitioners assign to public respondent the following errors(

FI

Chether or not the assailed <eed of Transfer of 9ights was validly executed.

II

Chether or not the %ourt of Appeals erred in not declaring as voidable contract under Art. 3/4 of the %ivil %odethe impugned <eed of Transfer of 9ights which was validly ratified thru the execution of the Uamicable settlement=by the contending parties.

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III

Chether or not the %ourt of Appeals erred in not setting aside the findings of the %ourt a Buo which recogniIedas lawful and valid the ownership and possession of private respondent over the remaining one half 2J15 portionof the subject property.L

"n a nutshell, petitioners-spouses contend that 25 the contract of sale 2<eed of Transfer of 9ights5 was merelyvoidable, and 215 such contract was ratified by private respondent when she entered into an amicable settlement withthem.

The petition is bereft of merit.

&etitioners insist that the Buestioned <eed of Transfer of 9ights was validly executed by the partieslitigants in good faith and for valuable consideration. The absence of private respondent=s consent merely rendered the<eed voidable under Article 3/4 of the %ivil %ode, which provides(

KA9T. 3/4. The following contracts are voidable or annullable, even though there may have been no damage tothe contracting parties(

x x x x x x x x x

215 Those where the consent is vitiated by mista8e, violence, intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are susceptible ofratification.2n5L

The error in petitioners= contention is evident. Article 3/4, par. 1, refers to contracts visited by vices oconsent, i.e., contracts which were entered into by a person whose consent was obtained and vitiated through mista8eviolence, intimidation, undue influence or fraud. "n this instance, private respondent=s consent to the contract of sale oftheir conjugal property was totally inexistent or absent. Eilda %orpuI, on direct examination, testified thus(

KL >ow, on 1arch , GGI, could you still recall where you wereM

A was still in 1anila during that time.

x x x x x x x x x

A%%N. O>%+P

L @hen did you come back to ?oronadal, +outh *otabatoM

A %hat was on 1arch , GGI, 1aQam.

L >ow, when you arrived at ?oronadal, was there any problem which arose concerning the ownership of your

residential house at *alle$o +ubdivisionM A @hen arrived here in ?oronadal, there was a problem which arose regarding my residential house and lot

because it was sold by my husband without my knowledge.R

This being the case, said contract properly falls within the ambit of Article 10 of the +amily %ode, which wascorrectly applied by the two lower courts(

KA9T. 10. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. "n case of disagreement, the husband=s decision shall prevail, subject to recourse to the court by the wifefor proper remedy, which must be availed of within five years from the date of the contract implementing suchdecision.

"n the event that one spouse is incapacitated or otherwise unable to participate in the administration of theconjugal properties, the other spouse may assume sole powers of administration. These powers do not includethe powers of disposition or encumbrance which must have the authority of the court or the written consent of the

other spouse. n the absence of such authority or consent, the disposition or encumbrance shall bevoid. Dowever, the transaction shall be construed as a continuing offer on the part of the consenting spouse andthe third person, and may be perfected as a binding contract upon the acceptance by the other spouse orauthoriIation by the court before the offer is withdrawn by either or both offerors.2*:a5L 2"talics supplied5

%omparing said law with its eBuivalent provision in the %ivil %ode, the trial court adroitly explained the amendatoryeffect of the above provision in this wise(

KThe legal provision is clear. The disposition or encumbrance is void. "t becomes still clearer if we compare thesame with the eBuivalent provision of the %ivil %ode of the &hilippines. 7nder Article ** of the %ivil %ode, thehusband cannot generally alienate or encumber any real property of the conjugal partnership without the wife=sconsent. The alienation or encumbrance if so made however is not null and void. "t is merely voidable. The

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offended wife may bring an action to annul the said alienation or encumbrance. Thus, the provision of Article 63of the %ivil %ode of the &hilippines, to wit(

UArt. 63. The wife may, during the marriage and within ten years from the transaction Buestioned, as8the courts for the annulment of any contract of the husband entered into without her consent, whensuch consent is reBuired, or any act or contract of the husband which tends to defraud her or impairher interest in the conjugal partnership property. hould the wife fail to exercise this right, she or herheirs after the dissolution of the marriage, may demand the value of property fraudulently alienated bythe husband.2n5=

This particular provision giving the wife ten 245 years x x x during theN marriage to annul the alienation orencumbrance was not carried over to the +amily %ode. "t is thus clear that any alienation or encumbrance madeafter August 3, /)) when the +amily %ode too8 effect by the husband of the conjugal partnership propertywithout the consent of the wife is null and void.L

+urthermore, it must be noted that the fraud and the intimidation referred to by petitioners were perpetrated in theexecution of the document embodying the amicable settlement. Eilda %orpuI alleged during trial that barangayauthorities made her sign said document through misrepresentation and coercion. "n any event, its execution does noalter the void character of the deed of sale between the husband and the petitioners-spouses, as will be discussedlater. The fact remains that such contract was entered into without the wife=s consent.

"n sum, the nullity of the contract of sale is premised on the absence of private respondent=s consent. To constitute avalid contract, the %ivil %ode reBuires the concurrence of the following elements( 25 cause, 215 object, and 23consent, the last element being indubitably absent in the case at bar.

"nsisting that the contract of sale was merely voidable, petitioners aver that it was duly ratified by the contendingparties through the Kamicable settlementL they executed on March *, //4 in arangay %ase @o. 3).

The position is not well ta8en. The trial and the appellate courts have resolved this issue in favor of the privaterespondent. The trial court correctly held(

Ky the specific provision of the law Art. 3/4, %ivil %odeN therefore, the <eed of Transfer of 9ights 2#xh. UA=5cannot be ratified, even by an Uamicable settlement=. The participation by some barangay authorities in theUamicable settlement= cannot otherwise validate an invalid act. Moreover, it cannot be denied that the Uamicablesettlement= 2#xh. U=5 entered into by plaintiff Eilda %orpuI and defendant spouses Euiang is a contract. "t is adirect offshoot of the <eed of Transfer of 9ights 2#xh. UA=5. y express provision of law, such a contract is alsovoid. Thus, the legal provision, to wit(

UArt. 011. A contract which is the direct result of a previous illegal contract, is also void and

inexistent.= 2%ivil %ode of the &hilippines5."n summation therefore, both the <eed of Transfer of 9ights 2#xh. UA=5 and the Uamicable settlement= 2#xh. U3=5 arenull and void.L

<octrinally and clearly, a void contract cannot be ratified.

@either can the Kamicable settlementL be considered a continuing offer that was accepted and perfected by theparties, following the last sentence of Article 10. The order of the pertinent events isclear( after the sale, petitioners filed a complaint for trespassing against private respondent, after which the barangayauthorities secured an Kamicable settlementL and petitioners filed before the MT% a motion for its execution. Thesettlement, however, does not mention a continuing offer to sell the property or an acceptance of such a continuingoffer. "ts tenor was to the effect that private respondent would vacate the property. y no stretch of the imagination, canthe %ourt interpret this document as the acceptance mentioned in Article 10.

WH%R%)OR%' the %ourt hereby ->+ the petition and AC1+ the challenged <ecision and 9esolution. %osts

against petitioners.O OR#%R%#(

,A$ALO ! A,AIA

GA&U$A$' J.:

The issue raised in this case is whether or not the husband may validly dispose of a conjugal property without thewife=s written consent.

The present controversy had its beginning when petitioner Thelma A. ader-Manalo allegedly came across anadvertisement placed by respondents, the pouses @orma +ernandeI %. %amaisa and #dilberto %amaisa, in the

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%lassified Ads ection of the newspaper 7>>#T"@ T'<A in its April, //1 issue, for the sale of their ten-doorapartment in Ma8ati, as well as that in Taytay, 9iIal.

As narrated by petitioner in her complaint filed with the 9egional Trial %ourt of Ma8ati, Metro Manila, she wasinterested in buying the two properties so she negotiated for the purchase through a real estate bro8erMr. &roceso #reno, authoriIed by respondent spouses. &etitioner made a visual inspection of the said lots with the reaestate bro8er and was shown the tax declarations, real property tax payment receipts, location plans, and vicinity mapsrelating to the properties. Thereafter, petitioner met with the vendors who turned out to be respondenspouses. he made a definite offer to buy the properties to respondent #dilberto %amaisa with the 8nowledge andconformity of his wife, respondent @orma %amaisa in the presence of the real estate bro8er. After some bargaining

petitioner and #dilberto agreed upon the purchase price of &,:44,444.44 for the Taytay property and &1,44,444.44 forthe Ma8ati property to be paid on installment basis withdownpayments of &44,444.44 and &144,444.44, respectively, on

April :, //1. The balance thereof was to be paid as follows(

Taytay &roperty Ma8ati &roperty

*th month &144,444.44 &344,444.44

1th month 644,444.44 ,*44,444.44

)th month :44,444.44

This agreement was handwritten by petitioner and signed by #dilberto. Chen petitioner pointed out the conjuganature of the properties, #dilberto assured her of his wife=s conformity and consent to the sale. The formal typewritten%ontracts to ell were thereafter prepared by petitioner. The following day, petitioner, the real estate bro8eand #dilberto met in the latter=s office for the formal signing of the typewritten %ontracts to ell. After #dilberto signed the

contracts, petitioner delivered to him two chec8s, namely, 7%& %hec8 @o. *1)46 dated April :, //1 for &144,444.44and 7%& %hec8 @o. *1)4) also dated April :, //1 for &44,444.44 in the presence of the real estate bro8er and anemployee in #dilberto=s office. The contracts were given to #dilberto for the formal affixing of his wife=s signature.

The following day, petitioner received a call from respondent @orma, reBuesting a meeting to clarify some provisionsof the contracts. To accommodate her Bueries, petitioner, accompanied by her lawyer, met with #dilberto and @orma andthe real estate bro8er at %afe 9iIal inMa8ati. <uring the meeting, handwritten notations were made on the contracts tosell, so they arranged to incorporate the notations and to meet again for the formal signing of the contracts.

Chen petitioner met again with respondent spouses and the real estate bro8er at #dilberto=s office for the formalaffixing of @orma=s signature, she was surprised when respondent spouses informed her that they were bac8ing out of theagreement because they needed Kspot cashL for the full amount of the consideration. &etitioner reminded respondentspouses that the contracts to sell had already been duly perfected and @orma=s refusal to sign the same would undulyprejudice petitioner. till, @orma refused to sign the contracts prompting petitioner to file a complaint for specific

performance and damages against respondent spouses before the 9egional Trial %ourt of Ma8ati, ranch 3* onApril 1///1, to compel respondent @orma %amaisa to sign the contracts to sell.

A Motion to <ismiss was filed by respondents which was denied by the trial court in its 9esolution of uly 1, //1.

9espondents then filed their Answer with %ompulsory %ounter-claim, alleging that it was an agreement betweenherein petitioner and respondent #dilberto %amaisa that the sale of the subject properties was still subject to the approvaand conformity of his wife @orma %amaisa. Thereafter, when @orma refused to give her consent to the sale, her refusawas duly communicated by #dilberto to petitioner. The chec8s issued by petitioner were returned to her by #dilberto andshe accepted the same without any objection. 9espondent further claimed that the acceptance of the chec8s returned topetitioner signified her assent to the cancellation of the sale of the subject properties. 9espondent @orma denied that sheever participated in the negotiations for the sale of the subject properties and that she gave her consent and conformity tothe same.

'n 'ctober 14, //1, respondent @orma +. %amaisa filed a Motion for ummary udgment asserting that there is no

genuine issue as to any material fact on the basis of the pleadings and admission of the parties considering that the wife=swritten consent was not obtained in the contract to sell, the subject conjugal properties belonging to respondents; hencethe contract was null and void.

'n April 0, //3, the trial court rendered a summary judgment dismissing the complaint on the ground that under Art. 10 of the +amily %ode, the court cannot intervene to authoriIe the transaction in the absence of the consent of thewife since said wife who refused to give consent had not been shown to be incapacitated. The dispositive portion of thetrial court=s decision reads(

CD#9#+'9#, considering these premises, judgment is hereby rendered(

. <ismissing the complaint and ordering the cancellation of the @otice of >is &endens by reason of its filing on T%T @os.20*0)*45 -)610 and 20*0)*5 -)61: of the 9egistry of <eeds at Ma8ati and on T%T @os. 1/:/6* and 1/:/6 of the9egistry of 9iIal.

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1. 'rdering plaintiff Thelma A. ader to pay defendant spouses @orma and #dilberto %amaisa, +"+T TD'7A@<2&:4,444.445 as Moral <amages and +"+T TD'7A@< 2&:4,444.445 as Attorney=s +ees.

%osts against plaintiff.

&etitioner, thus, elevated the case to the %ourt of Appeals. 'n @ovember 1/, 1444, the %ourt of Appeals affirmed thedismissal by the trial court but deleted the award of &:4,444.44 as damages and &:4,444.44 as attorney=s fees.

The %ourt of Appeals explained that the properties subject of the contracts were conjugal properties and as such, theconsent of both spouses is necessary to give effect to the sale. ince private respondent @orma %amaisa refused to signthe contracts, the sale was never perfected. "n fact, the downpayment was returned by respondent spouses and was

accepted by petitioner. The %ourt of Appeals also stressed that the authority of the court to allow sale or encumbrance ofa conjugal property without the consent of the other spouse is applicable only in cases where the said spouse isincapacitated or otherwise unable to participate in the administration of the conjugal property.

Dence, the present recourse assigning the following errors(

TD# D'@'9A># %'79T '+ A&&#A> E9"#O"'7> #99#< "@ 9#@<#9"@E 7MMA9 7<EM#@T "@<"M""@E TD# %'M&>A"@T #@T"9#> A@< '9<#9"@E TD# %A@%#>>AT"'@ '+ @'T"%# '+ >" &#@<#@'@ TD# T"T># '+ TD# 7#%T 9#A> &9'&#9T"#;

TD# D'@'9A># %'79T '+ A&&#A> E9"#O"'7> #99#< "@ +A">"@E T' %'@"<#9 TDAT TD# A># '+9#A> &9'&#9T"# 9#&'@<#@T T' &#T"T"'@#9 DAO# A>9#A< ##@ &#9+#%T#<, +'9 A+T#9TD# >ATT#9 &A"< &344,444.44 <'C@&AM#@T, 9#&'@<#@T M9. %AMA"A @#O#9 '#%T#< T'T"&7>AT"'@ C"TD 9#&#%T T' &9"%#, '#%T A@< T#9M '+ &AM#@T "@ TD# %'@T9A%T T' #>>

A>9#A< "E@#< TD# &#T"T"'@#9, 9#&'@<#@T M9. %AMA"A A@< C"T@## MA9$#< A

A@@# KEL "@ TD# %'M&>A"@T #%#&T, +'9 M"@'9 &9'O""'@ A>9#A< "M&>"#< >AC, >"$###%TM#@T '+ T#@A@T, 7<"O""'@ '+ T"T># A@< 9#%""'@ "@ %A# '+ @'@&AM#@T, CD"%D&#T"T"'@#9 9#A<"> AE9##< A@< A%%#<#< T' TD#"9 "@%>7"'@;

TD# D'@'9A># %'79T '+ A&&#A> E9"#O"'7> #99#< CD#@ "T +A">#< T' %'@"<#9 TDAT%'@T9A%T '+ A># " %'@#@7A> A@< "T " &#9+#%T#< TD# M#9# %'@#@T '+ TD# &A9T"#

A@< TD# A&&>"%A># &9'O""'@ A9# A9T"%># :6, 3:*, 3:6, 3:), 043, 04: A@< 06: '+ TD#%"O"> %'<# '+ TD# &D">"&&"@# A@< E'O#9@#< TD# TAT7T# '+ +9A7<.

The %ourt does not find error in the decisions of both the trial court and the %ourt of Appeals.

&etitioner alleges that the trial court erred when it entered a summary judgment in favor of respondent spouses therebeing a genuine issue of fact. &etitioner maintains that the issue of whether the contracts to sell between petitioner andrespondent spouses was perfected is a Buestion of fact necessitating a trial on the merits.

The %ourt does not agree. A summary judgment is one granted by the court upon motion by a party for an

expeditious settlement of a case, there appearing from the pleadings, depositions, admissions and affidavits that there areno important Buestions or issues of fact involved, and that therefore the moving party is entitled to judgment as a matter oflaw. A perusal of the pleadings submitted by both parties show that there is no genuine controversy as to the factsinvolved therein.

oth parties admit that there were negotiations for the sale of four parcels of land between petitioner and respondenspouses; that petitioner and respondent #dilberto %amaisa came to an agreement as to the price and the terms ofpayment, and a downpayment was paid by petitioner to the latter; and that respondent @orma refused to sign thecontracts to sell. The issue thus posed for resolution in the trial court was whether or not the contracts to sell betweenpetitioner and respondent spouses were already perfected such that the latter could no longer bac8 out of the agreement.

The law reBuires that the disposition of a conjugal property by the husband as administrator in appropriate casesreBuires the written consent of the wife, otherwise, the disposition is void. Thus, Article 10 of the +amily %ode provides(

Art. 10. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. "n

case of disagreement, the husband=s decision shall prevail, subject to recourse to the court by the wife for a properremedy, which must be availed of within five years from the date of the contract implementing such decision.

"n the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugalproperties, the other spouse may assume sole powers of administration. These powers do not include the powers ofdisposition or encumbrance which must have the authority of the court or the written consent of the other spouse. "n theabsence of such authority or consent the disposition or encumbrance shall be void. Dowever, the transaction shall beconstrued as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as abinding contract upon the acceptance by the other spouse or authoriIation by the court before the offer is withdrawn byeither or both offerors. 27nderscoring ours.5

The properties subject of the contracts in this case were conjugal; hence, for the contracts to sell to be effective, theconsent of both husband and wife must concur.

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9espondent @orma %amaisa admittedly did not give her written consent to the sale. #ven granting that respondent@orma actively participated in negotiating for the sale of the subject properties, which she denied, her written consent tothe sale is reBuired by law for its validity. ignificantly, petitioner herself admits that @orma refused to sign the contracts tosell. 9espondent @orma may have been aware of the negotiations for the sale of their conjugal properties. Doweverbeing merely aware of a transaction is not consent.

+inally, petitioner argues that since respondent @orma unjustly refuses to affix her signatures to the contracts to sell,court authoriIation under Article 10 of the +amily %ode is warranted.

The argument is bereft of merit. &etitioner is correct insofar as she alleges that if the written consent of the otherspouse cannot be obtained or is being withheld, the matter may be brought to court which will give such authority if thesame is warranted by the circumstances. Dowever, it should be stressed that court authoriIation under Art. 10 is onlyresorted to in cases where the spouse who does not give consent is incapacitated. "n this case, petitioner failed to allegeand prove that respondent @orma was incapacitated to give her consent to the contracts. "n the absence of such showingof the wife=s incapacity, court authoriIation cannot be sought.

7nder the foregoing facts, the motion for summary judgment was proper considering that there was no genuine issueas to any material fact. The only issue to be resolved by the trial court was whether the contract to sell involving conjugalproperties was valid without the written consent of the wife.

WH%R%)OR%' the petition is hereby <#@"#< and the decision of the %ourt of Appeals dated @ovember 1/, 1444 in%A-E.9. %O @o. 0301 A++"9M#<.

O OR#%R%#(

HO,%OW$%R A!I$3 "A$G ! #AILO

TI$3A' J.:

This is a petition for review on certiorari under 9ule 0: of the 9evised 9ules of %ourt, assailing the -ecision of the%ourt of Appeals in %A-E.9. %O @o. ://)* rendered on une 3, 1441, which affirmed with modification the 'ctober ),//6 -ecision of the 9egional Trial %ourt, ranch 1/, an &ablo %ity, >aguna in %ivil %ase @o. &-060) 2/65.

The following factual antecedents are undisputed.

9espondent Miguela %. <ailo and Marcelino <ailo, r. were married on August ), /*6. <uring their marriage, thespouses purchased a house and lot situated at arangay an +rancisco, an &ablo %ity from a certain andra <alidaThe subject property was declared for tax assessment purposes under Assessment of 9eal &roperty @o. /0-4:-1)41.The <eed of Absolute ale, however, was executed only in favor of the late Marcelino <ailo, r. as vendee thereof to theexclusion of his wife.

'n <ecember , //3, Marcelino <ailo, r. executed a pecial &ower of Attorney 2&A5 in favor of one >ilibethEesmundo, authoriIing the latter to obtain a loan from petitioner Domeowners avings and >oan an8 to be secured bythe spouses <ailo=s house and lot in an &ablo %ity. &ursuant to the &A, Eesmundo obtained a loan in the amountof &344,444.44 from petitioner. As security therefor, Eesmundo executed on the same day a 9eal #state Mortgageconstituted on the subject property in favor of petitioner. The abovementioned transactions, including the execution of the&A in favor of Eesmundo, too8 place without the 8nowledge and consent of respondent.

7pon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial foreclosure proceedingson the mortgaged property. After the extrajudicial sale thereof, a %ertificate of ale was issued in favor of petitioner as thehighest bidder. After the lapse of one year without the property being redeemed, petitioner, through its vice-presidentconsolidated the ownership thereof by executing on une *, //* an Affidavit of %onsolidation of 'wnership and a <eedof Absolute ale.

"n the meantime, Marcelino <ailo, r. died on <ecember 14, //:. "n one of her visits to the subject property,respondent learned that petitioner had already employed a certain 9oldan rion to clean its premises and that her car, a+ord sedan, was raIed because rion allowed a boy to play with fire within the premises.

%laiming that she had no 8nowledge of the mortgage constituted on the subject property, which was conjugal innature, respondent instituted with the 9egional Trial %ourt, ranch 1/, an &ablo %ity, %ivil %ase @o. &-1111 2/6for >ullity of Ceal state 1ortgage and *ertificate of +ale, Affidavit of *onsolidation of wnership, -eed of +ale,Ceconveyance with 'rayer for 'reliminary n$unction and -amages against petitioner. "n the latter=s Answer with*ounterclaim, petitioner prayed for the dismissal of the complaint on the ground that the property in Buestion was theexclusive property of the late Marcelino <ailo, r.

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After trial on the merits, the trial court rendered a -ecision on 'ctober ), //6. The dispositive portion thereof readsas follows(

CD#9#+'9#, the plaintiff having proved by the preponderance of evidence the allegations of the %omplaint, the %ourtfinds for the plaintiff and hereby orders(

'@ TD# +"9T %A7# '+ A%T"'@(

. The declaration of the following documents as null and void(2a5 The <eed of 9eal #state Mortgage dated <ecember , //3 executed before @otary &ublic 9omulo

7rrea and his notarial register entered as <oc. @o. 11; &age @o. 00, oo8 @o. ", eries of //3.

2b5 The %ertificate of ale executed by @otary &ublic 9eynaldo Alcantara on April 14, //:.2c5 The Affidavit of %onsolidation of 'wnership executed by the defendant

2c5 The Affidavit of %onsolidation of 'wnership executed by the defendant over the residential lot locatedat rgy. an +rancisco, an &ablo %ity, covered by A9& @o. /:-4/-13* entered as <oc. @o. 04*;&age @o. )3, oo8 @o. """, eries of //* of @otary &ublic 'ctavio M. ayas.

2d5 The assessment of real property @o. /:-4:-13*.

1. The defendant is ordered to reconvey the property subject of this complaint to the plaintiff.'@ TD# #%'@< %A7# '+ A%T"'@

. The defendant to pay the plaintiff the sum of &04,444.44 representing the value of the car which was burned.'@ 'TD %A7# '+ A%T"'@

. The defendant to pay the plaintiff the sum of &1:,444.44 as attorney=s fees;

1. The defendant to pay plaintiff &1:,444.44 as moral damages;

3. The defendant to pay the plaintiff the sum of &4,444.44 as exemplary damages;0. To pay the cost of the suit.

The counterclaim is dismissed.

' '9<#9#<.

7pon elevation of the case to the %ourt of Appeals, the appellate court affirmed the trial court=s finding that thesubject property was conjugal in nature, in the absence of clear and convincing evidence to rebut the presumption that thesubject property acBuired during the marriage of spouses <ailo belongs to their conjugal partnership. The appellate courtdeclared as void the mortgage on the subject property because it was constituted without the 8nowledge and consent ofrespondent, in accordance with Article 10 of the +amily %ode. Thus, it upheld the trial court=s order to reconvey thesubject property to respondent. Cith respect to the damage to respondent=s car, the appellate court found petitioner to beliable therefor because it is responsible for the conseBuences of the acts or omissions of the person it hired to accomplish

the assigned tas8.All told, the appellate court affirmed the trial court=s -ecision, but deleted the award for damages andattorney=s fees for lac8 of basis.

Dence, this petition, raising the following issues for this %ourt=s consideration(

. CD#TD#9 '9 @'T TD# M'9TEAE# %'@T"T7T#< TD# >AT# MA9%#>"@' <A">', 9. '@ TD# 7#%T&9'&#9T A %'-'C@#9 TD#9#'+ " OA>"< A T' D" 7@<"O"<#< DA9#.

1. CD#TD#9 '9 @'T TD# %'@7EA> &A9T@#9D"& " >"A># +'9 TD# &AM#@T '+ TD# >'A@ 'TA"@#< TD# >AT# MA9%#>"@' <A">', 9. TD# AM# DAO"@E 9#<'7@<#< T' TD# #@#+"T '+ TD# +AM">.

+irst, petitioner ta8es issue with the legal provision applicable to the factual milieu of this case. "t contends that Article10 of the +amily %ode should be construed in relation to Article 0/3 of the %ivil %ode, which states(

A9T. 0/3. #ach co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and hemay therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal

rights are involved. ut the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to theportion which may be allotted to him in the division upon the termination of the co-ownership.

Article 10 of the +amily %ode provides in part(

A9T. 10. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. . . ."n the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugalproperties, the other spouse may assume sole powers of administration. These powers do not include the powers ofdisposition or encumbrance which must have the authority of the court or the written consent of the other spouse. "n theabsence of such authority or consent, the disposition or encumbrance shall be void. . . .

&etitioner argues that although Article 10 of the +amily %ode reBuires the consent of the other spouse to themortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse from

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exercising full ownership over the portion of the conjugal property pertaining to him under the concept of co-ownership. Thus, petitioner would have this %ourt uphold the validity of the mortgage to the extent of the late Marcelino<ailo, r.=s share in the conjugal partnership.

"n uiang v. *ourt of Appeals, it was held that the sale of a conjugal property reBuires the consent of both thehusband and wife. "n applying Article 10 of the +amily %ode, this %ourt declared that the absence of the consent of onerenders the entire sale null and void, including the portion of the conjugal property pertaining to the husband whocontracted the sale. The same principle in uiang sBuarely applies to the instant case. As shall be discussed next, there isno legal basis to construe Article 0/3 of the %ivil %ode as an exception to Article 10 of the +amily %ode.

9espondent and the late Marcelino <ailo, r. were married on August ), /*6. "n the absence of a marriagesettlement, the system of relative community or conjugal partnership of gains governed the property relations betweenrespondent and her late husband. Cith the effectivity of the +amily %ode on August 3, /)), %hapter 0 on *on$uga'artnership of ains in the +amily %ode was made applicable to conjugal partnership of gains already established beforeits effectivity unless vested rights have already been acBuired under the %ivil %ode or other laws.

The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino <ailo, reven in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where thehusband and wife place in a common fund the proceeds, products, fruits and income from their separate properties andthose acBuired by either or both spouses through their efforts or by chance. 7nli8e the absolute community of propertywherein the rules on co-ownership apply in a suppletory manner, the conjugal partnership shall be governed by the ruleson contract of partnership in all that is not in conflict with what is expressly determined in the chapter 2on conjugapartnership of gains5 or by the spouses in their marriage settlements. Thus, the property relations of respondent and herlate husband shall be governed, foremost, by %hapter 0 on *on$ugal 'artnership of ains of the +amily %ode and

suppletorily, by the rules on partnership under the %ivil %ode. "n case of conflict, the former prevails because the %ivil%ode provisions on partnership apply only when the +amily %ode is silent on the matter.

The basic and established fact is that during his lifetime, without the 8nowledge and consent of his wife, Marcelino<ailo, r. constituted a real estate mortgage on the subject property, which formed part of their conjugal partnership. yexpress provision of Article 10 of the +amily %ode, in the absence of 2court5 authority or written consent of the otherspouse, any disposition or encumbrance of the conjugal property shall be void.

The aforeBuoted provision does not Bualify with respect to the share of the spouse who ma8es the disposition orencumbrance in the same manner that the rule on co-ownership under Article 0/3 of the %ivil %ode does. Chere the lawdoes not distinguish, courts should not distinguish. Thus, both the trial court and the appellate court are correct indeclaring the nullity of the real estate mortgage on the subject property for lac8 of respondent=s consent.

econd, petitioner imposes the liability for the payment of the principal obligation obtained by the late Marcelino

<ailo, r. on the conjugal partnership to the extent that it redounded to the benefit of the family.7nder Article 1 of the +amily %ode, KTNhe conjugal partnership shall be liable for( . . . 235 <ebts and obligations

contracted by either spouse without the consent of the other to the extent that the family may have been benefited; . . . .L+or the subject property to be held liable, the obligation contracted by the late Marcelino <ailo, r. must have redoundedto the benefit of the conjugal partnership. There must be the reBuisite showing then of some advantage which clearlyaccrued to the welfare of the spouses. %ertainly, to ma8e a conjugal partnership respond for a liability that shouldappertain to the husband alone is to defeat and frustrate the avowed objective of the new %ivil %ode to show the utmostconcern for the solidarity and well-being of the family as a unit.

The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with thecreditor-party litigant claiming as such. i incumbit probatio qui dicit, non qui negat 2he who asserts, not he who deniesmust prove5. &etitioner=s sweeping conclusion that the loan obtained by the late Marcelino <ailo, r. to finance theconstruction of housing units without a doubt redounded to the benefit of his family, without adducing adeBuate proof,does not persuade this %ourt. 'ther than petitioner=s bare allegation, there is nothing from the records of the case tocompel a finding that, indeed, the loan obtained by the late Marcelino <ailo, r. redounded to the benefit of the family.%onseBuently, the conjugal partnership cannot be held liable for the payment of the principal obligation.

"n addition, a perusal of the records of the case reveals that during the trial, petitioner vigorously asserted that thesubject property was the exclusive property of the late Marcelino <ailo, r. @owhere in the answer filed with the trial courtwas it alleged that the proceeds of the loan redounded to the benefit of the family. #ven on appeal, petitioner neverclaimed that the family benefited from the proceeds of the loan. Chen a party adopts a certain theory in the court belowhe will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the otheparty but it would also be offensive to the basic rules of fair play, justice and due process. A party may change his legaltheory on appeal only when the factual bases thereof would not reBuire presentation of any further evidence by theadverse party in order to enable it to properly meet the issue raised in the new theory.

WH%R%)OR%, the petition is <#@"#<. %osts against petitioner.

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O OR#%R%#(

RA!I$A ! !ILLA A"RILL%UIU,"I$3' Acting C.J.:

+or review are the <ecision dated +ebruary 1, 1441 and the 9esolution dated 'ctober 6, 1443 of the %ourt of Appeals in%A-E.9. %O @o. :0:*4. The appellate court modified the <ecision dated eptember 1*, //: of the 9egional Trial %ourt29T%5 of <avao %ity, ranch :.

imply stated, the facts as found by the %ourt of Appeals are as follows(

9espondent Mary Ann &asaol Oilla Abrille and &edro Oilla Abrille are husband and wife. They have four children, who arealso parties to the instant case and are represented by their mother, Mary Ann.

"n /)1, the spouses acBuired a :::-sBuare meter parcel of land denominated as >ot 6, located at $amuning treet, unaubdivision, Matina, <avao %ity, and covered by Transfer %ertificate of Title 2T%T5 @o. T-))*60 in their names. aid lot isadjacent to a parcel of land which &edro acBuired when he was still single and which is registered solely in his nameunder T%T @o. T-1*06.

Through their joint efforts and the proceeds of a loan from the <evelopment an8 of the &hilippines 2<&5, the spousesbuilt a house on >ot 6 and &edro=s lot. The house was finished in the early /)4=s but the spouses continuously madeimprovements, including a poultry house and an annex.

"n //, &edro 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. y himself, &edro offered to sell the house and the two lots to hereinpetitioners, &atrocinia and Cilfredo 9avina. Mary Ann objected and notified the petitioners of her objections, but &edrononetheless sold the house and the two lots without Mary Ann=s consent, as evidenced by a <eed of ale dated une 1,//. "t appears on the said deed that Mary Ann did not sign on top of her name.

'n uly :, // while Mary Ann was outside the house and the four children were in school, &edro together with armedmembers of the %ivilian Armed +orces Eeographical 7nit 2%A+E75 and acting in connivance with petitioners begantransferring all their belongings from the house to an apartment.

Chen Mary Ann and her daughter "ngrid Oilla Abrille came home, they were stopped from entering it. They waited outsidethe gate until evening under the rain. They sought help from the Talomo &olice tation, but police authorities refused tointervene, saying that it was a family matter. Mary Ann alleged that the incident caused stress, tension and anxiety to herchildren, so much so that one flun8ed at school. Thus, respondents Mary Ann and her children filed a complaint for

Annulment of ale, pecific &erformance, <amages and Attorney=s +ees with &reliminary Mandatory "njunction against

&edro and herein petitioners 2the 9avinas5 in the 9T% of <avao %ity.<uring the trial, &edro declared that the house was built with his own money. &etitioner &atrocinia 9avina testified thatthey bought the house and lot from &edro, and that her husband, petitioner Cilfredo 9avina, examined the titles whenthey bought the property.

'n eptember 1*, //:, the trial court ruled in favor of herein respondent Mary Ann &. Oilla Abrille as follows(

CD#9#+'9#, judgment is rendered as follows(

. The sale of lot ) covered by T%T @o. 1*06 by defendant &edro Abrille appearing in the <eed of ale mar8edas #xh. !#! is void as to one half or 166.: sBuare meters representing the share of plaintiff Mary Oilla Abrille.

1. That sale of >ot 6 covered by T%T @o. ))*60N by defendant &edro Oilla Abrille in the <eed of ale 2#xh. !A!5 isvalid as to one half or 166.: sBuare meters of the ::: sBuare meters as one half belongs to defendant &edro

Abrille but it is void as to the other half or 166.: sBuare 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 <eed of ale 2#xh. !A!5 is valid as far as the one half of the houserepresenting the share of defendant &edro Abrille is concerned but void as to the other half which is the share ofplaintiff Mary Abrille because she did not give her consentJsign the said sale.

0. The defendants shall jointly pay the plaintiffs.

0. A. eventeen Thousand &esos 2&6,444.445 representing the value of the movables and belongingsNthat were lost when un8nown men unceremoniously and without their 8nowledge and consent removedtheir movables from their house and brought them to an apartment.

0. . 'ne Dundred Thousand &esos 2& 44,444.445 to plaintiff Mary Abrille as moral damages.

0. %. +ifty Thousand &esos 2&:4,444.445 to each of the four children as moral damages, namely(

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a5 "ngrid Oilla Abrille R +ifty Thousand &esos 2&:4,444.445, b5 "ngremar8 Oilla Abrille R +ifty Thousand&esos 2&:4,444.445, c5 "ngresoll Oilla Abrille R +ifty Thousand &esos 2&:4,444.445 and d5 "ngrelyn Oilla

Abrille R +ifty Thousand &esos 2&:4,444.445.

:. Ten Thousand &esos 2&4,444.445 as exemplary damages by way of example and correction for the publicgood.

*. The costs of suit.

'n appeal, the %ourt of Appeals modified the decision, thus(

WH%R%)OR%, the appealed judgment is hereby ,O#I)I%# as follows(

. The sale of lot covered by T%T @o. 1*06 in favor of defendants spouses Cilfredo and &atrocinia 9avina isdeclared valid.

1. The sale of lot covered by T%T @o. ))*60 in favor of said defendants spouses 9avina, together with the housethereon, is declared null and void.

3. <efendant &edro Abrille is ordered to return the value of the consideration for the lot covered by T%T @o.))*60 and the house thereon to co-defendants spouses 9avina.

0. <efendants spouses 9avina aNre ordered to reconvey the lot and house covered by T%T @o. ))*60 in favor ofspouses &edro and Mary Oilla Abrille and to deliver possession to them.

:. &laintiffs are given the option to exercise their rights under Article 0:4N of the @ew %ivil %ode with respect tothe improvements introduced by defendant spouses 9avina.

*. <efendants &edro Oilla Abrille and spouses 9avina are ordered to pay jointly and severally the plaintiffs as

follows( a5 'ne Dundred Thousand &esos 2&44,444.445 to plaintiff Mary Oilla Abrille as moral damages.

b5 +ifty Thousand &esos 2&:4,444.445 as moral damages to each of the four children, namely( "ngrid Oilla Abrille, "ngremar8 Oilla Abrille, "ngresoll Oilla Abrille and "ngrelyn Oilla Abrille.

c5 Ten Thousand 2&4,444.445 as exemplary damages by way of example and correction for the publicgood.

' '9<#9#<.

Their Motion for 9econsideration having been denied, petitioners filed this petition. &etitioners argue that(

".

TD# %'79T '+ A&&#A> #99#< CD#@ "T <#%>A9#< x x x TD# A># '+ >'T %'O#9#< T%T @'. ))*60 "@+AO'9 '+ &'7# 9AO"@A, T'E#TD#9 C"TD TD# D'7# TD#9#'@, A @7>> A@< O'"< "@%# "T "%>#A9> %'@T9A9 T' >AC A@< #O"<#@%#.

"".

TD# %'79T '+ A&&#A> #99#< CD#@ "T 97>#< TDAT &#T"T"'@#9 &AT9'%"@"NA 9AO"@A A@< C">+9#<'9AO"@A A9# @'T "@@'%#@T &79%DA#9 +'9 OA>7#, TD# AM# #"@E %'@T9A9 T' >AC A@< #O"<#@%#

""".

TD# %'79T '+ A&&#A> #99#< CD#@ "T 97>#< TDAT &#T"T"'@#9 &AT9'%"@"NA 9AO"@A A@< C">+9#<'9AO"@A A9# >"A># +'9 <AMAE#, TD# AM# #"@E %'@T9A9 T' >AC A@< #O"<#@%#.

"n essence, petitioners assail the appellate court=s declaration that the sale to them by &edro of the lot covered by T%T@o. T-))*60 is null and void. Dowever, in addressing this issue, it is imperative to determine( 25 whether the subjectproperty covered by T%T @o. T-))*60 is an exclusive property of &edro or conjugal property, and 215 whether its sale by&edro was valid considering the absence of Mary Ann=s consent.

&etitioners assert that the subject lot covered by T%T @o. T-))*60 was the exclusive property of &edro having been

acBuired by him through barter or exchange. They allege that the subject lot was acBuired by &edro with the proceeds ofthe sale of one of his exclusive properties. Allegedly, &edro and his sister %armelita initially agreed to exchange theirexclusive lots covered by T%T @o. T-1*06/ and T%T @o. T-1*061, respectively. >ater, however, &edro sold the lot coveredby T%T @o. T-1*061 to one +rancisca Teh Ting and purchased the property of %armelita using the proceeds of the sale. Anew title, T%T @o. T-))*60, was issued thereafter. Thus, petitioners insist that the subject lot remains to be an exclusiveproperty of &edro as it was acBuired or purchased through the exclusive funds or money of the latter.

Ce are not persuaded. Article *4 of the @ew %ivil %ode provides, !All property of the marriage is presumed to belong tothe 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 T%T @o. T-1*06, which was an exclusive property of &edro, havingbeen acBuired by him before his marriage to Mary Ann. Dowever, the lot covered by T%T @o. T-))*60 was acBuired in/)1 during the marriage of &edro and Mary Ann. @o evidence was adduced to show that the subject property was

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acBuired through exchange or barter. The presumption of the conjugal nature of the property subsists in the absence ofclear, satisfactory and convincing evidence to overcome said presumption or to prove that the subject property isexclusively owned by &edro. &etitioners= bare assertion would not suffice to overcome the presumption that T%T @o. T-))*60, acBuired during the marriage of &edro and Mary Ann, is conjugal. >i8ewise, the house built thereon is conjugalproperty, having been constructed through the joint efforts of the spouses, who had even obtained a loan from <& toconstruct the house.avvphi

ignificantly, a sale or encumbrance of conjugal property concluded after the effectivity of the +amily %ode on August 3,/)), is governed by Article 10 of the same %ode that now treats such a disposition to be void if done 2a5 without theconsent of both the husband and the wife, or 2b5 in case of one spouse=s inability, the authority of the court. Article 10 of

the +amily %ode, the governing law at the time the assailed sale was contracted, is explicit( A9T. 10. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. "ncase of disagreement, the husband=s decision shall prevail, subject to recourse to the court by the wife for proper remedywhich must be availed of within five years from the date of the contract implementing such decision.

"n the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugalproperties, the other spouse may assume sole powers of administration. These powers do not include the powers ofdisposition or encumbrance which must have the authority of the court or the written consent of the other spouse. "n theabsence of such authority or consent, the disposition or encumbrance shall be void. Dowever, the transaction shall beconstrued as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as abinding contract upon the acceptance by the other spouse or authoriIation by the court before the offer is withdrawn byeither or both offerors. 2#mphasis supplied.5

The particular provision in the @ew %ivil %ode giving the wife ten 245 years to annul the alienation or encumbrance wasnot carried over to the +amily %ode. "t is thus clear that alienation or encumbrance of the conjugal partnership property bythe husband without the consent of the wife is null and void.

Dence, just li8e the rule in absolute community of property, if the husband, without 8nowledge and consent of the wife,sells conjugal property, such sale is void. "f the sale was with the 8nowledge but without the approval of the wife, therebyresulting in a disagreement, such sale is annullable at the instance of the wife who is given five 2:5 years from the date thecontract implementing the decision of the husband to institute the case.

Dere, respondent Mary Ann timely filed the action for annulment of sale within five 2:5 years from the date of sale andexecution of the deed. Dowever, her action to annul the sale pertains only to the conjugal house and lot and does notinclude the lot covered by T%T @o. T-1*06, a property exclusively belonging to &edro and which he can dispose of freelywithout Mary Ann=s consent.

'n the second assignment of error, petitioners contend that they are buyers in good faith. Accordingly, they need notinBuire whether the lot was purchased by money exclusively belonging to &edro or of the common fund of the spousesand may rely on the certificates of title.

The contention is bereft of merit. As correctly held by the %ourt of Appeals, a purchaser in good faith is one who buys theproperty of another without notice that some other person has a right to, or interest in, such property and pays a full andfair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other personin the property. To establish his status as a buyer for value in good faith, a person dealing with land registered in the nameof and occupied by the seller need only show that he relied on the face of the seller=s certificate of title. ut for a persondealing with land registered in the name of and occupied by the seller whose capacity to sell is restricted, such as by

Articles ** and 63 of the %ivil %ode or A+ti4le 15D of the +amily %ode, he must show that he inBuired into the latter=scapacity to sell in order to establish himself as a buyer for value in good faith.avvphi

"n the present case, the property is registered in the name of &edro and his wife, Mary Ann. &etitioners cannot deny8nowledge that during the time of the sale in //, &edro was married to Mary Ann. Dowever, Mary Ann=s conformity didnot appear in the deed. #ven assuming that petitioners believed in good faith that the subject property is the exclusiveproperty of &edro, they were apprised by Mary Ann=s lawyer of her objection to the sale and yet they still proceeded topurchase the property without Mary Ann=s written consent. Moreover, the respondents were the ones in actual, visible andpublic possession of the property at the time the transaction was being made. Thus, at the time of sale, petitioners 8newthat Mary Ann has a right to or interest in the subject properties and yet they failed to obtain her conformity to the deed ofsale. Dence, petitioners cannot now invo8e the protection accorded to purchasers in good faith.

@ow, if a voidable contract is annulled, the restoration of what has been given is proper. The relationship between theparties in any contract even if subseBuently annulled must always be characteriIed and punctuated by good faith and fairdealing. Dence, in consonance with justice and eBuity and the salutary principle of non-enrichment at another=s expense,we sustain the appellate court=s order directing &edro to return to petitioner spouses the value of the consideration for thelot covered by T%T @o. T-))*60 and the house thereon.

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Dowever, this court rules that petitioners cannot claim reimbursements for improvements they introduced after their goodfaith had ceased. As correctly found by the %ourt of Appeals, petitioner &atrocinia 9avina made improvements andrenovations on the house and lot at the time when the complaint against them was filed. 9avina continued introducingimprovements during the pendency of the action.

Thus, Article 00/ of the @ew %ivil %ode is applicable. "t provides that, !2h5e who builds, plants or sows in bad faith on theland of another, loses what is built, planted or sown without right to indemnity.!

'n the last issue, petitioners claim that the decision awarding damages to respondents is not supported by the evidenceon record.

The claim is erroneous to say the least. The manner by which respondent and her children were removed from the familyhome deserves our condemnation. 'n uly :, //, while respondent was out and her children were in school, &edro Oilla Abrille acting in connivance with the petitioners 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.

+irmly established in our civil law is the doctrine that( !#very person must, in the exercise of his rights and in theperformance of his duties, act with justice, give everyone his due, and observe honesty and good faith.! Chen a right isexercised in a manner that does not conform with such norms and results in damages to another, a legal wrong is therebycommitted for which the wrong doer must be held responsible. imilarly, any person who willfully causes loss or injury toanother in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damagescaused. "t is patent in this case that petitioners= alleged acts fall short of these established civil law standards.

CD#9#+'9#, we deny the instant petition for lac8 of merit. The <ecision dated +ebruary 1, 1441 and the 9esolutiondated 'ctober 6, 1443 of the %ourt of Appeals in %A-E.9. %O @o. :0:*4 are A++"9M#<.

%osts against petitioners.' '9<#9#<.

)U%$T% ! ROAA"A#' J.:

This case is about a husband=s sale of conjugal real property, employing a challenged affidavit of consent from anestranged wife. The buyers claim valid consent, loss of right to declare nullity of sale, and prescription.

The )a4ts and the ase

abina TarroIa owned a titled 3:)-sBuare meter lot in %anelar, amboanga %ity. 'n 'ctober , /)1 she sold it to herson, Tarciano T. 9oca 2Tarciano5 under a deed of absolute sale. ut Tarciano did not for the meantime have the registered

title transferred to his name.ix years later in /)), Tarciano offered to sell the lot to petitioners Manuel and >eticia +uentes 2the +uentes spouses5.They arranged to meet at the office of Atty. 9omulo <. &lagata whom they as8ed to prepare the documents of sale. Theylater signed an agreement to sell that Atty. &lagata prepared dated April 1/, /)), which agreement expressly stated thatit was to ta8e effect in six months.

The agreement reBuired the +uentes spouses to pay Tarciano a down payment of &*4,444.44 for the transfer of the lot=stitle to him. And, within six months, Tarciano was to clear the lot of structures and occupants and secure the consent of hisestranged wife, 9osario Eabriel 9oca 29osario5, to the sale. 7pon Tarciano=s compliance with these conditions, the+uentes spouses were to ta8e possession of the lot and pay him an additional &04,444.44 or &*4,444.44, dependingon whether or not he succeeded in demolishing the house standing on it. "f Tarci ano was unable to comply with theseconditions, the +uentes spouses would become owners of the lot without any further formality and payment.

The parties left their signed agreement with Atty. &lagata who then wor8ed on the other reBuirements of the sale.

According to the lawyer, he went to see 9osario in one of his trips to Manila and had her sign an affidavit of consent. Assoon as Tarciano met the other conditions, Atty. &lagata notariIed 9osario=s affidavit in amboanga %ity. 'n anuary ,/)/ Tarciano executed a deed of absolute sale in favor of the +uentes spouses. They then paid him theadditional &04,444.44 mentioned in their agreement. A new title was issued in the name of the spouses who immediatelyconstructed a building on the lot. 'n anuary 1), //4 Tarciano passed away, followed by his wife 9osario who died ninemonths afterwards.

#ight years later in //6, the children of Tarciano and 9osario, namely, respondents %onrado E. 9oca, Annabelle 9.oson, and 9ose Marie 9. %ristobal, together with Tarciano=s sister, &ilar 9. Malcampo, represented by her son, ohn &auM. Trinidad 2collectively, the 9ocas5, filed an action for annulment of sale and reconveyance of the land against the+uentes spouses before the 9egional Trial %ourt 29T%5 of amboanga %ity in %ivil %ase 0646. The 9ocas claimed thatthe sale to the spouses was void since Tarciano=s wife, 9osario, did not give her consent to it. Der signature on the

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affidavit of consent had been forged. They thus prayed that the property be reconveyed to them upon reimbursement ofthe price that the +uentes spouses paid Tarciano.

The spouses denied the 9ocas= allegations. They presented Atty. &lagata who testified that he personally saw 9osariosign the affidavit at her residence in &aco, Manila, on eptember :, /)). De admitted, however, that he notariIed thedocument in amboanga %ity four months later on anuary , /)/. All the same, the +uentes spouses pointed out thatthe claim of forgery was personal to 9osario and she alone could invo8e it. esides, the four-year prescriptive period fornullifying the sale on ground of fraud had already lapsed.

oth the 9ocas and the +uentes spouses presented handwriting experts at the trial. %omparing 9osario=s standardsignature on the affidavit with those on various documents she signed, the 9ocas= expert testified that the signatures werenot written by the same person. Ma8ing the same comparison, the spouses= expert concluded that they were.'n +ebruary , 144: the 9T% rendered judgment, dismissing the case. "t ruled that the action had already prescribedsince the ground cited by the 9ocas for annulling the sale, forgery or fraud, already prescribed under Article 3/ of the%ivil %ode four years after its discovery. "n this case, the 9ocas may be deemed to have notice of the fraud from the datethe deed of sale was registered with the 9egistry of <eeds and the new title was issued. Dere, the 9ocas filed their actionin //6, almost nine years after the title was issued to the +uentes spouses on anuary ), /)/.

Moreover, the 9ocas failed to present clear and convincing evidence of the fraud. Mere variance in the signatures of9osario was not conclusive proof of forgery. The 9T% ruled that, although the 9ocas presented a handwriting expert, thetrial court could not be bound by his opinion since the opposing expert witness contradicted the same. Atty. &lagata=stestimony remained technically unrebutted.

+inally, the 9T% noted that Atty. &lagata=s defective notariIation of the affidavit of consent did not invalidate the sale. The

law does not reBuire spousal consent to be on the deed of sale to be valid. @either does the irregularity vitiate 9osario=sconsent. he personally signed the affidavit in the presence of Atty. &lagata.

'n appeal, the %ourt of Appeals 2%A5 reversed the 9T% decision. The %A found sufficient evidence of forgery and did notgive credence to Atty. &lagata=s testimony that he saw 9osario sign the document in PueIon %ity. "ts jurat said differently.

Also, upon comparing the Buestioned signature with the specimen signatures, the %A noted significant variance betweenthem. That Tarciano and 9osario had been living separately for 34 years since /:) also reinforced the conclusion thather signature had been forged.

ince Tarciano and 9osario were married in /:4, the %A concluded that their property relations were governed by the%ivil %ode under which an action for annulment of sale on the ground of lac8 of spousal consent may be brought by thewife during the marriage within 4 years from the transaction. %onseBuently, the action that the 9ocas, her heirs, broughtin //6 fell within 4 years of the anuary , /)/ sale.

%onsidering, however, that the sale between the +uentes spouses and Tarciano was merely voidable, the %A held that its

annulment entitled the spouses to reimbursement of what they paid him plus legal interest computed from the filing of thecomplaint until actual payment. ince the +uentes spouses were also builders in good faith, they were entitled under Article 00) of the %ivil %ode to payment of the value of the improvements they introduced on the lot. The %A did not awarddamages in favor of the 9ocas and deleted the award of attorney=s fees to the +uentes spouses.

7nsatisfied with the %A decision, the +uentes spouses came to this court by petition for review.

The Issues &+esented

The case presents the following issues(

. Chether or not 9osario=s signature on the document of consent to her husband Tarciano=s sale of their conjugaland to the +uentes spouses was forged;

1. Chether or not the 9ocas= action for the declaration of nullity of that sale to the spouses already prescribed;and

3. Chether or not only 9osario, the wife whose consent was not had, could bring the action to annul that sale.

The %ourt=s 9ulings

+irst. The 8ey issue in this case is whether or not 9osario=s signature on the document of consent had been forged. +or, ifthe signature were genuine, the fact that she gave her consent to her husband=s sale of the conjugal land would renderthe other issues merely academic.

The %A found that 9osario=s signature had been forged. The %A observed a mar8ed difference between her signature onthe affidavit of consent and her specimen signatures. The %A gave no weight to Atty. &lagata=s testimony that he saw9osario sign the document in Manila on eptember :, /)) since this clashed with his declaration in the jurat that9osario signed the affidavit in amboanga %ity on anuary , /)/.

The %ourt agrees with the %A=s observation that 9osario=s signature stro8es on the affidavit appears heavy, deliberate,and forced. Der specimen signatures, on the other hand, are consistently of a lighter stro8e and more fluid. The way theletters !9! and !s! were written is also remar8ably different. The variance is obvious even to the untrained eye.

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ignificantly, 9osario=s specimen signatures were made at about the time that she signed the supposed affidavit ofconsent. They were, therefore, reliable standards for comparison. The +uentes spouses presented no evidence that9osario suffered from any illness or disease that accounted for the variance in her signature when she signed the affidavitof consent. @otably, 9osario had been living separately from Tarciano for 34 years since /:). And she resided so faraway in Manila. "t would have been Buite tempting for Tarciano to just forge her signature and avoid the ris8 that shewould not give her consent to the sale or demand a stiff price for it.

Chat is more, Atty. &lagata admittedly falsified the jurat of the affidavit of consent. That jurat declared that 9osario sworeto the document and signed it in amboanga %ity on anuary , /)/ when, as Atty. &lagata testified, she supposedlysigned it about four months earlier at her residence in &aco, Manila on eptember :, /)). Chile a defective

notariIation will merely strip the document of its public character and reduce it to a private instrument, that falsified jurat,ta8en together with the mar8s of forgery in the signature, dooms such document as proof of 9osario=s consent to the saleof the land. That the +uentes spouses honestly relied on the notariIed affidavit as proof of 9osario=s consent does notmatter. The sale is still void without an authentic consent.

econd. %ontrary to the ruling of the %ourt of Appeals, the law that applies to this case is the +amily %ode, not the %ivil%ode. Although Tarciano and 9osario got married in /:4, Tarciano sold the conjugal property to the +uentes spouses onanuary , /)/, a few months after the +amily %ode too8 effect on August 3, /)).

Chen Tarciano married 9osario, the %ivil %ode put in place the system of conjugal partnership of gains on their propertyrelations. Chile its Article *: made Tarciano the sole administrator of the conjugal partnership, Article ** prohibited himfrom selling commonly owned real property without his wife=s consent. till, if he sold the same without his wife=s consent,the sale is not void but merely voidable. Article 63 gave 9osario the right to have the sale annulled during the marriagewithin ten years from the date of the sale. +ailing 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. 63. The wife may, during the marriage, and within ten years from the transaction Buestioned, as8 the courts for theannulment of any contract of the husband entered into without her consent, when such consent is reBuired, or any act orcontract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. hould thewife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of propertyfraudulently alienated by the husband.

ut, as already stated, the +amily %ode too8 effect on August 3, /)). "ts %hapter 0 on %onjugal &artnership of Eainsexpressly superseded Title O", oo8 " of the %ivil %ode on &roperty 9elations etween Dusband and Cife.+urther, the+amily %ode provisions were also made to apply to already existing conjugal partnerships without prejudice to vestedrights. Thus(

Art. 4:. x x x The provisions of this %hapter shall also apply to conjugal partnerships of gains already establishedbetween spouses before the effectivity of this %ode, without prejudice to vested rights already acBuired in accordance withthe %ivil %ode or other laws, as provided in Article 1:*. 2n5%onseBuently, when Tarciano sold the conjugal lot to the +uentes spouses on anuary , /)/, the law that governed thedisposal of that lot was already the +amily %ode.

"n contrast to Article 63 of the %ivil %ode, Article 10 of the +amily %ode does not provide a period within which the wifewho gave no consent may assail her husband=s sale of the real property. "t simply provides that without the other spouse=swritten consent or a court order allowing the sale, the same would be void. Article 10 thus provides(

Art. 10. x x x "n the event that one spouse is incapacitated or otherwise unable to participate in the administration of theconjugal properties, the other spouse may assume sole powers of administration. These powers do not include thepowers of disposition or encumbrance which must have the authority of the court or the written consent of the otherspouse. "n the absence of such authority or consent, the disposition or encumbrance shall be void. x x x

7nder the provisions of the %ivil %ode 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, as in the case of asale of conjugal property without the other spouse=s written consent. A void contract is eBuivalent to nothing and isabsolutely wanting in civil effects. "t cannot be validated either by ratification or prescription.

ut, although a void contract has no legal effects even if no action is ta8en to set it aside, when any of its terms have beenperformed, an action to declare its inexistence is necessary to allow restitution of what has been given under it. Thisaction, according to Article 04 of the %ivil %ode does not prescribe. Thus(

Art. 04. The action or defense for the declaration of the inexistence of a contract does not prescribe.

Dere, the 9ocas filed an action against the +uentes spouses in //6 for annulment of sale and reconveyance of the realproperty that Tarciano sold without their mother=s 2his wife=s5 written consent. The passage of time did not erode the rightto bring such an action.

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esides, even assuming that it is the %ivil %ode that applies to the transaction as the %A held, Article 63 provides thatthe wife may bring an action for annulment of sale on the ground of lac8 of spousal consent during the marriage within 4years from the transaction. %onseBuently, the action that the 9ocas, her heirs, brought in //6 fell within 4 years of theanuary , /)/ sale. "t did not yet prescribe.

The +uentes spouses of course argue that the 9T% nullified the sale to them based on fraud and that, therefore, theapplicable prescriptive period should be that which applies to fraudulent transactions, namely, four years from itsdiscovery. ince notice of the sale may be deemed given to the 9ocas when it was registered with the 9egistry of <eedsin /)/, their right of action already prescribed in //3.

ut, if there had been a victim of fraud in this case, it would be the +uentes spouses in that they appeared to have agreedto buy the property upon an honest belief that 9osario=s written consent to the sale was genuine. They had four years thenfrom the time they learned that her signature had been forged within which to file an action to annul the sale and get bac8their money plus damages. They never exercised the right.

"f, on the other hand, 9osario had agreed to sign the document of consent upon a false representation that the propertywould go to their children, not to strangers, and it turned out that this was not the case, then she would have four yearsfrom the time she discovered the fraud within which to file an action to declare the sale void. ut that is not the case here.9osario was not a victim of fraud or misrepresentation. Der consent was simply not obtained at all. he lost nothing sincethe sale without her written consent was void. 7ltimately, the 9ocas ground for annulment is not forgery but the lac8 ofwritten consent of their mother to the sale. The forgery is merely evidence of lac8 of consent.

Third. The +uentes spouses point out that it was to 9osario, whose consent was not obtained, that the law gave the rightto bring an action to declare void her husband=s sale of conjugal land. ut here, 9osario died in //4, the year after thesale. <oes 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. %onseBuently, the land remained the propertyof Tarciano and 9osario despite that sale. Chen the two died, they passed on the ownership of the property to their heirs,namely, the 9ocas. As lawful owners, the 9ocas had the right, under Article 01/ of the %ivil %ode, to exclude any personfrom its enjoyment and disposal.avvphi

"n fairness to the +uentes spouses, however, they should be entitled, among other things, to recover from Tarciano=s heirsthe 9ocas, the &144,444.44 that they paid him, with legal interest until fully paid, chargeable against his estate.

+urther, the +uentes spouses appear to have acted in good faith in entering the land and building improvements on it. Atty&lagata, whom the parties mutually entrusted with closing and documenting the transaction, represented that he got9osario=s signature on the affidavit of consent. The +uentes spouses had no reason to believe that the lawyer hadviolated his commission and his oath. They had no way of 8nowing that 9osario did not come to amboanga to give herconsent. There is no evidence that they had a premonition that the reBuirement of consent presented some difficulty."ndeed, they willingly made a 34 percent down payment on the selling price months earlier on the assurance that it wasforthcoming.

+urther, the notariIed document appears to have comforted the +uentes spouses that everything was already in orderwhen Tarciano executed a deed of absolute sale in their favor on anuary , /)/. "n fact, they paid the balance due him.

And, acting on the documents submitted to it, the 9egister of <eeds of amboanga %ity issued a new title in the names ofthe +uentes spouses. "t was only after all these had passed that the spouses entered the property and built on it. De isdeemed a possessor in good faith, said Article :1* of the %ivil %ode, who is not aware that there exists in his title or modeof acBuisition any flaw which invalidates it.

As possessor in good faith, the +uentes spouses were under no obligation to pay for their stay on the property prior to itslegal interruption by a final judgment against them. Chat is more, they are entitled under Article 00) to indemnity for theimprovements they introduced into the property with a right of retention until the reimbursement is made. Thus(

Art. 00). 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 wor8s, sowing or planting, after payment of the indemnity provided for in Articles :0* and :0),or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. Dowever,the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees."n such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or treesafter proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fixthe terms thereof. 23*a5

The 9ocas shall of course have the option, pursuant to Article :0* of the %ivil %ode, of indemnifying the +uentes spousesfor the costs of the improvements or paying the increase in value which the property may have acBuired by reason of suchimprovements.

CD#9#+'9#, the %ourt <#@"# the petition and A++"9M C"TD M'<"+"%AT"'@ the decision of the %ourt of Appealsin %A-E.9. %O 44:3 dated +ebruary 16, 1446 as follows(

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. The deed of sale dated anuary , /)/ that Tarciano T. 9oca executed in favor of Manuel '. +uentes,married to >eticia >. +uentes, as well as the Transfer %ertificate of Title T-/4,/) that the 9egister of <eeds ofamboanga %ity issued in the names of the latter spouses pursuant to that deed of sale are <#%>A9#< void;

1. The 9egister of <eeds of amboanga %ity is <"9#%T#< to reinstate Transfer %ertificate of Title 3:33 in thename of Tarciano T. 9oca, married to 9osario Eabriel;

3. 9espondents EonIalo E. 9oca, Annabelle 9. oson, 9ose Marie 9. %ristobal, and &ilar Malcampo are'9<#9#< to pay petitioner spouses Manuel and >eticia +uentes the &144,444.44 that the latter paid Tarciano T.9oca, with legal interest from anuary , /)/ until fully paid, chargeable against his estate;

0. 9espondents EonIalo E. 9oca, Annabelle 9. oson, 9ose Marie 9. %ristobal, and &ilar Malcampo are further'9<#9#<, at their option, to indemnify petitioner spouses Manuel and >eticia +uentes with their expenses forintroducing useful improvements on the subject land or pay the increase in value which it may have acBuired byreason of those improvements, with the spouses entitled to the right of retention of the land until the indemnity ismade; and

:. The 9T% of amboanga %ity from which this case originated is <"9#%T#< to receive evidence and determinethe amount of indemnity to which petitioner spouses Manuel and >eticia +uentes are entitled.

' '9<#9#<.

3(R( $o( 166DB6 $oe9be+ B' 5//6

O%)A "AUTITA )%RR%R' &etitioner,vs.&( ,A$U%L ,( )%RR%R !IR3I$IA )%RR%R and &( I,A%L ,( )%RR%R and )LORA )%RR%R' 9espondents.

< # % " " ' @HIO-$A.ARIO' J.:

efore this %ourt is an Appeal by %ertiorari which assails the <ecision of the %ourt of Appeals dated * August 1440 in%A-E.9. & @o. 6):1:, reversing and setting aside the 'rder dated * <ecember 1441 of the 9egional Trial %ourt 29T%5Mandaluyong %ity, ranch 11 in %ivil %ase @o. M%41-6)4. The %ourt of Appeals ordered the dismissal of the%omplaint filed by petitioner osefa autista +errer against respondents ps. Manuel M. +errer and Oirginia +errer, andps. "smael M. +errer and +lora +errer in the aforesaid %ivil %ase @o. M%41-6)4.

"n her %omplaint for payment of conjugal improvements, sum of money, and accounting with prayer for injunction anddamages, petitioner alleged that she is the widow of Alfredo +errer 2Alfredo5, a half-brother of respondents Manuel M.+errer 2Manuel5 and "smael M. +errer 2"smael5. efore her marriage to Alfredo, the latter acBuired a piece of lot, coveredby Transfer %ertificate of Title 2T%T5 @o. *6/16. De applied for a loan with the ocial ecurity ystem 25 to buildimprovements thereon, including a residential house and a two-door apartment building. Dowever, it was during theirmarriage that payment of the loan was made using the couple=s conjugal funds. +rom their conjugal funds, petitioner

posited, they constructed a warehouse on the lot. Moreover, petitioner averred that respondent Manuel occupied one doorof the apartment building, as well as the warehouse; however, in eptember //, he stopped paying rentals thereon,alleging that he had acBuired ownership over the property by virtue of a <eed of ale executed by Alfredo in favor ofrespondents, Manuel and "smael and their spouses. T%T @o. *6/16 was cancelled, and T%T. @o. 161) was issued andregistered in the names of respondents.

"t is petitioner=s contention that on 1 'ctober /)/, when her husband was already bedridden, respondents "smael and+lora +errer made him sign a document, purported to be his last will and testament. The document, however, was a <eedof ale covering Alfredo=s lot and the improvements thereon. >earning of this development, Alfredo filed with the 9T% of&asig, a %omplaint for Annulment of the said sale against respondents, doc8eted as %ivil %ase @o. *316. 'n 11 une//3, the 9T% dismissed the same. The 9T% found that the terms and conditions of the <eed of ale are not contrary tolaw, morals, good customs, and public policy, and should be complied with by the parties in good faith, there being nocompelling reasonunder the law to do otherwise. The dismissal was affirmed by the %ourt of Appeals. ubseBuently, on 6 @ovember //0,this %ourt, in E.9. @o. >-64*6, finding no reversible error committed by the appellate court in affirming the dismissal ofthe 9T%, affirmed the <ecision of the %ourt of Appeals.

+urther, in support of her %omplaint, petitioner alluded to a portion of the <ecision dated 11 une //3 of the 9T% in %ivil%ase @o. *316, which stated, to wit("n determining which property is the principal and which is the accessory, the property of greater value shall be consideredthe principal. "n this case, the lot is the principal and the improvements the accessories. ince Article 14 of the +amily%ode provides the rule that the ownership of accessory follows the ownership of the principal, then the subject lot with allits improvements became an exclusive and capital property of Alfredo with an obligation to reimburse the conjugalpartnership of the cost of improvements at the time of liBuidation of theN conjugal partnership. %learly, Alfredo has all therights to sell the subject property by himself without need of osefa=s consent.

According to petitioner, the ruling of the 9T% shows that, when Alfredo died on 1/ eptember ///, or at the time of theliBuidation of the conjugal partnership, she had the right to be reimbursed for the cost of the improvements on Alfredo=s lot

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he alleged that the cost of the improvements amounted to &:44,444.44; hence, one-half thereof should be reimbursedand paid by respondents as they are now the registered owners of Alfredo=s lot. he averred that respondents cannotclaim lac8 of 8nowledge about the fact that the improvements were constructed using conjugal funds as they hadoccupied one of the apartment buildings on Alfredo=s lot, and even paid rentals to petitioner. "n addition, petitioner prayedthat respondents be ordered to render an accounting from eptember, //, on the income of the boarding houseconstructed thereon which they had appropriated for themselves, and to remit one-half thereof as her share. +inally,petitioner sought from respondents moral and exemplary damages, litigation and incidental expenses.

+or their part, respondents filed a Motion to <ismiss, contending that petitioner had no cause of action against them, andthat the cause of action was barred by prior judgment.

'n * <ecember 1441, the 9T% rendered an 'rder, denying the Motion to <ismiss. According to the 9T%, nopronouncement as to the improvements constructed on Alfredo=s lot has been made in %ivil %ase @o. *316, and thepayment of petitioner=s share in the conjugal partnership constitutes a separate cause of action. A subseBuent'rder dated 6 anuary 1443 was issued by the 9T%, denying respondents= Motion for 9econsideration.

Aggrieved, respondents elevated the case to the %ourt of Appeals by way of a &etition for %ertiorari, alleging grave abuseof discretion amounting to lac8 or excess of jurisdiction on the 9T% in denying the dismissal.

'n * August 1440, the %ourt of Appeals rendered a <ecision granting the &etition. "t held that petitioner=s %omplaintfailed to state a cause of action. The appellate court rationaliIed as follows(

CNe believe that the instant complaint is not the proper action for the respondent to enforce her right of reimbursement ofthe cost of the improvementsN on the subject property. As correctly pointed out by the petitioners, the same should bemade and directed in the settlement of estate of her deceased husband Alfredo +errer pursuant to Article 1/ of the+amily %ode. uch being the case, it appears that the complaint herein fails to state a cause of action against thepetitioners, the latter not being the proper parties against whom the subject action for reimbursement must be directed to.

A complaint states a cause of action where it contains three essential elements of a cause of action, namely( 25 the legalright of the plaintiff; 215 the correlative obligation of the defendant, and 235 the act or omission of the defendant in violationof said legal right. "f these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground offailure to state a cause of action. Albeit the respondent herein has the legal right to be reimbursed of the cost of theimprovements of the subject property, it is not the petitioners but the estate of her deceased husband which has theobligation to pay the same. The complaint herein is therefore dismissible for failure to state a cause of action against thepetitioners. @eedless to say, the respondent is not without any further recourse as she may file her claim against theestate of her deceased husband.

"n light of the foregoing, we find that the public respondent committed grave abuse of discretion in denying the petitioners=motion to dismiss for failure to state a cause of action.

Aggrieved, petitioner filed a Motion for 9econsideration thereon. Dowever, on 6 <ecember 1440, the %ourt of Appealsrendered a 9esolution denying the motion.

Dence, the present recourse.&etitioner submits the following grounds for the allowance of the instant &etition, to wit(

A. TD# D'@'9A># %'79T '+ A&&#A> #99#< "@ 97>"@E TDAT &#T"T"'@#9= %'M&>A"@T +A"> T'TAT# A %A7# '+ A%T"'@ AEA"@T TD# 9#&'@<#@T, TD# >ATT#9 @'T #"@E TD# &9'&#9&A9T"# AEA"@T CD'M TD# 7#%T A%T"'@ +'9 9#"M79#M#@T M7T # <"9#%T#< T'.. TD# D'@'9A># %'79T '+ A&&#A> #99#< "@ 97>"@E TDAT TD# &7>"% 9#&'@<#@T, D'@.9"A>"@A T. %A&%'-7MA>", %'MM"TT#< E9AO# A7# '+ <"%9#T"'@ "@ <#@"@E TD#9#&'@<#@T=N M'T"'@ T' <"M" +'9 +A">79# T' TAT# A %A7# '+ A%T"'@.

oth arguments raise the sole issue of whether the %ourt of Appeals erred in dismissing petitioner=s %omplaint for failureto state a cause of action.ection 2g5 9ule * of the //6 9ules of %ivil &rocedure ma8es it clear that failure to ma8e a sufficient allegation of acause of action in the complaint warrants the dismissal thereof. ection 1, 9ule 1 of the //6 9ules of %ivil &roceduredefines a cause of action as the act or omission by which a party violates the right of another. "t is the delict or the

wrongful act or omission committed by the defendant in violation of the primary right of the plaintiff. A cause of action has the following essential elements, viI(

25 A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

215 An obligation on the part of the named defendant to respect or not to violate such right; and

235 Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach ofthe obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damagesor other appropriate relief.

A complaint states a cause of action only when it has the three indispensable elements.

"n the determination of the presence of these elements, inBuiry is confined to the four corners of the complaint. 'nly thestatements in the %omplaint may be properly considered. The absence of any of these elements ma8es a complaintvulnerable to a Motion to <ismiss on the ground of a failure to state a cause of action.

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After a reading of the allegations contained in petitioner=s %omplaint, we are convinced that the same failed to state acause of action."n the case at bar, petitioner asserts a legal right in her favor by relying on the <ecision of the 9T% in %ivil %ase @o.*316. "t can be recalled that the aforesaid case is an action for Annulment filed by Alfredo and petitioner against therespondents to see8 annulment of the <eed of ale, executed by Alfredo in respondents= favor and covering the hereinsubject premises. The %omplaint was dismissed by the 9T%, and subseBuently affirmed by the %ourt of Appeals and bythis %ourt in E.9. @o. >-64*6.

According to petitioner, while the 9T% in %ivil %ase @o. *316 recogniIed that the improvements constructed on Alfredo=slots were deemed as Alfredo=s exclusive and capital property, the court also held that petitioner, as Alfredo=s spouse, has

the right to claim reimbursement from the estate of Alfredo. "t is argued by petitioner that her husband had no otherproperty, and his only property had been sold to the respondents; hence, she has the legal right to claim forreimbursement from the respondents who are now the owners of the lot and the improvements thereon. "n fine, petitionerasseverates that the %omplaint cannot be dismissed on the ground of failure to state a cause of action because therespondents have the correlative obligation to pay the value of the improvements.&etitioner was not able to show that there is an obligation on the part of the respondents to respect or not to violate herright. Chile we could concede that %ivil %ase @o. *316 made a reference to the right of the spouse as contemplated in

Article 14 of the +amily %ode to be reimbursed for the cost of the improvements, the obligation to reimburse rests on thespouse upon whom ownership of the entire property is vested. There is no obligation on the part of the purchaser of theproperty, in case the property is sold by the owner-spouse.

"ndeed, Article 14 provides the solution in determining the ownership of the improvements that are made on the separateproperty of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses. Thus,when the cost of the improvement and any resulting increase in value are more than the value of the property at the time

of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject toreimbursement of the value of the property of the owner-spouse at the time of the improvement; otherwise, said propertyshall be retained in ownership by the owner-spouse, li8ewise subject to reimbursement of the cost of the improvement.The subject property was precisely declared as the exclusive property of Alfredo on the basis of Article 14 of the +amily%ode.Chat is incontrovertible is that the respondents, despite the allegations contained in the %omplaint that they are thebuyers of the subject premises, are not petitioner=s spouse nor can they ever be deemed as the owner-spouse uponwhom the obligation to reimburse petitioner for her costs rested. "t is the owner-spouse who has the obligation toreimburse the conjugal partnership or the spouse who expended the acts or efforts, as the case may be. 'therwisestated, respondents do not have the obligation to respect petitioner=s right to be reimbursed.

'n this matter, we do not find an act or omission on the part of respondents in violation of petitioner=s rights. The right ofthe respondents to acBuire as buyers the subject premises from Alfredo under the assailed <eed of ale in %ivil %ase @o.*316 had been laid to rest. This is because the validity of the <eed of ale had already been determined and upheld with

finality. The same had been similarly admitted by petitioner in her %omplaint. "t can be said, thus, that respondents= act ofacBuiring the subject property by sale was not in violation of petitioner=s rights. The same can also be said of therespondents= objection to reimburse petitioner. imply, no correlative obligation exists on the part of the respondents toreimburse the petitioner. %orollary thereto, neither can it be said that their refusal to reimburse constituted a violation ofpetitioner=s rights. As has been shown in the foregoing, no obligation by the respondents under the law exists. &etitioner=s%omplaint failed to state a cause of action against the respondents, and for this reason, the %ourt of Appeals was not inerror in dismissing the same.CD#9#+'9#, the &etition is <#@"#<. The <ecision dated * August 1440 and the 9esolution dated 6 <ecember 1440of the %ourt of Appeals in %A E.9. &. @o. 6):1: are A++"9M#<. %osts de oficio.

' '9<#9#<.

3(R( $o( 1DB610 August 5B' 5//6

I$ R%: &%TITIO$ )OR %&ARATIO$ O) &RO&%RT? %L%$A "U%$A!%$TURA ,ULL%R' &etitioner,

vs.H%L,UT ,ULL%R' 9espondent.

< # % " " ' @

?$AR%-A$TIA3O' J .(This petition for review on certiorari assails the +ebruary 1*, 144 <ecision of the %ourt of Appeals in %A-E.9. %O @o.:/31 affirming with modification the August 1, //* <ecision of the 9egional Trial %ourt of PueIon %ity, ranch )* in%ivil %ase @o. P-/0-1)*1, which terminated the regime of absolute community of property between petitioner andrespondent, as well as the 9esolution dated August 3, 144 denying the motion for reconsideration.

The facts are as follows(&etitioner #lena uenaventura Muller and respondent Delmut Muller were married in Damburg, Eermany on eptember11, /)/. The couple resided in Eermany at a house owned by respondent=s parents but decided to move and residepermanently in the &hilippines in //1. y this time, respondent had inherited the house in Eermany from his parents

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which he sold and used the proceeds for the purchase of a parcel of land in Antipolo, 9iIal at the cost of &:1),444.44 andthe construction of a house amounting to &1,344,444.44. The Antipolo property was registered in the name of petitionerunder Transfer %ertificate of Title @o. 1/03) of the 9egister of <eeds of Mari8ina, Metro Manila.

<ue to incompatibilities and respondent=s alleged womaniIing, drin8ing, and maltreatment, the spouses eventuallyseparated. 'n eptember 1*, //0, respondent filed a petition for separation of properties before the 9egional Trial%ourt of PueIon %ity.

'n August 1, //*, the trial court rendered a decision which terminated the regime of absolute community of propertybetween the petitioner and respondent. "t also decreed the separation of properties between them and ordered the eBualpartition of personal properties located within the country, excluding those acBuired by gratuitous title during the marriage.

Cith regard to the Antipolo property, the court held that it was acBuired using paraphernal funds of the respondent.Dowever, it ruled that respondent cannot recover his funds because the property was purchased in violation of ection 6, Article "" of the %onstitution. Thus R

Dowever, pursuant to Article /1 of the +amily %ode, properties acBuired by gratuitous title by either spouse during themarriage shall be excluded from the community property. The real property, therefore, inherited by petitioner in Eermanyis excluded from the absolute community of property of the herein spouses. @ecessarily, the proceeds of the sale of saidreal property as well as the personal properties purchased thereby, belong exclusively to the petitioner. Dowever, the partof that inheritance used by the petitioner for acBuiring the house and lot in this country cannot be recovered by thepetitioner, its acBuisition being a violation of ection 6, Article "" of the %onstitution which provides that !save in cases ofhereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations orassociations Bualified to acBuire or hold lands of the public domain.! The law will leave the parties in the situation wherethey are in without prejudice to a voluntary partition by the parties of the said real property. x x x

x x x x

As regards the property covered by Transfer %ertificate of Title @o. 1/03) of the 9egistry of <eeds of Mari8ina, MetroManila, situated in Antipolo, 9iIal and the improvements thereon, the %ourt shall not ma8e any pronouncement onconstitutional grounds.

9espondent appealed to the %ourt of Appeals which rendered the assailed decision modifying the trial court=s <ecision. "theld that respondent merely prayed for reimbursement for the purchase of the Antipolo property, and not acBuisition ortransfer of ownership to him. "t also considered petitioner=s ownership over the property in trust for the respondent. Asregards the house, the %ourt of Appeals ruled that there is nothing in the %onstitution which prohibits respondent fromacBuiring the same. The dispositive portion of the assailed decision reads(CD#9#+'9#, in view of the foregoing, the <ecision of the lower court dated August 1, //* is hereby M'<"+"#<.9espondent #lena uenaventura Muller is hereby ordered to 9#"M79# the petitioner the amount of &:1),444.44 forthe acBuisition of the land and the amount of &1,344,444.44 for the construction of the house situated in Atnipolo, 9iIal,deducting therefrom the amount respondent spent for the preservation, maintenance and development of the aforesaidreal property including the depreciation cost of the house or in the alternative to #>> 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 andpreservation spent by the respondent. hould there be profit, the same shall be divided in proportion to the eBuity eachhas over the property. The case is 9#MA@<#< to the lower court for reception of evidence as to the amount claimed bythe respondents for the preservation and maintenance of the property.

' '9<#9#<.

Dence, the instant petition for review raising the following issues(

"TD# D'@'9A># %'79T '+ A&&#A> E9AO#> #99#< "@ D'><"@E TDAT TD# 9#&'@<#@T D#9#"@ "#@T"T>#< T' 9#"M79#M#@T '+ TD# AM'7@T 7#< T' &79%DA# TD# >A@< A C#>> A TD# %'T+'9 TD# %'@T97%T"'@ '+ TD# D'7#, +'9 "@ ' 97>"@E, "T "@<"9#%T> A>>'C#< A@ A%T <'@# CD"%D'TD#9C"# %'7>< @'T # <"9#%T> x x x <'@#, C"TD'7T <'"@E O"'>#@%# T' TD# %'@T"T7T"'@A>

&9'%9"&T"'@ TDAT A@ A>"#@ " &9'D""T#< +9'M A%P7"9"@E 'C@#9D"& '+ 9#A> &9'&#9T"#>'%AT#< "@ TD# &D">"&&"@#.

""

TD# %'79T '+ A&&#A> E9AO#> #99#< "@ 7TA"@"@E 9#&'@<#@T= %A7# '+ A%T"'@ CD"%D " A%T7A>> A <#&#9AT# ATT#M&T T' 'TA"@ 'C@#9D"& 'O#9 TD# >'T "@ P7#T"'@, %>'TD#< 7@<#9TD# E7"# '+ %>A"M"@E 9#"M79#M#@T.

&etitioner contends that respondent, being an alien, is disBualified to own private lands in the &hilippines; that respondentwas aware of the constitutional prohibition but circumvented the same; and that respondent=s purpose for filing an actionfor separation of property is to obtain exclusive possession, control and disposition of the Antipolo property.9espondent claims that he is not praying for transfer of ownership of the Antipolo property but merely reimbursement; thatthe funds paid by him for the said property were in consideration of his marriage to petitioner; that the funds were given topetitioner in trust; and that eBuity demands that respondent should be reimbursed of his personal funds.

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The issue for resolution is whether respondent is entitled to reimbursement of the funds used for the acBuisition of the Antipolo property.The petition has merit.

ection 6, Article "" of the /)6 %onstitution states(

ave in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,corporations, or associations Bualified to acBuire or hold lands of the public domain.

Aliens, whether individuals or corporations, are disBualified from acBuiring lands of the public domain. Dence, they arealso disBualified from acBuiring private lands. The primary purpose of the constitutional provision is the conservation ofthe national patrimony. "n the case of $riven8o v. 9egister of <eeds, the %ourt held(

7nder section of Article """ of the %onstitution, !natural resources, with the exception of public agricultural land, shallnot be alienated,! and with respect to public agricultural lands, their alienation is limited to +ilipino citiIens. ut thisconstitutional purpose conserving agricultural resources in the hands of +ilipino citiIens may easily be defeated by the+ilipino citiIens themselves who may alienate their agricultural lands in favor of aliens. "t is partly to prevent this result thatsection : is included in Article """, and it reads as follows(

!ec. :. ave in cases of hereditary succession, no private agricultural land will be transferred or assigned except toindividuals, corporations, or associations Bualified to acBuire or hold lands of the public domain in the &hilippines.!This constitutional provision closes the only remaining avenue through which agricultural resources may lea8 into aliens=hands. "t would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may befreely so alienated upon their becoming private agricultural lands in the hands of +ilipino citiIens. x x x

x x x x"f 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 acBuire and possess not only residential lots and houses for themselves butentire subdivisions, and whole towns and cities,! and that !they may validly buy and hold in their names lands of any areafor building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, mar8ets, golfcourses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant=s words, strictlyagricultural.! 2olicitor Eeneral=s rief, p. *.5 That this is obnoxious to the conservative spirit of the %onstitution is beyondBuestion.

9espondent was aware of the constitutional prohibition and expressly admitted his 8nowledge thereof to this %ourt. Dedeclared that he had the Antipolo property titled in the name of petitioner because of the said prohibition. Dis attempt atsubseBuently asserting or claiming a right on the said property cannot be sustained.

The %ourt of Appeals erred in holding that an implied trust was created and resulted by operation of law in view ofpetitioner=s marriage to respondent. ave for the exception provided in cases of hereditary succession, respondent=sdisBualification from owning lands in the &hilippines is absolute. @ot even an ownership in trust is allowed. esides, wherethe 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. To hold otherwise would allow circumvention of the constitutional prohibition."nvo8ing the principle that a court is not only a court of law but also a court of eBuity, is li8ewise misplaced. "t has beenheld that eBuity 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. De who see8s eBuity must do eBuity, and he who comes into eBuity must come with clean handsThe latter is a freBuently stated maxim which is also expressed in the principle that he who has done ineBuity shall nothave eBuity. "t signifies that a litigant may be denied relief by a court of eBuity on the ground that his conduct has beenineBuitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in issue.Thus, in the instant case, respondent cannot see8 reimbursement on the ground of eBuity where it is clear that he willinglyand 8nowingly bought the property despite the constitutional prohibition.

+urther, the distinction made between transfer of ownership as opposed to recovery of funds is a futile exercise onrespondent=s part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he isnot allowed to own. Thus, it is li8ewise proscribed by law. As expressly held in %heesman v. "ntermediate Appellate %ourt(

+inally, the fundamental law prohibits the sale to aliens of residential land. ection 0, Article "O of the /63 %onstitutionordains that, !ave in cases of hereditary succession, no private land shall be transferred or conveyed except toindividuals, corporations, or associations Bualified to acBuire or hold lands of the public domain.! &etitioner Thomas%heesman was, of course, charged with 8nowledge of this prohibition. Thus, assuming that it was his intention that the lotin Buestion be purchased by him and his wife, he acBuired no right whatever over the property by virtue of that purchase;and in attempting to acBuire a right or interest in land, vicariously and clandestinely, he 8nowingly violated the%onstitution; the sale as to him was null and void. "n any event, he had and has no capacity or personality to Buestion thesubseBuent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative ofa husband in respect of conjugal property. To sustain such a theory would permit indirect controversion of theconstitutional prohibition. "f the property were to be declared conjugal, this would accord to the alien husband a notinsubstantial interest and right over land, as he would then have a decisive vote as to its transfer or disposition. This is aright that the %onstitution does not permit him to have.

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As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, atthis stage of the proceedings be reviewed and overturned. ut even if it were a fact that said wife had used conjugal fundsto ma8e the acBuisition, the considerations just set out to militate, on high constitutional grounds, against his recoveringand holding the property so acBuired, or any part thereof. And whether in such an event, he may recover from his wife anyshare of the money used for the purchase or charge her with unauthoriIed disposition or expenditure of conjugal funds isnot now inBuired into; that would be, in the premises, a purely academic exercise. 2#mphasis added5CD#9#+'9#, in view of the foregoing, the instant petition is E9A@T#<. The <ecision dated +ebruary 1*, 144 of the%ourt of Appeals in %A-E.9. %O @o. :/31 ordering petitioner #lena uenaventura Muller to reimburse respondentDelmut Muller the amount of &:1),444 for the acBuisition of the land and the amount of &1,344,444 for the construction of

the house in Antipolo %ity, and the 9esolution dated August 3, 144 denying reconsideration thereof, are 9#O#9#<and #T A"<#. The August 1, //* <ecision of the 9egional Trial %ourt of PueIon %ity, ranch )* in %ivil %ase @o. P-/0-1)*1 terminating the regime of absolute community between the petitioner and respondent, decreeing a separation ofproperty between them and ordering the partition of the personal properties located in the &hilippines eBually, is9#"@TAT#<.

' '9<#9#<.!IR3ILIO ,AUILA$' 3(R( $O( 100D/B

&etitioner,&resent( @A9#-A@T"AE', J .,*hairperson,- versus - A7T9"A-MA9T"@#,

%D"%'-@AA9"', and@A%D79A, JJ .#ITA ,AUILA$' &romulgated(9espondent. une ), 1446x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

# % I I O $

AUTRIA-,ARTI$%.' J (:

efore the %ourt is a &etition for 9eview on *ertiorari under 9ule 0: of the 9ules of %ourt assailing the<ecision dated August 34, 1441 promulgated by the %ourt of Appeals 2%A5 in %A-E.9. & @o. */*)/, which affirmed theudgment on %ompromise Agreement dated anuary 1, 1441 of the 9egional Trial %ourt 29T%5, ranch3, @abunturan, %ompostela Oalley, and the 9T% 'rders dated anuary 1, 1441 and +ebruary 6, 1441 2'9<#95 in %iv%ase @o. *:*.

The facts of the case, as found by the %A, are as follows(Derein petitioner and herein private respondent are spouses who once had a blissful married life and outof which were blessed to have a son. Dowever, their once sugar coated romance turned bitter whenpetitioner 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 lattersparamour. %onseBuently, both the private respondent and her paramour were convicted of the crimecharged and were sentenced to suffer an imprisonment ranging from one 25 year, eight 2)5 months,minimum of prision correccional as minimum penalty, to three 235 years, six 2*5 months and twenty one

215 days, medium of prision correccional as maximum penalty. Thereafter, private respondent, through counsel, filed a &etition for <eclaration of @ullity of Marriage,<issolution and >iBuidation of %onjugal &artnership of Eains and <amages on une :, 144 with the9egional Trial %ourt, ranch 3 of @abunturan, %ompostela Oalley, doc8eted as %ivil %ase @o. *:*,imputing psychological incapacity on the part of the petitioner. <uring the pre-trial of the said case, petitioner and private respondent entered into a %'M&9'M"#

AE9##M#@T in the following terms, to wit(

. "n partial settlement of the conjugal partnership of gains, the parties agree to thefollowing(

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a. &:44,444.44 of the money deposited in the ban8 jointly in the name of

the spouses shall be withdrawn and deposited in favor and in trust of their common child, @eil MaBuilan, with the deposit in the joint account of the parties.

The balance of such deposit, which presently stands at&,3),403.3*,shall be withdrawn and divided eBually 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 bepaid the sum of&:4,444.44 as his share in the stoc8s of the store in fullsettlement thereof.

The plaintiff shall be allowed to occupy the bodega until the time theowner of the lot on which it stands shall construct a building thereon;

c. The motorcycles shall be divided between them such thatthe $awasa8i shall be owned by the plaintiff while the Donda <ream shallbe for the defendant;

d. The passenger jeep shall be for the plaintiff who shall pay the defendant

the sum of &6:,444.44 as his share thereon and in full settlement

thereof; e. The house and lot shall be to the common child.

1. This settlement is only partial, i.e., without prejudice to the litigation of other conjugalproperties that have not been mentioned;

x x x x

The said %ompromise Agreement was given judicial imprimatur by the respondent judge in theassailed udg9ent On o9*+o9ise Ag+ee9ent, which was erroneously dated anuary 1, 1441. Dowever, petitioner filed an 'mnibus Motion dated anuary :, 1441, praying for the repudiation of the

%ompromise Agreement and the reconsideration of the udgment on %ompromise Agreement by therespondent judge on the grounds that his previous lawyer did not intelligently and judiciously apprise himof the conseBuential effects of the %ompromise Agreement. The respondent udge in the assailed O+de+ dated anua+= 51' 5//5, denied the aforementioned'mnibus Motion. <ispleased, petitioner filed a Motion for 9econsideration of the aforesaid 'rder, but the same was deniedin the assailed O+de+ dated )eb+ua+= 7' 5//5. 2#mphasis supplied5

The petitioner filed a &etition for *ertiorari and &rohibition with the %A under 9ule *: of the 9ules of %ourt claiming thatthe 9T% committed grave error and abuse of discretion amounting to lac8 or excess of jurisdiction 25 in upholding thevalidity of the %ompromise Agreement dated anuary , 1441; 215 when it held in its 'rder dated +ebruary 6, 1441 thatthe %ompromise Agreement was made within the cooling-off period; 235 when it denied petitioners Motion to 9epudiate%ompromise Agreement and to 9econsider "ts udgment on %ompromise Agreement; and 205 when it conducted theproceedings without the appearance and participation of the 'ffice of the olicitor Eeneral andJor the &rovincia&rosecutor. 'n August 34, 1441, the %A dismissed the &etition for lac8 of merit. The %A held that the conviction of the respondent ofthe crime of adultery does not ipso facto disBualify her from sharing in the conjugal property, especially considering thatshe had only been sentenced with the penalty of prision correccional, a penalty that does not carry the accessory penaltyof civil interdiction which deprives the person of the rights to manage her property and to dispose of suchproperty inter vivosS that Articles 03 and *3 of the +amily %ode, which pertain to the effects of a nullified marriage and theeffects of legal separation, respectively, do not apply, considering, too, that the &etition for the <eclaration of the @ullity ofMarriage filed by the respondent invo8ing Article 3* of the +amily %ode has yet to be decided, and, hence, it is prematureto apply Articles 03 and *3 of the +amily %ode; that, although adultery is a ground for legal separation, nonetheless,

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Article *3 finds no application in the instant case since no petition to that effect was filed by the petitioner against therespondent; that the spouses voluntarily separated their property through their %ompromise Agreement with courtapproval under Article 30 of the +amily %ode; that the %ompromise Agreement, which embodies the voluntary separationof 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 ofthe %ompromise Agreement, this point is untenable since the mista8e or negligence of the lawyer binds his client, unlesssuch mista8e or negligence amounts to gross negligence or deprivation of due process on the part of his client; that theseexceptions are not present in the instant case; that the %ompromise Agreement was plainly worded and written in simplelanguage, which a person of ordinary intelligence can discern the conseBuences thereof, hence, petitioners claim that hisconsent was vitiated is highly incredible; that the %ompromise Agreement was made during the existence of the marriageof the parties since it was submitted during thependency of the petition for declaration of nullity of marriage; that theapplication of Article 143: of the %ivil %ode is misplaced; that the cooling-off period under Article :) of the +amily %odehas no bearing on the validity of the %ompromise Agreement; that the %ompromise 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 achange of mind; that the presence of the olicitor Eeneral or his deputy is not indispensable to the execution and validityof the %ompromise Agreement, since the purpose of his presence is to curtail any collusion between the parties and tosee to it that evidence is not fabricated, and, with this in mind, nothing in the %ompromise Agreement touches on the verymerits of the case of declaration of nullity of marriage for the court to be wary of any possible collusion; and, finally, thatthe %ompromise Agreement is merely an agreement between the parties to separate their conjugal properties partiallywithout prejudice to the outcome of the pending case of declaration of nullity of marriage.Dence, herein &etition, purely on Buestions of law, raising the following issues(

".

CD#TD#9 '+ @'T A &'7# %'@O"%T#< '+ #"TD#9 %'@%7"@AE# '9 A<7>T#9, %A@ T">>DA9# "@ TD# %'@7EA> &A9T@#9D"&;

"" CD#TD#9 '9 @'T A %'M&9'M"# AE9##M#@T #@T#9#< "@T' &'7#, '@# '+ CD'MCA %'@O"%T#< '+ A<7>T#9, E"O"@E TD# %'@O"%T#< &'7# A DA9# "@ TD# %'@7EA>&9'&#9T, OA>"< A@< >#EA>;

"""

CD#TD#9 '9 @'T A 7<EM#@T +'9 A@@7>M#@T A@< >#EA> #&A9AT"'@ " A &9#-

9#P7""T# #+'9# A &'7# %'@O"%T#< '+ #"TD#9 %'@%7"@AE# '9 A<7>T#9, #<"P7A>"+"#< A@< &9'D""T#< +9'M DA9"@E "@ TD# %'@7EA> &9'&#9T;

"O

CD#TD#9 '9 @'T TD# <"P7A>"+"%AT"'@ '+ A %'@O"%T#< &'7# '+ A<7>T#9 +9'MDA9"@E "@ A %'@7EA> &9'&#9T, %'@T"T7T# %"O"> "@T#9<"%T"'@.

The petitioner argues that the %ompromise Agreement should not have been given judicial imprimatur since it isagainst law and public policy; that the proceedings where it was approved is null and void, there being noappearance and participation of the olicitor Eeneral or the &rovincial &rosecutor; that it was timely repudiated;and that the respondent, having been convicted of adultery, is therefore disBualified from sharing in the conjugalproperty.The &etition must fail.The essential Buestion is whether the partial voluntary separation of property made by the spouses pending the petitionfor declaration of nullity of marriage is valid. irst. The petitioner contends that the %ompromise Agreement is void because it circumvents the law that prohibits theguilty spouse, who was convicted of either adultery or concubinage, from sharing in the conjugal property. ince therespondent was convicted of adultery, the petitioner argues that her share should be forfeited in favor of the common childunder Articles 03215 and *3 of the +amily %ode. To the petitioner, it is the clear intention of the law to disBualify the spouse convicted of adultery from sharing in theconjugal property; and because the %ompromise Agreement is void, it never became final and executory.Moreover, the petitioner cites Article 143: of the %ivil %ode and argues that since adultery is a ground for legal separationthe %ompromise Agreement is therefore void.

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These arguments are specious. The foregoing provisions of the law are inapplicable to the instant case.

Article 03 of the +amily %ode refers to Article 01, to wit(

Article 01. The subseBuent marriage referred to in the preceding Articleshall be automatically terminatedby the recording of the affidavit of reappearance of the absent spouse, unless there is a judgmentannulling 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 subseBuent marriage at the instance of any interested person, with duenotice to the spouses of the subseBuent marriage and without prejudice to the fact of reappearance being

judicially determined in case such fact is disputed. where a subseBuent marriage is terminated because of the reappearance of an absent spouse; while Article *3 applies tothe effects of a decree of legal separation. The present case involves a proceeding where the nullity of the marriage issought to be declared under the ground of psychological capacity.

Article 143: of the %ivil %ode is also clearly inapplicable. The %ompromise Agreement partially divided the properties ofthe conjugal partnership of gains between the parties and does not deal with the validity of a marriage or legalseparation. "t is not among those that are expressly prohibited by Article 143:.Moreover, the contention that the %ompromise Agreement is tantamount to a circumvention of the law prohibiting theguilty spouse from sharing in the conjugal properties is misplaced. #xisting law and jurisprudence do not impose such

disBualification. 7nder Article 03 of the +amily %ode, separation of property may be effected voluntarily or for sufficient cause, subject to

judicial approval. The Buestioned %ompromise Agreement which was judicially approved is exactly such a separation ofproperty allowed under the law. This conclusion holds true even if the proceedings for the declaration of nullity of marriagewas still pending. Howee+' the ou+t 9ust st+ess that this olunta+= se*a+ation of *+o*e+t= is sub2e4t to the +ightsof all 4+edito+s of the 4on2ugal *a+tne+shi* of gains and othe+ *e+sons with *e4unia+= inte+est *u+suant to A+ti4le16 of the )a9il= ode(+econd. &etitioners claim that since the proceedings before the 9T% were void in the absence of the participation of theprovincial prosecutor or solicitor, the voluntary separation made during the pendency of the case is also void. Theproceedings pertaining to the %ompromise Agreement involved the conjugal properties of the spouses. The settlementhad no relation to the Buestions surrounding the validity of their marriage. @or did the settlement amount to acollusion between the parties.

Article 0) of the +amily %ode states(

Art. 0). "n all cases of annulment or declaration of absolute nullity of marriage, the %ourt shall order theprosecuting attorney or fiscal assigned to it to appear on behalf of the tate to ta8e steps to *+eent4ollusion between the *a+ties and to ta@e 4a+e that the eiden4e is not fab+i4ated o+ su**+essed( 2#mphasis supplied5

ection 32e5 of 9ule / of the //6 9ules of %ourt provides( #%. 3. -efaultS declaration of.2 x x x x

x x x x

2e5 @here no defaults allowed. "f the defending party in action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the 4ou+t shall o+de+ the *+ose4uting atto+ne=to inestigate whethe+ o+ not a 4ollusion between the *a+ties e>ists if the+e is no 4ollusion' tointe+ene fo+ the tate in o+de+ to see to it that the eiden4e sub9itted is not fab+i4ated( 2#mphasissupplied

Truly, the purpose of the active participation of the &ublic &rosecutor or the olicitor Eeneral is to ensure that the interestof the tate is represented and protected in proceedings for annulment and declaration of nullity of marriages bypreventing collusion between the parties, or the fabrication or suppression of evidence. Chile the appearances of theolicitor Eeneral andJor the &ublic &rosecutor are mandatory, the failure of the 9T% to reBuire their appearance doesnot per se nullify the %ompromise Agreement. This %ourt fully concurs with the findings of the %A(

x x x. "t bears emphasiIing that the intendment of the law in reBuiring the presence of the olicitor Eeneral andJor tate prosecutor in all proceedings of legal separation and annulment or declaration of

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nullity of marriage is to curtail or prevent any possibility of collusion between the parties and to see to itthat their evidence respecting the case is not fabricated. "n the instant case, there is no exigency for thepresence of the olicitor Eeneral andJor the tate prosecutor because as already stated, nothing in thesubject 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 ris8 of beingrepetitiveN, the compromise agreement pertains merely to an agreement between the petitioner andthe private respondent to separate their conjugal properties partially without prejudice to the outcome of the pending case of declaration of nullity of marriage.

%hird . The conviction of adultery does not carry the accessory of civil interdiction. Article 30 of the 9evised &enal %odeprovides for the conseBuences of civil interdiction(

Art. 30. *ivil nterdiction. %ivil interdiction shall deprive the offender during the time of his sentence of therights of parental authority, or guardianship, either as to the person or property of any ward, of maritalauthority, of the right to manage his property and of the right to dispose of such property by any act or anyconveyance inter vivos.

7nder Article 333 of the same %ode, the penalty for adultery is prisioncorreccional in its medium and maximumperiods. Article 333 should be read with Article 03 of the same %ode. The latter provides(

Art. 03. 'rision correccional ts accessory penalties. The penalty ofprision correccional shall carry with itthat of suspension from public office, from the right to follow a profession or calling, and that of perpetualspecial disBualification from the right of suffrage, if the duration of said imprisonment shall exceedeighteen months. The offender shall suffer the disBualification provided in this article although pardoned

as to the principal penalty, unless the same shall have been expressly remitted in the pardon. "t is clear, therefore, and as correctly held by the %A, that the crime of adultery does not carry the accessory penalty ofcivil interdiction which deprives the person of the rights to manage her property and to dispose of suchproperty inter vivos. ourth. @either could it be said that the petitioner was not intelligently and judiciously informed of the conseBuential effectsof the compromise agreement, and that, on this basis, he may repudiate the %ompromise Agreement. The argument ofthe petitioner that he was not duly informed by his previous counsel about the legal effects of the voluntary settlement isnot convincing. Mista8e or vitiation of consent, as now claimed by the petitioner as his basis for repudiating the settlementcould hardly be said to be evident. "n +alonga v. *ourt of Appeals, this %ourt held(

"Nt 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 hisclient. %onseBuently, the mista8e or negligence of petitionersX counsel may result in the rendition of anunfavorable judgment against them.

#xceptions to the foregoing have been recogniIed by the %ourt in cases where rec8less or grossnegligence of counsel deprives the client of due process of law, or when its application !results in theoutright deprivation of oneXs property through a technicality.! x x x x

@one of these exceptions has been sufficiently shown in the present case. WH%R%)OR%' the &etition is #%$I%#. The <ecision of the %ourt of Appeals is A))IR,%# with ,O#I)IATIO$ that thesubject %ompromise Agreement is !ALI# without prejudice to the rights of all creditors and other persons with pecuniaryinterest in the properties of the conjugal partnership of gains. O OR#%R%#(

3(R( $o( 1B067/ #e4e9be+ ' 5/15

WILL%, "%U,%R' &etitioner,vs.A!%LI$A A,OR%' 9espondent.

< # % " " ' @

&%RLA-"%R$A"%' J.:

efore the %ourt is a &etition for 9eview on %ertiorari under 9ule 0: of the 9ules of %o>lli assailing the 'ctober ), 144/<ecision and anuary 10, 14 9esolution of the court of Appeals 2%A5 in %A-E.9. %O @o. 4/04, which affirmed the+ebruary 1), 1446 <ecision of the 9egional Trial %ourt 29T%5 of @egros 'riental, ranch 30 in %ivil %ase @o. " 1))0. The

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foregoing rulings dissolved the conjugal partnership of gains of Cillem eumer 2petitioner5 and Avelina Amores2respondent5 and distributed the properties forming part of the said property regime.The +actual Antecedents

&etitioner, a <utch @ational, and respondent, a +ilipina, married in March 1/, /)4. After several years, the 9T% of@egros 'riental, ranch 31, declared the nullity of their marriage in the <ecision dated @ovember 4, 1444 on the basisof the former=s psychological incapacity as contemplated in Article 3* of the +amily %ode.%onseBuently, petitioner filed a &etition for <issolution of %onjugal &artnership dated <ecember 0, 1444 praying for thedistribution of the following described properties claimed to have been acBuired during the subsistence of their marriage,to wit(

y &urchase(a. >ot , loc8 3 of the consolidated survey of >ots 100 V 106 of the <umaguete %adastre, covered by Transfer%ertificate of Title 2T%T5 @o. 11)0*, containing an area of 1:1 sBuare meters 2sB.m.5, including a residentialhouse constructed thereon.

b. >ot 101 of the <umaguete %adastre, covered by T%T @o. 1/60, containing an area of )4* sB.m., including aresidential house constructed thereon.c. >ot :)0: of the <umaguete %adastre, covered by T%T @o. 134*, containing an area of 6:* sB.m.

d. >ot 0, loc8 0 of the consolidated survey of >ots 100 V 106 of the <umaguete %adastre, covered by T%T @o1346, containing an area of 0: sB.m.

y way of inheritance(

e. J6 of >ot 14::-A of the <umaguete %adastre, covered by T%T @o. 13:*6, containing an area of 1,*3: sB.m.2the area that appertains to the conjugal partnership is 36*.0: sB.m.5.

f. J: of >ot 14::-" of the <umaguete %adastre, covered by T%T @o. 13:6:, containing an area of 3*4 sB.m. 2thearea that appertains to the conjugal partnership is 10 sB.m.5.

"n defense, respondent averred that, with the exception of their two 215 residential houses on >ots and 101, she andpetitioner did not acBuire any conjugal properties during their marriage, the truth being that she used her own personalmoney to purchase >ots , 101, :)0: and 0 out of her personal funds and >ots 14::-A and 14::-" by way ofinheritance. he submitted a joint affidavit executed by her and petitioner attesting to the fact that she purchased >ot 101and the improvements thereon using her own money. Accordingly, respondent sought the dismissal of the petition fordissolution as well as payment for attorney=s fees and litigation expenses.<uring trial, petitioner testified that while >ots , 101, :)0: and 0 were registered in the name of respondent, theseproperties were acBuired with the money he received from the <utch government as his disability benefitsince respondentdid not have sufficient income to pay for their acBuisition. De also claimed that the joint affidavit they submitted before the9egister of <eeds of <umaguete %ity was contrary to Article )/ of the +amily %ode, hence, invalid.

+or her part, respondent maintained that the money used for the purchase of the lots came exclusively from her personalfunds, in particular, her earnings from selling jewelry as well as products from Avon, Triumph and Tupperware. he furtherasserted that after she filed for annulment of their marriage in //*, petitioner transferred to their second house andbrought along with him certain personal properties, consisting of drills, a welding machine, grinders, clamps, etc. healleged that these tools and eBuipment have a total cost of &:44,444.44.

The 9T% 9uling

'n +ebruary 1), 1446, the 9T% of @egros 'riental, ranch 30 rendered its <ecision, dissolving the parties= conjugalpartnership, awarding all the parcels of land to respondent as her paraphernal properties; the tools and eBuipment in favorof petitioner as his exclusive properties; the two 215 houses standing on >ots and 101 as co-owned by the parties, thedispositive of which reads(

CD#9#+'9#, judgment is hereby rendered granting the dissolution of the conjugal partnership of gains betweenpetitioner Cillem eumer and respondent Avelina Amores considering the fact that their marriage was previously annulledby ranch 31 of this %ourt. The parcels of land covered by Transfer %ertificate of Titles @os. 11)0*, 1/60, 134*, 1346,

13:*6 and 13:6: are hereby declared paraphernal properties of respondent Avelina Amores due to the fact that whilethese real properties were acBuired by onerous title during their marital union, Cillem eumer, being a foreigner, is notallowed by law to acBuire any private land in the &hilippines, except through inheritance.

The personal properties, i.e., tools and eBuipment mentioned in the complaint which were brought out by Cillem from theconjugal dwelling are hereby declared to be exclusively owned by the petitioner.

The two houses standing on the lots covered by Transfer %ertificate of Title @os. 1/60 and 11)0* are hereby declared tobe co-owned by the petitioner and the respondent since these were acBuired during their marital union and since there isno prohibition on foreigners from owning buildings and residential units. &etitioner and respondent are, thereby, directed tosubject this court for approval their project of partition on the two houses aforementioned.

The %ourt finds no sufficient justification to award the counterclaim of respondent for attorney=s fees considering the wellsettled doctrine that there should be no premium on the right to litigate. The prayer for moral damages are li8ewise deniedfor lac8 of merit.

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@o pronouncement as to costs.' '9<#9#<.

"t ruled that, regardless of the source of funds for the acBuisition of >ots , 101, :)0: and 0, petitioner could not haveacBuired any right whatsoever over these properties as petitioner still attempted to acBuire them notwithstanding his8nowledge of the constitutional prohibition against foreign ownership of private lands. This was made evident by thesworn statements petitioner executed purporting to show that the subject parcels of land were purchased from theexclusive funds of his wife, the herein respondent. &etitioner=s plea for reimbursement for the amount he had paid topurchase the foregoing properties on the basis of eBuity was li8ewise denied for not having come to court with cleanhands.

The %A 9uling&etitioner elevated the matter to the %A, contesting only the 9T%=s award of >ots , 101, :)0: and 0 in favor ofrespondent. De insisted that the money used to purchase the foregoing properties came from his own capital funds andthat they were registered in the name of his former wife only because of the constitutional prohibition against foreignownership. Thus, he prayed for reimbursement of one-half 2J15 of the value of what he had paid in the purchase of thesaid properties, waiving the other half in favor of his estranged ex-wife.'n 'ctober ), 144/, the %A promulgated a <ecision affirming in toto the judgment rendered by the 9T% of @egros'riental, ranch 30. The %A stressed the fact that petitioner was !well-aware of the constitutional prohibition for aliens toacBuire lands in the &hilippines.! Dence, he cannot invo8e eBuity to support his claim for reimbursement.

%onseBuently, petitioner filed the instant &etition for 9eview on %ertiorari assailing the %A <ecision due to the followingerror(7@<#9 TD# +A%T #TA>"D#<, TD# %'79T #99#< "@ @'T 7TA"@"@E TD# &#T"T"'@#9= ATT#M&T AT

7#P7#@T> A#9T"@E '9 %>A"M"@E A 9"EDT '+ DA>+ '9 CD'># '+ TD# &79%DA# &9"%# 7#< "@TD# &79%DA# '+ TD# 9#A> &9'&#9T"# 7#%T '+ TD" %A#. 2#mphasis supplied5

The 9uling of the %ourtThe petition lac8s merit.

The issue to be resolved is not of first impression. "n "n 9e( &etition +or eparation of &roperty-#lena uenaventuraMuller v. Delmut Muller the %ourt had already denied a claim for reimbursement of the value of purchased parcels of&hilippine land instituted by a foreigner Delmut Muller, against his former +ilipina spouse, #lena uenaventura Muller. "theld that Delmut Muller cannot see8 reimbursement on the ground of eBuity where it is clear that he willingly and8nowingly bought the property despite the prohibition against foreign ownership of &hilippine land enshrined underection 6, Article "" of the /)6 &hilippine %onstitution which reads(ection 6. ave in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals,corporations, or associations Bualified to acBuire or hold lands of the public domain.

7ndeniably, petitioner openly admitted that he !is well aware of the above-cited constitutional prohibition! and evenasseverated that, because of such prohibition, he and respondent registered the subject properties in the latter=sname. %learly, petitioner=s actuations showed his palpable intent to s8irt the constitutional prohibition. 'n the basis of suchadmission, the %ourt finds no reason why it should not apply the Muller ruling and accordingly, deny petitioner=s claim forreimbursement.

As also explained in Muller, the time-honored principle is that he who see8s eBuity must do eBuity, and he who comes intoeBuity must come with clean hands. %onversely stated, he who has done ineBuity shall not be accorded eBuity. Thus, alitigant may be denied relief by a court of eBuity on the ground that his conduct has been ineBuitable, unfair and dishonest,or fraudulent, or deceitful.

"n this case, petitioner=s statements regarding the real source of the funds used to purchase the subject parcels of landdilute the veracity of his claims( Chile admitting to have previously executed a joint affidavit that respondent=s personalfunds were used to purchase >ot , he li8ewise claimed that his personal disability funds were used to acBuire the same.#vidently, these inconsistencies show his untruthfulness. Thus, as petitioner has come before the %ourt with uncleanhands, he is now precluded from see8ing any eBuitable refuge.

"n any event, the %ourt cannot, even on the grounds of eBuity, grant reimbursement to petitioner given that he acBuired noright whatsoever over the subject properties by virtue of its unconstitutional purchase. "t is well-established that eBuity asa rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be donedirectly. urely, a contract that violates the %onstitution and the law is null and void, vests no rights, creates no obligationsand produces no legal effect at all. %orollary thereto, under Article 01 of the %ivil %ode, petitioner cannot have thesubject properties deeded to him or allow him to recover the money he had spent for the purchase thereof. The law willnot aid either party to an illegal contract or agreement; it leaves the parties where it finds them. "ndeed, one cannotsalvage any rights from an unconstitutional transaction 8nowingly entered into.

@either can the %ourt grant petitioner=s claim for reimbursement on the basis of unjust enrichment. As held in +renIel v.%atito, a case also involving a foreigner see8ing monetary reimbursement for money spent on purchase of &hilippine land,the provision on unjust enrichment does not apply if the action is proscribed by the %onstitution, to wit(

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+utile, too, is petitionerXs reliance on Article 11 of the @ew %ivil %ode which reads( Art. 11. #very person who through an act of performance by another, or any other means, acBuires or comes intopossession of something at the expense of the latter without just or legal ground, shall return the same to him.

The provision is expressed in the maxim( !M#M' %7M A>T#9"7 <#T#9 <#T9#M#@T' &9'T#T! 2@o personshould unjustly enrich himself at the expense of another5. An action for recovery of what has been paid without just causehas been designated as an accion in rem verso. This provision does not apply if, as in this case, the action is proscribedby the %onstitution or by the application of the pari delicto doctrine. "t may be unfair and unjust to bar the petitioner fromfiling an accion in rem verso over the subject properties, or from recovering the money he paid for the said properties, but,as >ord Mansfield stated in the early case of Dolman v. ohnson( !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. "t is not for his sa8e,however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has theadvantage of, contrary to the real justice, as between him and the plaintiff.! 2%itations omitted5

@or would the denial of his claim amount to an injustice based on his foreign citiIenship. &recisely, it is the %onstitutionitself which demarcates the rights of citiIens and non-citiIens in owning &hilippine land. To be sure, the constitutional banagainst foreigners applies only to ownership of &hilippine land and not to the improvements built thereon, such as the two215 houses standing on >ots and 101 which were properly declared to be co-owned by the parties subject to partition.@eedless to state, the purpose of the prohibition is to conserve the national patrimony and it is this policy which the %ourtis duty-bound to protect.

CD#9#+'9#, the petition is <#@"#<. Accordingly, the assailed 'ctober ), 144/ <ecision and anuary 10, 149esolution of the %ourt of Appeals in %A-E.9. %O @o. 4/04 are A++"9M#<.

' '9<#9#<.

3(R( $o( 18858B August 5/' 5/1D

#A!I# A( $O!%RA' &etitioner,vs.L%TIIA T( $O!%RA' 9espondent.

< # % " " ' @

&%R%.' J.:

efore the %ourt is a petition for review assailing the / May 144) <ecision of the %ourt of Appeals in %A-E.9 .. %O @o.))*)*, which affirmed in part the ) <ecember 144* <ecision of the 9egional Trial %ourt 29T%5 of aler, Aurora, ranch/*.

The factual antecedents are as follow(

<avid A. @overas 2<avid5 and >eticia T. @overas 2>eticia5 were married on 3 <ecember /)) in PueIon %ity, &hilippines.They resided in %alifornia, 7nited tates of America 27A5 where they eventually acBuired American citiIenship. Theythen begot two children, namely( erome T.

@overas, who was born on 0 @ovember //4 and enaT. @overas, born on 1 May //3. <avid was engaged in courierservice business while >eticia wor8ed as a nurse in an +rancisco, %alifornia.

<uring the marriage, they acBuired the following properties in the &hilippines and in the 7A(

&HILI&&I$%

&RO&%RT? )AIR ,ARG%T !ALU%

Douse and >ot with an area of :4 sB. m.located at 4): @orma treet, ampaloc,Manila 2ampaloc property5

&,*/3,1:.44

Agricultural land with an area of 14,601 sB. m.

located at >aboy, <ipaculao, Aurora

&044,444.44

A parcel of land with an area of 1.: hectareslocated at Maria Aurora, Aurora

&0/4,444.44

A parcel of land with an area of 6: sB.m.located at abang aler, Aurora

&6:,444.44

3-has. coconut plantation in an oaBuin Maria Aurora, Aurora

&6:4,444.44

U A

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&RO&%RT? )AIR ,ARG%T !ALU%

Douse and >ot at :: Danover treet, <aly%ity, %alifornia

[::4,444.442unpaid debt of [1):,444.445

+urniture and furnishings [3,444

ewelries 2ring and watch5 [/,444

1444 @issan +rontier 0x0 pic8up truc8 [3,664.44

an8 of America %hec8ing Account [),444

an8 of America %ash <eposit

>ife "nsurance 2%ash Oalue5 [44,444.44

9etirement, pension, profit-sharing, annuities [:*,11).44

The ampaloc property used to beowned by <avid=s parents. The parties herein secured a loan from a ban8 and

mortgaged the property. Chen said property was about to be foreclosed, the couple paid a total of &.: Million for theredemption of the same.

<ue to business reverses, <avid left the 7A and returned to the &hilippines in 144. "n <ecember 1441,>eticia executeda pecial &ower of Attorney 2&A5 authoriIing <avid to sell the ampaloc property for &1.1 Million. According to >eticia,sometime in eptember 1443, <avid abandoned his family and lived with #strellita MartineI in Aurora province. >eticiaclaimed that <avid agreed toand executed a oint Affidavit with >eticia in the presence of <avid=s father, Atty. "saias@overas, on 3 <ecember 1443 stating that( 5 the &.Million proceeds from the sale of the ampaloc property shall bepaid to and collected by >eticia; 15 that <avid shall return and pay to >eticia &6:4,444.44, which is eBuivalent to half of theamount of the redemption price of the ampaloc property; and 35 that <avid shall renounce and forfeit all his rights andinterest in the conjugal and real properties situated in the &hilippines. <avid was able to collect &,6/4,444.44 from thesale of the ampaloc property, leaving an unpaid balance of &04,444.44.7pon learning that <avid had an extra-marital affair, >eticia filed a petition for divorce with the uperior %ourt of %alifornia,%ounty of an Mateo, 7A. The %alifornia court granted the divorce on 10 une 144: and judgment was duly entered on1/ une 144:. The %alifornia court granted to >eticia the custody of her two children, as well as all the couple=s propertiesin the 7A.

'n ) August 144:, >eticia filed a petition for udicial eparation of %onjugal &roperty before the 9T% of aler, Aurora.he relied on the 3 <ecember 1443 oint Affidavit and <avid=s failure to comply with his obligation under the same. heprayed for( 5 the power to administer all conjugal properties in the &hilippines; 15 <avid and his partner to cease anddesist from selling the subject conjugal properties; 35 the declaration that all conjugal properties be forfeited in favor of herchildren; 05 <avid to remit half of the purchase price as share of >eticia from the sale of the ampaloc property; and :5 thepayment of&:4,444.44 and &44,444.44 litigation expenses.

"n his Answer, <avid stated that a judgment for the dissolution of their marriage was entered on 1/ une 144: by theuperior %ourt of %alifornia, %ounty of an Mateo. De demanded that the conjugal partnership properties, which alsoinclude the 7A properties, be liBuidated and that all expenses of liBuidation, including attorney=s fees of both parties becharged against the conjugal partnership.

The 9T% of aler, Aurora simplified the issues as follow(. Chether or not respondent <avid A. @overas committed acts of abandonment and marital infidelity which canresult intothe forfeiture of the parties= properties in favor of the petitioner and their two 215 children.

1. Chether or not the %ourt has jurisdiction over the properties in %alifornia, 7..A. and the same can be includedin the judicial separation prayed for.

3. Chether or not the !oint Affidavit! x x x executed by petitioner >eticia T. @overas and respondent <avid A.@overas will amount to a waiver or forfeiture of the latter=s property rights over their conjugal properties.

0. Chether or not >eticia T. @overas isentitled to reimbursement of onehalf of the &1.1 MNillion sales proceeds oftheir property in ampaloc, Manila and one-half of the &.: MNillion used to redeem the property of Atty. "saias@overas, including interests and charges.

:. Dow the absolute community properties should be distributed.

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*. Chether or not the attorney=s feesand litigation expenses of the parties were chargeable against their conjugalproperties.

%orollary to the aboveis the issue of(

Chether or not the two common children of the parties are entitled to support and presumptive legitimes.

'n ) <ecember 144*, the 9T% rendered judgment as follows(

. The absolute community of property of the parties is hereby declared <"'>O#<;1. The net assets of the absolute community of property ofthe parties in the &hilippines are hereby ordered to beawarded to respondent <avid A. @overas only, with the properties in the 7nited tates of America remaining in thesole ownership of petitioner >eticia @overas a.8.a. >eticia Tacbiana pursuant to the divorce decree issuedby theuperior %ourt of %alifornia, %ounty of an Mateo, 7nited tates of America, dissolving the marriage of theparties as of une 10, 144:. The titles presently covering said properties shall be cancelled and new titles beissued in the name of the party to whom said properties are awarded;

3. 'ne-half of the properties awarded to respondent <avid A. @overas in the preceding paragraph are herebygiven to erome and ena, his two minor children with petitioner >eticia@overas a.8.a. >eticia Tacbiana as theirpresumptive legitimes and said legitimes must be annotated on the titles covering the said properties.Their sharein the income from these properties shall be remitted to them annually by the respondent within the first half ofanuary of each year, starting anuary 144);

0. 'ne-half of the properties in the 7nited tates of America awarded to petitioner >eticia @overas a.8.a. >eticiaTacbiana in paragraph 1 are hereby given to erome and ena, her two minor children with respondent <avid A.@overas as their presumptive legitimes and said legitimes must be annotated on the titlesJdocuments covering thesaid 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 anuary of each year, starting anuary 144);:. +or the support of their two 215 minor children, erome and ena, respondent <avid A. @overas shall give them7[44.44 as monthly allowance in addition to their income from their presumptive legitimes, while petitioner>eticia Tacbiana shall ta8e care of their food, clothing, education and other needs while they are in her custody inthe 7A. The monthly allowance due from the respondent shall be increased in the future as the needs of thechildren reBuire and his financial capacity can afford;*. 'f the unpaid amount of &04,444.44 on the purchase price of the ampaloc property, the &aringit pousesare hereby ordered to pay &:,444.44 to respondent <avid A. @overas and &04:,444.44 to the two children. Theshare of the respondent may be paid to him directly but the share of the two children shall be deposited with alocal ban8 in aler, Aurora, in a joint account tobe ta8en out in their names, withdrawal from which shall only bemade by them or by their representative duly authoriIed with a pecial &ower of Attorney. uch paymentJdepositshall be made withinthe period of thirty 2345 days after receipt of a copy of this <ecision, with the passboo8 of the

joint account to be submitted to the custody of the %ler8 of %ourt of this %ourt within the same period. aid

passboo8 can be withdrawn from the %ler8 of %ourt only by the children or their attorney-in-fact; and6. The litigation expenses and attorney=s fees incurred by the parties shall be shouldered by them individually.The trial court recogniIed that since the parties are 7 citiIens, the laws that cover their legal and personalstatus arethose of the 7A. Cith respect to their marriage, the parties are divorced by virtue of the decree of dissolution of theirmarriage issued by the uperior %ourt of %alifornia, %ounty of an Mateo on 10une 144:. 7nder their law, the parties=marriage had already been dissolved. Thus, the trial court considered the petition filed by >eticia as one for liBuidation ofthe 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.

Cith respect to their property relations, the trial court first classified their property regime as absolute community ofproperty because they did not execute any marriage settlement before the solemniIation of their marriage pursuant to

Article 6: of the +amily %ode. Then, the trial court ruled that in accordance with the doctrine of processual presumption,&hilippine law should apply because the court cannot ta8e judicial notice of the 7 law since the parties did not submitany 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 >eticiaand her children. Moreover, the trial court observed that >eticia failed to prove abandonment and infidelity withpreponderant evidence.

The trial court however ruled that >eticia is not entitled to the reimbursements she is praying for considering that shealready acBuired all of the properties in the 7A. 9elying still on the principle of eBuity, the %ourt also adjudicated the&hilippine properties to <avid, subject to the payment of the children=s presumptive legitimes. The trial court held thatunder Article )/ of the +amily %ode, the waiver or renunciation made by <avid of his property rights in the oint Affidavit isvoid.

'n appeal, the %ourt of Appeals modified the trial court=s <ecision by directing the eBual division of the &hilippineproperties between the spouses. Moreover with respect to the common children=s presumptive legitime, the appellatecourt ordered both spouses to each pay their children the amount of &:14,444.44, thus(

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CD#9#+'9#, the instant appeal is &A9T> E9A@T#<. @umbers 1, 0 and * of the assailed<ecision dated <ecember ),144* of ranch /*, 9T% of aler, Aurora &rovince, in %ivil %ase @o. )1) are hereby M'<"+"#< to read as follows(

1. The net assets of the absolute community of property of the parties in the &hilippines are hereby dividedeBually between petitioner >eticia @overas a.8.a. >eticia Tacbiana 2sic5 and respondent <avid A. @overas;

x x x

0. 'ne-half of the properties awarded to petitioner >eticia Tacbiana 2sic5 in paragraph 1 shall pertain to her minorchildren, erome and ena, as their presumptive legitimes which shall be annotated on the titlesJdocumentscovering the said properties. Their share in the income therefrom, if any, shall be remitted to them by petitionerannually within the first half of anuary, starting 144);

x x x*. 9espondent <avid A. @overas and petitioner >eticia Tacbiana 2sic5 are each ordered to pay the amountof&:14,444.44 to their two children, erome and ena, as their presumptive legitimes from the sale of theampaloc property inclusive of the receivables therefrom, which shall be deposited to a local ban8 of aler,

Aurora, under a joint account in the latter=s names. The paymentJdeposit shall be made within a period of thirty2345 days from receipt ofa copy of this <ecision and the corresponding passboo8 entrusted to the custody ofthe%ler8 of %ourt a Buowithin the same period, withdrawable only by the children or their attorney-in-fact.

A number ) is hereby added, which shall read as follows(

). 9espondent <avid A. @overas is hereby ordered to pay petitioner >eticia Tacbiana 2sic5 the amountof&,404,444.44 representing her share in the proceeds from the sale of the ampaloc property.

The last paragraph shall read as follows(end a copy of this <ecision to the local civil registry of aler, Aurora; the local civil registry of PueIon %ity; the %ivil

9egistrarEeneral, @ational tatistics 'ffice, Oibal uilding, Times treet corner #<A, PueIon %ity; the 'ffice of the9egistry of <eeds for the &rovince of Aurora; and to the children, erome @overas and ena @overas.

The rest of the <ecision is A++"9M#<."n the present petition, <avid insists that the %ourt of Appeals should have recogniIed the %alifornia udgment whichawarded the &hilippine properties to him because said judgment was part of the pleading presented and offered inevidence before the trial court. <avid argues that allowing >eticia to share in the &hilippine properties is tantamount tounjust enrichment in favor of >eticia considering that the latter was already granted all 7 properties by the %aliforniacourt.

"n summary and review, the basic facts are( <avid and >eticia are 7 citiIens who own properties in the 7A and in the&hilippines. >eticia obtained a decree of divorce from the uperior %ourt of %alifornia in une 144: wherein the courtawarded all the properties in the 7A to >eticia. Cith respect to their properties in the &hilippines, >eticia filed a petitionfor judicial separation of conjugal properties.

At the outset, the trial court erred in recogniIing the divorce decree which severed the bond of marriage between theparties. "n %orpuI v. to. Tomas, we stated that(

The starting point in any recognition of a foreign divorce judgment is the ac8nowledgment that our courts do not ta8e judicial notice of foreign judgments and laws. ustice Derrera explained that, as a rule, !no sovereign is bound to giveeffect within its dominion to a judgment rendered by a tribunal of another country.! This means that the foreign judgmentand its authenticity must beproven as facts under our rules on evidence, together with the alien=s applicable national lawto show the effect of the judgment on the alien himself or herself. The recognition may be made in an action institutedspecifically for the purpose or in another action where a party invo8es the foreign decree as an integral aspect of his claimor defense.

The reBuirements of presenting the foreign divorce decree and the national law of the foreigner must comply with our9ules of #vidence. pecifically, for &hilippine courts to recogniIe a foreign judgment relating to the status of a marriage, acopy of the foreign judgment may be admitted in evidence and proven as a fact under 9ule 31, ections 10 and 1:, inrelation to 9ule 3/, ection 0)2b5 of the 9ules of %ourt.

7nder ection 10 of 9ule 31, the record of public documents of a sovereign authority or tribunal may be proved by( 25an official publication thereof or 215 a copy attested by the officer having the legal custody thereof. uch official publicationor copy must beaccompanied, if the record is not 8ept in the &hilippines, with a certificate that the attesting officer has thelegal custody thereof. The certificate may be issued by any of the authoriIed &hilippine embassy or consular officialsstationed in the foreign country in which the record is 8ept, and authenticated by the seal of his office. The attestationmust state, in substance, that the copy is a correct copy of the original, or a specific part thereof, asthe case may be, andmust be under the official seal of the attesting officer.ection 1: of the same 9ule 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 thecase may be. The attestation must be under the official seal of the attesting officer, if there be any, or if hebe the cler8 of acourt having a seal, under the seal of such court.

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ased on the records, only the divorce decree was presented in evidence. The reBuired certificates to prove itsauthenticity, as well as the pertinent %alifornia law on divorce were not presented."t may be noted that in ayot v. %ourt of Appeals, we relaxed the reBuirement on certification where we held that!petitioner thereinN was clearly an American citiIenwhen she secured the divorce and that divorce is recogniIed andallowed in any of the tates of the 7nion, the presentation of a copy of foreign divorce decree duly authenticatedby theforeign court issuing said decree is, as here, sufficient.! "n this case however, it appears that there is no seal from theoffice where the divorce decree was obtained.

#ven if we apply the doctrine of processual presumption as the lower courts did with respect to the property regime of theparties, the recognition of divorce is entirely a different matter because, to begin with, divorce is not recogniIed between

+ilipino citiIens in the &hilippines. Absent a valid recognition of the divorce decree, it follows that the parties are stilllegally married in the &hilippines. The trial court thus erred in proceeding directly to liBuidation. As a general rule, any modification in the marriage settlements must be made before the celebration of marriage. Anexception to this rule is allowed provided that the modification is judicially approved and refers only to the instancesprovided in Articles **,*6, 1), 3: and 3* of the +amily %ode.

>eticia anchored the filing of the instant petition for judicial separation of property on paragraphs 0 and * of Article 3: ofthe +amily %ode, to wit(

Art. 3:. Any of the following shall be considered sufficient cause for judicial separation of property(

25 That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction;215 That the spouse of the petitioner has been judicially declared an absentee;

235 That loss of parental authority ofthe spouse of petitioner has been decreed by the court;205 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 4;2:5 That the spouse granted the power of administration in the marriage settlements has abused that power; and2*5 That at the time of the petition, the spouses have been separated in fact for at least one year andreconciliation is highly improbable.

"n the cases provided for in @umbers 25, 215, and 235, the presentation of the final judgment against the guiltyor absentspouse shall be enough basis for the grant of the decree ofjudicial separation of property. 2#mphasis supplied5.

The trial court had categorically ruled that there was no abandonment in this case to necessitate judicial separation ofproperties under paragraph 0 of Article 3: of the +amily %ode. The trial court ratiocinated(

Moreover, abandonment, under Article 4 of the +amily %ode Buoted above, must be for a valid cause and the spouse isdeemed to have abandoned the other when heJshe has left the conjugal dwelling without intention of returning. Theintention of not returning is prima facie presumed if the allegedly sicN abandoning spouse failed to give any information asto his or her whereabouts within the period of three months from such abandonment.

"n the instant case, the petitioner 8nows that the respondent has returned to and stayed at his hometown in Maria Aurora,&hilippines, as she even went several times to visit him there after the alleged abandonment. Also, the respondent hasbeen going bac8 to the 7A to visit her and their children until the relations between them worsened. The last visit of saidrespondent was in 'ctober 1440 when he and the petitioner discussed the filing by the latter of a petition for dissolution of marriage with the %alifornia court. uch turn for the worse of their relationship and the filing of the saidpetition can also beconsidered as valid causes for the respondent to stay in the &hilippines.

eparation in fact for one year as a ground to grant a judicial separation of property was not tac8led in the trial court=sdecision because, the trial court erroneously treated the petition as liBuidation of the absolute community of properties.The records of this case are replete with evidence that >eticia and <avid had indeed separated for more than a year andthat reconciliation is highly improbable. +irst, while actual abandonment had not been proven, it is undisputed that thespouses had been living separately since 1443 when <avid decided to go bac8 to the &hilippines to set up his ownbusiness. econd, >eticia heard from her friends that <avid has been cohabiting with #strellita MartineI, who representedherself as #strellita @overas. #ditha Apolonio, who wor8ed in the hospital where <avid was once confined, testified that

she saw the name of #strellita listed as the wife of <avid in the %onsent for 'peration form. Third and more significantly,they had filed for divorce and it was granted by the %alifornia court in une 144:.

Daving established that >eticia and <avid had actually separated for at least one year, the petition for judicial separationof absolute community of property should be granted.The grant of the judicial separation of the absolute community property automatically dissolves the absolute communityregime, as stated in the 0th paragraph of Article // ofthe +amily %ode, thus(

Art. //. The absolute community terminates(25 7pon the death of either spouse;

215 Chen there is a decree of legal separation;235 Chen the marriage is annulled or declared void; or

205 "n case of judicial separation of property during the marriage under Articles 30 to 3). 2#mphasis supplied5.

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7nder Article 41 of the same %ode, liBuidation follows the dissolution of the absolute community regime and the followingprocedure should apply(

Art. 41. 7pon dissolution of the absolute community regime, the following procedure shall apply(

25 An inventory shall be prepared, listing separately all the properties of the absolute community and theexclusive properties of each spouse.

215 The debts and obligations of the absolute community shall be paid out of its assets. "n case of insufficiency ofsaid assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties inaccordance with the provisions of the second paragraph of Article /0.

235 Chatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them.

205 The net remainder of the properties of the absolute community shall constitute its net assets, which shall bedivided eBually between husband and wife, unless a different proportion or division was agreed upon in themarriage settlements, or unless there has been a voluntary waiver of such share provided in this %ode. +orpurposes of computing the net profits subject to forfeiture in accordance with Articles 03, @o. 215 and *3, @o.215,the said profits shall be the increase in value between the mar8et value of the community property at the timeof the celebration of the marriage and the mar8et value at the time of its dissolution.

2:5 The presumptive legitimes of the common children shall be delivered upon partition, in accordance with Article:.

2*5 7nless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the loon which it is situated shall be adjudicated tothe spouse with whom the majority of the common children choose toremain. %hildren below the age of seven years are deemed to have chosen the mother, unless the court hasdecided otherwise. "n case there is no such majority, the court shall decide, ta8ing into consideration the best

interests of said children. At the ris8 of being repetitious, we will not remand the case to the trial court. "nstead, weshall adopt the modifications made by the %ourt of Appeals on the trial court=s <ecision with respect to liBuidation.

Ce agree with the appellate court that the &hilippine courts did not acBuire jurisdiction over the %alifornia properties of<avid and >eticia. "ndeed, Article * of the %ivil %ode clearly states that real property as well as personal property issubject to the law of the country where it is situated. Thus, liBuidation shall only be limited to the &hilippine properties.

Ce affirm the modification made by the %ourt of Appeals with respect to the share of the spouses in the absolutecommunity properties in the &hilippines, as well as the payment of their children=s presumptive legitimes, which theappellate court explained in this wise(

>eticia and <avid shall li8ewise have an eBual share in the proceeds of the ampaloc property. Chile both claimed tohave contributed to the redemption of the @overas property, absent a clear showing where their contributions came from,the same is presumed to have come from the community property. Thus, >eticia is not entitled to reimbursement of half ofthe redemption money.

<avidXs allegation that he used part of the proceeds from the sale of the ampaloc property for the benefit of the absolute

community cannot be given full credence. 'nly the amount of &14,444.44 incurred in going to and from the 7..A. maybe charged thereto. #lection expenses in the amount of &344,444.44 when he ran as municipal councilor cannot beallowed in the absence of receipts or at least the tatement of %ontributions and #xpenditures reBuired under ection 0of 9epublic Act @o. 6** duly received by the %ommission on #lections. >i8ewise, expenses incurred to settle the criminacase of his personal driver is not deductible as the same had not benefited the family. "n sum, >eticia and <avid shallshare eBually in the proceeds of the sale net of the amount of &14,444.44 or in the respective amountsof &,404,444.44.

x x x x

7nder the first paragraph of Article ))) of the %ivil %ode, !2t5he legitime of legitimate children and descendants consists ofone-half or the hereditary estate of the father and of the mother.! The children arc therefore entitled to half of the share ofeach spouse in the net assets of the absolute community, which shall be annotated on the titlesJdocuments covering thesame, as well as to their respective shares in the net proceeds from the sale of the ampaloc property including thereceivables from ps. &aringit in the amount of &04,444.44. %onseBuently, <avid and >eticia should each pay them the

amount of &:14,444.44 as their presumptive legitimes therefrom.CD#9#+'9#, the petition is <#@"#<. The assailed <ecision of the %ourt of Appeals in %A E.9. %O @o. ))*)* is

A++"9M#<.

' '9<#9#<.

J3(R( $o( 1557DB( ul= 1' 1BB6K

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A$TO$IO A( ( !AL#%' petitioner, vs( R%3IO$AL TRIAL OURT' "RA$H 1/5' U%.O$ IT?' and O$U%LO,( 3O,%.-!AL#%'respondents(

# % I I O $

!ITU3' J (:

The petition for review bewails, purely on a Buestion of law, an alleged error committed by the 9egional Trial %ourt in%ivil %ase @o. P-/1-1:3/. &etitioner avers that the court a quo has failed to apply the correct law that should govern thedisposition of a family dwelling in a situation where a marriage is declared void ab initio because of psychologicaincapacity on the part of either or both of the parties to the contract.

The pertinent facts giving rise to this incident are, by and large, not in dispute.

Antonio Oaldes and %onsuelo EomeI were married on 4: anuary /6. egotten during the marriage were fivechildren. "n a petition, dated 11 une //1, Oaldes sought the declaration of nullity of the marriage pursuant to Article 3* ofthe +amily %ode 2doc8eted %ivil %ase @o. P-/1-1:3/, 9egional Trial %ourt of PueIon %ity, ranch 415. After hearingthe parties following the joinder of issues, the trial court, in its decision of 1/ uly //0, granted the petition; vi/ (

!CD#9#+'9#, judgment is hereby rendered as follows(

!25 The marriage of petitioner Antonio Oaldes and respondent %onsuelo EomeI-Oaldes is hereby declared null and voidunder Article 3* of the +amily %ode on the ground of their mutual psychological incapacity to comply with their essentialmarital obligations;

!215 The three older children, %arlos #nriBue """, Antonio Puintin and Angela 9osario shall choose which parent they wouldwant to stay with.!tella #loisa and oaBuin &edro shall be placed in the custody of their mother, herein respondent %onsuelo EomeI-Oaldes.

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

!235 The petitioner and respondent are directed to start proceedings on the liquidation of their common properties asdefined by Article ET of the +amily %ode, and to comply with the provisions of Articles DI, D and D4 of the same code,within thirty 2345 days from notice of this decision.

!>et a copy of this decision be furnished the >ocal %ivil 9egistrar of Mandaluyong, Metro Manila, for proper recording inthe registry of marriages.! 2"talics ours5

%onsuelo EomeI sought a clarification of that portion of the decision directing compliance with Articles :4, : and :1of the +amily %ode. he asserted that the +amily %ode contained no provisions on the procedure for the liBuidation of

common property in !unions without marriage.! &arenthetically, during the hearing on the motion, the children filed a jointaffidavit expressing their desire to remain with their father, Antonio Oaldes, herein petitioner.

"n an 'rder, dated 4: May //:, the trial court made the following clarification(

!%onseBuently, considering that Article 06 of the +amily %ode explicitly provides that the property acBuired by bothparties during their union, in the absence of proof to the contrary, are presumed to have been obtained through the jointefforts of the parties and will be owned by them in eBual shares, plaintiff and defendant will own their Xfamily homeX and alltheir other properties for that matter in equal shares.

!"n the liBuidation and partition of the properties owned in common by the plaintiff and defendant, the provisions on co-ownership found in the %ivil %ode shall apply.! 2"talics supplied5

"n addressing specifically the issue regarding the disposition of the family dwelling, the trial court said(

!%onsidering that this %ourt has already declared the marriage between petitioner and respondent as null and void ab

initio, pursuant to Art. 06, the property regime of petitioner and respondent shall be governed by the rules on co2ownership.

!The provisions of Articles 41 and 1/ of the +amily %ode finds no application since Article 41 refers to the procedurefor the liBuidation of the con$ugal partnership property and Article 1/ refers to the procedure for the liBuidation ofthe absolute community of property .!

&etitioner moved for a reconsideration of the order. The motion was denied on 34 'ctober //:.

"n his recourse to this %ourt, petitioner submits that Articles :4, : and :1 of the +amily %ode should be heldcontrolling; he argues that(

I

!Article 06 of the +amily %ode does not apply to cases where the parties are psychological incapacitated.

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II

!Articles :4, : and :1 in relation to Articles 41 and 1/ of the +amily %ode govern the disposition of the family dwellingin cases where a marriage is declared void ab initio, including a marriage declared void by reason of the psychologicalincapacity of the spouses.

III

!Assuming arguendo that Article 06 applies to marriages declared void ab initio on the ground of the psychologicalincapacity of a spouse, the same may be read consistently with Article 1/.

I!!"t is necessary to determine the parent with whom majority of the children wish to stay.!

The trial court correctly applied the law. "n a void marriage, regardless of the cause thereof, the property relations ofthe parties during the period of cohabitation is governed by the provisions of Article 06 or Article 0), such as the casemay be, of the +amily %ode. Article 06 is a rema8e of Article 00 of the %ivil %ode as interpreted and so applied inprevious cases; it provides(

!A9T. 06. Chen a man and a woman who are capacitated to marry each other, live exclusively with each other ashusband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned bythem in eBual shares and the property acBuired by both of them through their wor8 or industry shall be governed by therules on co-ownership.

!"n the absence of proof to the contrary, properties acBuired while they lived together shall be presumed to have been

obtained by their joint efforts, wor8 or industry, and shall be owned by them in eBual shares. +or purposes of this Article, aparty who did not participate in the acBuisition by the other party of any property shall be deemed to have contributed jointly in the acBuisition thereof if the formerXs efforts consisted in the care and maintenance of the family and of thehousehold.

!@either party can encumber or dispose by acts inter vivos of his or her share in the property acBuired during cohabitationand owned in common, without the consent of the other, until after the termination of their cohabitation.!Chen only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownershipshall be forfeited in favor of their common children. "n case of default of or waiver by any or all of the common children ortheir descendants, each vacant share shall belong to the respective surviving descendants. "n the absence ofdescendants, such share shall belong to the innocent party. "n all cases, the forfeiture shall ta8e place upon termination ofthe cohabitation.!

This peculiar 8ind of co-ownership applies when a man and a woman, suffering no legal impediment to marry eachother, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term!capacitated! in the provision 2in the first paragraph of the law5 refers to the legal capacity of a party to contract marriagei.e., any !male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles36 and 3)! of the %ode.

7nder this property regime, property acBuired by both spouses through their work andindustry shall be governed bythe rules on equal co-ownership. Any property acBuired during the union is prima facie presumed to have been obtainedthrough their joint efforts. A party who did not participate in the acBuisition of the property shall still be considered ashaving contributed thereto jointly if said partyXs !efforts consisted in the care and maintenance of the familyhousehold.! 7nli8e the conjugal partnership of gains, the fruits of the coupleXs separate property are not included in theco-ownership.

Article 06 of the +amily %ode, in substance and to the above extent, has clarified Article 00 of the %ivil %ode; inaddition, the law now expressly provides that

2a5 @either party can dispose or encumber by act inter vivos his or her share in co-ownership property, without theconsent of the other, during the period of cohabitation; and

2b5 "n 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 tothe respective surviving descendants, or still in default thereof, to the innocent party. The forfeiture shall ta8e place uponthe termination of the cohabitation or declaration of nullity of the marriage.

@hen the common2law spouses suffer from a legal impediment to marry or when they do not live e#clusively witheach other (as husband and wife 5,only the property acBuired by both of them through their actual $oint contribution omoney, property or industry shall be owned in common and in proportion to their respective contributions. uchcontributions and corresponding shares, however, are prima facie presumed to be eBual. The share of any party who ismarried to another shall accrue to the absolute community or conjugal partnership, as the case may be, if so existing

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under a valid marriage. "f the party who has acted in bad faith is not validly married to another, his or her share shall beforfeited in the manner already heretofore expressed.

"n deciding to ta8e further cogniIance of the issue on the settlement of the partiesX common property, the trial courtacted neither imprudently nor precipitately; a court which has jurisdiction to declare the marriage a nullity must be deemedli8ewise clothed with authority to resolve incidental and conseBuential matters. @or did it commit a reversible error in rulingthat petitioner and private respondent own the !family home! and all their common property in equal shares, as well as inconcluding that, in the liBuidation and partition of the property owned in common by them, the provisions on co-ownershipunder the %ivil %ode, not Articles :4, : and :1, in relation to Articles 41 and 1/, of the +amily %ode, should aptlyprevail. The rules set up to govern the liBuidation of either the absolute community or the conjugal partnership of gains,

the property regimes recogniIed for valid and voidable marriages 2in the latter case until the contract is annulled 5,areirrelevant to the liBuidation of the co-ownership that exists between common-law spouses. The first paragraph of Article :4of the +amily %ode, applying paragraphs 21 5,23 5,205 and 2:5 of Article 03, relates only, by its explicit termsto voidablemarriages and, exceptionally, to void marriages under Article 04 of the %ode, i.e., the declaration of nullity of asubseBuent marriage contracted by a spouse of a prior void marriage before the latter is judicially declared void. The latteris a special rule that somehow recogniIes the philosophy and an old doctrine that void marriages are inexistent from thevery beginning and no judicial decree is necessary to establish their nullity. "n now reBuiring for purposes of remarriagethe declaration of nullity by final judgment of the previously contracted void marriage, the present law aims to do awaywith any continuing uncertainty on the status of the second marriage. "t is not then illogical for the provisions of Article 03,in relation to Articles 0 and 01, of the +amily %ode, on the effects of the termination of a subseBuent marriage contractedduring the subsistence of a previous marriage to be made applicable pro hac vice. "n all other cases, it is not to beassumed that the law has also meant to have coincident property relations, on the one hand, between spouses in validand voidable marriages 2before annulment5 and, on the other, between common-law spouses or spouses of void

marriages, leaving to ordain, in the latter case, the ordinary rules on co-ownership subject to the provision of Article 06and Article 0) of the +amily %ode. "t must be stressed, nevertheless, even as it may merely state the obvious, that theprovisions of the +amily %ode on the !family home,! i.e., the provisions found in Title O, %hapter 1, of the +amily %ode,remain in force and effect regardless of the property regime of the spouses.

WH%R%)OR%, the Buestioned orders, dated 4: May //: and 34 'ctober //:, of the trial court are A++"9M#<. @ocosts.

O OR#%R%#(

J3(R( $o( 15708( ,a+4h 1' 5//0K

$O%L "U%$A!%$TURA' petitioner, vs. OURT O) A&&%AL and IA"%L LUIA I$3H"U%$A!%$TURA' respondents(

J3(R( $o( 157DDB( ,a+4h 1' 5//0K

$O%L "U%$A!%$TURA' petitioner, vs. OURT O) A&&%AL and IA"%L LUIA I$3H"U%$A!%$TURA' respondents(

# % I I O $

A.U$A' J.:

These cases involve a petition for the declaration of nullity of marriage, which was filed by petitioner @oeuenaventura on uly 1, //1, on the ground of the alleged psychological incapacity of his wife, "sabel inghuenaventura, herein respondent. After respondent filed her answer, petitioner, with leave of court, amended his petitionby stating that both he and his wife were psychologically incapacitated to comply with the essential obligations ofmarriage. "n response, respondent filed an amended answer denying the allegation that she was psychologicallyincapacitated.

'n uly 3, //:, the 9egional Trial %ourt promulgated a <ecision, the dispositive portion of which reads(

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CD#9#+'9#, judgment is hereby rendered as follows(

5 <eclaring and decreeing the marriage entered into between plaintiff @oel A. uenaventura and defendant"sabel >ucia ingh uenaventura on uly 0, /6/, null and void ab initio;

15 'rdering the plaintiff to pay defendant moral damages in the amount of 1.: million pesos and exemplarydamages of million pesos with *S interest from the date of this decision plus attorneys feesof &44,444.44;

35 'rdering the plaintiff to pay the defendant expenses of litigation of &:4,444.44, plus costs;

05 'rdering the liBuidation of the assets of the conjugal partnership property,N particularly the plaintiffsseparationJretirement benefits received from the +ar #ast an8 andN Trust %ompany,N by ceding, givingand paying to her fifty percent 2:4S5 of the net amount of&3,*6:,33:.6/ or &,)36,**6.)/ together with1S interest per annum from the date of this decision and one-half 2J15 of his outstanding shares of stoc8with Manila Memorial &ar8 and &rovident Eroup of %ompanies;

:5 'rdering him to give a regular support in favor of his son avy ingh uenaventura in the amountof &:,444.44 monthly, subject to modification as the necessity arises;

*5 Awarding the care and custody of the minor avy ingh uenaventura to his mother, the herein defendant;and

65 Dereby authoriIing the defendant to revert bac8 to the use of her maiden family name ingh.

>et copies of this decision be furnished the appropriate civil registry and registries of properties.

' '9<#9#<.

&etitioner appealed the above decision to the %ourt of Appeals. Chile the case was pending in the appellate court,respondent filed a motion to increase the &:,444 monthly support pendente lite of their son avy ingh uenaventura&etitioner filed an opposition thereto, praying that it be denied or that such incident be set for oral argument.

'n eptember 1, //*, the %ourt of Appeals issued a 9esolution increasing the support pendentelite to &14,444. &etitioner filed a motion for reconsideration Buestioning the said 9esolution.

'n 'ctober ), //*, the appellate court promulgated a <ecision dismissing petitioners appeal for lac8 of merit andaffirming in toto the trial courts decision. &etitioner filed a motion for reconsideration which was denied. +rom theabovementioned <ecision, petitioner filed the instant &etition for 9eview on *ertiorari .

'n @ovember 3, //*, through another 9esolution, the %ourt of Appeals denied petitioners motion foreconsideration of the eptember 1, //* 9esolution, which increased the monthly support for the son. &etitioner filed a&etition for *ertiorari to Buestion these two 9esolutions.

'n uly /, //6, the &etition for 9eview on *ertiorari and the &etition for *ertiorari were ordered consolidated by this%ourt.

"n the &etition for 9eview on *ertiorari petitioner claims that the %ourt of Appeals decided the case not in accord withlaw and jurisprudence, thus(

. CD#@ "T ACA9<#< <#+#@<A@T-A&&#>>## M'9A> <AMAE# "@ TD# AM'7@T '+ &1.: M">>"'@ A@<##M&>A9 <AMAE# '+ & M">>"'@, C"TD *S "@T#9#T +9'M TD# <AT# '+ "T <#%""'@, C"TD'7T A@>#EA> A@< M'9A> A";

1. CD#@ "T ACA9<#< &44,444.44 ATT'9@# +## A@< &:4,444.44 #&#@# '+ >"T"EAT"'@, &>7 %'T,T' <#+#@<A@T-A&&#>>##, C"TD'7T +A%T7A> A@< >#EA> A";

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

0. CD#@ "T ACA9<#< #%>7"O# %A9# A@< %7T'< 'O#9 TD# &A9T"# M"@'9 %D">< T' <#+#@<A@T- A&&#>>## C"TD'7T A$"@E TD# %D">< 2CD' CA A>9#A< 3 #A9 '>< AT TDAT T"M#5 D" %D'"%# A T'CD'M, #TC##@ D" TC' &A9#@T, D# C'7>< >"$# T' DAO# %7T'< 'O#9 D" &#9'@.

"n the &etition for *ertiorari , petitioner advances the following contentions(

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TD# %'79T '+ A&&#A> E9AO#> A7#< "T <"%9#T"'@ CD#@ "T 9#+7#< T' #T 9#&'@<#@TM'T"'@ +'9 "@%9#A#< 7&&'9T +'9 TD# &A9T"# '@ +'9 D#A9"@E.TD#9# CA @' @##< +'9 TD# %'79T '+ A&&#A> T' "@%9#A# AO M'@TD> 7&&'9T '+ &:,444.44#"@E E"O#@ &#T"T"'@#9 #O#@ AT &9##@T &9"%#.

"@ 9#'>O"@E 9#&'@<#@T M'T"'@ +'9 TD# "@%9#A# '+ AO 7&&'9T, TD# %'79T '+ A&&#A>D'7>< DAO# #AM"@#< TD# >"T '+ #&#@# 7M"TT#< 9#&'@<#@T "@ TD# >"EDT '+&#T"T"'@#9 '#%T"'@ TD#9#T', "@T#A< '+ M#9#> A7M"@E TDAT AO " #@T"T>#< T' A &:,444"@%9#A# "@ 7&&'9T A A"< AM'7@T " T'' M"@"MA>.

>"$#C"#, TD# %'79T '+ A&&#A> D'7>< DAO# E"O#@ &#T"T"'@#9 A@ '&&'9T7@"T T' &9'O# D"

&9##@T "@%'M# T' D'C TDAT D# %A@@'T A++'9< T' "@%9#A# AO 7&&'9T.Cith regard to the first issue in the main case, the %ourt of Appeals articulated(

'n Assignment of #rror %, the trial court, after findings of fact ascertained from the testimonies not only of the partiesparticularly the defendant-appellee but li8ewise, those of the two psychologists, awarded damages on the basis of Articles1, 116 and 111/ of the %ivil %ode of the &hilippines.

Thus, the lower court found that plaintiff-appellant deceived the defendant-appellee into marrying him by professing truelove instead of revealing to her that he was under heavy parental pressure to marry and that because of pride he marrieddefendant-appellee; that he was not ready to enter into marriage as in fact his career was and always would be his firstpriority; that he was unable to relate not only to defendant-appellee as a husband but also to his son, avy, as a father;that he had no inclination to ma8e the marriage wor8 such that in times of trouble, he chose the easiest way out, that ofleaving defendant appellee and their son; that he had no desire to 8eep defendant-appellee and their son as proved by hisreluctance and later, refusal to reconcile after their separation; that the aforementioned caused defendant-appellee to

suffer mental anguish, anxiety, besmirched reputation, sleepless nights not only in those years the parties were togetherbut also after and throughout their separation.&laintiff-appellant assails the trial court=s decision on the ground that unli8e those arising from a breach in ordinarycontracts, damages arising as a conseBuence of marriage may not be awarded. Chile it is correct that there is, as yet, nodecided case by the upreme %ourt where damages by reason of the performance or non-performance of maritalobligations were awarded, it does not follow that no such award for damages may be made.

<efendant-appellee, in her amended answer, specifically prayed for moral and exemplary damages in the total amount of6 million pesos. The lower court, in the exercise of its discretion, found full justification of awarding at least half of whatwas originally prayed for. Ce find no reason to disturb the ruling of the trial court.

The award by the trial court of moral damages is based on Articles 116 and 1 of the %ivil %ode, which read asfollows(

A9T. 116. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,wounded feelings, moral shoc8, social humiliation, and similar injury. Though incapable of pecuniary computation, moraldamages may be recovered if they are the proximate result of the defendants wrongful act or omission.

A9T. 1. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs orpublic policy shall compensate the latter for the damage.

The trial court referred to Article 1 because Article 11/ of the %ivil %ode enumerates the cases in which moradamages may be recovered and it mentions Article 1 as one of the instances. "t must be noted that Article 1 states thatthe individual must willfully cause loss or injury to another. There is a need that the act is willful and hence done incomplete freedom. "n granting moral damages, therefore, the trial court and the %ourt of Appeals could not but haveassumed that the acts on which the moral damages were based were done willfully and freely, otherwise the grant ofmoral damages would have no leg to stand on.

'n the other hand, the trial court declared the marriage of the parties null and void based on Article 3* of the +amily

%ode, due to psychological incapacity of the petitioner, @oel uenaventura. Article 3* of the +amily %ode states( A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply withthe essential marital obligations of marriage, shall li8ewise be void even if such incapacity becomes manifest only after itssolemniIation.

&sychological incapacity has been defined, thus(

. . . no less than a mental 2not physical5 incapacity that causes a party to be t+ul= in4ognitie of the basi4 9a+ital4oenants that 4on4o9itantl= 9ust be assu9ed and dis4ha+ged b= the *a+ties to the 9a++iage which, as soexpressed by Article *) of the +amily %ode, include their mutual obligations to live together, observe love, respect andfidelity and render help and support. There is hardly any doubt that the intendment of the law has been to confine themeaning of !psychological incapacity! to the most serious cases of personality disorders clearly demonstrative of an utte+insensitiit= o+ inabilit= to gie 9eaning and signifi4an4e to the 9a++iage( ( ( (

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The %ourt of Appeals and the trial court considered the acts of the petitioner after the marriage as proof of hispsychological incapacity, and therefore a product of his incapacity or inability to comply with the essential obligations ofmarriage. @evertheless, said courts considered these acts as willful and hence as grounds for granting moral damages. "tis contradictory to characteriIe acts as a product of psychological incapacity, and hence beyond the control of the partybecause of an innate inability, while at the same time considering the same set of acts as willful. y declaring thepetitioner as psychologically incapacitated, the possibility of awarding moral damages on the same set of facts wasnegated. The award of moral damages should be predicated, not on the mere act of entering into the marriage, but onspecific evidence that it was done deliberately and with malice by a party who had 8nowledge of his or her disability andyet willfully concealed the same. @o such evidence appears to have been adduced in this case.

+or the same reason, since psychological incapacity means that one is truly incognitive of the basic maritacovenants that one must assume and discharge as a conseBuence of marriage, it removes the basis for the contentionthat the petitioner purposely deceived the private respondent. "f the private respondent was deceived, it was not due to awillful act on the part of the petitioner. Therefore, the award of moral damages was without basis in law and in fact.

ince the grant of moral damages was not proper, it follows that the grant of exemplary damages cannot stand sincethe %ivil %ode provides that exemplary damages are imposed in addition to moral, temperate, liBuidated ocompensatory damages.

Cith respect to the grant of attorneys fees and expenses of litigation the trial court explained, thus(

9egarding Attorneys fees, Art. 114) of the %ivil %ode authoriIes an award of attorneys fees and expenses of litigation,other than judicial costs, when as in this case the plaintiffs act or omission has compelled the defendant to litigate and toincur expenses of litigation to protect her interest 2par. 15, and where the %ourt deems it just and eBuitable that attorneys

fees and expenses of litigation should be recovered. 2par. 5The %ourt of Appeals reasoned as follows(

'n Assignment of #rror <, as the award of moral and exemplary damages is fully justified, the award of attorneys feesand costs of litigation by the trial court is li8ewise fully justified.

The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity, and his act infiling the complaint for the annulment of his marriage cannot be considered as unduly compelling the private respondentto litigate, since both are grounded on petitioners psychological incapacity, which as explained above is a mentaincapacity causing an utter inability to comply with the obligations of marriage. Dence, neither can be a ground forattorneys fees and litigation expenses. +urthermore, since the award of moral and exemplary damages is no longer

justified, the award of attorneys fees and expenses of litigation is left without basis.

Anent the retirement benefits received from the +ar #ast an8 and Trust %o. and the shares of stoc8 in the Manila

Memorial &ar8 and the &rovident Eroup of %ompanies, the trial court said(The third issue that must be resolved by the %ourt is what to do with the assets of the conjugal partnership in the event ofdeclaration of annulment of the marriage. The Donorable upreme %ourt has held that the declaration of nullity ofmarriage carries ipso facto a judgment for the liBuidation of property 2<omingo v. %ourt of Appeals, et al., E.9. @o.40)), ept. 6, //3, 11* %9A, pp. :61 :63, :)*5. Thus, spea8ing through ustice +lerida 9uth &. 9omero, it wasruled in this case(

Chen a marriage is declared void ab initio, the law states that the final judgment therein shall provide for the liBuidation,partition and distribution of the properties of the spouses, the custody and support of the common children and thedelivery of their presumptive legitimes, unless such matters had been adjudicated in the previous proceedings.

The parties here were legally married on uly 0, /6/, and therefore, all property acBuired during the marriage, whetherthe acBuisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed tobe conjugal unless the contrary is proved 2Art. *, @ew +amily %ode; Art. *4, %ivil %ode5. Art. 6 of the +amily %ode

enumerates what are conjugal partnership properties. Among others they are the following(5 Those acBuired by onerous title during the marriage at the expense of the common fund, whether the acBuisition be forthe partnership, or for only one of the spouses;

15 Those obtained from the labor, industry, wor8 or profession of either or both of the spouses;

35 The fruits, natural, industrial, or civil, due or received during the marriage from the common property, as well as the netfruits from the exclusive property of each spouse. . . .

Applying the foregoing legal provisions, and without prejudice to reBuiring an inventory of what are the parties conjugalproperties and what are the exclusive properties of each spouse, it was disclosed during the proceedings in this case thatthe plaintiff who wor8ed first as ranch Manager and later as Oice-&resident of +ar #ast an8 V Trust %o. receivedseparationJretirement pac8age from the said ban8 in the amount of &3,64,:44.44 which after certain deductionsamounting to &1*,*0.1 gave him a net amount of &3,*6:,33:.6/ and actually paid to him on anuary /, //: 2#xhs. *,6, ), /, 4, 5. @ot having shown debts or obligations other than those deducted from the said retirementJseparation pay,

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under Art. 1/ of the +amily %ode The net remainder of the conjugal partnership properties shall constitute the profits,which shall be divided eBually between husband and wife, unless a different proportion or division was agreed upon in themarriage settlement or unless there has been a voluntary waiver or forfeiture of such share as provided in this %ode. "nthis particular case, however, there had been no marriage settlement between the parties, nor had there been anyvoluntary waiver or valid forfeiture of the defendant wifes share in the conjugal partnership properties. The previouscession and transfer by the plaintiff of his one-half 2J15 share in their residential house and lot covered by T.%.T. @o. -3:*)4 of the 9egistry of <eeds of &araaBue, Metro Manila, in favor of the defendant as stipulated in their %ompromise

Agreement dated uly 1, //3, and approved by the %ourt in its &artial <ecision dated August *, //3, was actuallyintended to be in full settlement of any and all demands for past support. "n reality, the defendant wife had allowed someconcession in favor of the plaintiff husband, for were the law strictly to be followed, in the process of liBuidation of theconjugal assets, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by theparties, be adjudicated to the spouse with whom their only child has chosen to remain 2Art. 1/, par. /5. Dere, what wasdone was one-half 2J15 portion of the house was ceded to defendant so that she will not claim anymore for past unpaidsupport, while the other half was transferred to their only child as his presumptive legitime.%onseBuently, nothing yet has been given to the defendant wife by way of her share in the conjugal properties, and it isbut just, lawful and fair, that she be given one-half 2J15 share of the separationJretirement benefits received by the plaintiffthe same being part of their conjugal partnership properties having been obtained or derived from the labor, industry, wor8or profession of said defendant husband in accordance with Art. 6, par. 1 of the +amily %ode. +or the same reason, sheis entitled to one-half 2J15 of the outstanding shares of stoc8 of the plaintiff husband with the Manila Memorial &ar8 andthe &rovident Eroup of %ompanies.

The %ourt of Appeals articulated on this matter as follows(

'n Assignment of #rror #, plaintiff-appellant assails the order of the trial court for him to give one-half of hisseparationJretirement benefits from +ar #ast an8 V Trust %ompany and half of his outstanding shares in ManilaMemorial &ar8 and &rovident Eroup of %ompanies to the defendant-appellee as the latters share in the conjugalpartnership.

'n August *, //3, the trial court rendered a &artial <ecision approving the %ompromise Agreement entered into by theparties. "n the same %ompromise Agreement, the parties had agreed that henceforth, their conjugal partnership isdissolved. Thereafter, no steps were ta8en for the liBuidation of the conjugal partnership.

+inding that defendant-appellee is entitled to at least half of the separationJretirement benefits which plaintiff-appellantreceived from +ar #ast an8 V Trust %ompany upon his retirement as Oice-&resident of said company for the reason thatthe benefits accrued from plaintiffappellants service for the ban8 for a number of years, most of which while he wasmarried to defendant-appellee, the trial court adjudicated the same. The same is true with the outstanding shares ofplaintiff-appellant in Manila Memorial &ar8 and &rovident Eroup of %ompanies. As these were acBuired by the plaintiff-appellant at the time he was married to defendant-appellee, the latter is entitled to one-half thereof as her share in the

conjugal partnership. Ce find no reason to disturb the ruling of the trial court.ince the present case does not involve the annulment of a bigamous marriage, the provisions of Article :4 in

relation to Articles 0, 01 and 03 of the +amily %ode, providing for the dissolution of the absolute community or conjugalpartnership of gains, as the case may be, do not apply. 9ather, the general rule applies, which is that in case a marriage isdeclared void ab initio, the property regime applicable and to be liBuidated, partitioned and distributed is that of eBual co-ownership.

"n !aldes v. Cegional %rial *ourt, &ranch I4, Lue/on *ity , this %ourt expounded on the conseBuences of a voidmarriage on the property relations of the spouses and specified the applicable provisions of law(

The trial court correctly applied the law. "n a void marriage, regardless of the cause thereof, the property relations of theparties during the period of cohabitation is governed by the provisions of Article 06 or Article 0), such as the case maybe, of the +amily %ode. Article 06 is a rema8e of Article 00 of the %ivil %ode as interpreted and so applied in previouscases; it provides(

A9T. 06. Chen a man and a woman who are capacitated to marry each other, live exclusively with each other ashusband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned bythem in eBual shares and the property acBuired by both of them through their wor8 or industry shall be governed by therules on co-ownership.

"n the absence of proof to the contrary, properties acBuired while they lived together shall be presumed to have beenobtained by their joint efforts, wor8 or industry, and shall be owned by them in eBual shares. +or purposes of this Article, aparty who did not participate in the acBuisition by the other party of any property shall be deemed to have contributed

jointly in the acBuisition thereof if the formerXs efforts consisted in the care and maintenance of the family and of thehousehold.

@either party can encumber or dispose by acts inter vivos of his or her share in the property acBuired during cohabitationand owned in common, without the consent of the other, until after the termination of their cohabitation.

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Chen only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownershipshall be forfeited in favor of their common children. "n case of default of or waiver by any or all of the common children ortheir descendants, each vacant share shall belong to the respective surviving descendants. "n the absence ofdescendants, such share shall belong to the innocent party. "n all cases, the forfeiture shall ta8e place upon termination ofthe cohabitation.This peculiar 8ind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other,so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term!capacitated! in the provision 2in the first paragraph of the law5 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

36 and 3)! of the %ode.7nder this property regime, property acBuired by both spouses through their work andindustry shall be governed by therules on eBual co-ownership. Any property acBuired during the union is prima facie presumed to have been obtainedthrough their joint efforts. A party who did not participate in the acBuisition of the property shall still be considered ashaving contributed thereto jointly if said partyXs !efforts consisted in the care and maintenance of the family household.!7nli8e the conjugal partnership of gains, the fruits of the coupleXs separate property are not included in the co-ownership.

Article 06 of the +amily %ode, in substance and to the above extent, has clarified Article 00 of the %ivil %ode; inaddition, the law now expressly provides that

2a5 @either party can dispose or encumber by actsN inter vivos ofN his or her share in co-ownership property, without theconsent of the other, during the period of cohabitation; and2b5 "n the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-ownership in favor of theircommon children; in default thereof or waiver by any or all of the common children, each vacant share shall belong to therespective surviving descendants, or still in default thereof, to the innocent party. The forfeiture shall ta8e place upon the

termination of the cohabitation or declaration of nullity of the marriage."n deciding to ta8e further cogniIance of the issue on the settlement of the partiesX common property, the trial court actedneither imprudently nor precipitately; a court which had jurisdiction to declare the marriage a nullity must be deemedli8ewise clothed with authority to resolve incidental and conseBuential matters. @or did it commit a reversible error in rulingthat petitioner and private respondent own the !family home! and all their common property in equal shares, as well as inconcluding that, in the liBuidation and partition of the property owned in common by them, the provisions on co-ownershipunder the %ivil %ode, not Articles :4, : and :1, in relation to Articles 41 and 1/, of the +amily %ode, should aptlyprevail. The rules set up to govern the liBuidation of either the absolute community or the conjugal partnership of gains,the property regimes recogniIed for valid and voidable marriages 2in the latter case until the contract is annulled5, areirrelevant to the liBuidation of the co-ownership that exists between common-law spouses. The first paragraph of Article :4of the +amily %ode, applying paragraphs 215, 235, 205 and 2:5 of Article 03, relates only, by its explicit terms,to voidable marriages and, exceptionally, to void marriages under Article 04 of the %ode, i.e., the declaration of nullity of asubseBuent 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 recogniIes the philosophy and an old doctrine that void marriages are inexistent from thevery beginning and no judicial decree is necessary to establish their nullity. "n now reBuiring for purposes of remarriage,the declaration of nullity by final judgment of the previously contracted void marriage, the present law aims to do awaywith any continuing uncertainty on the status of the second marriage. "t is not then illogical for the provisions of Article 03,in relation to Articles 0 and 01, of the +amily %ode, on the effects of the termination of a subseBuent marriage contractedduring the subsistence of a previous marriage to be made applicable pro hac vice. "n all other cases, it is not to beassumed that the law has also meant to have coincident property relations, on the one hand, between spouses in validand voidable marriages 2before annulment5 and, on the other, between common-law spouses or spouses of voidmarriages, leaving to ordain, in the latter case, the ordinary rules on co-ownership subject to the provision of Article 06and Article 0) of the +amily %ode. "t must be stressed, nevertheless, even as it may merely state the obvious, that theprovisions of the +amily %ode on the !family home,! i.e., the provisions found in Title O, %hapter 1, of the +amily %ode,remain in force and effect regardless of the property regime of the spouses.

ince the properties ordered to be distributed by the court a Buo were found, both by the trial court and the %ourt of Appeals, to have been acBuired during the union of the parties, the same would be covered by the co-ownership. @o fruitsof a separate property of one of the parties appear to have been included or involved in said distribution. The liBuidationpartition and distribution of the properties owned in common by the parties herein as ordered by the court a quo shouldtherefore, be sustained, but on the basis of co-ownership and not of the regime of conjugal partnership of gains.

As to the issue on custody of the parties over their only child, avy ingh uenaventura, it is now moot since he isabout to turn twenty-five years of age on May 16, 144: and has, therefore, attained the age of majority.

Cith regard to the issues on support raised in the &etition for *ertiorari , these would also now be moot, owing to thefact that the son, avy ingh uenaventura, as previously stated, has attained the age of majority.

WH%R%)OR%, the <ecision of the %ourt of Appeals dated 'ctober ), //* and its 9esolution dated <ecember 4,//* which are contested in the &etition for 9eview 2E.9. @o. 1600/5, are hereby M'<"+"#<, in that the award of mora

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and exemplary damages, attorneys fees, expenses of litigation and costs are deleted. The order giving respondent one-half of the retirement benefits of petitioner from +ar #ast an8 and Trust %o. and one-half of petitioners shares of stoc8 inManila Memorial &ar8 and in the &rovident Eroup of %ompanies issustained but on the basis of the li;uidation*a+tition and dist+ibution of the 4o-owne+shi* and not of the +egi9e of 4on2ugal *a+tne+shi* of gains . The rest osaid <ecision and 9esolution are A++"9M#<.

The &etition for 9eview on *ertiorari 2E.9. @o. 163:)5 contesting the %ourt of Appeals 9esolutions of eptember 1//* and @ovember 3, //* which increased the support pendente lite in favor of the parties son, avy inghuenaventura, is now M''T and A%A<#M"% and is, accordingly, <"M"#<.

@o costs.O OR#%R%#(

3(R( $o( 1D65BD ul= 1' 5//6

OH$ A"I$3' petitioner,vs.WA%?A$' respondent.

< # % " " ' @3ARIA' (:

"n this appeal by way of a petition for review under 9ule 0: of the 9ules of %ourt, petitioner ohn Abing 2ohn, hereafter5see8s to set aside the <ecision dated 'ctober 10, 1444 of the %ourt of Appeals 2%A5 in *A2.C. +' >o. EF5TD , reversingthat of the 9egional Trial %ourt 29T%5 of enguet, ranch *0, which affirmed an earlier decision of the Municipal Trial%ourt 2MT%5 of Man8ayan, enguet in an ejectment suit thereat commenced by the petitioner against the respondent."n the main, the controversy is between a man and a woman who, during the good old days, lived together as husbandand wife without the benefit of marriage. <uring their cohabitation, they acBuired properties. >ater, they parted ways, andwith it this litigation between them involving one of their common properties.

The facts(ometime in /)*, ohn and respondent CA#A@ 2Caeyan, for short5 met and fell in love with each other. "n time, theduo cohabited as husband and wife without the benefit of marriage. Together, the couple bought a 1-storey residentialhouse from one enjamin Macua which was erected on a lot owned by a certain Alejandro <iQo on Aurora treet,Man8ayan, enguet. %onseBuent to the purchase, the tax declaration of the 1-storey house was transferred in the nameof Caeyan.

'n <ecember 1, //, Caeyan left for overseas employment in $orea. he would send money to ohn who depositedthe same in their joint ban8 account.

"n //1, the original 1-storey residential house underwent renovation. To it was annexed a new structure which housed

a sari2sari store. This new structure and the sari2sari store thereat are the properties involved in this case."n //0, Caeyan returned from $orea and continued to live with ohn. he managed the sari2sari store while ohn wor8edas a mine employee of the >epanto %onsolidated Mining, "nc.

"n //:, the relationship between the two turned from bad to worse. Dence, they decided to partition their properties. +orthe purpose, they executed on 'ctober 6, //: a 1emorandum of Agreement . 7nfortunately, the document was leftunsigned by the parties although signed by the witnesses thereto. 7nder their unsigned agreement, ohn shall leave thecouplesX dwelling with Caeyan paying him the amount of &01),)64.44 representing ohnXs share in all their properties. 'nthe same date R 'ctober 6, //: R Caeyan paid ohn the sum of&131,3/6.** by way of partial payment of his share, withthe balance of &/*,061.30 to be paid by Caeyan in twelve monthly installment beginning @ovember //:.

Caeyan, however, failed to ma8e good the balance. 'n account thereof, ohn demanded of her to vacate the annexstructure housing the sari2sari store. Caeyan refused, prompting ohn to file an ejectment suit against her before the MT%of Man8ayan, enguet.

"n his complaint, ohn alleged that he alone spent for the construction of the annex structure with his own funds and thrumoney he borrowed from his relatives. "n fact, he added that the tax declaration for the structure was under his name. 'nthis premise, ohn claimed exclusive ownership of the subject structure, which thereby gave him the right to eject Caeyantherefrom upon the latterXs failure to pay the agreed balance due him under the aforementioned 1emorandum of

Agreement .

"n her answer, Caeyan countered that their original house was renovated thru their common funds and that the subjectstructure annexed thereto was merely an attachment or an extension of their original residential house, hence the samepertained to the two of them in common.

"n a decision dated March :, //6, the MT%, on its finding that the money used in the construction of the structure inBuestion solely came from ohn, ruled that the same exclusively pertained to the latter, and accordingly ordered CaeyanXseviction therefrom, including the sari2sari store thereat, and reBuired her to surrender possession thereof to ohn, thus(

CD#9#+'9#, judgment is rendered in favor of the plaintiff 2ohn5 and against the defendant 2Caeyan5.

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<efendant is hereby ordered to vacate the premises of the store in litigation covered by Tax <eclaration @o. /*-44-4400: in the name of the &laintiff and turn over possession thereof to the latter.<efendant is hereby further ordered to pay the &laintiff the sum of &1,:44.44 a month from the time she withheldpossession of the store in litigation in une //* until she vacates the same and turn over possession thereof tothe &laintiff.

<efendant is finally ordered, to pay the sum of &:,444.44 to the &laintiff by way of AttorneyXs fees; and to pay thecosts.' '9<#9#<.

'n CaeyanXs appeal to the 9T%, the latter, in its decision of uly 1/, //:, affirmed that of the MT%. 7ndaunted, Caeyan

then went to the %A in *A2.C. +' >o. EF5TD . As stated at the threshold hereof, the %A, in its <ecision of 'ctober 10, 1444, reversed that of the 9T%, to wit(

CD#9#+'9#, the petition is E9A@T#<. The assailed decision of the 9egional Trial %ourt is hereby reversedand set aside. &etitioner, CA#A@ is entitled to possess the property and maintain therein her business.

' '9<#9#<.

&artly says the %A in its reversal disposition("t is undisputed that the parties lived together as husband and wife without the benefit of marriage from /)* to//: and that they acBuired certain properties which must be divided between them upon the termination of theircommon law relationship.

xxx xxx xxx. . . their property relations cannot be governed by the provision of the %ivil %ode on conjugal partnership... but bythe rule on co-ownership.

xxx xxx xxx

. . . the partiesX share in respect of the properties they have accumulated during their cohabitation shall be eBualunless there is proof to the contrary.

To the %A, ohnXs evidence failed to establish that he alone spent for the construction of the annex structure. Dence, thesame pertained to both, and being a co-owner herself, Caeyan cannot be evicted therefrom, adding that if ever, ohnXscause of action should have been for a sum of money !because he claims that Caeyan still owes him the payment for theextension.! According to the %A, ejectment cannot lie against Caeyan because CaeyanXs possession of the premises indispute was not by virtue of a contract, express or implied, nor did she obtain such possession thru force, intimidation,threat, strategy or stealth.

Dence, ohnXs present recourse, submitting that the %A erred in R

. not giving effect to the partiesX 1emorandum of Agreement which should have been binding between themalbeit unsigned by both;

1. in holding that the subject premises 2annex structure housing the sari-sari store5 is owned by the two of them incommon;

3. in ruling that the parties should settle their common properties in a separate action for partition even as thecommunity character of the subject premises has not been proven.

Ce A++"9M with modification.

#ssentially, the issues raised center on the core Buestion of whether or not the property subject of the suit pertains to theexclusive ownership of petitioner, ohn. <eparting from the factual findings of the two courts before it, the %A found thatthe premises in dispute is owned in common by Caeyan and ohn, the latter having failed to establish by the reBuiredBuantum of proof that the money spent for the construction thereof solely came from him. eing a co-owner of the samestructure, Caeyan may not be ejected therefrom.

Chile the Buestion raised is essentially one of fact, of which the %ourt normally eschews from, yet, given the conflictingfactual findings of the three courts below, the %ourt shall go by the exception to the general rule and proceed to ma8e its

own assessment of the evidence.+irst and foremost, it is undisputed that the parties hereto lived together as husband and wife from /)* to //: withoutthe benefit of marriage. @either is it disputed that sometime in <ecember //, Caeyan left for $orea and wor8ed thereatsending money to ohn which the latter deposited in their joint account. "n fact, Caeyan was still in $orea when the annexstructure was constructed in //1.'ther than ohnXs bare allegation that he alone, thru his own funds and money he borrowed from his relatives, spent forthe construction of the annex structure, evidence is wanting to support such na8ed claim. +or sure, ohn even failed toreveal how much he spent therefor. @either did he divulge the names of the alleged relatives from whom he made hisborrowings, let alone the amount of money he borrowed from them. All that petitioner could offer by way of reinforcing hisclaim of spending his own funds and borrowed money in putting up the subject structure was the affidavit executed by acertain Manuel Macaraeg to the effect that petitioner borrowed&34,444.44 from him. #ven then, Macaraeg stated in hisaffidavit that it was sometime in //4 when ohn borrowed said amount from him. Cith the petitionerXs own admission tha

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the subject structure was constructed only in //1, or two years after he borrowed &34,444.44 from Macaraeg, it is evendoubtful whether the amount he allegedly borrowed from the latter went into the construction of the structure in dispute.More, it is noted that while petitioner was able to present in evidence the Macaraeg affidavit, he failed to introduce similaraffidavits, if any, of his close relatives from whom he claimed to have made similar borrowings. +or sure, not a singlerelative came forward to confirm petitionerXs tale. "n short, there is a paucity of evidence, testimonial or documentary, tosupport petitionerXs self-serving allegation that the annex structure which housed the sari-sari store was put up thru hisown funds andJor money borrowed by him. ure, petitioner has in his favor the tax declaration covering the subjectstructure. Ce have, however, ruled time and again that tax declarations do not prove ownership but at best an indicia ofclaims of ownership. &ayment of taxes is not proof of ownership, any more than indicating possession in the concept of anowner. @either tax receipts nor declaration of ownership for taxation purposes are evidence of ownership or of the right topossess realty when not supported by other effective proofs."n this connection, Article 06 of the +amily %ode is instructive. "t reads(

Art. 06. Chen a man and a woman who are capacitated to marry each other, live exclusively with each other ashusband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall beowned by them in eBual shares and the property acBuired by both of them through their wor8 or industry shall begoverned by the rules on co-ownership.

"n the absence of proof to the contrary, properties acBuired while they lived together shall be presumed to havebeen obtained by their joint efforts, wor8 or industry, and shall be owned by them in eBual shares. +or purposes ofthis Article, a party who did not participate in the acBuisition by other party of any property shall be deemed tohave contributed jointly in the acBuisition thereof if the formerXs efforts consisted in the care and maintenance ofthe family and of the household.

The law is clear. "n the absence, as here, of proofs to the contrary, any property acBuired by common-law spouses during

their period of cohabitation is presumed to have been obtained thru their joint efforts and is owned by them in eBualshares. Their property relationship is governed by the rules on co-ownership. And under this regime, they owned theirproperties in common !in eBual shares.! eing herself a co-owner of the structure in Buestion, Caeyan, as correctly ruledby the %A, may not be ejected therefrom.True it is that under Article 0)6 of the %ivil %ode, a co-owner may bring an action for ejectment against a co-owner whota8es exclusive possession and asserts exclusive ownership of a common property. "t bears stressing, however, that inthis case, evidence is totally wanting to establish ohnXs or CaeyanXs exclusive ownership of the property in Buestion.@either did Caeyan obtain possession thereof by virtue of a contract, express or implied, or thru intimidation, threat,strategy or stealth. As borne by the record, Caeyan was in possession of the subject structure and the sari2sari storethereat by virtue of her being a co-owner thereof. As such, she is as much entitled to enjoy its possession and ownershipas ohn.

Ce, however, disagree with the ruling of the %A that the subject 1emorandum of Agreement , being unsigned by Caeyanand ohn, has no binding effect between them.

"t is a matter of record that pursuant to said Agreement, Caeyan did pay ohn the amount of &131,3/6.**, as initialpayment for ohnXs share in their common properties, with the balance of &/*,061.30 payable in twelve monthlyinstallments beginning @ovember //:. "t is also a matter of record that the Agreement was signed by the witnessesthereto. Dence, the irrelevant circumstances that the Agreement was left unsigned by Caeyan and ohn cannot adverselyaffect its binding force or effect between them, as evidently, CaeyanXs initial payment of&131,3/6.** to ohn was infulfillment of what the parties had agreed upon thereunder. Dowever, and as correctly held by the %A, CaeyanXs failure topay ohn the balance of the latterXs share in their common properties could at best give rise to an action for a sum ofmoney against Caeyan, or for rescission of the said agreement and not for ejectment.

CD#9#+'9#, the petition is #%$I%# and the assailed %A <ecision is A))IR,%#, except that portion thereof denyingeffect to the partiesX Memorandum of Agreement for being unsigned by both.

%osts against petitioner.

' '9<#9#<.

3(R( $o( 167DD )eb+ua+= 5B' 5//8,%TRO&OLITA$ "A$G A$# TRUT O(' petitioner,vs.$IHOLO$ &AUAL a(@(a( $%LO$ &AUAL' respondent.

# % I I O $

!%LAO' R(' J (:

9espondent @icholson &ascual and +lorencia @evalga were married on anuary /, /):. <uring the union, +lorenciabought from spouses %larito and elen ering a 1:4-sBuare meter lot with a three-door apartment standing thereonlocated in Ma8ati %ity. ubseBuently, Transfer %ertificate of Title 2T%T5 @o. -4063JT-:4 covering the purchased lotwas canceled and, in lieu thereof, T%T @o. :*1)3 of the 9egistry of <eeds of Ma8ati %ity was issued in the name of+lorencia, !married to @elson &ascual! a.8.a. @icholson &ascual.

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"n //0, +lorencia filed a suit for the declaration of nullity of marriage under Article 3* of the +amily %ode, doc8eted as%ivil %ase @o. P-/:-13:33. After trial, the 9egional Trial %ourt 29T%5, ranch /0 in PueIon %ity rendered, on uly 3,//:, a <ecision, declaring the marriage of @icholson and +lorencia null and void on the ground of psychologicalincapacity on the part of @icholson. "n the same decision, the 9T%, inter alia, ordered the dissolution and liBuidation of theex-spouses= conjugal partnership of gains. ubseBuent events saw the couple going their separate ways withoutliBuidating their conjugal partnership.'n April 34, //6, +lorencia, together with spouses @orberto and #lvira 'liveros, obtained a &h& :) million loan frompetitioner Metropolitan an8 and Trust %o. 2Metroban85. To secure the obligation, +lorencia and the spouses 'liverosexecuted several real estate mortgages 29#Ms5 on their properties, including one involving the lot covered by T%T @o.

:*1)3. Among the documents +lorencia submitted to procure the loan were a copy of T%T @o. :*1)3, a photocopy ofthe marriage-nullifying 9T% decision, and a document denominated as !Caiver! that @icholson purportedly executed on April /, //:. The waiver, made in favor of +lorencia, covered the conjugal properties of the ex-spouses listed therein, butdid not incidentally include the lot in Buestion.

<ue to the failure of +lorencia and the spouses 'liveros to pay their loan obligation when it fell due, Metroban8, on@ovember 1/, ///, initiated foreclosure proceedings under Act @o. 33:, as amended, before the 'ffice of the @otary&ublic of Ma8ati %ity. ubseBuently, Metroban8 caused the publication of the notice of sale on three issues of Cemate. Atthe auction sale on anuary 1, 1444, Metroban8 emerged as the highest bidder.Eetting wind of the foreclosure proceedings, @icholson filed on une 1), 1444, before the 9T% in Ma8ati %ity, a %omplaintto declare the nullity of the mortgage of the disputed property, doc8eted as %ivil %ase @o. 44-6)/ and eventually raffled toranch *: of the court. "n it, @icholson alleged that the property, which is still conjugal property, was mortgaged withouthis consent.

Metroban8, in its Answer with *ounterclaim and *ross2*laim, alleged that the disputed lot, being registered in +lorencia=s

name, was paraphernal. Metroban8 also asserted having approved the mortgage in good faith.+lorencia did not file an answer within the reglementary period and, hence, was subseBuently declared in default.

The RT #e4la+ed the R%, Inalid

After trial on the merits, the 9T% rendered, on eptember 10, 144, judgment finding for @icholson. The falloreads(

&9#M"# %'@"<#9#<, the %ourt renders judgment declaring the real estate mortgage on the propertycovered by T%TN @o. :*1)3 of the 9egistry of <eeds for the %ity of Ma8ati as well as all proceedings thereonnull and void.

The %ourt further orders defendants Metroban8 and +lorenciaN jointly and severally to pay plaintiff @icholsonN(

. &h&44,444.44 by way of moral damages;1. &h&6:,444.44 by way of attorney=s fees; and

3. The costs.

' '9<#9#<.#ven as it declared the invalidity of the mortgage, the trial court found the said lot to be conjugal, the same having beenacBuired during the existence of the marriage of @icholson and +lorencia. "n so ruling, the 9T% invo8ed Art. * of the+amily %ode, providing that !all property acBuired during the marriage, whether the acBuisition appears to have beenmade, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary isproved.! To the trial court, Metroban8 had not overcome the presumptive conjugal nature of the lot. And being conjugal,the 9T% concluded that the disputed property may not be validly encumbered by +lorencia without @icholson=s consent.The 9T% also found the deed of waiver +lorencia submitted to Metroban8 to be fatally defective. +or let alone the fact that@icholson denied executing the same and that the signature of the notariIing officer was a forgery, the waiver documentwas allegedly executed on April /, //: or a little over three months before the issuance of the 9T% decision declaring thenullity of marriage between @icholson and +lorencia.

The trial court also declared Metroban8 as a mortgagee in bad faith on account of negligence, stating the observation thatcertain data appeared in the supporting contract documents, which, if properly scrutiniIed, would have put the ban8 on

guard against approving the mortgage. Among the data referred to was the date of execution of the deed of waiver.The 9T% dismissed Metroban8=s counterclaim and cross-claim against the ex-spouses.

Metroban8=s motion for reconsideration was denied. 7ndeterred, Metroban8 appealed to the %ourt of Appeals 2%A5, theappeal doc8eted as %A-E.9. %O @o. 60)60.

The A Affi+9ed with ,odifi4ation the RTEs #e4ision

'n anuary 1), 1440, the %A rendered a <ecision affirmatory of that of the 9T%, except for the award therein of moraldamages and attorney=s fees which the %A ordered deleted. The dispositive portion of the %A=s <ecision reads(

CD#9#+'9#, premises considered, the appealed decision is hereby A++"9M#< C"TD M'<"+"%AT"'@ withrespect to the award of moral damages and attorney=s fees which is hereby <#>#T#<.

' '9<#9#<.

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>i8e the 9T% earlier held, the %A ruled that Metroban8 failed to overthrow the presumption established in Art. * of the+amily %ode. And also decreed as going against Metroban8 was +lorencia=s failure to comply with the prescriptions of thesucceeding Art. 10 of the %ode on the disposition of conjugal partnership property. Art. 10 states(

Art. 10. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. "n case of disagreement, the husband=s decision shall prevail, subject to recourse to the court by the wifefor proper remedy x x x.

"n the event that one spouse is incapacitated or otherwise unable to participate in the administration of theconjugal properties, the other spouse may assume sole powers of administration. These powers do not includedisposition or encumbrance without authority of the court or written consent of the other spouse. "n the absence of

such authority or consent, the disposition or encumbrance shall be void. Dowever, the transaction shall beconstrued as a continuing offer on the part of the consenting spouse and the third person, and may be perfectedas a binding contract upon the acceptance by the other spouse or authoriIation by the court before the offer iswithdrawn by either or both offerors.

As to the deletion of the award of moral damages and attorney=s fees, the %A, in gist, held that Metroban8 did not enterinto the mortgage contract out of ill-will or for some fraudulent purpose, moral obliBuity, or li8e dishonest considerations asto justify damages.

Metroban8 moved but was denied reconsideration by the %A.

Thus, Metroban8 filed this &etition for 9eview on %ertiorari under 9ule 0:, raising the following issues for consideration(

a. Chether or not the %AN erred in declaring subject property as conjugal by applying Article * of the +amily%ode.b. Chether or not the %AN erred in not holding that the declaration of nullity of marriage between the respondent

@icholson &ascual and +lorencia @evalga ipso facto dissolved the regime of community of property of thespouses.

c. Chether or not the %AN erred in ruling that the petitioner is an innocent purchaser for value.Ou+ Ruling

A modification of the %A=s <ecision is in order.

The #is*uted &+o*e+t= is on2ugal

"t is Metroban8=s threshold posture that Art. *4 of the %ivil %ode providing that !aNll property of the marriage is presumedto belong to the conjugal partnership, unless it be provenN that it pertains exclusively to the husband or to the wife,!applies. To Metroban8, Art. * of the +amily %ode could not be of governing application inasmuch as @icholson and+lorencia contracted marriage before the effectivity of the +amily %ode on August 3, /)). %iting 1anongsong v.stimo, Metroban8 asserts that the presumption of conjugal ownership under Art. *4 of the %ivil %ode applies whenthere is proof that the property was acBuired during the marriage. Metroban8 adds, however, that for the presumption ofconjugal ownership to operate, evidence must be adduced to prove that not only was the property acBuired during themarriage but that conjugal funds were used for the acBuisition, a burden @icholson allegedly failed to discharge.To bolster its thesis on the paraphernal nature of the disputed property, Metroban8 cites rancisco v. *ourt of

Appeals and Jocson v. *ourt of Appeals, among other cases, where this %ourt held that a property registered in the nameof a certain person with a description of being married is no proof that the property was acBuired during the spouses=marriage.

'n the other hand, @icholson, ban8ing on -e eon v. Cehabilitation inance *orporation and @ong v. A* ,contends thatMetroban8 failed to overcome the legal presumption that the disputed property is conjugal. De asserts that Metroban8=sarguments on the matter of presumption are misleading as only one postulate needs to be shown for the presumption infavor of conjugal ownership to arise, that is, the fact of acBuisition during marriage. @icholson dismisses, asinapplicable, rancisco and Jocson, noting that they are relevant only when there is no indication as to the exact date ofacBuisition of the property alleged to be conjugal.

As a final point, @icholson invites attention to the fact that Metroban8 had virtually recogniIed the conjugal nature of the

property in at least three instances. The first was when the ban8 lumped him with +lorencia in %ivil %ase @o. 44-6)/ asco-mortgagors and when they were referred to as !spouses! in the petition for extrajudicial foreclosure of mortgage. Thencame the published notice of foreclosure sale where @icholson was again designated as co-mortgagor. And third, in itsdemand-letter to vacate the disputed lot, Metroban8 addressed @icholson and +lorencia as !spouses,! albeit the finality ofthe decree of nullity of marriage between them had long set in.

Ce find for @icholson.

irst, while Metroban8 is correct in saying that Art. *4 of the %ivil %ode, not Art. * of the +amily %ode, is the applicablelegal provision since the property was acBuired prior to the enactment of the +amily %ode, it errs in its theory that, beforeconjugal ownership could be legally presumed, there must be a showing that the property was acBuired duringmarriage using 4on2ugal funds( %ontrary to Metroban8=s submission, the %ourt did not, in1anongsong, add the matter ofthe use of conjugal funds as an essential reBuirement for the presumption of conjugal ownership to arise. @icholson iscorrect in pointing out that only proof of acBuisition during the marriage is needed to raise the presumption that the

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property is conjugal. "ndeed, if proof on the use of conjugal funds is still reBuired as a necessary condition before thepresumption can arise, then the legal presumption set forth in the law would veritably be a superfluity. As we stressedin *astro v. 1iat (

&etitioners also overloo8 Article *4 of the @ew %ivil %ode. "t provides that !all property of the marriage ispresumed to be conjugal partnership, unless it be provenN that it pertains exclusively to the husband or to thewife.! This article does not +e;ui+e *+oof that the *+o*e+t= was a4;ui+ed with funds of the *a+tne+shi*( Thepresumption applies even when the manner in which the property was acBuired does not appear. 2#mphasissupplied.5

+econd, rancisco and Jocson do not reinforce Metroban8=s theory. Metroban8 would thrust on the %ourt, invo8ing the

two cases, the argument that the registration of the property in the name of !+lorencia @evalga, married to @elson&ascual! operates to describe only the marital status of the title holder, but not as proof that the property was acBuiredduring the existence of the marriage.

Metroban8 is wrong. As @icholson aptly points out, if proof obtains on the acBuisition of the property during the existenceof the marriage, then the presumption of conjugal ownership applies. The correct lesson of ranciscoand Jocson is thatproof of acBuisition during the marital coverture is a condition sine qua non for the operation of the presumption in favor ofconjugal ownership. Chen there is no showing as to when the property was acBuired by the spouse, the fact that a title isin the name of the spouse is an indication that the property belongs exclusively to said spouse.

The %ourt, to be sure, has ta8en stoc8 of @icholson=s arguments regarding Metroban8 having implicitly ac8nowledged,thus being in virtual estoppel to Buestion, the conjugal ownership of the disputed lot, the ban8 having named the former inthe foreclosure proceedings below as either the spouse of +lorencia or her co-mortgagor. "t is felt, however, that there isno compelling reason to delve into the matter of estoppel, the same having been raised only for the first time in thispetition. esides, however @icholson was designated below does not really change, one way or another, the classification

of the lot in Buestion.Te+9ination of on2ugal &+o*e+t= Regi9e does

not ipso facto %nd the $atu+e of on2ugal Owne+shi*

Metroban8 next maintains that, contrary to the %A=s holding, Art. 1/ of the +amily %ode is inapplicable. Art. 1/ in partreads(

Art. 1/. 7pon the dissolution of the conjugal partnership regime, the following procedure shall apply(

x x x x

265 The net remainder of the conjugal partnership properties shall constitute the profits, which shall be dividedeBually between husband and wife, unless a different proportion or division was agreed upon in the marriagesettlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this %ode.

Apropos the aforeBuoted provision, Metroban8 asserts that the waiver executed by @icholson, effected as it werebefore the dissolution of the conjugal property regime, vested on +lorencia full ownership of all the properties

acBuired during the marriage.@icholson counters that the mere declaration of nullity of marriage, without more, does not automatically result in a regimeof complete separation when it is shown that there was no liBuidation of the conjugal assets.

Ce again find for @icholson.

Chile the declared nullity of marriage of @icholson and +lorencia severed their marital bond and dissolved the conjugalpartnership, the character of the properties acBuired before such declaration continues to subsist as conjugal propertiesuntil and after the liBuidation and partition of the partnership. This conclusion holds true whether we apply Art. 1/ of the+amily %ode on liBuidation of the conjugal partnership=s assets and liabilities which is generally prospective in application,or ection 6, %hapter 0, Title "O, oo8 " 2Arts. 6/ to ):5 of the %ivil %ode on the subject, %onjugal &artnership of Eains.+or, the relevant provisions of both %odes first reBuire the liBuidation of the conjugal properties before a regime ofseparation of property reigns.

"n -ael v. ntermediate Appellate *ourt, we ruled that pending its liBuidation following its dissolution, the conjugalpartnership of gains is converted into an implied ordinary co-ownership among the surviving spouse and the other heirs ofthe deceased."n this pre-liBuidation scenario, Art. 0/3 of the %ivil %ode shall govern the property relationship between the formerspouses, where(

#ach co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and hemay therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except whenpersonal rights are involved. "ut the effe4t of the alienation o+ the 9o+tgage' with +es*e4t to the 4o-owne+s'shall be li9ited to the *o+tion whi4h 9a= be allotted to hi9 in the diision u*on the te+9ination of the 4o-owne+shi*. 2#mphasis supplied.5

"n the case at bar, +lorencia constituted the mortgage on the disputed lot on April 34, //6, or a little less than two yearsafter the dissolution of the conjugal partnership on uly 3, //:, but before the liBuidation of the partnership. e that as itmay, what governed the property relations of the former spouses when the mortgage was given is the aforeBuoted Art.

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0/3. 7nder it, +lorencia has the right to mortgage or even sell her one-half 2J15 undivided interest in the disputed propertyeven without the consent of @icholson. Dowever, the rights of Metroban8, as mortgagee, are limited only to the J1undivided portion that +lorencia owned. Accordingly, the mortgage contract insofar as it covered the remaining J1undivided portion of the lot is null and void, @icholson not having consented to the mortgage of his undivided half.

The conclusion would have, however, been different if @icholson indeed duly waived his share in the conjugal partnership.ut, as found by the courts a quo, the April /, //: deed of waiver allegedly executed by @icholson three months prior tothe dissolution of the marriage and the conjugal partnership of gains on uly 3, //: bore his forged signature, not tomention that of the notariIing officer. A spurious deed of waiver does not transfer any right at all, albeit it may become theroot of a valid title in the hands of an innocent buyer for value.

7pon the foregoing perspective, Metroban8=s right, as mortgagee and as the successful bidder at the auction of the lot, isconfined only to the J1 undivided portion thereof heretofore pertaining in ownership to +lorencia. The other undivided halfbelongs to @icholson. As owner pro indiviso of a portion of the lot in Buestion, Metroban8 may as8 for the partition of thelot and its property rights !shall be limited to the portion which may be allotted to the ban8N in the division upon thetermination of the co-ownership.! This disposition is in line with the well-established principle that the binding force of acontract must be recogniIed as far as it is legally possible to do soRRquando res non valet ut ago, valeat quantum valere

potest .

"n view of our resolution on the validity of the auction of the lot in favor of Metroban8, there is hardly a need to discuss atlength whether or not Metroban8 was a mortgagee in good faith. uffice it to state for the nonce that where the mortgageeis a ban8ing institution, the general rule that a purchaser or mortgagee of the land need not loo8 beyond the four cornersof the title is inapplicable. 7nli8e private individuals, it behooves ban8s to exercise greater care and due diligence beforeentering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and thevalidity of the mortgagor=s title must be standard and indispensable part of the ban8=s operation. A ban8 that failed to

observe due diligence cannot be accorded the status of a bona fide mortgagee, as here.ut as found by the %A, however, Metroban8=s failure to comply with the due diligence reBuirement was not the result of adishonest purpose, some moral obliBuity or breach of a 8nown duty for some interest or ill-will that parta8es of fraud thatwould justify damages.

WH%R%)OR%' the petition is &ARTL? 3RA$T%#( The appealed <ecision of the %A dated anuary 1), 1440, upholdingwith modification the <ecision of the 9T%, ranch *: in Ma8ati %ity, in %ivil %ase @o. 44-6)/, isA))IR,%# withthe ,O#I)IATIO$ that the 9#M over the lot covered by T%T @o. :*1)3 of the 9egistry of <eeds of Ma8ati %ity ishereby declared valid only insofar as the pro indiviso share of +lorencia thereon is concerned.

As modified, the <ecision of the 9T% shall read(&R%,I% O$I#%R%#' the real estate mortgage on the property covered by T%T @o. :*1)3 of the 9egistry of<eeds of Ma8ati %ity and all proceedings thereon are $ULL and !OI# with respect to the undivided J1 portion of thedisputed property owned by @icholson, but !ALI# with respect to the other undivided J1 portion belonging to +lorencia.

The claims of @icholson for moral damages and attorney=s fees are #%$I%# for lac8 of merit.@o pronouncement as to costs.

O OR#%R%#(

ALAI$ ,( #IO , 3(R( $o( 178/DD

&etitioner,&resent(

%A9&"', J ., %hairperson,- versus - @A%D79A,

&#9A>TA,

AA<, and

M#@<'A, JJ .,A( ARI#A# L( #IO, &romulgated(

9espondent. anuary /, 14x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

# % I I O $

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AR&IO' J.:

The ase

efore the %ourt is a petition for review assailing the ) 'ctober 144* <ecision and the 1 March 1446 'rder of the9egional Trial %ourt of >as &iQas %ity, ranch 1:0 2trial court5 in %ivil %ase @o. >&-4-40/.

The Ante4edent )a4ts

Alain M. <iQo 2petitioner5 and Ma. %aridad >. <iQo 2respondent5 were childhood friends and sweethearts. They startedliving together in /)0 until they decided to separate in //0. "n //*, petitioner and respondent decided to live togetheragain. 'n 0 anuary //), they were married before Mayor Oergel Aguilar of >as &iQas %ity.

'n 34 May 144, petitioner filed an action for <eclaration of @ullity of Marriage against respondent, citing psychologicalincapacity under Article 3* of the +amily %ode. &etitioner alleged that respondent failed in her marital obligation to givelove and support to him, and had abandoned her responsibility to the family, choosing instead to go on shopping spreesand gallivanting with her friends that depleted the family assets. &etitioner further alleged that respondent was not faithful,and would at times become violent and hurt him.

#xtrajudicial service of summons was effected upon respondent who, at the time of the filing of the petition, was alreadyliving in the 7nited tates of America. <espite receipt of the summons, respondent did not f ile an answer to the petitionwithin the reglementary period. &etitioner later learned that respondent filed a petition for divorceJdissolution of hermarriage with petitioner, which was granted by the uperior %ourt of %alifornia on 1: May 144. &etitioner also learnedthat on : 'ctober 144, respondent married a certain Manuel O.Alcantara.

'n 34 April 1441, the 'ffice of the >as &iQas prosecutor found that there were no indicative facts of collusion between theparties and the case was set for trial on the merits.

<r. @edy >. Tayag 2<r. Tayag5, a clinical psychologist, submitted a psychological report establishing that respondent wassuffering from @arcissistic &ersonality <isorder which was deeply ingrained in her system since her early formative years.<r. Tayag found that respondents disorder was long-lasting and by nature, incurable.

"n its ) 'ctober 144* <ecision, the trial court granted the petition on the ground that respondent waspsychologically incapacited to comply with the essential marital obligations at the time of the celebration of the marriage.

The #e4ision of the T+ial ou+t

The trial court ruled that based on the evidence presented, petitioner was able to establish respondents psychological

incapacity. The trial court ruled that even without <r. Tayagspsychological report, the allegations in the complaint,substantiated in the witness stand, clearly made out a case of psychological incapacity against respondent. The trial courtfound that respondent committed acts which hurt and embarrassed petitioner and the rest of the family, and thatrespondent failed to observe mutual love, respect and fidelity reBuired of her under Article *) of the +amily %ode. The trialcourt also ruled that respondent abandoned petitioner when she obtained a divorce abroad and married another man.

The dispositive portion of the trial courts decision reads(

CD#9#+'9#, in view of the foregoing, judgment is hereby rendered(

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. <eclaring the marriage between plaintiff A>A"@ M. <"\' and defendant MA. %A9"<A< >. <"\'on anuary 0, //), and all its effects under the law, as @7>> and O'"< from the beginning; and

1. <issolving the regime of absolute community of property.

A <#%9## '+ A'>7T# @7>>"T '+ MA99"AE# shall only be issued upon compliance with ArticlesN :4 and: of the +amily %ode.

>et copies of this <ecision be furnished the parties, the 'ffice of the olicitor Eeneral, 'ffice of the %ity&rosecutor, >as &iQas %ity and the 'ffice of the >ocal %ivil 9egistrar of >as &iQas %ity, for their information andguidance.

' '9<#9#<.

&etitioner filed a motion for partial reconsideration Buestioning the dissolution of the absolute community of property andthe ruling that the decree of annulment shall only be issued upon compliance with Articles :4 and : of the +amily %ode.

"n its 1 March 1446 'rder, the trial court partially granted the motion and modified its ) 'ctober 144* <ecision asfollows(

CD#9#+'9#, in view of the foregoing, judgment is hereby rendered(

5 <eclaring the marriage between plaintiff A>A"@ M. <"\' and defendant MA. %A9"<A< >. <"\' on anuary 0//), and all its effects under the law, as @7>> and O'"< from the beginning; and

15 <issolving the regime of absolute community of property.

A <#%9## '+ A'>7T# @7>>"T '+ MA99"AE# shall be issued after liBuidation, partition and distribution othe parties properties under Article 06 of the +amily %ode.

>et copies of this 'rder be furnished the parties, the 'ffice of the olicitor Eeneral, the 'ffice of the %ity&rosecutor of >as &iQas %ity and the >ocal %ivil 9egistrar of >as &iQas %ity, for their information and guidance.

Dence, the petition before this %ourt.The Issue

The sole issue in this case is whether the trial court erred when it ordered that a decree of absolute nullity of marriageshall only be issued after liBuidation, partition, and distribution of the parties properties under Article 06 of the +amily%ode.

The Ruling of this ou+t

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The petition has merit.&etitioner assails the ruling of the trial court ordering that a decree of absolute nullity of marriage shall only be issued afterliBuidation, partition, and distribution of the parties properties under Article 06 of the +amily %ode. &etitioner argues thatection /25 of the 9ule on <eclaration of Absolute @ullity of @ull Marriages and Annulment of Ooidable Marriages 2the9ule5 does not apply to Article 06 of the +amily %ode.

Ce agree with petitioner.

The %ourt has ruled in !aldes v. C%*, &ranch I4, Lue/on *ity that in a void marriage, regardless of its cause, theproperty relations of the parties during the period of cohabitation is governed either by Article 06 or Article 0) of the+amily %ode. Article 06 of the +amily %ode applies to union of parties who are legally capacitated and not barred by anyimpediment to contract marriage, but whose marriage is nonetheless void, such as petitioner and respondent in the casebefore the %ourt.

Article 06 of the +amily %ode provides(

Article 06. Chen a man and a woman who are capacitated to marry each other, live exclusively with each otheras husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall beowned by them in eBual shares and the property acBuired by both of them through their wor8 or industry shall begoverned by the rules on co-ownership.

"n the absence of proof to the contrary, properties acBuired while they lived together shall be presumed to havebeen obtained by their joint efforts, wor8 or industry, and shall be owned by them in eBual shares. +or purposes ofthis Article, a party who did not participate in the acBuisition by the other party of any property shall be deemed tohave contributed jointly in the acBuisition thereof if the formers efforts consisted in the care and maintenance ofthe family and of the household.

@either party can encumber or dispose by acts inter vivos of his or her share in the property acBuired duringcohabitation and owned in common, without the consent of the other, until after the termination of theircohabitation.

Chen 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. "n case of default of or waiver by any or all of thecommon children or their descendants, each vacant share shall belong to the respective surviving descendants."n the absence of descendants, such share shall belong to the innocent party. "n all cases, the forfeiture shall ta8eplace upon termination of the cohabitation.

+or Article 06 of the +amily %ode to apply, the following elements must be present(

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

1. They live exclusively with each other as husband and wife; and3. Their union is without the benefit of marriage, or their marriage is void.

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All these elements are present in this case and there is no Buestion that Article 06 of the +amily %ode applies to theproperty relations between petitioner and respondent.

Ce agree with petitioner that the trial court erred in ordering that a decree of absolute nullity of marriage shall be issuedonly after liBuidation, partition and distribution of the parties properties under Article 06 of the +amily %ode. The rulinghas no basis because ection /25 of the 9ule does not apply to cases governed under Articles 06 and 0) of the

+amily %ode. ection /25 of the 9ule provides(

ec. /. -ecision. - 25 "f the court renders a decision granting the petition, it shall declare therein that the decreeof absolute nullity or decree of annulment shall be issued by the court only after compliance with Articles :4 and: of the +amily %ode as implemented under the 9ule on >iBuidation, &artition and <istribution of &roperties.

The pertinent provisions of the +amily %ode cited in ection /25 of the 9ule are(

Article :4. The effects provided for in paragraphs 215, 235, 205 and 2:5 of Article 03 and in Article 00 shall also applyin proper cases to marriages which are declared void ab initio or annulled by final judgment under Articles 04 and0:.

The final judgment in such cases shall provide for the liBuidation, partition and distribution of the properties of thespouses, the custody and support of the common children, and the delivery of their presumptive legitimes, unlesssuch 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 ofthe proceedings for liBuidation.

"n the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated in accordance withthe provisions of Articles 41 and 1/.

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

The children of their guardian, or the trustee of their property, may as8 for the enforcement of the judgment.

The delivery of the presumptive legitimes herein prescribed shall in no way prejudice theultimatesuccessional rights of the children accruing upon the death of either or both of the parents; but the value

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of the properties already received under the decree of annulment or absolute nullity shall be considered asadvances on their legitime.

"t is clear from Article :4 of the +amily %ode that ection /25 of the 9ule applies only to marriages which are declaredvoid ab initio or annulled by final judgment unde+ A+ti4les D/ and D0 of the )a9il= ode. "n short, Article :4 of the+amily %ode does not apply to marriages which are declared void ab initio under Article 3* of the +amily %ode, whichshould be declared void without waiting for the liBuidation of the properties of the parties.

Article 04 of the +amily %ode contemplates a situation where a second or bigamous marriage was contracted. 7nder Article 04, tNhe absolute nullity of a previous marriage may be invo8ed for purposes of remarriage on the basis solely of afinal judgment declaring such previous marriage void. Thus we ruled(

x x x where the absolute nullity of a previous marriage is sought to be invo8ed for purposes of contracting asecond marriage, the sole basis acceptable in law, for said projected marriage to be free from legal infirmity, is afinal judgment declaring a previous marriage void.

Article 0: of the +amily %ode, on the other hand, refers to voidable marriages, meaning, marriages which are valid untilthey are set aside by final judgment of a competent court in an action for annulment. "n both instances under Articles 04

and 0:, the marriages are governed either by absolute community of property or conjugal partnership of gains unless theparties agree to a complete separation of property in a marriage settlement entered into before the marriage. ince theproperty relations of the parties is governed by absolute community of property or conjugal partnership of gains, there is aneed to liBuidate, partition and distribute the properties before a decree of annulment could be issued. That is not the casefor annulment of marriage under Article 3* of the +amily %ode because the marriage is governed by the ordinary rules onco-ownership.

"n this case, petitioners marriage to respondent was declared void under Article 3* of the +amily %ode and not under Article 04 or 0:. Thus, what governs the liBuidation of properties owned in common by petitioner and respondent are therules on co-ownership. "n !aldes, the %ourt ruled that the property relations of parties in a void marriage during the periodof cohabitation is governed either by Article 06 or Article 0) of the +amily %ode. The rules on co-ownership apply andthe properties of the spouses should be liBuidated in accordance with the %ivil %ode provisions on co-ownership. 7nder

Article 0/* of the %ivil %ode, pNartition may be made by agreement between the parties or by judicialproceedings. x x x. "t is not necessary to liBuidate the properties of the spouses in the same proceeding for declaration ofnullity of marriage.

WH%R%)OR%, we A))IR, the <ecision of the trial court with the ,O#I)IATIO$that the decree of absolute nullity ofthe marriage shall be issued upon finality of the trial courts decision without waiting for the liBuidation, partition, anddistribution of the parties properties under Article 06 of the +amily %ode.

O OR#%R%#.

3(R( $o( 5/57/ e*te9be+ 5' 5/1

UA$ %!ILLA ALA' R(' &etitioner,vs.%#%$ !ILL%$A A3UILA' 9espondent.

< # % " " ' @AR&IO' J.:

The %ase

This petition for review on certiorari assails the * March 141 <ecision and the 1) une 141 9esolution of the %ourt of Appeals 2%A5 in %A-E.9. %O @o. /:311. The %A affirmed the 1* eptember 144) 'rder of the 9egional Trial %ourt of@asugbu, atangas, ranch 0 29T%5, in %ivil %ase @o. 6)6.

The +acts

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'n 6 eptember /):, petitioner uan evilla alas, r. 2alas5 and respondent #den Oillena Aguila 2Aguila5 weremarried. 'n 6 une /)*, Aguila gave birth to their daughter, oan iselle. +ive months later, alas left their conjugaldwelling. ince then, he no longer communicated with Aguila or their daughter.

'n 6 'ctober 1443, Aguila filed a &etition for <eclaration of @ullity of Marriage 2petition5 citing psychological incapacityunder Article 3* of the +amily %ode. The petition states that they !have no conjugal properties whatsoever.! "n the 9eturnof ummons dated 3 'ctober 1443, the sheriff narrated that alas instructed his mother >uisa alas to receive the copyof summons and the petition.

'n 6 May 1446, the 9T% rendered a <ecision declaring the nullity of the marriage of alas and Aguila 29T% <ecision5.The 9T% <ecision further provides for the !dissolution of their conjugal partnership of gains, if any.!

'n 4 eptember 1446, Aguila filed a Manifestation and Motion stating that she discovered( 2a5 two 144-sBuare-meterparcels of land with improvements located in an artolome, PueIon %ity, covered by Transfer %ertificate of Title 2T%T5@o. @-1:/1//-A and T%T @o. @-1::0/6; and 2b5 a 4)-sBuare-meter parcel of land with improvement located in Tondo,Manila, covered by T%T @o. 103363 2collectively, !<iscovered &roperties!5. The registered owner of the <iscovered&roperties is !&etitioner, married to 9ubina %. alas.! The manifestation was set for hearing on 1 eptember 1446.Dowever, alas= notice of hearing was returned unserved with the remar8, !9T 9efused To 9eceive.!

'n / eptember 1446, alas filed a Manifestation with #ntry of Appearance reBuesting for an #ntry of udgment of the9T% <ecision since no motion for reconsideration or appeal was filed and no conjugal property was involved.

'n 1 eptember 1446, the hearing for Aguila=s manifestation ensued, with Aguila, her counsel and the state prosecutorpresent. <uring the hearing, Aguila testified that on 6 April 1446 someone informed her of the existence of the<iscovered &roperties. Thereafter, she verified the information and secured copies of T%Ts of the <iscovered &roperties.Chen as8ed to clarify, Aguila testified that 9ubina %. alas 29ubina5 is alas= common-law wife.

'n ) +ebruary 144), alas filed an 'pposition to the Manifestation alleging that there is no conjugal property to bepartitioned based on Aguila=s petition. According to alas, Aguila=s statement was a judicial admission and was not madethrough palpable mista8e. alas claimed that Aguila waived her right to the <iscovered &roperties. alas li8ewiseenumerated properties he allegedly waived in favor of Aguila, to wit(25 parcels of land with improvements located inugar >anding ubdivision, Alangilan, atangas %ity; @o. 6* rias treet, @asugbu, atangas; &. amaniego treet,ilangan, @asugbu, atangas; and atangas %ity, financed by +ilinvest; 215 cash amounting to &144,444.44; and 235motor vehicles, specifically Donda %ity and Toyota Tamaraw +2collectively, !Caived &roperties!5. Thus, alas contendedthat the conjugal properties were deemed partitioned.

The 9uling of the 9egional Trial %ourt

"n its 1* eptember 144) 'rder, the 9T% ruled in favor of Aguila. The dispositive portion of the 'rder reads(CD#9#+'9#, foregoing premises being considered, the petitioner and the respondent are hereby directed to partitionbetween themselves by proper instruments of conveyance, the following properties, without prejudice to the legitime oftheir legitimate child, oan isselle Aguila alas(

25 A parcel of land registered in the name of uan . alas married to 9ubina %. alas located in an artolome,PueIon %ity and covered by T%T @o. @-1:/1//-A mar8ed as #xhibit !A! and its improvements;215 A parcel of land registered in the name of uan .alas married to 9ubina %. alas located in an artolome,PueIon %ity and covered by T%T @o. @-1::0/6 mar8ed as #xhibit !! and its improvements;

235 A parcel of land registered in the name of uan .alas married to 9ubina %orteI alas located in Tondo andcovered by T%T @o. 103363-"nd. mar8ed as #xhibit !<! and its improvements.

Thereafter, the %ourt shall confirm the partition so agreed upon bythe parties, and such partition, together with the 'rderof the %ourt confirming the same, shall be recorded in the 9egistry of <eeds of the place in which the property is situated.

' '9<#9#<.

The 9T% held that pursuant to the 9ules, even upon entry of judgment granting the annulment of marriage, the court canproceed with the liBuidation, partition and distribution of the conjugal partnership of gains if it has not been judiciallyadjudicated upon, as in this case. The 9T% found that the <iscovered &roperties are among the conjugal properties to be

partitioned and distributed between alas and Aguila. Dowever, the 9T% held that alas failed to prove the existence ofthe Caived &roperties.

'n @ovember 144), 9ubina filed a %omplaint-in-"ntervention, claiming that( 25 she is 9ubina %orteI, a widow andunmarried to alas; 215 the <iscovered &roperties are her paraphernal properties; 235 alas did not contribute money topurchase the <iscovered &roperties as he had no permanent job in apan; 205 the 9T% did not acBuire jurisdiction overher as she was not a party in the case; and 2:5 she authoriIed her brother to purchase the <iscovered &roperties butbecause he was not well-versed with legal documentation, he registered the properties in the name of !uan . alas,married to 9ubina %. alas.!

"n its * <ecember 144/ 'rder, the 9T% denied the Motion for 9econsideration filed by alas. The 9T% found that alasfailed to prove his allegation that Aguila transferred the Caived &roperties to third persons. The 9T% emphasiIed that itcannot go beyond the T%Ts, which state that alas is the registered owner of the <iscovered &roperties. The 9T% furtherheld that alas and 9ubina were at fault for failing to correct the T%Ts, if they were not married as they claimed.

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Dence, alas filed an appeal with the %A.The 9uling of the %ourt of Appeals

'n * March 141, the %A affirmed the order of the 9T%. The %A ruled that Aguila=s statement in her petition is not a judicial admission. The %A pointed out that the petition was filed on 6 'ctober 1443, but Aguila found the <iscovered&roperties only on 6 April 1446 or before the promulgation of the 9T% decision. Thus, the %A concluded that Aguila waspalpably mista8en in her petition and it would be unfair to punish her over a matter that she had no 8nowledge of at thetime she made the admission. The %A also ruled that alas was not deprived of the opportunity to refute Aguila=sallegations in her manifestation, even though he was not present in its hearing. The %A li8ewise held that 9ubina cannotcollaterally attac8 a certificate of title.

"n a 9esolution dated 1) une 141, the %A denied the Motion for 9econsideration filed by alas. Dence, this petition.The "ssues

alas see8s a reversal and raises the following issues for resolution(

. The %ourt of Appeals erred in affirming the trial court=s decision ordering the partition of the parcels of landcovered by T%T @os. @-1:/1//-A and @-1::0/6 in PueIon %ity and as well as the property in Manila covered byT%T @o. 103363 between petitioner and respondent.1. The %ourt of Appeals erred in affirming the trial court=s decision in not allowing 9ubina %. %orteI to intervene inthis case

The 9uling of the %ourt

The petition lac8s merit.

ince the original manifestation was an action for partition, this %ourt cannot order a division of the property, unless it firstma8es a determination as to the existence of a co-ownership. Thus, the settlement of the issue of ownership is the first

stage in this action.asic is the rule that the party ma8ing an allegation in a civil case has the burden of proving it by a preponderance ofevidence. alas alleged that contrary to Aguila=s petition stating that they had no conjugal property, they actually acBuiredthe Caived &roperties during their marriage. Dowever, the 9T% found, and the %A affirmed, that alas failed to prove theexistence and acBuisition of the Caived &roperties during their marriage(

A perusal of the record shows that the documents submitted by alasN as the properties allegedly registered in the nameof AguilaN are merely photocopies and not certified true copies, hence, this %ourt cannot admit the same as part of therecords of this case. These are the following(

25 T%T @o. T-*:)6* R a parcel of land located at &oblacion, @asugbu, atangas, registered in the name of #den A. alas, married to uan alas r. which is cancelled by T%T @o. T-4:003 in the name of oan iselle A. alas,single;

215 T%T @o. T-*)4** R a parcel of land situated in the arrio of >anding, @asugbu, atangas, registered in the

name of #den A. alas, married to uan . alas r.Moreover, AguilaN submitted original copy of %ertification issued by Ms. #rlinda A. <asal, Municipal Assessor of @asugbu,atangas, certifying that AguilaN has no real property 2land and improvement5 listed in the Assessment 9oll for taxationpurposes, as of eptember 6, 144).

uch evidence, in the absence of proof to the contrary, has the presumption of regularity. x x x.uffice it to say that such real properties are existing and registered in the name of AguilaN, certified true copies thereofshould have been the ones submitted to this %ourt. Moreover, there is also a presumption that properties registered in the9egistry of <eeds are also declared in the Assessment 9oll for taxation purposes.

'n the other hand, Aguila proved that the <iscovered &roperties were acBuired by alas during their marriage.oth the9T% and the %A agreed that the <iscovered &roperties registered in alas= name were acBuired during his marriage with

Aguila. The T%Ts of the <iscovered &roperties were entered on 1 uly /// and 1/ eptember 1443, or during the validityof alas and Aguila=s marriage. "n Oillanueva v. %ourt of Appeals, we held that the Buestion of whether the properties wereacBuired during the marriage is a factual issue. +actual findings of the 9T%, particularly if affirmed by the %A, are bindingon us, except under compelling circumstances not present in this case.'n alas= allegation that he was not accorded due process for failing to attend the hearing of Aguila=s manifestation, wefind the allegation untenable. The essence of due process is opportunity to be heard. Ce hold that alas was given suchopportunity when he filed his opposition to the manifestation, submitted evidence and filed his appeal.

'n both alas and 9ubina=s contention that 9ubina owns the <iscovered &roperties, we li8ewise find the contentionunmeritorious. The T%Ts state that !uan . alas, married to 9ubina %. alas! is the registered owner of the <iscovered&roperties. A Torrens title is generally a conclusive evidence of the ownership of the land referred to, because there is astrong presumption that it is valid and regularly issued. The phrase !married to! is merely descriptive of the civil status ofthe registered owner. +urthermore, alas did not initially dispute the ownership of the <iscovered &roperties in hisopposition to the manifestation. "t was only when 9ubina intervened that alas supported 9ubina=s statement that sheowns the <iscovered &roperties.

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%onsidering that 9ubina failed to prove her title or her legal interest in the <iscovered &roperties, she has no right tointervene in this case. The 9ules of %ourt provide that only !a person who has a legal interest in the matter in litigation, orin the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by adistribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, beallowed to intervene in the action.!"n <iQo v. <iQo, we held that Article 06 of the +amily %ode applies to the union of parties who are legally capacitated andnot barred by any impediment to contract marriage, but whose marriage is nonetheless declared void under Article 3* ofthe +amily %ode, as in this case. Article06 of the +amily %ode provides(

A9T. 06. Chen 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 bythem in eBual shares and the property acBuired by both of them through their wor8 or industry shall be governed by therules on co-ownership.

"n the absence of proof to the contrary, properties acBuired while they lived together shall be presumed to have beenobtained by their joint efforts, wor8 or industry, and shall be owned by them in eBual shares. +or purposes of this Article, aparty who did not participate in the acBuisition by the other party of any property shall be deemed to have contributed

jointly in the acBuisition thereof if the former=s efforts consisted in the care and maintenance of the family and of thehousehold.

@either party can encumber or dispose by acts inter vivos of his or her share in the property acBuired during cohabitationand owned in common, without the consent of the other, until after the termination of their cohabitation.Chen only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownershipshall be forfeited in favor of their common children. "n case of default of or waiver by any or all of the common children ortheir descendants, each vacant share shall belong to the respective surviving descendants. "n the absence of

descendants, such share shall belong to the innocent party. "n all cases, the forfeiture shall ta8e place upon termination ofthe cohabitation. 2#mphasis supplied5

7nder this property regime, property acBuired during the marriage is prima facie presumed to have been obtained throughthe couple=s joint efforts and governed by the rules on co-ownership. "n the present case, alas did not rebut thispresumption. "n a similar case where the ground for nullity of marriage was also psychological incapacity, we held that theproperties acBuired during the union of the parties, as found by both the 9T% and the %A, would be governed by co-ownership. Accordingly, the partition of the <iscovered &roperties as ordered by the 9T% and the %A should be sustainedbut on the basis of co-ownership and not on the regime of conjugal partnership of gains.CD#9#+'9#, we <#@ the petition. Ce A++"9M the <ecision dated March 141 and the 9esolution dated 1) une141 of the %ourt of Appeals in %A-E.9. %O @o. /:311.

' '9<#9#<.

3(R( $o( 5/5B5' O4tobe+ 5' 5/1

%#IL"%RTO U( !%$TURA' R(, 'etitioner , v. &OU% &AULI$O A$# %!A$3%LI$% A"U#A'Cespondents.# % I I O $

AR&IO' J.

The ase

This petition for review on certiorari see8s to annul the <ecision dated / March 141 of the %ourt of Appeals 2%A5 in %A-E.9. %O @o. /1334 and the 9esolution dated 3 August 141 denying the motion for reconsideration. The <ecision and9esolution dismissed the Appeal dated 13 'ctober 144/ and affirmed with modification the <ecision dated 10 @ovember144) of the 9egional Trial %ourt of Manila, ranch 31 29T% Manila5.

The )a4ts

The 9T%-Manila and the %A found the facts to be as follows(

ocorro Torres 2ocorro5 and #steban Abletes 2#steban5 were married on / une /)4. Although ocorro and #stebannever had common children, both of them had children from prior marriages( #steban had a daughter named #vangeline

Abuda 2#vangeline5, and ocorro had a son, who was the father of #dilberto 7. Oentura, r. 2#dilberto5, the petitioner inthis case.

#vidence shows that ocorro had a prior subsisting marriage to %rispin 9oxas 2%rispin5 when she married #steban.ocorro married %rispin on ) April /:1. This marriage was not annulled, and %rispin was alive at the time of ocorro=smarriage to #steban.

#steban=s prior marriage, on the other hand, was dissolved by virtue of his wife=s death in /*4.

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According to #dilberto, sometime in /*), #steban purchased a portion of a lot situated at 10/1 tate Alley, onifaciotreet, Oitas, Tondo, Manila 2Oitas property5. The remaining portion was thereafter purchased by #vangeline on herfather=s behalf sometime in /64. The Oitas property was covered by Transfer %ertificate of Title @o. 06)1, dated <ecember /)4, issued to K#steban Abletes, of legal age, +ilipino, married to ocorro Torres.L

#dilberto also claimed that starting /6), #vangeline and #steban operated small business establishments located at /43and /4: <elpan treet, Tondo, Manila 2<elpan property5.

'n * eptember //6, #steban sold the Oitas and <elpan properties to #vangeline and her husband, &aulino Abuda2&aulino5. According to #dilberto(

wNhen #steban was diagnosed with colon cancer sometime in //3, he decided to sell the <elpan and Oitas properties to#vangeline. #vangeline continued paying the amortiIations on the two 215 properties situated in <elpan treet. TheamortiIations, together with the amount of Two Dundred Thousand &esos 2&hp 144,444.445, which #steban reBuested asadvance payment, were considered part of the purchase price of the <elpan properties. #vangeline li8ewise gave herfather +ifty Thousand &esos 2&hp :4,444.445 for the purchase of the Oitas properties and sheN shouldered his medicalexpenses.

#steban passed away on eptember //6, while ocorro passed away on 3 uly ///.

ometime in 1444, >eonora 7rBuila 2>eonora5, the mother of #dilberto, discovered the sale. Thus, #dilberto, representedby >eonora, filed a &etition for Annulment of <eeds of ale before the 9T%-Manila. #dilberto alleged that the sale of the

properties was fraudulent because #steban=s signature on the deeds of sale was forged. 9espondents, on the other hand,argued that because of ocorro=s prior marriage to %rispin, her subseBuent marriage to #steban was null and void. Thus,neither ocorro nor her heirs can claim any right or interest over the properties purchased by #steban and respondents.

The Ruling of the RT-,anila

The 9T%-Manila dismissed the petition for lac8 of merit.

The 9T%-Manila ruled that the marriage between ocorro and #steban was void from the beginning.4 Article )3 of the%ivil %ode, which was the governing law at the time #steban and ocorro were married, provides(

Art. )3. Any marriage subseBuently contracted by any person during the lifetime of the first spouse of such person shall beillegal and void from its performance unless(

. The first marriage was annulled or dissolved; or

1. The first spouse had been absent for seven consecutive years at the time of the second marriage without the spousepresent having news of the absentee being alive, or if the absentee, though he has been absent for less than sevenyears, is generally considered as dead and believed to be so by the spouse present at the time of contracting suchsubseBuent marriage, or if the absentee is presumed dead according to articles 3/4 and 3/. The marriage so contractedshall be valid in any of the three cases until declared null and void.

<uring trial, #dilberto offered the testimony of ocorro=s daughter- in-law %onchita Oentura 2%onchita5. "n her first affidavit,%onchita claimed that %rispin, who was a seaman, had been missing and unheard from for 3: years. Dowever, %onchitarecanted her earlier testimony and executed an Affidavit of 9etraction.

The 9T%-Manila ruled that the lac8 of a judicial decree of nullity does not affect the status of the union. "t applied ourruling in >iBal v. &adayog (

urisprudence under the %ivil %ode states that no judicial decree is necessary in order to establish the nullity of amarriage. x x x

7nder ordinary circumstances, the effect of a void marriage, so far as concerns the conferring of legal rights upon theparties, is as though no marriage had ever ta8en place. And therefore, being good for no legal purpose, its invalidity canbe maintained in any proceeding in which theN fact of marriage may be material, either direct or collateral, in any civilcourt between any parties at any time, whether before or after the death of either or both the husband and the wife, andupon mere proof of the facts rendering such marriage void, it will be disregarded or treated as non- existent by the courts.

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According to the 9T%-Manila, the Oitas and <elpan properties are not conjugal, and are governed by Articles 00 and 0):of the %ivil %ode, to wit(

Art. 00. Chen a man and a woman live together as husband and wife, but they are not married, or their marriage is voidfrom the beginning, the property acBuired by either or both of them through their wor8 or industry or their wages andsalaries shall be governed by the rules on co-ownership.

Art. 0):. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respectiveinterests. 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 eBual, unless the contrary is proved.

The 9T%-Manila then determined the respective shares of ocorro and #steban in the properties. "t found that(

wNith respect to the property located at 10/1 tate Alley, onifacio t. Oitas, Tondo, Manila covered by T%T @o. 06)1,formerly Marcos 9oad, Magsaysay Oillage, Tondo, Manila, #vangelineN declared that part of it was first acBuired by herNfather #steban Abletes sometime in /*) when he purchased the right of Ampiano %aballegan. Then, in /64, she x x xbought the right to one-half of the remaining property occupied by Ampiano %aballegan. Dowever, during the survey of the@ational Dousing Authority, she allowed the whole lot to beN registered in her father=s name. As proof thereof, shepresented #xhibits K)L to KL x x x. These documents prove thatN that she has been an occupant of the said property inOitas, Tondo even before her father and ocorro Torres got married in une, /)4.

Anent the parcels of land and improvements thereon /43 and /4: <el &an treet, Tondo, Manila, x x x #vangelineprofessed that in /6), before herN father met ocorro Torres and before the construction of the >" &roject thereat,herN father already hadN a bodega of canvas 2lona5 and a sewing machine to sew the canvas being sold at /43 <el &antreet, Tondo Manila. "n /6), she was also operating Oangie=s %anvas tore at /4: <el &an treetN, Tondo, Manila,which was evidenced by %ertificate of 9egistration of usiness @ame issued in her favor on 4/ @ovember //) x x x.Chen the >" project was constructed in /)4, the propertyN became 8nown as 7nitsN <-/ and <-4. At first, herNfather paidN for the amortiIations forN these two 215 parcels of land but when he got sic8 withN colon cancer in //3, heas8ed respondentsN to continue paying for the amortiIations x x x. #vangelineN paid a total of &/:,1:/.:1 for 7nit <-/as shown by the 36 pieces of receipts x x x and the aggregate amount of &)),:/*.4/ for 7nit <-4, as evidenced byN 3*receipts x x x.

The 9T%-Manila concluded that ocorro did not contribute any funds for the acBuisition of the properties. Dence, she

cannot be considered a co- owner, and her heirs cannot claim any rights over the Oitas and <elpan properties.

Aggrieved, #dilberto filed an appeal before the %A.

The Ruling of the A

"n its <ecision dated / March 141, the %A sustained the decision of the 9T%-Manila. The dispositive portion of the %A<ecision reads(

CD#9#+'9#, the Appeal is hereby <#@"#< and the challenged <ecision of the court a quoTA@<.

' '9<#9#<.

The %A ruled, however, that the 9T%-Manila should have applied Article 0) of the +amily %ode, and not Articles 00 and0): of the %ivil %ode. Article 0) of the +amily %ode states that in unions between a man and a woman who areincapacitated to marry each other(

x x x only the properties acBuired by both of the parties through their actual joint contribution of money, property, orindustry shall be owned by them in common in proportion to their respective contributions. "n the absence of proof to thecontrary, their contributions and corresponding shares are presumed to be eBual. The same rule and presumption shallapply to joint deposits of money and evidences of credit.

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

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The foregoing rules on forfeiture shall li8ewise apply even if both parties are in bad faith.

The %A applied our ruling in +aguid v. *ourt of Appeals, and held that the foregoing provision applies Keven if thecohabitation or the acBuisition of the property occurred before the effectivityN of the +amily %ode.L The %A found that#dilberto failed to prove that ocorro contributed to the purchase of the Oitas and <elpan properties. #dilberto was unableto provide any documentation evidencing ocorro=s alleged contribution.

'n 1 April 141, #dilberto filed a Motion for 9econsideration, which was denied by the %A in its 9esolution dated 3 Augus

141.


The Ruling of this ou+t

Ce deny the petition.

#dilberto admitted that in unions between a man and a woman who are incapacitated to marry each other, the ownershipover the properties acBuired during the subsistence of that relationship shall be based on the actual contribution of theparties. De even Buoted our ruling in &orromeo v. -escallar in his petition(

"t is necessary for each of the partners to prove his or her actual contribution to the acBuisition of property in order to be

able to lay claim to any portion of it. &resumptions of co-ownership and eBual contribution do not apply.

This is a reiteration of Article 0) of the +amily %ode, which the %A applied in the assailed decision(

Art 0). "n cases of cohabitation wherein the parties are incapacitated to marry each otherN, only the properties acBuiredby both of the parties through their actual joint contribution of money, property, or industry shall be owned by them incommon in proportion to their respective contributions. "n the absence of proof to the contrary, their contributions andcorresponding shares are presumed to be eBual. The same rule and presumption shall apply to joint deposits of moneyand evidences of credit.

"f one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolutecommunity or conjugal partnership existing in such valid marriage. "f the party who acted in bad faith is not validly marriedto 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 li8ewise apply even if both parties are in bad faith.

Applying the foregoing provision, the Oitas and <elpan properties can be considered common property if( 25 these wereacBuired during the cohabitation of #steban and ocorro; and 215 there is evidence that the properties were acBuiredthrough the parties= actual joint contribution of money, property, or industry.

#dilberto argues that the certificate of title covering the Oitas property shows that the parcel of land is co-owned by#steban and ocorro because( 25 the Transfer %ertificate of Title was issued on <ecember /)4, or several monthsafter the parties were married; and 215 title to the land was issued to K#steban Abletes, of legal age, married to ocorroTorres.L

Ce disagree. The title itself shows that the Oitas property is owned by #steban alone. The phrase Kmarried to ocorro

TorresL is merely descriptive of his civil status, and does not show that ocorro co-owned the property. The evidence onrecord also shows that #steban acBuired ownership over the Oitas property prior to his marriage to ocorro, even if thecertificate of title was issued after the celebration of the marriage. 9egistration under the Torrens title system merelyconfirms, and does not vest title. This was admitted by #dilberto on page / of his petition wherein he Buotes an excerpt ofour ruling in&orromeo(

9Negistration is not a mode of acBuiring ownership. "t is only a means of confirming the fact of its existence with notice tothe world at large. %ertificates of title are not a source of right. The mere possession of a title does not ma8e one the trueowner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name does notnecessarily, conclusively and absolutely ma8e her the owner. The rule on indefeasibility of title li8ewise does not apply torespondent. A certificate of title implies that the title is Buiet, and that it is perfect, absolute and indefeasible. Dowever,there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not acBuire thesubject properties for a valuable consideration.

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#dilberto claims that #stebanXs actual contribution to the purchase of the <elpan property was not sufficiently proven since#vangeline shouldered some of the amortiIations. Thus, the law presumes that #steban and ocorro jointly contributedto the acBuisition of the <el pan property.

Ce cannot sustain #dilbertoXs claim. oth the 9T%-Manila and the %A found that the <elpan property was acBuired priorto the marriage of #steban and ocorro. +urthermore, even if payment of the purchase price of the <elpan property wasmade by #vangeline, such payment was made on behalf of her father. Article 13) of the %ivil %ode provides(

Art. 13). &ayment made by a third person who does not intend to be reimbursed by the debtor is deemed to be adonation, which reBuires the debtorXs consent. ut the payment is in any case valid as to the creditor who has accepted it.

Thus, it is clear that #vangeline paid on behalf of her father, and the parties intended that the <elpan property would beowned by and registered under the name of #steban.

<uring trial, the Abuda spouses presented receipts evidencing payments of the amortiIations for the <elpan property. 'nthe other hand, #dilberto failed to show any evidence showing ocorroXs alleged monetary contributions. As correctlypointed out by the %A(

sNettled is the rule that in civil cases x x x the burden of proof rests upon the party who, as determined by the pleadings orthe nature of the case, asserts the affirmative of an issue. x x x. Dere it is Appellant who is duty bound to prove theallegations in the complaint which undoubtedly, he miserably failed to do so.

WH%R%)OR%, the petition is #%$I%#. The <ecision dated / March 141 of the %ourt of Appeals in %A-E.9. %O @o./1334 is A))IR,%#.

O OR#%R%#.

J3(R( $o( 116668( ul= 58' 1BB7K

%RLI$#A A( A3A&A?' petitioner, vs. ARLI$A OR$%LIAC !( &ALA$3 and H%R,I$IA &( #%LARU.' respondents(

# % I I O $

RO,%RO' J.:

efore us is a petition for review of the decision of the %ourt of Appeals in %A-E.9. %O @o. 10// entitled #rlinda Agapay v. %arlina 2%ornelia5 &alang and Derminia &. <ela %ruI dated une 11, //0 involving the ownership of two

parcels of land acBuired during the cohabitation of petitioner and private respondents legitimate spouse.Miguel &alang contracted his first marriage on uly *, /0/ when he too8 private respondent %arlina 2or %ornelia

Oallesterol as a wife at the &oIorrubio 9oman %atholic %hurch in &angasinan. A few months after the wedding, in 'ctobe/0/, he left to wor8 in Dawaii.Miguel and %arlinas only child, Derminia &alang, was born on May 1, /:4.

Miguel returned in /:0 for a year. Dis next visit to the &hilippines was in /*0 and during the entire duration of hisyear-long sojourn he stayed in ambales with his brother, not in &angasinan with his wife and child. The trial court foundevidence that as early as /:6, Miguel had attempted to divorce %arlina in Dawaii. Chen he returned for good in /61, herefused to live with private respondents, but stayed alone in a house in &oIorrubio, &angasinan.

'n uly :, /63, the then sixty-three-year-old Miguel contracted his second marriage with nineteen-year-old #rlinda Agapay, herein petitioner. Two months earlier, on May 6, /63, Miguel and #rlinda, as evidenced by the <eed of ale jointly purchased a parcel of agricultural land located at an +elipe, inalonan, &angasinan with an area of 4,4)4 sBuaremeters. %onseBuently, Transfer %ertificate of Title @o. 463* covering said rice land was issued in their names.

A house and lot in inalonan, &angasinan was li8ewise purchased on eptember 13, /6:, allegedly by #rlinda asthe sole vendee. T%T @o. 0314 covering said property was later issued in her name.

'n 'ctober 34, /6:, Miguel and %ornelia &alang executed a <eed of <onation as a form of compromise agreemento settle and end a case filed by the latter. The parties therein agreed to donate their conjugal property consisting of sixparcels of land to their only child, Derminia &alang.

Miguel and #rlindas cohabitation produced a son, $ristopher A. &alang, born on <ecember *, /66. "n /6/, Migueland #rlinda were convicted of %oncubinage upon %arlinas complaint. Two years later, on +ebruary :, /), Miguel died.

'n uly , /), %arlina &alang and her daughter Derminia &alang de la %ruI, herein private respondents,instituted the case at bar, an action for recovery of ownership and possession with damages against petitioner before the9egional Trial %ourt in 7rdaneta, &angasinan 2%ivil %ase @o. 7-01*:5. &rivate respondents sought to get bac8 the

7/17/2019 68 - 133 cases


riceland and the house and lot both located at inalonan, &angasinan allegedly purchased by Miguel during hiscohabitation with petitioner.

&etitioner, as defendant below, contended that while the riceland covered by T%T @o. 463* is registered in theirnames 2Miguel and #rlinda5, she had already given her half of the property to their son $ristopher &alang. he added thathe house and lot covered by T%T @o. 0314 is her sole property, having bought the same with her own money. #rlindaadded that %arlina is precluded from claiming aforesaid properties since the latter had already donated their conjugaestate to Derminia.

After trial on the merits, the lower court rendered its decision on une 34, /)/ dismissing the complaint afterdeclaring that there was little evidence to prove that the subject properties pertained to the conjugal property of %arlinaand Miguel &alang. The lower court went on to provide for the intestate shares of the parties, particularly of $ristophe&alang, Miguels illegitimate son. The dispositive portion of the decision reads(

CD#9#+'9#, premises considered, judgment is hereby rendered-

5 <ismissing the complaint, with costs against plaintiffs;

15 %onfirming the ownership of defendant #rlinda Agapay of the residential lot located at &oblacion, inalonan,&angasinan, as evidenced by T%T @o. 0314, >ot 1/4- including the old house standing therein;

35 %onfirming the ownership of one-half 2J15 portion of that piece of agricultural land situated at alisa, an +elipe,inalonan, &angasinan, consisting of 4,4)4 sBuare meters and as evidenced by T%T @o. 463*, >ot 13-A to #rlinda

Agapay;

05 Adjudicating to $ristopher &alang as his inheritance from his deceased father, Miguel &alang, the one-half 2J15 of theagricultural land situated at alisa, an +elipe, inalonan, &angasinan, under T%T @o. 463* in the name of Miguel

&alang, provided that the former 2$ristopher5 executes, within : days after this decision becomes final and executory, aBuit-claim forever renouncing any claims to annulJreduce the donation to Derminia &alang de la %ruI of all conjugalproperties of her parents, Miguel &alang and %arlina Oallesterol &alang, dated 'ctober 34, /6:, otherwise, the estate ofdeceased Miguel &alang will have to be settled in another separate action;

:5 @o pronouncement as to damages and attorneys fees.

' '9<#9#<.

'n appeal, respondent court reversed the trial courts decision. The %ourt of Appeals rendered its decision on uly11, //0 with the following dispositive portion(

CD#9#+'9#, &9#M"# %'@"<#9#<, the appealed decision is hereby 9#O#9#< and another one entered(

. <eclaring plaintiffs-appellants the owners of the properties in Buestion;

1. 'rdering defendant-appellee to vacate and deliver the properties in Buestion to herein plaintiffs-appellants;

3. 'rdering the 9egister of <eeds of &angasinan to cancel Transfer %ertificate of Title @os. 0314 and 463* and toissue in lieu thereof another certificate of title in the name of plaintiffs-appellants.



&etitioner claims that the %ourt of Appeals erred in not sustaining the validity of two deeds of absolute sale coveringthe riceland and the house and lot, the first in favor of Miguel &alang and #rlinda Agapay and the second, in favor of#rlinda Agapay alone. econd, petitioner contends that respondent appellate court erred in not declaring $ristopher A&alang as Miguel &alangs illegitimate son and thus entitled to inherit from Miguels estate. Third, respondent court erredaccording to petitioner, in not finding that there is sufficient pleading and evidence that $ristoffer A. &alang or %hristopher

A. &alang should be considered as party-defendant in %ivil %ase @o. 7-0*1: before the trial court and in %A-E.9. @o10//.

After studying the merits of the instant case, as well as the pertinent provisions of law and jurisprudence, the %ourt

denies the petition and affirms the Buestioned decision of the %ourt of Appeals.The first and principal issue is the ownership of the two pieces of property subject of this action. &etitioner assails the

validity of the deeds of conveyance over the same parcels of land.There is no dispute that the transfers of ownership fromthe original owners of the riceland and the house and lot, %oraIon "lomin and the spouses %espedes, respectively, werevalid.

The sale of the riceland on May 6, /63, was made in favor of Miguel and #rlinda. The provision of law applicablehere is Article 0) of the +amily %ode providing for cases of cohabitation when a man and a woman whoare not capacitated to marry each other live exclusively with each other as husband and wife without the benefit omarriage or under a void marriage. Chile Miguel and #rlinda contracted marriage on uly :, /63, said union waspatently void because the earlier marriage of Miguel and %arlina was still susbsisting and unaffected by the latters de

facto separation.

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7nder Article 0), only the properties acBuired by both of the parties through their a4tual 2oint 4ont+ibution of9one=' *+o*e+t= o+ indust+= shall be owned by them in common in proportion to their respective contributions. "t musbe stressed that actual contribution is reBuired by this provision, in contrast to Article 06 which states that efforts in thecare and maintenance of the family and household, are regarded as contributions to the acBuisition of common propertyby one who has no salary or income or wor8 or industry. "f the actual contribution of the party is not proved, there will beno co-ownership and no presumption of eBual shares.

"n the case at bar, #rlinda tried to establish by her testimony that she is engaged in the business of buy and sell andhad a sari2sari store but failed to persuade us that she actually contributed money to buy the subject riceland. Corthnoting is the fact that on the date of conveyance, May 6, /63, petitioner was only around twenty years of age and

Miguel &alang was already sixty-four and a pensioner of the 7.. Eovernment. %onsidering her youthfulness, it isunrealistic to conclude that in /63 she contributed &3,6:4.44 as her share in the purchase price of subject property, therebeing no proof of the same.

&etitioner now claims that the riceland was bought two months before Miguel and #rlinda actually cohabited. "n thenature of an afterthought, said added assertion was intended to exclude their case from the operation of Article 0) of the+amily %ode. &roof of the precise date when they commenced their adulterous cohabitation not having been adduced, wecannot state definitively that the riceland was purchased even before they started living together. "n any case, evenassuming that the subject property was bought before cohabitation, the rules of co-ownership would still apply and proofof actual contribution would still be essential.

ince petitioner failed to prove that she contributed money to the purchase price of the riceland in inalonan,&angasinan, we find no basis to justify her co-ownership with Miguel over the same. %onseBuently, the riceland should, ascorrectly held by the %ourt of Appeals, revert to the conjugal partnership property of the deceased Miguel and private

respondent %arlina &alang.+urthermore, it is immaterial that Miguel and %arlina previously agreed to donate their conjugal property in favor of

their daughter Derminia in /6:. The trial court erred in holding that the decision adopting their compromise agreement ineffect parta8es the nature of judicial confirmation of the separation of property between spouses and the termination of theconjugal partnership. eparation of property between spouses during the marriage shall not ta8e place except by judiciaorder or without judicial conferment when there is an express stipulation in the marriage settlements. The judgment whichresulted from the parties compromise was not specifically and expressly for separation of property and should not be soinferred.

Cith respect to the house and lot, #rlinda allegedly bought the same for &14,444.44 on eptember 13, /6: whenshe was only 11 years old. The testimony of the notary public who prepared the deed of conveyance for the propertyreveals the falsehood of this claim. Atty. %onstantino agun testified that Miguel &alang provided the money for thepurchase price and directed that #rlindas name alone be placed as the vendee.

The transaction was properly a donation made by Miguel to #rlinda, but one which was clearly void and inexistent byexpress provision of law because it was made between persons guilty of adultery or concubinage at the time of thedonation, under Article 63/ of the %ivil %ode.Moreover, Article )6 of the +amily %ode expressly provides that theprohibition against donations between spouses now applies to donations between persons living together as husband andwife without a valid marriage, for otherwise, the condition of those who incurred guilt would turn out to be better than thosein legal union.

The second issue concerning $ristopher &alangs status and claim as an illegitimate son and heir to Miguels estate ishere resolved in favor of respondent courts correct assessment that the trial court erred in ma8ing pronouncementsregarding $ristophers heirship and filiation inasmuch as Buestions as to who are the heirs of the decedent, proof offiliation of illegitimate children and the determination of the estate of the latter and claims thereto should be ventilated inthe proper probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in the instantordinary civil action which is for recovery of ownership and possession.

As regards the third issue, petitioner contends that $ristopher &alang should be considered as party-defendant in thecase at bar following the trial courts decision which expressly found that $ristopher had not been impleaded as partydefendant but theoriIed that he had submitted to the courts jurisdiction through his motherJguardian ad litem. The triacourt erred gravely.$ristopher, not having been impleaded, was, therefore, not a party to the case at bar. Dis mother#rlinda, cannot be called his guardian ad litem for he was not involved in the case at bar. &etitioner adds that there is noneed for $ristopher to file another action to prove that he is the illegitimate son of Miguel, in order to avoid multiplicity ofsuits. &etitioners grave error has been discussed in the preceeding paragraph where the need for probate proceedings toresolve the settlement of Miguels estate and $ristophers successional rights has been pointed out.

WH%R%)OR%, the instant petition is hereby <#@"#<. The Buestioned decision of the %ourt of Appeals is A++"9M#<. %osts against petitioner.

O OR#%R%#(

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J3(R( $o( 1760/( A*+il 15' 5///K

3UILL%R,A TU,LO' petitioner, vs( &OU% ,ARIO )%R$A$#%. and LOUR#% )%R$A$#%.' respondents.

# % I I O $

&A$3A$I"A$' J (:

7nder Article 0) of the +amily %ode, a man and a woman who are not legally capacitated to marry each other, but whononetheless live together conjugally, may be deemed co-owners of a property acBuired during the cohabitation only uponproof that each made an actual contribution to its acBuisition. Dence, mere cohabitation without proof of contribution willnot result in a co-ownership.

The aseefore us is a &etition for 9eview under 9ule 0: of the 9ules of %ourt, assailing the @ovember /, //) <ecision of the%ourt of Appeals 2%A5, which reversed the 'ctober 6, //6 'rder of the 9egional Trial %ourt 29T%5. The dispositive partof the %A <ecision reads( ur-is

!CD#9#+'9#, the instant petition is E9A@T#<, and the Buestioned orders of the court a Buo dated'ctober 6, //6 and @ovember , //6, are hereby 9#O#9#< and #T A"<#. The judgment of thecourt a Buo dated une :, //6 is hereby 9#"@TAT#<. %osts against the private respondents.!

The assailed 'rder of the 9T% disposed as follows( upr-ema

!Cherefore, the decision of this %ourt rendered on une :, //6 affirming in toto the appealed judgmentof the MT%N is hereby reconsidered and a new one is entered reversing said decision of the MT%N anddismissing the complaint in the above-entitled case.!

&etitioner also assails the +ebruary 0, /// %A 9esolution denying the Motion for 9econsideration.The )a4ts

The %ourt of Appeals narrates the facts as follows(

!Derein respondentsN were the plaintiffs in %ivil %ase @o. *6:*, an action for ejectment filed before ranch )1 of theMT% of OalenIuela, Metro Manila against herein &etitionerN Euillerma Tumlos, Toto Tumlos, and Eina Tumlos. "n theircomplaint dated uly :, //*, the said spouses alleged that they are the absolute owners of an apartment buildinglocated at A9T# 7<"O""'@ """, >awang ato, OalenIuela, Metro Manila; that through tolerance they had allowed thedefendants-private respondents to occupy the apartment building for the last seven 265 years, since /)/, without thepayment of any rent; that it was agreed upon that after a few months, defendant Euillerma Tumlos will pay &,*44.44 amonth while the other defendants promised to pay &,444.44 a month, both as rental, which agreement was notcomplied with by the said defendants; that they have demanded several times thatN the defendants x x x vacate thepremises, as they are in need of the property for the construction of a new building; and that they have also demanded

payment of &)0,444.44 from Toto and Eina Tumlos representing rentals for seven 265 years and payment of&03,*44.44 from Euillerma Tumlos as unpaid rentals for seven 265 years, but the said demands went unheeded. Theythen prayed that the defendants be ordered to vacate the property in Buestion and to pay the stated unpaid rentals, aswell as to jointly pay &34,444.44 in attorneys fees.

!&etitionerN Euillerma Tumlos was the only one who filed an answer to the complaint. he averred thereinthat the +ernandeI spouses had no cause of action against her, since she is a co-owner of the subjectpremises as evidenced by a %ontract to ell wherein it was stated that she is a co-vendee of the propertyin Buestion together with 9espondentN Mario +ernandeI. he then as8ed for the dismissal of thecomplaint.

!After an unfruitful preliminary conference on @ovember :, //*, the MT% reBuired the parties to submittheir affidavits and other evidence on the factual issues defined in their pleadings within ten 245 daysfrom receipt of such order, pursuant to section / of the 9evised 9ule on ummary &rocedure. &etitionerN

Euillerma Tumlos submitted her affidavitJposition paper on @ovember 1/, //*, while the respondentsNfiled their position paper on <ecember :, //*, attaching thereto their marriage contract, letters ofdemand to the defendants, and the %ontract to ell over the disputed property. The MT% thereafterpromulgated its judgment on anuary 11, //6.Ncs-daad

x x x x x x x x x

!7pon appeal to the 9T%N, petitioner and the two otherN defendants alleged in their memorandum onappeal that 9espondentN Mario +ernandeI and &etitionerN Euillerma had an amorous relationship, andthat they acBuired the property in Buestion as their love nest. "t was further alleged that they lived togetherin the said apartment building with their two 215 children for around ten245 years, and that Euillermaadministered the property by collecting rentals from the lessees of the other apartments, until shediscovered that 9espondent MarioN deceived her as to the annulment of his marriage. "t was also during

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the early part of //* when 9espondent MarioN accused her of being unfaithful and demonstrated hisbaseless jealousyN.

!"n the same memorandum, petitioner and the two otherN defendants further averred that it was onlyrecently that Toto Tumlos was temporarily accommodated in one of the rooms of the subject premiseswhile Eina Tumlos acted as a nanny for the children. "n short, their presence there wasN only transientand they wereN not tenants of the +ernandeI spouses.

!'n une :, //6, the 9T%N rendered a decision affirming in toto the judgment of the MT%. -daad

!The petitioner and the two other defendantsN seasonably filed a motion for reconsideration on uly 3,

//6, alleging that the decision of affirmance by the 9T% was constitutionally flawed for failing to point oudistinctly and clearly the findings of facts and law on which it was based vis--vis the statements of issuesthey have raised in their memorandum on appeal. They also averred that the %ontract to ell presentedby the plaintiffs which named the buyer as Mario &. +ernandeI, of legal age, married to >ourdes &.+ernandeI, should not be given credence as it was falsified to appear that way. According to them, the%ontract to ell originally named Euillerma +ernandeI as the spouse of 9espondent MarioN. As found bythe 9T%N in its judgment, a new %ontract to ell was issued by the sellers naming the respondentsN asthe buyers after the latter presented their marriage contract and reBuested a change in the name of thevendee-wife. uch facts necessitate the conclusion that Euillerma was really a co-owner thereof, and thatthe respondentsN manipulated the evidence in order to deprive her of her rights to enjoy and use theproperty as recogniIed by law. d-aamiso

x x x x x x x x x

!The 9T%N, in determining the Buestion of ownership in order to resolve the issue of possession, ruledtherein that the %ontract to ell submitted by the +ernandeI spouses appeared not to be authentic, asthere was an alteration in the name of the wife of 9espondentN Mario +ernandeI. Dence, the contractpresented by the respondentsN cannot be given any weight. The court further ruled that Euillerma and9espondent MarioN acBuired the property during their cohabitation as husband and wife, although withoutthe benefit of marriage. +rom such findings, the court concluded that &etitionerN Euillerma Tumlos was aco-owner of the subject property and could not be ejected therefrom.

!The respondentsN then filed a motion for reconsideration of the order of reversal, but the same wasdenied by the 9T%N.!

As earlier stated, the %A reversed the 9T%. Dence, this &etition filed by Euillerma Tumlos only.

Ruling of the ou+t of A**eals

The %A rejected petitioners claim that she and 9espondent Mario +ernandeI were co-owners of the disputed property.

The %A ruled( cnc-m!+rom the inception of the instant case, the only defense presented by private respondent Euillerma isher right as a co-owner of the subject property.N

x x x x x x x x x

This claim of co-ownership was not satisfactorily proven by Euillerma, as correctly held by the trial court.@o other evidence was presented to validate such claim, except for the said affidavitJposition paper. Aspreviously stated, it was only on appeal that Euillerma alleged that she cohabited with the petitioner-husband without the benefit of marriage, and that she bore him two 215 children. Attached to hermemorandum on appeal are the birth certificates of the said children. uch contentions and documentsshould not have been considered by the x x x 29T%5, as they were not presented in her affidavitJpositionpaper before the trial court 2MT%5.

x x x x x x x x x

!Dowever, even if the said allegations and documents could be considered, the claim of co-ownershipmust still fail. As herein 9espondentN Mario +ernandeI is validly married to 9espondentN >ourdes+ernandeI 2as per Marriage %ontract dated April 16, /*), p. 0:, 'riginal 9ecord5, Euillerma and Marioare not capacitated to marry each other. Thus, the property relations governing their supposedcohabitation is that found in Article 0) of #xecutive 'rder @o. 14/, as amended, otherwise 8nown as the+amily %ode of the &hilippines.N

x x x x x x x x x

!"t is clear that actual contribution is reBuired by this provision, in contrast to Article 06 of the +amily%ode which states that efforts in the care and maintenance of the family and household are regarded ascontributions to the acBuisition of common property by one who has no salary or income or wor8 orindustry (Agapay v. 'alang, 4T5 +*CA EI). The care given by one party toN the home, children, and

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household, or spiritual or moral inspiration provided to the other, is not included in Article 0) (Handbook

on the amily *ode of the 'hilippines by Alicia !. +empio2-iy, GFF ed., p. 4IG) . Dence, if actualcontribution of the party is not proved, there will be no co-ownership and no presumption of eBualshares (Agapay, supra at p. EF, citing *ommentaries and Jurisprudence on the *ivil *ode of the

'hilippines !olume by Arturo 1. %olentino, GGI ed., p. DII) .

!"n the instant case, no proof of actual contribution by Euillerma Tumlos in the purchase of the subjectproperty was presented. Der only evidence was her being named in the %ontract to ell as the wife of9espondentN Mario +ernandeI. ince she failed to prove that she contributed money to the purchaseprice of the subject apartment building, Ce find no basis to justify her co-ownership with 9espondent

MarioN. The said property is thus presumed to belong to the conjugal partnership property of Mario and>ourdes +ernandeI, it being acBuired during the subsistence of their marriage and there being no otherproof to the contrary(please see Article 5 of the amily *ode).

!The court a quo 29T%5 also found that 9espondent MarioN has two 215 children with Euillerma who are inher custody, and that to eject them from the apartment building would be to run counter with the obligationof the former to give support to his minor illegitimate children, which indispensably includes dwelling. Aspreviously discussed, such finding has no leg to stand on, it being based on evidence presented for thefirst time on appeal. @c-mmis

x x x x x x x x x

!#ven assuming arguendo that the said evidence was validly presented, the 9T% failed to consider thatthe need for support cannot be presumed. Article 143 of the +amily %ode expressly provides that theobligation to give support shall be demandable from the time the person who has a right to receive thesame needs it for maintenance, but it shall not be paid except from the date of judicial or extrajudicialdemand. x x x. @c-m

!"n contrast to the clear pronouncement of the upreme %ourt, the 9T% instead presumed that Euillermaand her children needed support from 9espondent MarioN. Corse, it relied on evidence not properlypresented before the trial court 2MT%5.

!Cith regard to the other defendantsN, Eina and Toto Tumlos, a close perusal of the records shows thatthey did not file any responsive pleading. Dence, judgment may be rendered against them as may bewarranted by the facts alleged in the complaint and limited to what is prayed for therein, as provided for inection * of the 9evised 9ules on ummary &rocedure. There was no basis for the public respondent todismiss the complaint against them.! 2emphasis in the original5 'l-dmiso

The Issues

"n her Memorandum, petitioner submits the following issues for the consideration of the %ourt(!". The %ourt of Appeals gravely erred and abused its discretion in not outrightly dismissing the petition forreview filed by respondents.

!"". The %ourt of Appeals erred in finding that petitioner is not the co-owner of the property in litis.

!""". %orollary thereto, the %ourt of Appeals erred in applying Art. 0) of the +amily %ode in the case atbar. Man-i8an

!"O. The %ourt of Appeals erred in disregarding the substantive right of support vis--vis the remedy ofejectment resorted to by respondents.!

"n resolving this case, we shall answer two Buestions( 2a5 "s the petitioner a co-owner of the property? 2b5 %an the claimfor support bar this ejectment suit? Ce shall also discuss these preliminary matters( 2a5 whether the %A was biased infavor of respondents and 2b5 whether the MT% had jurisdiction over the ejectment suit. Mani8-s

The ou+ts Ruling

The &etition has no merit.

&+eli9ina+= ,atte+s

&etitioner submits that the %A exhibited partiality in favor of herein respondents. This bias, she argues, is manifest in thefollowing( Man-i8x

. The %A considered the respondents &etition for 9eview despite their failure to attach several pleadings as well as theexplanation for the proof of service, despite the clear mandate of ection of 9ule 3 of the 9evised 9ules of %ourt anddespite the ruling in olar Team #ntertainment, "nc. v. 9icafort.

1. "t allowed respondents to submit the pleadings that were not attached.

3. "t considered respondents 9eply dated May 14, //), which had allegedly been filed out of time. @e-xold

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0. "t declared that the case was submitted for decision without first determining whether to give due course to the &etition,pursuant to ection *, 9ule 01 of the 9ules of %ourt.

The %A, for its part, succinctly dismissed these arguments in this wise( Mi-so

!"t is too late in the day now to Buestion the alleged procedural error after we have rendered the decision.More importantly, when the private respondent filed their comment to the petition on April 1*, //), theyfailed to Buestion such alleged procedural error. @either have they Buestioned all the resolutions issuedby the %ourt after their filing of such comment. They should, therefore, be now considered in estoppel toBuestion the same.!

Ce agree with the appellate court. &etitioner never raised these matters before the %A. he cannot be allowed now tochallenge its <ecision on grounds of alleged technicalities beingbelatedly raised as an afterthought. "n this light, shecannot invo8e +olar because she never raised this issue before the %A. pp-edjo

More important, we find it Buite sanctimonious indeed on petitioners part to rely, on the one hand, on these proceduraltechnicalities to overcome the appealed <ecision and, on the other hand, assert that the 9T% may consider the newevidence she presented for the first time on appeal. uch posturing only betrays the futility of petitioners assertion, if notits absence of merit.

'ne other preliminary matter. &etitioner implies that the court of origin, the Municipal Trial %ourt 2MT%5, did not have jurisdiction over the !nature of the case,! alleging that the real Buestion involved is one of ownership. ince the issue ofpossession cannot be settled without passing upon that of ownership, she maintains that the MT% should have dismissedthe case. osp-ped

This contention is erroneous. The issue of ownership may be passed upon by the MT% to settle the issue of

possession. uch disposition, however, is not final insofar as the issue of ownership is concerned, which may be thesubject of another proceeding brought specifically to settle that Buestion.

Daving resolved these preliminary matters, we now move on to petitioners substantive contentions. pped

)i+st Issue: Petitioner as Co-owner

&etitioners= central theory and main defense against respondents= action for ejectment is her claim of co-ownership overthe property with 9espondent Mario +ernandeI. At the first instance before the MT%, she presented a %ontract to ellindicating that she was his spouse. The MT% found this document insufficient to support her claim. The 9T%, however,after considering her allegation that she had been cohabiting with Mario +ernandeI as shown by evidence presentedbefore it, ruled in her favor. Misspped

'n the other hand, the %A held that the pieces of evidence adduced before the 9T% could no longer be consideredbecause they had not been submitted before the MT%. Dence, the appellate court concluded that !tNhe claim of co-ownership was not satisfactorily proven x x x.!

Ce agree with the petitioner that the 9T% did not err in considering the evidence presented before it. @onetheless, wereject her claim that she was a co-owner of the disputed property.Missc

Evidence Presented on Appeal Before the RTC

"n ruling that the 9T% erred in considering on appeal the evidence presented by petitioner, the %A relied on the doctrinethat issues not raised during trial could not be considered for the first time during appeal.

Ce disagree. "n the first place, there were no new matters or issues belatedly raised during the appeal before the 9T%.The defense invo8ed by petitioner at the very start was that she was a co-owner. To support her claim, she presented a%ontract to ell dated @ovember 0, /)*, which stated that Mario +ernandeI was legally married to her. The allegationthat she was cohabiting with him was a mere elaboration of her initial theory.

"n the second place, procedural rules are generally premised on considerations of fair play. 9espondents never objectedwhen the assailed evidence was presented before the 9T%. Thus, they cannot claim unfair surprise or prejudice. cmis

Petitioner ot a Co-!wner "nder Article #$$ of the Civil Code#ven considering the evidence presented before the MT% and the 9T%, we cannot accept petitioners submission that sheis a co-owner of the disputed property pursuant to Article 00 of the %ivil %ode. As correctly held by the %A, the applicablelaw is not Article 00 of the %ivil %ode, but Article 0) of the +amily %ode which provides(

!Art. 0). "n cases of cohabitation not falling under the preceding Article, only the properties acBuired byboth of the parties through their actual joint contribution of money, property, or industry shall be owned bythem in common in proportion to their respective contributions. "n the absence of proof to the contrary,their contributions and corresponding shares are presumed to be eBual. The same rule and presumptionshall apply to joint deposits of money and evidences of credit.

!"f one of the parties is validly married to another, his or her share in the co-ownership shall accrue to theabsolute community or conjugal partnership existing in such valid marriage. "f the party who acted in bad

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faith is not validly married to another, his or her share shall be forfeited in the manner provided in the lastparagraph of the preceding Article.

!The foregoing rules on forfeiture shall li8ewise apply even if both parties are in bad faith.! c

Article 00 of the %ivil %ode applies only to a relationship between a man and a woman who are capacitated to marryeach other, or to one in which the marriage of the parties is void from the beginning. "t does not apply to a cohabitationthat amounts to adultery or concubinage, for it would be absurd to create a co-ownership where there exists a priorconjugal partnership or absolute community between the man and his lawful wife.

ased on evidence presented by respondents, as well as those submitted by petitioner herself before the 9T%, it is clear

that Mario +ernandeI was incapacitated to marry petitioner because he was legally married to >ourdes +ernandeI. "t isalso clear that, as readily admitted by petitioner, she cohabited with Mario in a state of concubinage. Therefore, Article 00of the %ivil %ode is inapplicable.

As stated above, the relationship between petitioner and 9espondent Mario +ernandeI is governed by Article 0) of the+amily %ode. ustice Alicia O. empio-<iy points out that !tNhe +amily %ode has filled the hiatus in Article 00 of the %ivil%ode by expressly regulating in its Article 0) the property relations of couples living in a state of adultery orconcubinage.! x-sc

Dence, petitioners argument -- that the +amily %ode is inapplicable because the cohabitation and the acBuisition of theproperty occurred before its effectivity -- deserves scant consideration. uffice it to say that the law itself states that it canbe applied retroactively if it does not prejudice vested or acBuired rights. "n this case, petitioner failed to show any vestedright over the property in Buestion. Moreover, to resolve similar issues, we have applied Article 0) of the +amily %oderetroactively.

o Evidence of Act%al Joint Contri&%tion Another consideration militates against petitioners claim that she is a co-owner of the property. "n Agapay, the %ourt ruled(

!7nder Article 0), only the properties acBuired by both of the parties through their actual $oint

contribution of money, property or industry shall be owned by them in common in proportion to theirrespective contributions. "t must be stressed that the actual contribution is reBuired by this provision, incontrast to Article 06 which states that efforts in the care and maintenance of the family and household,are regarded as contributions to the acBuisition of common property by one who has no salary or incomeor wor8 or industry. f the actual contribution of the party is not proved, there will be no co2ownership andno presumption of eBual shares.! 2emphasis ours5 xl-aw

"n this case, petitioner fails to present any evidence that she had made an actual contribution to purchase the subjectproperty. "ndeed, she anchors her claim of co-ownership merely on her cohabitation with 9espondent Mario +ernandeI.

>i8ewise, her claim of having administered the property during the cohabitation is unsubstantiated. "n any event, this fact

by itself does not justify her claim, for nothing in Article 0) of the +amily %ode provides that the administration of theproperty amounts to a contribution in its acBuisition.

%learly, there is no basis for petitioners claim of co-ownership. The property in Buestion belongs to the conjugalpartnership of respondents. Dence, the MT% and the %A were correct in ordering the ejectment of petitioner from thepremises. c-lex

e4ond Issue: '%pport vers%s E(ect)ent

&etitioner contends that since 9espondent Mario +ernandeI failed to repudiate her claim regarding the filiation of hisalleged sons, Mar8 Eil and Michael +ernandeI, his silence on the matter amounts to an admission. Arguing that Mario isliable for support, she advances the theory that the childrens right to support, which necessarily includes shelter, prevailsover the right of respondents to eject her.

Ce disagree. "t should be emphasiIed that this is an ejectment suit whereby respondents see8 to exercise theirpossessory right over their property. "t is summary in character and dealssolely with the issue of possession of theproperty in dispute. Dere, it has been shown that they have a better right to possess it than does the petitioner, whoseright to possess is based merely on their tolerance. cl-aw

Moreover, 9espondent Mario +ernandeI alleged failure to repudiate petitioners claim of filiation is not relevant to thepresent case. "ndeed, it would be highly improper for us to rule on such issue. esides, it was not properly ta8en upbelow. "n any event, Article 1/) of the %ivil %ode reBuires that there should be an extrajudicial demand. @one was madehere. The %A was correct when it said(

!#ven assuming arguendo that the said evidence was validly presented, the 9T% failed to consider thatthe need for support cannot be presumed. Article 1/)N of the @ew %ivil %odeN expressly provides that theobligation to give support shall be demandable from the time the person who has a right to receive thesame need it for maintenance, but it shall not be paid except from the date of judicial and extrajudicialdemand.!

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WH%R%)OR%, the &etition is ->- and the appealed <ecision AC1-. %osts against petitioner. 9tc-spped

O OR#%R%#(

J3(R( $o( 168/( une 16' 5///K

%UTAUIO ,ALLILI$' R(' petitioner, vs. ,A( %L!IRA ATILLO'respondent.

# % I I O $

,%$#O.A' J (: batas

This is a petition for review of the amended decision of the %ourt of Appeals dated May 6, //) in %A E.9. %O @o. 0)003granting respondents motion for reconsideration of its decision dated @ovember 6, //*, and of the resolution dated

<ecember 1, //) denying petitioners motion for reconsideration.The factual and procedural antecedents are as follows(

'n +ebruary 10, //3, petitioner #ustaBuio Mallilin, r. filed a complaint for !&artition andJor &ayment of %o-'wnershiphare, Accounting and <amages! against respondent Ma. #lvira %astillo. The complaint, doc8eted as %ivil %ase @o. /3-*:* at the 9egional Trial %ourt in Ma8ati %ity, alleged that petitioner and respondent, both married and with children, butseparated from their respective spouses, cohabited after a brief courtship sometime in /6/ while their respectivemarriages still subsisted. <uring their union, they set up the uperfreight %ustoms ro8erage %orporation, with petitioneras president and chairman of the board of directors, and respondent as vice-president and treasurer. The businessflourished and petitioner and respondent acBuired real and personal properties which were registered solely inrespondents name. "n //1, due to irreconcilable differences, the couple separated. &etitioner demanded fromrespondent his share in the subject properties, but respondent refused alleging that said properties had been registeredsolely in her name.

"n her Amended Answer, respondent admitted that she engaged in the customs bro8erage business with petitioner but

alleged that the uperfreight %ustoms ro8erage %orporation was organiIed with other individuals and duly registeredwith the ecurities and #xchange %ommission in /)6. he denied that she and petitioner lived as husband and wifebecause the fact was that they were still legally married to their respective spouses. he claimed to be the exclusiveowner of all real and personal properties involved in petitioners action for partition on the ground that they were acBuiredentirely out of her own money and registered solely in her name.

'n @ovember 1:, //0, respondent filed a Motion for ummary udgment, in accordance with 9ule 30 of the 9ules of%ourt. he contended that summary judgment was proper, because the issues raised in the pleadings were sham and notgenuine, to wit( %'<#

A.

The main issue is -- %an plaintiff validly claim the *a+tition andMo+ *a=9ent of4o-owne+shi* sha+e'a44ounting and da9ages' 4onside+ing that *laintiff and defendant a+e ad9ittedl= both 9a++ied tothei+ +es*e4tie s*ouses unde+ still alid and subsisting 9a++iages, even assuming as claimed byplaintiff, that they lived together as husband and wife without benefit of marriage? "n other words, can theparties be considered as co-owners of the properties, under the law, considering the present status of theparties as both married and incapable of marrying each other, even assuming that they lived together ashusband and wife 2?5

.

As a 4ollate+al issue' 4an the *laintiff be 4onside+ed as an un+egiste+ed 4o-owne+ of the +eal*+o*e+ties unde+ the T+ansfe+ e+tifi4ates of Title dul= +egiste+ed solel= in the na9e of defendant,a( %li+a astillo This issue is also true as far as the motor vehicles in Buestion are concerned whichare also registered in the name of defendant.

'n the first point, respondent contended that even if she and petitioner actually cohabited, petitioner could not validlyclaim a part of the subject real and personal properties because Art. 00 of the %ivil %ode, which provides that the ruleson co-ownership shall govern the properties acBuired by a man and a woman living together as husband and wife but notmarried, or under a marriage which is void ab initio, applies only if the parties are not in any way incapacitated to contract

marriage. "n the parties case, their union suffered the legal impediment of a prior subsisting marriage. Thus, the Buestionof fact being raised by petitioner, i.e., whether they lived together as husband and wife, was irrelevant as no co-ownershipcould exist between them.

As to the second issue, respondent maintained that petitioner can not be considered an unregistered co-owner of thesubject properties on the ground that, since titles to the land are solely in her name, to grant petitioners prayer would be toallow a collateral attac8 on the validity of such titles.&etitioner opposed respondents Motion for ummary udgment. De contended that the case presented genuine factualissues and that Art. 00 of the %ivil %ode had been repealed by the +amily %ode which now allows, under Art. 0), alimited co-ownership even though a man and a woman living together are not capacitated to marry each other. &etitioneralso asserted that an implied trust was constituted when he and respondent agreed to register the properties solely in thelatters name although the same were acBuired out of the profits made from their bro8erage business. &etitioner invo8edthe following provisions of the %ivil %ode( yacats

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Art. 0:1. "f two or more persons agree to purchase property and by common consent the legal title ista8en in the name of one of them for the benefit of all, a trust is created by force of law in favor of theothers in proportion to the interest of each.

Art. 0:3. Chen the property is conveyed to a person in reliance upon his declared intention to hold it for,or transfer it to another grantor, there is an implied trust in favor of the person whose benefit iscontemplated.

'n anuary 34, //:, the trial court rendered its decision granting respondents motion for summary judgment. "t ruled thatan examination of the pleadings shows that the issues involved were purely legal. The trial court also sustainedrespondents contention that petitioners action for partition amounted to a collateral attac8 on the validity of the certificates

of title covering the subject properties. "t held that even if the parties really had cohabited, the action for partition could notbe allowed because an action for partition among co-owners ceases to be so and becomes one for title if the defendant,as in the present case, alleges exclusive ownership of the properties in Buestion. +or these reasons, the trial courtdismissed %ivil %ase @o. /3-*:*.

'n appeal, the %ourt of Appeals on @ovember 6, //*, ordered the case remanded to the court of origin for trial on themerits. "t cited the decision in Coque v. ntermediate Appellate *ourt to the effect that an action for partition is at once anaction for declaration of co-ownership and for segregation and conveyance of a determinate portion of the propertiesinvolved. "f the defendant asserts exclusive title over the property, the action for partition should not be dismissed. 9ather,the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner, the court shoulddismiss the action, not because the wrong remedy was availed of, but because no basis exists for reBuiring the defendantto submit to partition. 9esolving the issue whether petitioners action for partition was a collateral attac8 on the validity ofthe certificates of title, the %ourt of Appeals held that since petitioner sought to compel respondent to execute documentsnecessary to effect transfer of what he claimed was his share, petitioner was not actually attac8ing the validity of the titles

but in fact, recogniIed their validity. +inally, the appellate court upheld petitioners position that Art. 00 of the %ivil %odehad been repealed by Art. 0) of the +amily %ode. haideem

9espondent moved for reconsideration of the decision of the %ourt of Appeals. 'n May 6, //), nearly two years after itsfirst decision, the %ourt of Appeals granted respondents motion and reconsidered its prior decision. "n its decision nowchallenged in the present petition, it held

&refatorily, and to better clarify the controversy on whether this suit is a collateral attac8 on the titles inissue, it must be underscored that plaintiff-appellant alleged in his complaint that all the nine 2/5 titles areregistered in the name of defendant-appellee, Ma. #lvira T. %astillo, except one which appears in thename of #loisa %astillo 2see par. G, *omplaint). Dowever, a verification of the annexes of such initiatorypleading shows some discrepancies, to wit(

. T%T @o. 0/40* 2Annex A5 ].#lvira T. %astillo, single

1. T%T @o. *)14) 2 Annex 5 ]..........-do-

3. T%T @o. 3640* 2Annex %5 ]..........-do-

0. T%T @o. 36406 2Annex <5 ] ..... ...-do-

:. T%T @o. 3640) 2Annex #5 ]..........-do-

*. T%T @o. 343*) 2Annex +5 ].teelhaus 9ealty V <ev. %orp.

6. T%T @o. 343*/ 2Annex E5 ]..........-do-

). T%T @o. 3436 2Annex +5 ]..........-do-

/.T%T @o. 2/13135 *6)) 2Annex"5 ] #loisa %astillo

hustisya

"n this action, plaintiff-appellant see8s to be declared as J1 co-owner of the real properties covered bythe above listed titles and eventually for their partition Upar. (a), 'rayerS p. E CecordsV . @otably, in order toachieve such prayer for a joint co-ownership declaration, it is unavoidable that the individual titles involvedbe altered, changed, canceled or modified to include therein the name of the appellee as a registered J1co-owner. et, no cause of action or even a prayer is contained in the complaint filed. Manifestly, absent

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any cause or prayer for the alteration, cancellation, modification or changing of the titles involved, thedesired declaration of co-ownership and eventual partition will utterly be an indirect or collateral attac8 onthe subject titles in this suit.

"t is here that Ce fell into error, such that, if not rectified will surely lead to a procedural lapse and apossible injustice. Cell settled is the rule that a certificate of title cannot be altered, modified or canceledexcept in a direct proceeding in accordance with law. 8sm

"n this jurisdiction, the remedy of the landowner whose property has been wrongfully or erroneouslyregistered in another name is, after one year from the date of the decree, not to set aside the decree, butrespecting it as incontrovertible and no longer open to review, to bring an action for reconveyance or, if

the property had passed into the hands of an innocent purchaser for value, for damages. Oerily, plaintiff-appellant should have first pursued such remedy or any other relief directly attac8ing the subject titlesbefore instituting the present partition suit. Apropos, the case at bench appears to have been prematurelyfiled.

>astly, to grant the partition prayed for by the appellant will in effect rule and decide against the propertiesregistered in the names of teelhouse 9ealty and <evelopment %orporation and #loisa %astillo, who arenot parties in the case. To allow this to happen will surely result to injustice and denial of due process oflaw. . . .

&etitioner moved for reconsideration but his motion was denied by the %ourt of Appeals in its resolution dated <ecember1, //). Dence this petition.&etitioner contends that( 25 the %ourt of Appeals, in its first decision of @ovember 6, //*, was correct in applyingthe Coque ruling and in rejecting respondents claim that she was the sole owner of the subject properties and that thepartition suit was a collateral attac8 on the titles; 215 the %ourt of Appeals correctly ruled in its first decision that Art. 0) of

the +amily %ode governs the co-ownership between the parties, hence, the complaint for partition is proper; 235 withrespect to the properties registered in the name of teelhouse 9ealty, respondent admitted ownership thereof and, at thevery least, these properties could simply be excluded and the partition limited to the remaining real and personalproperties; and 205 the %ourt of Appeals erred in not holding that under the %ivil %ode, there is an implied trust in his favor.

The issue in this case is really whether summary judgment, in accordance with 9ule 3: of the 9ules of %ourt, is proper.Ce rule in the negative.

)i+st. 9ule 3:, 3 of the 9ules of %ourt provides that summary judgment is proper only when, based on the pleadings,depositions, and admissions on file, and after summary hearing, it is shown that except as to the amount of damages,there is no veritable issue regarding any material fact in the action and the movant is entitled to judgment as a matter oflaw.%onversely, where the pleadings tender a genuine issue, i.e., an issue of fact the resolution of which calls for thepresentation of evidence, as distinguished from an issue which is sham, fictitious, contrived, set-up in bad faith, or patentlyunsubstantial, summary judgment is not proper. %hiefx

"n the present case, we are convinced that genuine issues exist. &etitioner anchors his claim of co-ownership on twofactual grounds( first, that said properties were acBuired by him and respondent during their union from /6/ to //1 fromprofits derived from their bro8erage business; and second, that said properties were registered solely in respondentsname only because they agreed to that arrangement, thereby giving rise to an implied trust in accordance with Art. 0:1and Art. 0:3 of the %ivil %ode. These allegations are denied by respondent. he denies that she and petitioner livedtogether as husband and wife. he also claims that the properties in Buestion were acBuired solely by her with her ownmoney and resources. Cith such conflicting positions, the only way to ascertain the truth is obviously through thepresentation of evidence by the parties.The trial court ruled that it is immaterial whether the parties actually lived together as husband and wife because Art. 00of the %ivil %ode can not be made to apply to them as they were both incapacitated to marry each other. Dence, it wasimpossible for a co-ownership to exist between them.

Ce disagree.

Art. 00 of the %ivil %ode provides(

Chen a man and a woman live together as husband and wife, but they are not married, or their marriageis void from the beginning, the property acBuired by either or both of them through their wor8 or industryor their wages and salaries shall be governed by the rules on co-ownership.

This provision of the %ivil %ode, applies only to cases in which a man and a woman live together as husband and wifewithout the benefit of marriage provided they are not incapacitated or are without impediment to marry each other, or inwhich the marriage is voidab initio, provided it is not bigamous. Art. 00, therefore, does not cover parties living in anadulterous relationship. Dowever, Art. 0) of the +amily %ode now provides for a limited co-ownership in cases where theparties in union are incapacitated to marry each other. "t states(

"n cases of cohabitation not falling under the preceding article, only the properties acBuired by both of theparties through their actual joint contribution of money, property or industry shall be owned by them incommon in proportion to their respective contributions. "n the absence of proof to the contrary, their

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contributions and corresponding shares are presumed to be eBual. The same rule and presumption shallapply to joint deposits of money and evidences of credits.DTM>"f one of the parties is validly married to another, his or her share in the co-ownership shall accrue to theabsolute community or conjugal partnership existing in such valid marriage. "f the party who acted in badfaith is not validly married to another, his or her share shall be forfeited in the manner provided in the lastparagraph of the preceding article.

The foregoing rules on forfeiture shall li8ewise apply even if both parties are in bad faith."t was error for the trial court to rule that, because the parties in this case were not capacitated to marry each other at thetime that they were alleged to have been living together, they could not have owned properties in common. The +amily

%ode, in addition to providing that a co-ownership exists between a man and a woman who live together as husband andwife without the benefit of marriage, li8ewise provides that, if the parties are incapacitated to marry each other, propertiesacBuired by them through their joint contribution of money, property or industry shall be owned by them in common inproportion to their contributions which, in the absence of proof to the contrary, is presumed to be eBual. There is thus co-ownership eventhough the couple are not capacitated to marry each other.

"n this case, there may be a co-ownership between the parties herein. %onseBuently, whether petitioner and respondentcohabited and whether the properties involved in the case are part of the alleged co-ownership are genuine and material.

All but one of the properties involved were alleged to have been acBuired after the +amily %ode too8 effect on August 3,/)). Cith respect to the property acBuired before the +amily %ode too8 effect if it is shown that it was really acBuiredunder the regime of the %ivil %ode, then it should be excluded.&etitioner also alleged in paragraph 6 of his complaint that(

<ue to the effective management, hardwor8 and enterprise of plaintiff assisted by defendant, theircustoms bro8erage business grew and out of the profits therefrom, the parties acBuired real and personalproperties which were, upon agreement of the parties, listed and registered in defendants name withplaintiff as the unregistered co-owner of all said properties. #smsc

'n the basis of this, he contends that an implied trust existed pursuant to Art. 0:1 of the %ivil %ode which provides that!2"5f two or more persons agree to purchase property and by common consent the legal title is ta8en in the name of one ofthem for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each.! Cedo not thin8 this is correct. The legal relation of the parties is already specifically covered by Art. 0) of the +amily %odeunder which all the properties acBuired by the parties out of their actual joint contributions of money, property or industryshall constitute a co-ownership. %o-ownership is a form of trust and every co-owner is a trustee for the other. Theprovisions of Art. 0:1 and Art. 0:3 of the %ivil %ode, then are no longer material since a trust relation already inheres ina co-ownership which is governed under Title """, oo8 "" of the %ivil %ode.

e4ond. The trial court li8ewise dismissed petitioners action on the ground that the same amounted to a collateral attac8on the certificates of title involved. As already noted, at first, the %ourt of Appeals ruled that petitioners action does notchallenge the validity of respondents titles. Dowever, on reconsideration, it reversed itself and affirmed the trial court. "tnoted that petitioners complaint failed to include a prayer for the alteration, cancellation, modification, or changing of thetitles involved. Absent such prayer, the appellate court ruled that a declaration of co-ownership and eventual partitionwould involve an indirect or collateral attac8 on the titles. Ce disagree.

A torrens title, as a rule, is conclusive and indefeasible. &roceeding from this, &.<. @o. :1/,0) provides that a certificateof title shall not be subject to collateral attac8 and can not be altered, modified, or canceled except in a direct proceeding.Chen is an action an attac8 on a title? "t is when the object of the action or proceeding is to nullify the title, and thuschallenge the judgment pursuant to which the title was decreed. The attac8 is direct when the object of an action orproceeding is to annul or set aside such judgment, or enjoin its enforcement. 'n the other hand, the attac8 is indirect orcollateral when, in an action to obtain a different relief, an attac8 on the judgment is nevertheless made as an incidentthereof.

"n his complaint for partition, consistent with our ruling in Coque regarding the nature of an action for partition, petitionersee8s first, a declaration that he is a co-owner of the subject properties; and second, the conveyance of his lawful shares.

De does not attac8 respondents titles. &etitioner alleges no fraud, mista8e, or any other irregularity that would justify areview of the registration decree in respondents favor. Dis theory is that although the subject properties were registeredsolely in respondents name, but since by agreement between them as well as under the +amily %ode, he is co-owner ofthese properties and as such is entitled to the conveyance of his shares. 'n the premise that he is a co-owner, he canvalidly see8 the partition of the properties in co-ownership and the conveyance to him of his share. #smmisThus, in uevara v. uevara, in which a parcel of land beBueathed in a last will and testament was registered in the nameof only one of the heirs, with the understanding that he would deliver to the others their shares after the debts of theoriginal owner had been paid, this %ourt ruled that notwithstanding the registration of the land in the name of only one ofthe heirs, the other heirs can claim their shares in !such action, judicial or extrajudicial, as may be necessary to partitionthe estate of the testator.!

Thi+d. The %ourt of Appeals also reversed its first decision on the ground that to order partition will, in effect, rule anddecide against teelhouse 9ealty <evelopment %orporation and #loisa %astillo, both strangers to the present case, as tothe properties registered in their names. This reasoning, however, ignores the fact that the majority of the properties

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involved in the present case are registered in respondents name, over which petitioner claims rights as a co-owner.esides, other than the real properties, petitioner also see8s partition of a substantial amount of personal propertiesconsisting of motor vehicles and several pieces of jewelry. y dismissing petitioners complaint for partition on grounds ofdue process and eBuity, the appellate court unwittingly denied petitioner his right to prove ownership over the claimed realand personal properties. The dismissal of petitioners complaint is unjustified since both ends may be amply served bysimply excluding from the action for partition the properties registered in the name of teelhouse 9ealty and #loisa%astillo.

WH%R%)OR%, the amended decision of the %ourt of Appeals, dated May 6, //), is 9#O#9#< and the case is9#MA@<#< to the 9egional Trial %ourt, ranch :/, Ma8ati %ity for further proceedings on the merits.

O OR#%R%#(J3(R( $o( 1505B( )eb+ua+= 5' 5//1K

UA$ $I#AO ARIO' petitioner, vs. UA$ ?%% ARIO' respondent.

# % I I O $

?$AR%-A$TIA3O' J (:

The issue for resolution in the case at bar hinges on the validity of the two marriages contracted by the deceased&'0 antiago . %ariQo, whose death benefits is now the subject of the controversy between the two usans whom hemarried.

efore this %ourt is a petition for review on certiorari see8ing to set aside the decision of the %ourt of Appeals in %A-E.9. %O @o. :1*3, which affirmed in toto the decision of the 9egional Trial %ourt of PueIon %ity, ranch )6, in %ivi%ase @o. P-/3-)*31.

<uring the lifetime of the late &'0 antiago . %ariQo, he contracted two marriages, the first was on une 14, /*/with petitioner usan @icdao %ariQo 2hereafter referred to as usan @icdao5, with whom he had two offsprings, namelyahlee and andee %ariQo; and the second was on @ovember 4, //1, with respondent usan ee %ariQo 2hereafterreferred to as usan ee5, with whom he had no children in their almost ten year cohabitation starting way bac8 in /)1.

"n /)), &'0 antiago . %ariQo became ill and bedridden due to diabetes complicated by pulmonarytuberculosis. De passed away on @ovember 13, //1, under the care of usan ee, who spent for his medical and buriaexpenses. oth petitioner and respondent filed claims for monetary benefits and financial assistance pertaining to thedeceased from various government agencies. &etitioner usan @icdao was able to collect a total of &0*,444.44 fromMA", &%%7", %ommutation, @A&'>%'M, andN &ag-ibig, while respondent usan ee received a total of &1,444.44from E" >ife, urial 2E"5 and burial 25.

'n <ecember 0, //3, respondent usan ee filed the instant case for collection of sum of money againstpetitioner usan @icdao praying, inter alia, that petitioner be ordered to return to her at least one-half of the one hundred

forty-six thousand pesos 2&0*,444.445 collectively denominated as death benefits which she 2petitioner5 received fromMA", &%%7", %ommutation, @A&'>%'M, andN &ag-ibig. <espite service of summons, petitioner failed to file heranswer, prompting the trial court to declare her in default.

9espondent usan ee admitted that her marriage to the deceased too8 place during the subsistence of, and withoutfirst obtaining a judicial declaration of nullity of, the marriage between petitioner and the deceased. he, however, claimedthat she had no 8nowledge of the previous marriage and that she became aware of it only at the funeral of the deceased,where she met petitioner who introduced herself as the wife of the deceased. To bolster her action for collection of sum omoney, respondent contended that the marriage of petitioner and the deceased is void ab initio because the same wassolemniIed without the reBuired marriage license. "n support thereof, respondent presented( 5 the marriage certificate ofthe deceased and the petitioner which bears no marriage license number; and 15 a certification dated March /, //0, fromthe >ocal %ivil 9egistrar of an uan, Metro Manila, which reads

%his is to certify that this ffice has no record of marriage license of the spouses +A>%A *AC> (sic) and +O+A>

>*-A, who are married in this municipality on June 4I, G5G. Hence, we cannot issue as requested a true copy ortranscription of 1arriage icense number from the records of this archives.

%his certification is issued upon the request of 1rs. +usan Nee *ariBo for whatever legal purpose it may serve.

'n August 1), //:, the trial court ruled in favor of respondent, usan ee, holding as follows(

@HCC, the defendant is hereby ordered to pay the plaintiff the sum of 'T,III.II, half of the amount which was

paid to her in the form of death benefits arising from the death of +'E +antiago +. *ariBo, plus attorneys fees in the

amount of 'D,III.II, and costs of suit.

% + + C-C-.

'n appeal by petitioner to the %ourt of Appeals, the latter affirmed in toto the decision of the trial court. Dence, theinstant petition, contending that(

I(

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TD# D'@'9A># %'79T '+ A&&#A> E9AO#> #99#< "@ A++"9M"@E TD# +"@<"@E '+ TD# >'C#9%'79T TDAT O<A. <# %'@7#E9A O. E" " A&&>"%A># T' TD# %A# AT A9.

II(

TD# D'@'9A># %'79T '+ A&&#A> E9AO#> #99#< "@ A&&>"@E #P7"T "@ TD# "@TA@T %A#"@T#A< '+ TD# %>#A9 A@< 7@#P7"O'%A> MA@<AT# '+ TD# +AM"> %'<#.

III(

TD# D'@'9A># %'79T '+ A&&#A> E9AO#> #99#< "@ @'T +"@<"@E TD# %A# '+ O<A. <#%'@7#E9A O E" T' DAO# ##@ M'<"+"#<, AM#@<#< A@< #O#@ AA@<'@#< TD# #@A%TM#@T

'+ TD# +AM"> %'<#.7nder Article 04 of the +amily %ode, the absolute nullity of a previous marriage may be invo8ed for purposes of

remarriage on the basis solely of a final judgment declaring such previous marriage void.Meaning, where the absolutenullity of a previous marriage is sought to be invo8ed for purposes of contracting a second marriage, the sole basisacceptable in law, for said projected marriage to be free from legal infirmity, is a final judgment declaring the previousmarriage void. Dowever, for purposes other than remarriage, no judicial action is necessary to declare a marriage anabsolute nullity. +or other purposes, such as but not limited to the determination of heirship, legitimacy or illegitimacy of achild, settlement of estate, dissolution of property regime, or a criminal case for that matter, the court may pass upon thevalidity of marriage even after the death of the parties thereto, and even in a suit not directly instituted to Buestion thevalidity of said marriage, so long as it is essential to the determination of the case. "n such instances, evidence must beadduced, testimonial or documentary, to prove the existence of grounds rendering such a previous marriage an absolutenullity. These need not be limited solely to an earlier final judgment of a court declaring such previous marriage void.

"t is clear therefore that the %ourt is clothed with sufficient authority to pass upon the validity of the two marriages inthis case, as the same is essential to the determination of who is rightfully entitled to the subject death benefits of thedeceased.

7nder the %ivil %ode, which was the law in force when the marriage of petitioner usan @icdao and the deceasedwas solemniIed in /*/, a valid marriage license is a reBuisite of marriage, and the absence thereof, subject to certainexceptions, renders the marriage void ab initio.

"n the case at bar, there is no Buestion that the marriage of petitioner and the deceased does not fall within themarriages exempt from the license reBuirement. A marriage license, therefore, was indispensable to the validity of theirmarriage. This notwithstanding, the records reveal that the marriage contract of petitioner and the deceased bears nomarriage license number and, as certified by the >ocal %ivil 9egistrar of an uan, Metro Manila, their office has no recordof such marriage license. "nCepublic v. *ourt of Appeals, the %ourt held that such a certification is adeBuate to prove thenon-issuance of a marriage license. Absent any circumstance of suspicion, as in the present case, the certification issued

by the local civil registrar enjoys probative value, he being the officer charged under the law to 8eep a record of all datarelative to the issuance of a marriage license.

uch being the case, the presumed validity of the marriage of petitioner and the deceased has been sufficientlyovercome. "t then became the burden of petitioner to prove that their marriage is valid and that they secured the reBuiredmarriage license. Although she was declared in default before the trial court, petitioner could have sBuarely met the issueand explained the absence of a marriage license in her pleadings before the %ourt of Appeals and this %ourt. upetitioner conveniently avoided the issue and chose to refrain from pursuing an argument that will put her case in

jeopardy. Dence, the presumed validity of their marriage cannot stand.

"t is beyond cavil, therefore, that the marriage between petitioner usan @icdao and the deceased, having beensolemniIed without the necessary marriage license, and not being one of the marriages exempt from the marriage licensereBuirement, is undoubtedly void ab initio.

"t does not follow from the foregoing disBuisition, however, that since the marriage of petitioner and the deceased is

declared void ab initio, the death benefits under scrutiny would now be awarded to respondent usan ee. To reiterateunder Article 04 of the +amily %ode, for purposes of remarriage, there must first be a prior judicial declaration of the nullityof a previous marriage, though void, before a party can enter into a second marriage, otherwise, the second marriagewould also be void.

Accordingly, the declaration in the instant case of nullity of the previous marriage of the deceased and petitionerusan @icdao does not validate the second marriage of the deceased with respondent usan ee. The fact remains thattheir marriage was solemniIed without first obtaining a judicial decree declaring the marriage of petitioner usan @icdaoand the deceased void. Dence, the marriage of respondent usan ee and the deceased is, li8ewise, void ab initio.

'ne of the effects of the declaration of nullity of marriage is the separation of the property of the spouses accordingto the applicable property regime. %onsidering that the two marriages are void ab initio, the applicable property regimewould not be absolute community or conjugal partnership of property, but rather, be governed by the provisions of Articles06 and 0) of the +amily %ode on &roperty 9egime of 7nions Cithout Marriage.

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7nder Article 0) of the +amily %ode, which refers to the property regime of bigamous marriages, adulterousrelationships, relationships in a state of concubine, relationships where both man and woman are married to otherpersons, multiple alliances of the same married man, -

... UVnly the properties acquired by both of the parties through their actual $oint contribution of money, property, or

industry shall be owned by them in common in proportion to their respective contributions ...

"n this property regime, the properties acBuired by the parties through their a4tual 2oint 4ont+ibutionshall belong to theco-ownership. Cages and salaries earned by each party belong to him or her exclusively. Then too, contributions in theform of care of the home, children and household, or spiritual or moral inspiration, are excluded in this regime.

%onsidering that the marriage of respondent usan ee and the deceased is a bigamous marriage, having beensolemniIed during the subsistence of a previous marriage then presumed to be valid 2between petitioner and thedeceased5, the application of Article 0) is therefore in order.

The disputed &0*,444.44 from MA" A+& Mutual enefit Association, "nc.N, @A&'>%'M, %ommutation, &ag-ibigand &%%7", are clearly renumerations, incentives and benefits from governmental agencies earned by the deceased as apolice officer. 7nless respondent usan ee presents proof to the contrary, it could not be said that she contributedmoney, property or industry in the acBuisition of these monetary benefits. Dence, they are not owned in common byrespondent and the deceased, but belong to the deceased alone and respondent has no right whatsoever to claim thesame. y intestate succession, the said death benefits of the deceased shall pass to his legal heirs. And, respondent, notbeing the legal wife of the deceased is not one of them.

As to the property regime of petitioner usan @icdao and the deceased, Article 06 of the +amily %ode governs. Thisarticle applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but

whose marriage is nonetheless void for other reasons, li8e the absence of a marriage license. Article 06 of the +amily%ode reads -

Art. ET. @hen a man and a woman who are capacitated to marry each other, live e#clusively 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

co2ownership.

n the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been

obtained by their $oint efforts, work or industry, and shall be owned by them in equal shares. or 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

$ointly in the acquisition thereof if the formers efforts consisted in the care and maintenance of the family and of the

household.

# # # # # # # # #

@hen only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co2ownershipshall be forfeited in favor of their common children. n 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. n the absence of

descendants, such share shall belong to the innocent party. n all cases, the forfeiture shall take place upon termination of

the cohabitation.

"n contrast to Article 0), under the foregoing article, wages and salaries earned by either party during thecohabitation shall be owned by the parties in eBual shares and will be divided eBually between them, even if only oneparty earned the wages and the other did not contribute thereto. %onformably, even if the disputed death benefits wereearned by the deceased alone as a government employee, Article 06 creates a co-ownership in respect thereto, entitlingthe petitioner to share one-half thereof. As there is no allegation of bad faith in the present case, both parties of the firstmarriage are presumed to be in good faith. Thus, one-half of the subject death benefits under scrutiny shall go to thepetitioner as her share in the property regime, and the other half pertaining to the deceased shall pass by, intestate

succession, to his legal heirs, namely, his children with usan @icdao."n affirming the decision of the trial court, the %ourt of Appeals relied on the case of !da. de *onsuegra v

overnment +ervice nsurance +ystem, where the %ourt awarded one-half of the retirement benefits of the deceased tothe first wife and the other half, to the second wife, holding that(

... U+Vince the defendants first marriage has not been dissolved or declared void the con$ugal partnership established by

that marriage has not ceased. >or has the first wife lost or relinquished her status as putative heir of her husband under

the new *ivil *ode, entitled to share in his estate upon his death should she survive him. *onsequently, whether as

con$ugal partner in a still subsisting marriage or as such putative heir she has an interest in the husbands share in the

property here in dispute.... And with respect to the right of the second wife, this *ourt observed that although the second

marriage can be presumed to be void ab initio as it was celebrated while the first marriage was still subsisting, still there is

need for $udicial declaration of such nullity. And inasmuch as the con$ugal partnership formed by the second marriage was

dissolved before $udicial declaration of its nullity, UtVhe only $ust and equitable solution in this case would be to recogni/e

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the right of the second wife to her share of one2half in the property acquired by her and her husband, and consider the

other half as pertaining to the con$ugal partnership of the first marriage.

"t should be stressed, however, that the aforecited decision is premised on the rule which reBuires a prior andseparate judicial declaration of nullity of marriage. This is the reason why in the said case, the %ourt determined the rightsof the parties in accordance with their existing property regime.

"n -omingo v. *ourt of Appeals, however, the %ourt, construing Article 04 of the +amily %ode,clarified that a prior andseparate declaration of nullity of a marriage is an all important condition precedent only for purposes of remarriage. Thatis, if a party who is previously married wishes to contract a second marriage, he or she has to obtain first a judicial decreedeclaring the first marriage void, before he or she could contract said second marriage, otherwise the second marriagewould be void.The same rule applies even if the first marriage is patently void because the parties are not free todetermine for themselves the validity or invalidity or their marriage. Dowever, for purposes other than to remarry, li8e forfiling a case for collection of sum of money anchored on a marriage claimed to be valid, no prior and separate judicialdeclaration of nullity is necessary. All that a party has to do is to present evidence, testimonial or documentary, that wouldprove that the marriage from which his or her rights flow is in fact valid. Thereupon, the court, if material to thedetermination of the issues before it, will rule on the status of the marriage involved and proceed to determine the rights ofthe parties in accordance with the applicable laws and jurisprudence. Thus, in >ial v. &ayadog , the %ourt explained(

U%Vhe court may pass upon the validity of marriage even in a suit not directly instituted to question the same so long as it is

essential to the determination of the case. %his is without pre$udice to any issue that may arise in the case. @hen such

need arises, a final $udgment of declaration of nullity is necessary even if the purpose is other than to remarry. %he clause

on the basis of a final $udgment declaring such previous marriage void in Article EI of the amily *ode connoted that such

final $udgment need not be obtained only for purpose of remarriage.

WH%R%)OR%, the petition is E9A@T#<, and the decision of the %ourt of Appeals in %A-E.9. %O @o. :1*3 whichaffirmed the decision of the 9egional Trial %ourt of PueIon %ity ordering petitioner to pay respondent the sum of&63,444.44 plus attorneys fees in the amount of &:,444.44, is 9#O#9#< and #T A"<#. The complaint in %ivil %ase@o. P-/3-)*31, is hereby <"M"#<. @o pronouncement as to costs.

O OR#%R%#(

J3(R( $o( 10/611( une 1/' 5//K

AI$TO A3UI#' petitioner, vs. HO$( OURT O) A&&%AL' TH%R%3IO$AL TRIAL OURT' "RA$H BD' "OA,ARI$#UU% and3I$A ( R%?' respondents(

# % I I O $

?$AR%-A$TIA3O' J (:

The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to

marry each other, but who nonetheless live together as husband and wife, applies to properties acBuired during saidcohabitation in proportion to their respective contributions. %o-ownership will only be up to the extent of the proven actualcontribution of money, property or industry. Absent proof of the extent thereof, their contributions and correspondingshares shall be presumed to be eBual.

eventeen-year old Eina . 9ey was married, but separated de facto from her husband, when she met petitioneracinto aguid in MarinduBue, sometime in uly /)6. After a brief courtship, the two decided to cohabit as husband andwife in a house built on a lot owned by acintos father. Their cohabitation was not blessed with any children. acinto madea living as the patron of their fishing vessel aguid rothers. Eina, on the other hand, wor8ed as a fish dealer, but decidedto wor8 as an entertainer in apan from //1 to //0 when her relationship with acintos relatives turned sour. Deperiodic absence, however, did not ebb away the conflict with petitioners relatives. "n //*, the couple decided toseparate and end up their /-year cohabitation.

'n anuary /, //6, private respondent filed a complaint for &artition and 9ecovery of &ersonal &roperty with

9eceivership against the petitioner with the 9egional Trial %ourt of oac, MarinduBue. he alleged that from her salary of[,:44.44 a month as entertainer in apan, she was able to contribute &64,444.44 in the completion of their unfinishedhouse. Also, from her own earnings as an entertainer and fish dealer, she was able to acBuire and accumulateappliances, pieces of furniture and household effects, with a total value of &,36:.44. he prayed that she be declaredthe sole owner of these personal properties and that the amount of &64,444.44, representing her contribution to theconstruction of their house, be reimbursed to her.

&rivate respondent testified that she deposited part of her earnings in her savings account with +irst Allied<evelopment an8. Der &ass oo8 shows that as of May 13, //:, she had a balance of &1,40*.4). he further statedthat she had a total of &3:,0*:.44 share in the joint account deposit which she and the petitioner maintained with thesame ban8. Eina declared that said deposits were spent for the purchase of construction materials, appliances and otherpersonal properties.

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"n his answer to the complaint, petitioner claimed that the expenses for the construction of their house were defrayedsolely from his income as a captain of their fishing vessel. De averred that private respondents meager income as fishdealer rendered her unable to contribute in the construction of said house. esides, selling fish was a mere pastime toher; as such, she was contented with the small Buantity of fish allotted to her from his fishing trips.&etitioner furthercontended that Eina did not wor8 continuously in apan from //1 to //0, but only for a *-month duration eachyear. Chen their house was repaired and improved sometime in //:-//*, private respondent did not share in theexpenses because her earnings as entertainer were spent on the daily needs and business of her parents. +rom hisincome in the fishing business, he claimed to have saved a total of &34,444.44, &6:,444.44 of which was placed in a

joint account deposit with private respondent. This savings, according to petitioner was spent in purchasing the disputed

personal properties.'n May 1, //6, the trial court declared the petitioner as in default for failure to file a pre-trial brief as reBuired by

upreme %ourt %ircular @o. -)/.

'n May 1*, //6, petitioner filed a motion for reconsideration of the May 1, //6 order, which was denied on une1, //6, and private respondent was allowed to present evidence e# parte. &etitioner filed another motion foreconsideration but the same was also denied on 'ctober ), //6.

'n uly :, //), a decision was renderedin favor of private respondent, the dispositive portion of which reads(

CD#9#+'9#, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiff Eina . 9ey againstdefendant acinto aguid(

a5 'rdering the partition of the house identified as plaintiffs #xhibit % and < and directing the defendant to return andJorreimburse to the plaintiff the amount of seventy thousand pesos 2&64,444,445 which the latter actually contributed to its

construction and completion;b5 <eclaring the plaintiff as the exclusive owner of the personal properties listed on #xhibit M;

c5 'rdering the defendant, andJor anyone in possession of the aforesaid personal properties, to return andJor deliver thesame to the plaintiff; and

d5 'rdering the defendant to pay the plaintiff moral damages in the sum of fifty thousand pesos 2&:4,444.445 plus thecosts of suit.

' '9<#9#<.

'n appeal, said decision was affirmed by the %ourt of Appeals; however, the award of &:4,444.44 as moral damageswas deleted for lac8 of basis. The appellate court ruled that the propriety of the order which declared the petitioner as indefault became moot and academic in view of the effectivity of the //6 9ules of %ivil &rocedure. "t explained that thenew rules now reBuire the filing of a pre-trial brief and the defendants non-compliance therewith entitles the plaintiff topresent evidence e# parte.

oth parties filed motions for reconsideration which were denied; hence, petitioner filed the instant petition based onthe following assigned errors(

A(

TD# D'@'9A># %'79T '+ A&&#A> %'MM"TT#<N A 9#O#9"># #99'9 "@ A&&>"@E 9#T9'A%T"O#>TD# //6 97># '+ %"O"> &9'%#<79# "@ TD# &9##@T %A# A@< D'><"@E TD# +"9T A"E@#< #99'9TD#9#"@ M''T A@< A%A<#M"% TD7, +A">#< T' 97># '@ TD# &9'&9"#T '+ TD# T9"A> %'79T 9#+7A>T' #T A"<# TD# '9<#9 '+ <#+A7>T <7# T' M"TA$# A@<J'9 #%7A># @#E>"E#@%# %'MM"TT#< &#T"T"'@#9.

"(

TD# D'@'9A># %'79T '+ A&&#A> %'MM"TT#<N A 9#O#9"># #99'9 "@ 9#>"@E '@ TD# +A%T7A>+"@<"@E '+ TD# T9"A> %'79T CD"%D 9#%#"O#< TD# #O"<#@%# '+ D#9#"@ 9#&'@<#@T '@> # &A9T#

The issues for resolution are( 25 whether or not the trial court erred in allowing private respondent to presentevidence e# parte; and 215 whether or not the trial courts decision is supported by evidence.

7nder ection *, 9ule ) of the //6 9ules of %ivil &rocedure, the failure of the defendant to file a pre-trial brief shalhave the same effect as failure to appear at the pre-trial, i.e., the plaintiff may present his evidence e# parte and the courshall render judgment on the basis thereof. The remedy of the defendant is to file a motion for reconsideration showingthat his failure to file a pre-trial brief was due to fraud, accident, mista8e or excusable neglect.The motion need not reallystress the fact that the defendant has a valid and meritorious defense because his answer which contains his defenses isalready on record.

"n the case at bar, petitioner insists that his failure to file a pre-trial brief is justified because he was not representedby counsel. This justification is not, however, sufficient to set aside the order directing private respondent to presentevidence e# parte, inasmuch as the petitioner chose at his own ris8 not to be represented by counsel. #ven without theassistance of a lawyer, petitioner was able to file a motion for extension to file answer, the reBuired answer stating therein

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the special and affirmative defenses, and several other motions. "f it were true that petitioner did not understand the importof the April 13, //6 order directing him to file a pre-trial brief, he could have inBuired from the court or filed a motion forextension of time to file the brief. "nstead, he waited until May 1*, //6, or 0 days from his alleged receipt of the April 13//6 order before he filed a motion as8ing the court to excuse his failure to file a brief.&re-trial rules are not to be belittledor dismissed because their non-observance may result in prejudice to a partys substantive rights. >i8e all rules, theyshould be followed except only for the most persuasive of reasons when they may be relaxed to relieve a litigant of aninjustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed.

"n the instant case, the fact that petitioner was not assisted by a lawyer is not a persuasive reason to relax theapplication of the rules. There is nothing in the %onstitution which mandates that a party in a non-criminal proceeding be

represented by counsel and that the absence of such representation amounts to a denial of due process. The assistanceof lawyers, while desirable, is not indispensable. The legal profession is not engrafted in the due process clause such thatwithout the participation of its members the safeguard is deemed ignored or violated.

Dowever, the %ourt of Appeals erred in ruling that the effectivity of the //6 9ules of %ivil &rocedure, specificallyection *, 9ule ) thereof, rendered moot and academic the issue of whether or not the plaintiff may be allowed topresent evidence e# parte for failure of the defendant to file a pre-trial brief. Chile the rules may indeed be appliedretroactively, the same is not called for in the case at bar. #ven before the //6 9ules of %ivil &rocedure too8 effect onuly , //6, the filing of a pre-trial brief was reBuired under %ircular @o. -)/ which became effective on +ebruary ,/)/. &ursuant to the said circular, fNailure to file pre-trial briefs may be given the same effect as the failure to appear atthe pre-trial, that is, the party may be declared non-suited or considered as in default.

%oming now to the substantive issue, it is not disputed that Eina and acinto were incapacitated to marry each otherbecause the former was validly married to another man at the time of her cohabitation with the latter. Their property

regime therefore is governed by Article 0) of the +amily %ode, which applies to bigamous marriages, adulterousrelationships, relationships in a state of concubinage, relationships where both man and woman are married to otherpersons, and multiple alliances of the same married man. 7nder this regime, only the properties acBuired by both of theparties through their actual joint contribution of money, property, or industry shall be owned by them in common inproportion to their respective contributions ... &roof of actual contribution is reBuired.

"n the case at bar, although the adulterous cohabitation of the parties commenced in /)6, which is before the dateof the effectivity of the +amily %ode on August 3, //), Article 0) thereof applies because this provision was intendedprecisely to fill up the hiatus in Article 00 of the %ivil %ode. efore Article 0) of the +amily %ode was enacted, there wasno provision governing property relations of couples living in a state of adultery or concubinage. Dence, even if thecohabitation or the acBuisition of the property occurred before the +amily %ode too8 effect, Article 0) governs.

"n the cases of Agapay v. 'alang , and %umlos v. ernande/ , which involved the issue of co-ownership of propertiesacBuired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that proof of actua

contribution in the acBuisition of the property is essential. The claim of co-ownership of the petitioners therein who wereparties to the bigamous and adulterous union is without basis because they failed to substantiate their allegation that theycontributed money in the purchase of the disputed properties. Also in Adriano v. *ourt of Appeals, we ruled that the facthat the controverted property was titled in the name of the parties to an adulterous relationship is not sufficient proof ofco-ownership absent evidence of actual contribution in the acBuisition of the property.

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature ofthe case, asserts an affirmative issue. %ontentions must be proved by competent evidence and reliance must be had onthe strength of the partys own evidence and not upon the wea8ness of the opponents defense. This applies with morevigor where, as in the instant case, the plaintiff was allowed to present evidence e# parte. The plaintiff is not automaticallyentitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove theallegations in the complaint. +avorable relief can be granted only after the court is convinced that the facts proven by theplaintiff warrant such relief. "ndeed, the party alleging a fact has the burden of proving it and a mere allegation is not

evidence."n the case at bar, the controversy centers on the house and personal properties of the parties. &rivate responden

alleged in her complaint that she contributed &64,444.44 for the completion of their house. Dowever, nowhere in hetestimony did she specify the extent of her contribution. Chat appears in the record are receipts in her name for thepurchase of construction materials on @ovember 6, //: and <ecember 13, //:, in the total amount of &,03.44.

'n the other hand, both parties claim that the money used to purchase the disputed personal properties came partlyfrom their joint account with +irst Allied <evelopment an8.Chile there is no Buestion that both parties contributed in their

joint account deposit, there is, however, no sufficient proof of the exact amount of their respective sharestherein. &ursuant to Article 0) of the +amily %ode, in the absence of proof of extent of the parties respective contributiontheir share shall be presumed to be eBual. Dere, the disputed personal properties were valued at &,36:.44, theexistence and value of which were not Buestioned by the petitioner. Dence, their share therein is eBuivalent to one-half, i.e., &::,*)6.:4 each.

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The %ourt of Appeals thus erred in affirming the decision of the trial court which granted the reliefs prayed for byprivate respondent. 'n the basis of the evidence established, the extent of private respondents co-ownership over thedisputed house is only up to the amount of &,03.44, her proven contribution in the construction thereof. Anent thepersonal properties, her participation therein should be limited only to the amount of &::,*)6.:4.

As regards the trial courts award of &:4,444.44 as moral damages, the %ourt of Appeals correctly deleted the samefor lac8 of basis.

WH%R%)OR%, in view of all the foregoing, the <ecision of the %ourt of Appeals in %A-E.9. %O @o. *0** is A++"9M#< with M'<"+"%AT"'@. &rivate respondent Eina . 9ey is declared co-owner of petitioner acinto aguid in thecontroverted house to the extent of &,03.44 and personal properties to the extent of &::,*)6.:4. &etitioner is orderedto reimburse the amount of &*6,44.:4 to private respondent, failing which the house shall be sold at public auction tosatisfy private respondents claim.

O OR#%R%#(

LU&O ATI%$.A'&etitione+'

- e+sus -

?OLA$#A #% ATRO'Res*ondent(

3(R( $o( 16B6B8 &resent( &7@', J., *hairperson,A@<'OA>-E7T"#99#,%'9'@A,

A%7@A, andEA9%"A, JJ.

&romulgated( @ovember 1/, 144*

x------------------------------------------------------------------------------------------x

# % I I O $

3ARIA' J (:

Assailed and sought to be set aside in this petition for review on certiorari is the <ecision dated April 1/, 144: of the %ourof Appeals 2%A5 in *A2.C. *! >o. 5GTGT,as reiterated in its 9esolution of eptember *, 144:, reversing an earlierdecision of the 9egional Trial %ourt 29T%5 of Ma8ati %ity, ranch *, in an action for Judicial 'artition of Cea'roperty thereat commenced by the herein petitioner >upo AtienIa against respondent olanda de %astro.The facts( ometime in /)3, petitioner >upo AtienIa, then the &resident and Eeneral Manager of #nrico hipping %orporation and#urasian Maritime %orporation, hired the services of respondent olanda 7. <e %astro as accountant for the twocorporations.

"n the course of time, the relationship between >upo and olanda became intimate.<espite >upo being a married man, heand olanda eventually lived together in consortium beginning the later part of /)3. 'ut of their union, two children wereborn. Dowever, after the birth of their second child, their relationship turned sour until they parted ways. 'n May 1), //1, >upo filed in the 9T% of Ma8ati %ity a complaint against olanda for the judicial partition between themof a parcel of land with improvements located in el-Air ubdivision, Ma8ati %ity and covered by Transfer %ertificate oTitle @o. 06)1) of the 9egistry of <eeds of Ma8ati %ity. "n his complaint, doc8eted in said court as %ivil %ase @o. /1013, >upo alleged that the subject property was acBuired during his union with olanda as common-law husband andwife, hence the property is co-owned by them. #laborating, >upo averred in his complaint that the property in Buestion was acBuired by olanda sometime in /)6 usinghis exclusive funds and that the title thereto was transferred by the seller in olandas name without his 8nowledge and

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consent. De did not interpose any objection thereto because at the time, their affair was still thriving. "t was only after theiseparation and his receipt of information that olanda allowed her new live-in partner to live in the disputed property, whenhe demanded his share thereat as a co-owner."n her answer, olanda denied >upos allegations. According to her, she acBuired the same property for Two Million ixDundred Thousand &esos 2&1,*44,444.445 using her exclusive funds. he insisted having bought it thru her own savingsand earnings as a businesswoman. "n a decision dated <ecember , 1444, the trial court rendered judgment for >upo by declaring the contested property asowned in common by him and olanda and ordering its partition between the two in eBual shares, thus(

CD#9#+'9#, judgment is hereby rendered declaring the property covered by Transfer %ertificate of Title @o. 06)1) of the 9egistry of <eeds of Ma8ati %ity to be owned in common by plaintiff >7&'

AT"#@A and the defendant '>A@<A 7. <# %AT9' share-and-share ali8e and ordering the partitionof said property between them. 7pon the finality of this <ecision, the parties are hereby directed to submitfor the confirmation of the %ourt a mutually agreed project of partition of said property or, in case thephysical partition of said property is not feasible because of its nature, that either the same be assigned toone of the parties who shall pay the value corresponding to the share of the other or that the property tobe sold and the proceeds thereof be divided eBually between the parties after deducting the expensesincident to said sale. The parties shall bear their own attorneys fees and expenses of litigation. %osts against the defendant.

' '9<#9#<. +rom the decision of the trial court, olanda went on appeal to the %A in *A2.C. *! >o. 5GTGT, therein arguing that theevidence on record preponderate that she purchased the disputed property in her own name with her own money. hemaintained that the documents appertaining to her acBuisition thereof are the best evidence to prove who actually boughtit, and refuted the findings of the trial court, as well as >upos assertions casting doubt as to her financial capacity toacBuire the disputed property.

As stated at the threshold hereof, the appellate court, in its decision of April 1/, 144:, reversed and set aside thaof the trial court and adjudged the litigated property as exclusively owned by olanda, to wit(

WH%R%)OR%' the foregoing considered, the assailed decision is herebyR%!%R%# and %T

AI#% . The subject property is hereby declared to be exclusively owned by defendant-appellant olanda

7. <e %astro. @o costs. O OR#%R%#(

"n decreeing the disputed property as exclusively owned by olanda, the %A ruled that under the provisions of Article 0)of the +amily %ode vis22vis the evidence on record and attending circumstances, olandas claim of sole ownership ismeritorious, as it has been substantiated by competent evidence. To the %A, >upo failed to overcome the burden ofproving his allegation that the subject property was purchased by olanda thru his exclusive funds.

Cith his motion for reconsideration having been denied by the %A in its 9esolution of eptember *, 144:, >upois now with this %ourt via the present recourse arguing that pursuant to Article 00 of the %ivil %ode, he was in no wayburdened to prove that he contributed to the acBuisition of the subject property because with or without the contribution byeither partner, he is deemed a co-owner thereof, adding that under Article 0)0 of %ivil %ode, as long as the propertywas acBuired by either or both of themduring their extramarital union, such property would be legally owned by them incommon and governed by the rules on co-ownership, which apply in default of contracts, or special provisions. Ce #%$?( "t is not disputed that the parties herein were not capacitated to marry each other because petitioner >upo AtienIa wasvalidly married to another woman at the time of his cohabitation with the respondent. Their property regime, therefore, isgoverned by Article 0) of the +amily %ode, which applies to bigamous marriages, adulterous relationships, relationshipsin a state of concubinage, relationships where both man and woman are married to other persons, and multiple alliancesof the same married man.7nder this regime, only the properties acquired by both of the parties through their actual $ointcontribution of money, property, or industry shall be owned by them in common in proportion to their respectivecontributions ... &roof of actual contribution is reBuired.

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As it is, the regime of limited co-ownership of property governing the union of parties who are not legally capacitated tomarry each other, but who nonetheless live together as husband and wife, applies to properties acBuired during saidcohabitation in proportion to their respective contributions. %o-ownership will only be up to the extent of the proven actualcontribution of money, property or industry. Absent proof of the extent thereof, their contributions and correspondingshares shall be presumed to be eBual. Dere, although the adulterous cohabitation of the parties commenced in /)3, or way before the effectivity of the +amily%ode on August 3, //), Article 0) thereof applies because this provision was intended precisely to fill up the hiatus in

Article 00 of the %ivil %ode. efore Article 0) of the +amily %ode was enacted, there was no provision governingproperty relations of couples living in a state of adultery or concubinage. Dence, even if the cohabitation or the acBuisitionof the property occurred before the +amily %ode too8 effect, Article 0) governs. The applicable law being settled, we now remind the petitioner that here, as in other civil cases, the burden of proof restsupon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. %ontentionsmust be proved by competent evidence and reliance must be had on the strength of the partys own evidence and notupon the wea8ness of the opponents defense. The petitioner as plaintiff below is not automatically entitled to the relieprayed for. The law gives the defendant some measure of protection as the plaintiff must still prove the allegations in thecomplaint. +avorable relief can be granted only after the court is convinced that the facts proven by the plaintiff warrantsuch relief. "ndeed, the party alleging a fact has the burden of proving it and a mere allegation is not evidence. "t is the petitioners posture that the respondent, having no financial capacity to acBuire the property in Buestion, merelymanipulated the dollar ban8 accounts of his two 215 corporations to raise the amount needed therefor. 7nfortunately forpetitioner, his submissions are burdened by the fact that his claim to the property contradicts duly written instruments, i.e.

the %ontract to ell dated March 10, /)6, the <eed of Assignment of 9edemption dated March 16, /)6 and the <eed oTransfer dated April 16, /)6, all entered into by and between the respondent and the vendor of said property, to theexclusion of the petitioner. As aptly pointed out by the %A(

%ontrary to the disBuisition of the trial court, >upoN failed to overcome this burden. &erusing the recordsof the case, it is evident that the trial court committed errors of judgment in its findings of fact andappreciation of evidence with regard to the source of the funds used for the purchase of the disputedproperty and ultimately the rightful owner thereof. +actual findings of the trial court are indeed entitled torespect and shall not be disturbed, unless some facts or circumstances of weight and substance havebeen overloo8ed or misinterpreted that would otherwise materially affect the disposition of the case. "n ma8ing proof of his case, it is paramount that the best and most complete evidence be formallyentered. 9ather than presenting proof of his actual contribution to the purchase money used as

consideration for the disputed property, >upoN diverted the burden imposed upon him to olandaN bypainting her as a shrewd and scheming woman without the capacity to purchase any property. "nstead of proving his ownership, or the extent thereof, over the subject property, >upoN relegated his complaint to amere attac8 on the financial capacity of olandaN. De presented documents pertaining to the ins and outsof the dollar accounts of #@9"%' and #79A"A@, which unfortunately failed to prove his actualcontribution in the purchase of the said property. The fact that olandaN had a limited access to the fundsof the said corporations and had repeatedly withdrawn money from their ban8 accounts for their behalf donot prove that the money she used in buying the disputed property, or any property for that matter, camefrom said withdrawals.

As it is, the disBuisition of the court a Buo heavily rested on the apparent financial capacity of the parties.'n one side, there is >upoN, a retired sea captain and the &resident and Eeneral Manager of twocorporations and on the other is olandaN, a %ertified &ublic Accountant. urmising that >upoN isfinancially well heeled than olandaN, the court a Buo concluded, sans evidence, that olandaN had ta8enadvantage of >upoN. %learly, the court a Buo is in error. 2Cords in brac8ets supplied.5

As we see it, petitioners claim of co-ownership in the disputed property is without basis because not only did he fail tosubstantiate his alleged contribution in the purchase thereof but li8ewise the very trail of documents pertaining to itspurchase as evidentiary proof redounds to the benefit of the respondent. "n contrast, aside from his mere say so andvoluminous records of ban8 accounts, which sadly find no relevance in this case, the petitioner failed to overcome hisburden of proof. Allegations must be proven by sufficient evidence. imply stated, he who alleges a fact has the burden ofproving it; mere allegation is not evidence. True, the mere issuance of a certificate of title in the name of any person does not foreclose the possibility that the reaproperty covered thereby may be under co-ownership with persons not named in the certificate or that the registrant mayonly be a trustee or that other parties may have acBuired interest subseBuent to the issuance of the certificate of title.Dowever, as already stated, petitioners evidence in support of his claim is either insufficient or immaterial to warrant the

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trial courts finding that the disputed property falls under the purview of Article 0) of the +amily %ode. "n contrast topetitioners dismal failure to prove his cause, herein respondent was able to present preponderant evidence of her soleownership. There can clearly be no co-ownership when, as here, the respondent sufficiently established that she derivedthe funds used to purchase the property from her earnings, not only as an accountant but also as a businesswomanengaged in foreign currency trading, money lending and jewelry retail. he presented her clientele and the promissorynotes evincing substantial dealings with her clients. he also presented her ban8 account statements and ban8transactions, which reflect that she had the financial capacity to pay the purchase price of the subject property.

All told, the %ourt finds and so holds that the %A committed no reversible error in rendering the herein challenged decisionand resolution. WH%R%)OR%, the instant petition is #%$I%# and the assailed issuances of the %A areA))IR,%#. %osts against the petitioner. O OR#%R%#(

3(R( $o( 10B1/ )eb+ua+= 5D' 5//B

A,ILO )( "ORRO,%O' &etitioner,vs.A$TO$I%TTA O( #%ALLAR' 9espondent.

< # % " " ' @

&U$O' C.J.:

Chat are the rights of an alien 2and his successor-in-interest5 who acBuired real properties in the country as against hisformer +ilipina girlfriend in whose sole name the properties were registered under the Torrens system?

The facts are as follows(

Cilhelm ambrich, an Austrian, arrived in the &hilippines in /)3 after he was assigned by his employer, immering-EraI&an8er A.E., an Austrian company, to wor8 at a project in Mindoro. "n /)0, he transferred to %ebu and wor8ed at the@aga "" &roject of the @ational &ower %orporation. There, he met respondent Antonietta 'palla-<escallar, a separatedmother of two boys who was wor8ing as a waitress at t. MoritI Dotel. ambrich befriended respondent and as8ed her totutor him in #nglish. "n dire need of additional income to support her children, respondent agreed. The tutorials were heldin Antonietta=s residence at a sBuatters= area in Eorordo Avenue.

ambrich and respondent fell in love and decided to live together in a rented house in Dernan %ortes, Mandaue %ity.>ater, they transferred to their own house and lots at Agro-Macro ubdivision, %abancalan, Mandaue %ity. "n the%ontracts to ell dated @ovember ), /): and March 4, /)* covering the properties, ambrich and respondent werereferred to as the buyers. A <eed of Absolute ale dated @ovember *, /)6 was li8ewise issued in their favor. Dowever,when the <eed of Absolute ale was presented for registration before the 9egister of <eeds, registration was refused onthe ground that ambrich was an alien and could not acBuire alienable lands of the public domain. %onseBuently,ambrich=s name was erased from the document. ut it could be noted that his signature remained on the left handmargin of page , beside respondent=s signature as buyer on page 3, and at the bottom of page 0 which is the last page.Transfer %ertificate of Title 2T%T5 @os. 106/4, 106/ and 106/1 over the properties were issued in respondent=s namealone.

ambrich also formally adopted respondent=s two sons in p. &roc. @o. 3/-MA@, and per <ecision of the 9egional Trial%ourt of Mandaue %ity dated May :, /)).

Dowever, the idyll lasted only until April //. y then, respondent found a new boyfriend while ambrich began to livewith another woman in <anao %ity. ambrich supported respondent=s sons for only two months after the brea8 up.

ambrich met petitioner %amilo +. orromeo sometime in /)*. &etitioner was engaged in the real estate business. Dealso built and repaired speedboats as a hobby. "n /)/, ambrich purchased an engine and some accessories for his boat

from petitioner, for which he became indebted to the latter for about &:4,444.44. To pay for his debt, he sold his rightsand interests in the Agro-Macro properties to petitioner for &1:4,444, as evidenced by a !<eed of AbsolutealeJAssignment.! 'n uly 1*, //, when petitioner sought to register the deed of assignment, he discovered that titlesto the three lots have been transferred in the name of respondent, and that the subject property has already beenmortgaged.

'n August 1, //, petitioner filed a complaint against respondent for recovery of real property before the 9egional Trial%ourt of Mandaue %ity. &etitioner alleged that the %ontracts to ell dated @ovember ), /): and March 4, /)* andthe <eed of Absolute ale dated @ovember *, /)6 over the properties which identified both ambrich and respondentas buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchaseprice and was not in fact a buyer; that it was ambrich alone who paid for the properties using his exclusive funds; thatambrich was the real and absolute owner of the properties; and, that petitioner acBuired absolute ownership by virtue ofthe <eed of Absolute aleJAssignment dated uly , // which ambrich executed in his favor.

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"n her Answer, respondent belied the allegation that she did not pay a single centavo of the purchase price. 'n thecontrary, she claimed that she !solely and exclusively used her own personal funds to defray and pay for the purchaseprice of the subject lots in Buestion,! and that ambrich, being an alien, was prohibited to acBuire or own real property inthe &hilippines.

At the trial, respondent presented evidence showing her alleged financial capacity to buy the disputed property withmoney from a supposed copra business. &etitioner, in turn, presented ambrich as his witness and documentary evidenceshowing the substantial salaries which ambrich received while still employed by the Austrian company, immering-EraI&an8er A.E.

"n its decision, the court a Buo foundZ

#vidence on hand clearly show that at the time of the purchase and acBuisition of theN properties under litigation thatCilhelm ambrich was still wor8ing and earning much. This fact of ambrich earning much is not only supported bydocumentary evidence but also by the admission made by the defendant AntoniettNa 'palla. o that, ambrich=s financialcapacity to acBuire and purchase the properties . . . is not disputed.

x x x'n the other hand, evidence . . . clearly show that before defendant met ambrich sometime in the latter part of /)0, shewas only wor8ing as a waitress at the t. MoritI Dotel with an income of &,444.44 a month and was . . . renting and livingonly in . . . aN room at . . . aN sBuatter area at Eorordo Ave., %ebu %ity; that ambrich too8 pity of her and the situation ofher children that he offered her a better life which she readily accepted. "n fact, this miserable financial situation of hersand her two children . . . are all stated and reflected in the %hild tudy 9eport dated April 14, /)3 2#xhs. !E! and !E-!5which facts she supplied to the ocial Cor8er who prepared the same when she was personally interviewed by her inconnection with the adoption of her two children by Cilhelm ambrich. o that, if such facts were not true because theseare now denied by her . . . and if it was also true that during this time she was already earning as much as &),444.44

to &/,444.44 as profit per month from her copra business, it would be highly unbelievable and impossible for her to beliving only in such a miserable condition since it is the observation of this %ourt that she is not only an extravagant butalso an expensive person and not thrifty as she wanted to impress this %ourt in order to have a big saving as clearlyshown by her actuation when she was already cohabiting and living with ambrich that according to her . . . the allowancegiven . . . by him in the amount of [:44.44 a month is not enough to maintain the education and maintenance of herchildren.

This being the case, it is highly improbable and impossible that she could acBuire the properties under litigation or couldcontribute any amount for their acBuisition which according to her is worth more than &644,444.44 when while she waswor8ing as aN waitress at t. MoritI Dotel earning &,444.44 a month as salary and tips of more or less &1,444.44 shecould not even provide forN the daily needs of her family so much so that it is safe to conclude that she was really infinancial distress when she met and accepted the offer of ambrich to come and live with him because that was a bigfinancial opportunity for her and her children who were already abandoned by her husband.

x x x

The only probable and possible reason why her name appeared and was included in the contracts to sell dated@ovember ), /): and March 4, /)* and finally, the deed of absolute sale dated @ovember *, /)6N as buyer isbecause as observed by the %ourt, she being a scheming and exploitive woman, she has ta8en advantage of thegoodness of ambrich who at that time was still bewitched by her beauty, sweetness, and good attitude shown by her tohim since he could still very well provide for everything she needs, he being earning 2sic5 much yet at that time. "n fact, asobserved by this %ourt, the acBuisition of these properties under litigation was at the time when their relationship was stillgoing smoothly and harmoniously. #mphasis supplied.NThe dispositive portion of the <ecision states(

CD#9#+'9#, . . . <ecision is hereby rendered in favor of the plaintiff and against the defendant AntoniettNa 'palla by(5 <eclaring plaintiff as the owner in fee simple over the residential house of strong materials and three parcels ofland designated as >ot @os. , 3 and : which are covered by T%T @os. 106/4, 106/ and 106/1 issued by the9egister of <eeds of Mandaue %ity;

15 <eclaring as null and void T%T @os. 106/4, 106/ and 106/1 issued in the name of defendant AntoniettNa<escallar by the 9egister of <eeds of Mandaue %ity;35 'rdering the 9egister of <eeds of Mandaue %ity to cancel T%T @os. 106/4, 106/ and 106/1 in the name ofdefendant AntoniettNa <escallar and to issue new ones in the name of plaintiff %amilo +. orromeo;

05 <eclaring the contracts now mar8ed as #xhibits !",! !$! and !>! as avoided insofar as they appear to conveyrights and interests over the properties in Buestion to the defendant AntoniettNa <escallar;:5 'rdering the defendant to pay plaintiff attorney=s fees in the amount of &1:,444.44 and litigation expenses inthe amount of &4,444.44; and,

*5 To pay the costs.9espondent appealed to the %ourt of Appeals. "n a <ecision dated April 4, 1441, the appellate court reversed thedecision of the trial court. "n ruling for the respondent, the %ourt of Appeals held(

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Ce disagree with the lower court=s conclusion. The circumstances involved in the case cited by the lower court and similarcases decided on by the upreme %ourt which upheld the validity of the title of the subseBuent +ilipino purchasers areabsent in the case at bar. "t should be noted that in said cases, the title to the subject property has been issued in thename of the alien transferee 2EodineI et al., vs. +ong &a8 >uen et al., 14 %9A 113 citing $riven8o vs. 9egister of<eeds of Manila, 6/ &hils. 0*; 7nited %hurch oard for Corld Ministries vs. ebastian, :/ %9A 00*, citing the case ofarsosa Oda. <e arsobia vs. %uenco, 3 %9A :06; Tejido vs. amacoma, 3) %9A 6)5. "n the case at bar, the titleof the subject property is not in the name of ambrich but in the name of defendant-appellant. Thus, ambrich could nothave transferred a property he has no title thereto.

&etitioner=s motion for reconsideration was denied.

Dence, this petition for review.&etitioner assigns the following errors(

". TD# D'@'9A># %'79T '+ A&&#A> #9"'7> #99#< "@ <"9#EA9<"@E 9#&'@<#@T= 7<"%"A> A<M""'@ A@< 'TD#9 'O#9CD#>M"@E #O"<#@%# #TA>"D"@E AM9"%D= &A9T"%"&AT"'@, "@T#9#T A@< 'C@#9D"& '+ TD# &9'&#9T"# "@ P7#T"'@ A +'7@< TD# D'@'9A># T9"A> %'79T."". TD# D'@'9A># %'79T '+ A&&#A> #9"'7> #99#< "@ D'><"@E TDAT AM9"%D DA @' T"T># T'TD# &9'&#9T"# "@ P7#T"'@ A@< MA @'T TD#9#+'9# T9A@+#9 A@< A"E@ A@ 9"EDT A@<"@T#9#T "@ +AO'9 '+ &#T"T"'@#9.

""". TD# D'@'9A># %'79T '+ A&&#A> #9"'7> #99#< "@ 9#O#9"@E TD# C#>>-9#A'@#< <#%""'@'+ TD# T9"A> %'79T A@< "@ "M&'"@E <'7># %'T AEA"@T D#9#"@ &#T"T"'@#9 2TD#@, &>A"@T"++-

A&&#>>##5.+irst, who purchased the subject properties?

The evidence clearly shows, as pointed out by the trial court, who between respondent and ambrich possesses thefinancial capacity to acBuire the properties in dispute. At the time of the acBuisition of the properties in /): to /)*,ambrich was gainfully employed at immering-EraI &an8er A.E., an Austrian company. De was earning an estimatedmonthly salary of &:4,444.44. Then, ambrich was assigned to yria for almost one year where his monthly salary wasapproximately &/4,444.44.

'n the other hand, respondent was employed as a waitress from /)0 to /): with a monthly salary of not morethan &,444.44. "n /)*, when the parcels of land were acBuired, she was unemployed, as admitted by her during thepre-trial conference. Der allegations of income from a copra business were unsubstantiated. The supposed coprabusiness was actually the business of her mother and their family, with ten siblings. he has no license to sell copra, andhad not filed any income tax return. All the motoriIed bancas of her mother were lost to fire, and the last one left standingwas already scrap. +urther, the %hild tudy 9eport submitted by the <epartment of ocial Celfare and <evelopment2<C<5 in the adoption proceedings of respondent=s two sons by ambrich disclosed that(

Antonietta tried all types of job to support the children until she was accepted as a waitress at t. MoritI 9estaurant in

/)0. At first she had no problem with money because most of the customers of t. MoritI are 2sic5 foreigners and theygave good tips but towards the end of /)0 there were no more foreigners coming because of the situation in the&hilippines at that time. Der financial problem started then. he was even renting a small room in a sBuatters area inEorordo Ave., %ebu %ity. "t was during her time of great financial distress that she met Cilhelm ambrich who later offeredher a decent place for herself and her children.The <C< Dome tudy 9eport further disclosed that(

ambrichN was then at the 9estaurant of t. MoritI when he saw Antonietta <escallar, one of the waitresses of the said9estaurants. De made friends with the girl and as8ed her to tutor him in theN #nglish language. Antonietta accepted theoffer because she was in need of additional income to support herN 1 young children who were abandoned by their father.Their session was agreed to be scheduled every afternoon at the residence of Antonietta in the sBuatters area in Eorordo

Avenue, %ebu %ity. The Austrian was observing the situation of the family particularly the children who weremalnourished. After a few months sessions, Mr. ambrich offered to transfer the family into a decent place. De told

Antonietta that the place is not good for the children. Antonietta who was miserable and financially distressed at that time

accepted the offer for the sa8e of the children.+urther, the following additional pieces of evidence point to ambrich as the source of fund used to purchase the threeparcels of land, and to construct the house thereon(

25 9espondent <escallar herself affirmed under oath, during her re-direct examination and during theproceedings for the adoption of her minor children, that ambrich was the owner of the properties in Buestion, butthat his name was deleted in the <eed of Absolute ale because of legal constraints. @onetheless, his signatureremained in the deed of sale, where he signed as buyer.

215 The money used to pay the subject parcels of land in installments was in postdated chec8s issued byambrich. 9espondent has never opened any account with any ban8. 9eceipts of the installment payments werealso in the name of ambrich and respondent.

235 "n /)*-/)6, respondent lived in yria with ambrich and her two children for ten months, where she wascompletely under the support of ambrich.

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205 ambrich executed a >ast Cill and Testament, where he, as owner, beBueathed the subject properties torespondent.

Thus, ambrich has all authority to transfer all his rights, interests and participation over the subject properties to petitionerby virtue of the <eed of Assignment he executed on uly , //.

Cell-settled is the rule that this %ourt is not a trier of facts. The findings of fact of the trial court are accorded great weightand respect, if not finality by this %ourt, subject to a number of exceptions. "n the instant case, we find no reason to disturbthe factual findings of the trial court. #ven the appellate court did not controvert the factual findings of the trial court. Theydiffered only in their conclusions of law.

+urther, the fact that the disputed properties were acBuired during the couple=s cohabitation also does not help

respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as husband andwife without the benefit of marriage, but are otherwise capacitated to marry each other, does not apply. "n the instant caserespondent was still legally married to another when she and ambrich lived together. "n such an adulterous relationship,no co-ownership exists between the parties. "t is necessary for each of the partners to prove his or her actual contributionto the acBuisition of property in order to be able to lay claim to any portion of it. &resumptions of co-ownership and eBualcontribution do not apply.

econd, we dispose of the issue of registration of the properties in the name of respondent alone. Daving found that thetrue buyer of the disputed house and lots was the Austrian Cilhelm ambrich, what now is the effect of registration of theproperties in the name of respondent?"t is settled that registration is not a mode of acBuiring ownership. "t is only a means of confirming the fact of its existencewith notice to the world at large. %ertificates of title are not a source of right. The mere possession of a title does not ma8eone the true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in hername does not necessarily, conclusively and absolutely ma8e her the owner. The rule on indefeasibility of title li8ewise

does not apply to respondent. A certificate of title implies that the title is Buiet,and that it is perfect, absolute andindefeasible. Dowever, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faithand did not acBuire the subject properties for a valuable consideration. This is the situation in the instant case.9espondent did not contribute a single centavo in the acBuisition of the properties. he had no income of her own at thattime, nor did she have any savings. he and her two sons were then fully supported by ambrich.

9espondent argued that aliens are prohibited from acBuiring private land. This is embodied in ection 6, Article "" of the/)6 %onstitution, which is basically a reproduction of ection :, Article """ of the /3: %onstitution, and ection 0,

Article "O of the /63 %onstitution. The capacity to acBuire private land is dependent on the capacity !to acBuire or holdlands of the public domain.! &rivate land may be transferred only to individuals or entities !Bualified to acBuire or holdlands of the public domain.! 'nly +ilipino citiIens or corporations at least *4S of the capital of which is owned by +ilipinosare Bualified to acBuire or hold lands of the public domain. Thus, as the rule now stands, the fundamental law explicitlyprohibits non-+ilipinos from acBuiring or holding title to private lands, except only by way of legal succession or if theacBuisition was made by a former natural-born citiIen.

Therefore, in the instant case, the transfer of land from Agro-Macro <evelopment %orporation to ambrich, who is an Austrian, would have been declared invalid if challenged, had not ambrich conveyed the properties to petitioner who is a+ilipino citiIen. "n 7nited %hurch oard for Corld Ministries v. ebastian, the %ourt reiterated the consistent ruling in anumber of cases that if land is invalidly transferred to an alien who subseBuently becomes a +ilipino citiIen or transfers itto a +ilipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.

Applying 7nited %hurch oard for Corld Ministries, the trial court ruled in favor of petitioner, viI.(

CNhile the acBuisition and the purchase of 2sic5 Cilhelm ambrich of the properties under litigation wereN void ab initiosince they wereN contrary to the %onstitution of the &hilippines, he being a foreigner, yet, the acBuisition of theseproperties by plaintiff who is a +ilipino citiIen from him, has cured the flaw in the original transaction and the title of thetransferee is valid.

The trial court upheld the sale by ambrich in favor of petitioner and ordered the cancellation of the T%Ts in the name ofrespondent. "t declared petitioner as owner in fee simple of the residential house of strong materials and three parcels ofland designated as >ot @os. , 3 and :, and ordered the 9egister of <eeds of Mandaue %ity to issue new certificates oftitle in his name. The trial court li8ewise ordered respondent to pay petitioner &1:,444 as attorney=s fees and &4,444 aslitigation expenses, as well as the costs of suit.

Ce affirm the 9egional Trial %ourt.The rationale behind the %ourt=s ruling in 7nited %hurch oard for Corld Ministries, as reiterated in subseBuent cases, isthis R since the ban on aliens is intended to preserve the nation=s land for future generations of +ilipinos, that aim isachieved by ma8ing lawful the acBuisition of real estate by aliens who became +ilipino citiIens by naturaliIation or thosetransfers made by aliens to +ilipino citiIens. As the property in dispute is already in the hands of a Bualified person, a+ilipino citiIen, there would be no more public policy to be protected. The objective of the constitutional provision to 8eepour lands in +ilipino hands has been achieved.

"@ O"#C CD#9#'+, the petition is E9A@T#<. The <ecision of the %ourt of Appeals in %.A. E.9. %O @o. 01/1/ dated April 4, 1441 and its 9esolution dated uly ), 1443 are 9#O#9#< and #T A"<#. The <ecision of the 9egional Trial%ourt of Mandaue %ity in %ivil %ase @o. MA@-0) is 9#"@TAT#<.

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' '9<#9#<.

)IRT #I!IIO$

3(R( $o( 171B1D' ul= 5' 5/1D

OL%#A# L( LA!A#IA, 'etitioner , v. H%IR O) UA$ LU% LU$A' R%&R%%$T%# "? 3R%3ORIO .( LU$A A$#%U3%$IA .A"ALL%RO-LU$A, Cespondents.

# % I I O $

The ase

The petitioner, the second wife of the late Atty. uan >uces >una, appeals the adverse decision promulgated on @ovember, 144:, whereby the %ourt of Appeals 2%A5 affirmed with modification the decision rendered on August 16, 144 by the9egional Trial %ourt 29T%5, ranch 3), in Ma8ati %ity. The %A thereby denied her right in the 1:J44 pro indiviso share othe husband in a condominium unit, and in the law boo8s of the husband acBuired during the second marriage.

Ante4edents

The antecedent facts were summariIed by the %A as follows(

ATT. >7@A, a practicing lawyer, was at first a name partner in the prestigious law firm ycip, alaIar, >una, ManaloDernandeI V +eliciano >aw 'ffices at that time when he was living with his first wife, herein intervenor-appellant #ugenia

aballero->una 2#7E#@"A5, whom he initially married in a civil ceremony conducted by the ustice of the &eace of&araQaBue, 9iIal on eptember 4, /06 and later solemniIed in a church ceremony at the &ro-%athedral in an Miguelulacan on eptember 1, /0). "n ATT. >7@A=s marriage to #7E#@"A, they begot seven 265 children, namely( 9eginaMaria >. @adal, uan >uis >una, Araceli Oictoria >. Arellano, Ana Maria >. Tabunda, Eregorio Macario >una, %arolina>inda >. Tapia, and %esar Antonio >una. After almost two 215 decades of marriage, ATT. >7@A and #7E#@"A eventuallyagreed to live apart from each other in +ebruary /** and agreed to separation of property, to which end, they enteredinto a written agreement entitled KAE9##M#@T +'9 #&A9AT"'@ A@< &9'&#9T #TT>#M#@TL dated @ovembe1, /6:, whereby they agreed to live separately and to dissolve and liBuidate their conjugal partnership of property.

'n anuary 1, /6*, ATT. >7@A obtained a divorce decree of his marriage with #7E#@"A from the %ivil and%ommercial %hamber of the +irst %ircumscription of the %ourt of +irst "nstance of to. <omingo, <ominican 9epublic

Also in to. <omingo, <ominican 9epublic, on the same date, ATT. >7@A contracted another marriage, this time with'>#<A<. Thereafter, ATT. >7@A and '>#<A< returned to the &hilippines and lived together as husband and wifeuntil /)6

ometime in /66, ATT. >7@A organiIed a new law firm named( >una, &uruganan, ison and 'ng8i8o 2>7&"%'@5where ATT. >7@A was the managing partner

'n +ebruary 0, /6), >7&"%'@ through ATT. >7@A purchased from Tandang ora <evelopment %orporation the *th+loor of $alaw->edesma %ondominium &roject 2condominium unit5 at Eamboa t., Ma8ati %ity, consisting of :6.:1sBuare meters, for &,00/,4:*.44, to be paid on installment basis for 3* months starting on April :, /6). aidcondominium unit was to be used as law office of >7&"%'@. After full payment, the <eed of Absolute ale over thecondominium unit was executed on uly :, /)3, and %%T @o. 066/ was issued on August 4, /)3, which wasregistered bearing the following names(K7A@ >7%# >7@A, married to oledad >. >una 20*J445; MA9"' #. '@E$"$', married to onia &.E. 'ng8i8o21:J445; E9#E'9"' 9. &797EA@A@, married to &aI A. &uruganan 26J445; and T#9#"TA %97 "'@, married to

Antonio .M. ison 21J445 x x xL

ubseBuently, )J44 share of ATT. >7@A and 6J44 share of Atty. Eregorio 9. &uruganan in the condominium unit wassold to Atty. Mario #. 'ng8i8o, for which a new %%T @o. 16* was issued on +ebruary 6, //1 in the following names(K7A@ >7%# >7@A, married to oledad >. >una 23)J445; MA9"' #. '@E$"$', married to onia &.E. 'ng8i8o2:4J445; T#9#"TA %97 "'@, married to Antonio .M. ison 21J445 x x xL

ometime in //1, >7&"%'@ was dissolved and the condominium unit was partitioned by the partners but the samewas still registered in common under %%T @o. 16*. The parties stipulated that the interest of ATT. >7@A over thecondominium unit would be 1:J44 share

ATT. >7@A thereafter established and headed another law firm with Atty. 9enato E. <e la %ruI and used a portion of theoffice condominium unit as their office. The said law firm lasted until the death of ATT. 7A@ on uly 1, //6.

After the death of ATT. 7A@, his share in the condominium unit including the lawboo8s, office furniture and eBuipment

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found therein were ta8en over by Eregorio . >una, ATT. >7@A=s son of the first marriage. Eregorio . >una then leasedout the 1:J44 portion of the condominium unit belonging to his father to Atty. 9enato E. <e la %ruI who established hisown law firm named 9enato E. <e la %ruI V Associates

The 1:J44 pro2indiviso share of ATT. >una in the condominium unit as well as the law boo8s, office furniture andeBuipment became the subject of the complaint filed by '>#<A< against the heirs of ATT. 7A@ with the 9T% ofMa8ati %ity, ranch 3), on eptember 4, ///, doc8eted as %ivil %ase @o. //-*00. The complaint alleged that thesubject properties were acBuired during the existence of the marriage between ATT. >7@A and '>#<A< through thei

joint efforts that since they had no children, '>#<A< became co-owner of the said properties upon the death of ATT>7@A to the extent of ^ pro-indiviso share consisting of her Y share in the said properties plus her Y share in the netestate of ATT. >7@A which was beBueathed to her in the latter=s last will and testament; and that the heirs of ATT>7@A through Eregorio . >una excluded '>#<A< from her share in the subject properties. The complaint prayed that'>#<A< be declared the owner of the ^ portion of the subject properties; that the same be partitioned; that anaccounting of the rentals on the condominium unit pertaining to the share of '>#<A< be conducted; that a receiver beappointed to preserve ad administer the subject properties; and that the heirs of ATT. >7@A be ordered to pay attorney=sfees and costs of the suit to '>#<A<.

Ruling of the RT

'n August 16, 144, the 9T% rendered its decision after trial upon the aforementioned facts, disposing thusly(

CD#9#+'9#, judgment is rendered as follows

2a5 The 10J44 pro-indiviso share in the condominium unit located at the "TD +>''9 of the $A>AC >#<#MA%'@<'M"@"7M &9'#%T covered by %ondominium %ertificate of Title @o. 16* consisting of +"O# D7@<9#<#O#@T##@ 2:6J445 P7A9# M#T#9 is adjudged to have been acBuired by uan >ucas >una through his soleindustry;

2b5 &laintiff has no right as owner or under any other concept over the condominium unit, hence the entry in %ondominium%ertificate of Title @o. 16* of the 9egistry of <eeds of Ma8ati with respect to the civil status of uan >uces >una shouldbe changed from K7A@ >7%# >7@A married to oledad >. >unaL to K7A@ >7%# >7@A married to #ugenia aballero>unaL;

2c5 &laintiff is declared to be the owner of the boo8s %orpus uris, +letcher on %orporation, American urisprudence and+ederal upreme %ourt 9eports found in the condominium unit and defendants are ordered to deliver them to the plaintiffas soon as appropriate arrangements have been made for transport and storage

@o pronouncement as to costs

' '9<#9#<.

#e4ision of the A

oth parties appealed to the %A.

'n her part, the petitioner assigned the following errors to the 9T%, namely(

". TD# >'C#9 %'79T #99#< "@ 97>"@E TDAT TD# %'@<'M"@"7M 7@"T CA A%P7"9#< TD9TD# '># "@<7T9 '+ ATT. 7A@ >7%# >7@A;

"". TD# >'C#9 %'79T #99#< "@ 97>"@E TDAT &>A"@T"++-A&&#>>A@T <"< @'T %'@T9"7TM'@# +'9 TD# A%P7""T"'@ '+ TD# %'@<'M"@"7M 7@"T;

""". TD# >'C#9 %'79T #99#< "@ E"O"@E %9#<#@%# T' &'9T"'@ '+ TD# T#T"M'@ 'E9#E'9"' >7@A, CD' DA @' A%T7A> $@'C>#<E# '+ TD# A%P7""T"'@ '+ TD# 7@"T, 7T"E@'9#< 'TD#9 &'9T"'@ '+ D" T#T"M'@ +AO'9A># T' TD# &>A"@T"++-A&&#>>A@T;

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"O. TD# >'C#9 %'79T #99#< "@ @'T E"O"@E "E@"+"%A@%# T' TD# +A%T TDAT TD# %'@7EA&A9T@#9D"& #TC##@ >7@A A@< "@T#9O#@'9-A&&#>>A@T CA A>9#A< <"'>O#< A@<>"P7"<AT#< &9"'9 T' TD# 7@"'@ '+ &>A"@T"++-A&&#>>A@T A@< >7@A;

O. TD# >'C#9 %'79T #99#< "@ E"O"@E 7@<7# "E@"+"%A@%# T' TD# A#@%# '+ TD#<"&'"T"'@ '+ TD# %'@<'M"@"7M 7@"T "@ TD# D'>'E9A&D"% C">> '+ TD# &>A"@T"++

A&&#>>A@T;

O". TD# >'C#9 %'79T #99#< "@ E"O"@E 7@<7# "E@"+"%A@%# T' TD# +A%T TDAT TD# @AM# '&>A"@T"++-A&&#>>A@T <"< @'T A&&#A9 "@ TD# <##< '+ A'>7T# A># ##%7T#< TA@<A@E '9A <#O#>'&M#@T %'9&'9AT"'@ 'O#9 TD# %'@<'M"@"7M 7@"T;

O"". TD# >'C#9 %'79T #99#< "@ 97>"@E TDAT @#"TD#9 A9T"%># 0) '+ TD# +AM"> %'<# @'9 A9T"%># 00 '+ TD# %"O"> %'<# '+ TD# &D">"&&"@# A9# A&&>"%A>#;

O""". TD# >'C#9 %'79T #99#< "@ @'T 97>"@E TDAT TD# %A7# '+ A%T"'@ '+ TD# "@T#9O#@'9 A&&#>>A@T DA ##@ A99#< &#%9"&T"'@ A@< >A%D#; and

". TD# >'C#9 %'79T #99#< "@ @'T #&7@E"@EJ<"M""@E TD# "@T#9O#@T"'@ +'9 +A">79'+ "@T#9O#@'9-A&&#>>A@T T' &A +">"@E +##.

"n contrast, the respondents attributed the following errors to the trial court, to wit(

". TD# >'C#9 %'79T #99#< "@ D'><"@E TDAT %#9TA"@ +'9#"E@ >AC ''$ "@ TD# >AC'++"%# '+ ATT. >7@A C#9# '7EDT C"TD TD# 7# '+ &>A"@T"++= M'@#;

"". TD# >'C#9 %'79T #99#< "@ D'><"@E TDAT &>A"@T"++ &9'O#< &9#&'@<#9A@%# '#O"<#@%# 2D#9 %>A"M 'O#95 TD# &#%"+"#< +'9#"E@ >AC ''$ +'7@< "@ ATT. >7@A=>AC '++"%#; and

""". TD# >'C#9 %'79T #99#< "@ @'T D'><"@E TDAT, A7M"@E &>A"@T"++ &A"< +'9 TD# A"<+'9#"E@ >AC ''$, TD# 9"EDT T' 9#%'O#9 TD#M DA< &9#%9"#< A@< A99#< >A%D# A@< #T'&&#>.

'n @ovember , 144:, the %A promulgated its assailed modified decision, holding and ruling(

#7E#@"A, the first wife, was the legitimate wife of ATT. >7@A until the latter=s death on uly 1, //6. The absolutedivorce decree obtained by ATT. >7@A in the <ominican 9epublic did not terminate his prior marriage with #7E#@"Abecause foreign divorce between +ilipino citiIens is not recogniIed in our jurisdiction. x x x

x x x x

WH%R%)OR%, premises considered, the assailed August 16, 144 <ecision of the 9T% of Ma8ati %ity, ranch 3), ishereby M'<"+"#< as follows(

2a5 The 1:J44 pro-indiviso share in the condominium unit at the "TD +>''9 of the $A>AC >#<#MA

%'@<'M"@"7M &9'#%T covered by %ondominium %ertificate of Title @o. 16* consisting of +"O# D7@<9#<#O#@T##@ 2:6J445 2sic5 P7A9# M#T#9 is hereby adjudged to defendants-appellants, the heirs of uan >uces>una and #ugenia aballero->una 2first marriage5, having been acBuired from the sole funds and sole industry of uan>uces >una while marriage of uan >uces >una and #ugenia aballero->una 2first marriage5 was still subsisting and valid;

2b5 &laintiff-appellant oledad >avadia has no right as owner or under any other concept over the condominium unithence the entry in %ondominium %ertificate of Title @o. 16* of the 9egistry of <eeds of Ma8ati with respect to the civistatus of uan >uces >una should be changed from K7A@ >7%# >7@A married to oledad >. >unaL to K7A@ >7%#>7@A married to #ugenia aballero >unaL

2c5 <efendants-appellants, the heirs of uan >uces >una and #ugenia aballero->una 2first marriage5 are hereby declaredto be the owner of the boo8s %orpus uris, +letcher on %orporation, American urisprudence and +ederal upreme %ourt9eports found in the condominium unit

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O OR#%R%#.

'n March 3, 144*, the %A denied the petitioner=s motion for reconsideration.

Issues

"n this appeal, the petitioner avers in her petition for review on certiorari that(

A. The Donorable %ourt of Appeals erred in ruling that the Agreement for eparation and &ropertyettlement executed by >una and 9espondent #ugenia was unenforceable; hence, their conjugapartnership was not dissolved and liBuidated;

. The Donorable %ourt of Appeals erred in not recogniIing the <ominican 9epublic court=s approval of the Agreement;

%. The Donorable %ourt of Appeals erred in ruling that &etitioner failed to adduce sufficient proof of actuacontribution to the acBuisition of purchase of the subject condominium unit; and

<. The Donorable %ourt of Appeals erred in ruling that &etitioner was not entitled to the subject law boo8s.

The decisive Buestion to be resolved is who among the contending parties should be entitled to the 1:J44 proindiviso share in the condominium unit; and to the law boo8s 2i.e., %orpus uris, +letcher on %orporation, Americanurisprudence and +ederal upreme %ourt 9eports5.

The resolution of the decisive Buestion reBuires the %ourt to ascertain the law that should determine, firstly, whether thedivorce between Atty. >una and #ugenia aballero->una 2#ugenia5 had validly dissolved the f irst marriage; and, secondly,whether the second marriage entered into by the late Atty. >una and the petitioner entitled the latter to any rights inproperty.

Ruling of the ou+tCe affirm the modified decision of the %A.

1(Att=( LunaEs fi+st 9a++iage with %ugenia

subsisted u* to the ti9e of his death

The first marriage between Atty. >una and #ugenia, both +ilipinos, was solemniIed in the &hilippines on eptember 4,/06. The law in force at the time of the solemniIation was the +panish *ivil *ode, which adopted the nationality rule.The *ivil *ode continued to follow the nationality rule, to the effect that &hilippine laws relating to family rights and duties,or to the status, condition and legal capacity of persons were binding upon citiIens of the &hilippines, although livingabroad. &ursuant to the nationality rule, &hilippine laws governed this case by virtue of both Atty. >una and #ugeniohaving remained +ilipinos until the death of Atty. >una on uly 1, //6 terminated their marriage.

+rom the time of the celebration of the first marriage on eptember 4, /06 until the present, absolute divorce between+ilipino spouses has not been recogniIed in the &hilippines. The non-recognition of absolute divorce between +ilipinoshas remained even under the amily *ode, even if either or both of the spouses are residing abroad. "ndeed, the only twotypes of defective marital unions under our laws have been the void and the voidable marriages. As such, the remediesagainst such defective marriages have been limited to the declaration of nullity of the marriage and the annulment of themarriage.

"t is true that on anuary 1, /6*, the %ourt of +irst "nstance 2%+"5 of to. <omingo in the <ominican 9epublic issued the<ivorce <ecree dissolving the first marriage of Atty. >una and #ugenia. %onformably with the nationality rule, however, thedivorce, even if voluntarily obtained abroad, did not dissolve the marriage between Atty. >una and #ugenia, which

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subsisted up to the time of his death on uly 1, //6. This finding conforms to the %onstitution, which characteriIesmarriage as an inviolable social institution,and regards it as a special contract of permanent union between a man and awoman for the establishment of a conjugal and family life. The non-recognition of absolute divorce in the &hilippines is amanifestation of the respect for the sanctity of the marital union especially among +ilipino citiIens. "t affirms that theextinguishment of a valid marriage must be grounded only upon the death of either spouse, or upon a ground expresslyprovided by law. +or as long as this public policy on marriage between +ilipinos exists, no divorce decree dissolving themarriage between them can ever be given legal or judicial recognition and enforcement in this jurisdiction.

5(The Agree)ent for 'eparation and Propert* 'ettle)ent

was oid fo+ la4@ of 4ou+t a**+oal

The petitioner insists that the Agreement for +eparation and 'roperty +ettlement 2Agreement5 that the late Atty. >una and#ugenia had entered into and executed in connection with the divorce proceedings before the %+" of to. <omingo in the<ominican 9epublic to dissolve and liBuidate their conjugal partnership was enforceable against #ugenia. Dence, the %Acommitted reversible error in decreeing otherwise.

The insistence of the petitioner was unwarranted.

%onsidering that Atty. >una and #ugenia had not entered into any marriage settlement prior to their marriage oneptember 4, /06, the system of relative community or conjugal partnership of gains governed their property relations.This is because the +panish *ivil *ode, the law then in force at the time of their marriage, did not specify the property

regime of the spouses in the event that they had not entered into any marriage settlement before or at the time of themarriage. Article / of the *ivil *odeclearly so provides, to wit(

A+ti4le 11B( The futu+e s*ouses 9a= in the 9a++iage settle9ents ag+ee u*on absolute o+ +elatie 4o99unit= of*+o*e+t=' o+ u*on 4o9*lete se*a+ation of *+o*e+t=' o+ u*on an= othe+ +egi9e( In the absen4e of 9a++iagesettle9ents' o+ when the sa9e a+e oid' the s=ste9 of +elatie 4o99unit= o+ 4on2ugal *a+tne+shi* of gains asestablished in this ode' shall goe+n the *+o*e+t= +elations between husband and wife(

Article 01 of the *ivil *ode has defined a conjugal partnership of gains thusly(

Article 01. y means of the conjugal partnership of gains the husband and wife place in a common fund the fruits of theiseparate property and the income from their wor8 or industry, and divide eBually, upon the dissolution of the marriage or of

the partnership, the net gains or benefits obtained indiscriminately by either spouse during the marriage.

The conjugal partnership of gains subsists until terminated for any of various causes of termination enumerated in Article6: of the *ivil *ode, vi/ (

Article 6:. The conjugal partnership of gains terminates

25 7pon the death of either spouse

215 Chen there is a decree of legal separation

235 Chen the marriage is annulled

205 In 4ase of 2udi4ial se*a+ation of *+o*e+t= unde+ A+ti4le 1B1.

The mere execution of the Agreement by Atty. >una and #ugenia did not per se dissolve and liBuidate their conjugalpartnership of gains. The approval of the Agreement by a competent court was still reBuired under Article /4 and Article/ of the *ivil *ode, as follows(

Article /4. "n the absence of an express declaration in the marriage settlements, the separation of property betweenspouses during the marriage shall not ta8e place sae in i+tue of a 2udi4ial o+de+ . 2031a

Article /. The husband or the wife may as8 for the separation of property, and it shall be decreed when the spouse of

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the petitioner has been sentenced to a penalty which carries with it civil interdiction, or has been declared absent, or whenlegal separation has been granted

x x x x

The husband and the wife may agree upon the dissolution of the conjugal partnership during the marriage, sub2e4t to 2udi4ial a**+oal( All the creditors of the husband and of the wife, as well as of the conjugal partnership shall be notifiedof any petition for judicial approval or the voluntary dissolution of the conjugal partnership, so that any such creditors mayappear at the hearing to safeguard his interests. 7pon approval of the petition for dissolution of the conjugal partnership,the court shall ta8e such measures as may protect the creditors and other third persons

After dissolution of the conjugal partnership, the provisions of articles 10 and 1: shall apply. The provisions of this %odeconcerning the effect of partition stated in articles 0/) to :4 shall be applicable. 2033a5

ut was not the approval of the Agreement by the %+" of to. <omingo in the <ominican 9epublic sufficient in dissolvingand liBuidating the conjugal partnership of gains between the late Atty. >una and #ugenia?

The Buery is answered in the negative. There is no Buestion that the approval too8 place only as an incident of the actionfor divorce instituted by Atty. >una and #ugenia, for, indeed, the justifications for their execution of the Agreement wereidentical to the grounds raised in the action for divorce. Cith the divorce not being itself valid and enforceable under&hilippine law for being contrary to &hilippine public policy and public law, the approval of the Agreement was not alsolegally valid and enforceable under &hilippine law. %onseBuently, the conjugal partnership of gains of Atty. >una and#ugenia subsisted in the lifetime of their marriage.

(Att=( LunaEs 9a++iage with oledad' being biga9ous'was oid< *+o*e+ties a4;ui+ed du+ing thei+ 9a++iage

we+e goe+ned b= the +ules on 4o-owne+shi*

Chat law governed the property relations of the second marriage between Atty. >una and oledad?

The %A expressly declared that Atty. >una=s subseBuent marriage to oledad on anuary 1, /6* was void for beingbigamous, on the ground that the marriage between Atty. >una and #ugenia had not been dissolved by the <ivorce<ecree rendered by the %+" of to. <omingo in the <ominican 9epublic but had subsisted until the death of Atty. >una onuly 1, //6.

The %ourt concurs with the %A.

"n the &hilippines, marriages that are bigamous, polygamous, or incestuous are void. Article 6 of the *ivil *ode clearlystates(

Article 6. All marriages performed outside the &hilippines in accordance with the laws in force in the country where theywere performed, and valid there as such, shall also be valid in this country, e>4e*t biga9ous' *ol=ga9ous' o+in4estuous 9a++iages as dete+9ined b= &hili**ine law.

igamy is an illegal marriage committed by contracting a second or subseBuent marriage before the first marriage has

been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a judgmentrendered in the proper proceedings. A bigamous marriage is considered voidab initio.

<ue to the second marriage between Atty. >una and the petitioner being void ab initio by virtue of its being bigamous, theproperties acBuired during the bigamous marriage were governed by the rules on co-ownership, conformably with Article00 of the *ivil *ode, viI(

Article 00. Chen a man and a woman live together as husband and wife, but they are not married, or their marriage isvoid from the beginning, the property acBuired by either or both of them through their wor8 or industry or their wages andsalaries shall be governed by the rules on co-ownership.2n5

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"n such a situation, whoever alleges co-ownership carried the burden of proof to confirm such fact. To establish co-ownership, therefore, it became imperative for the petitioner to offer proof of her actual contributions in the acBuisition ofproperty. Der mere allegation of co-ownership, without sufficient and competent evidence, would warrant no relief in herfavor. As the %ourt explained in +aguid v. *ourt of Appeals(

"n the cases of Agapay v. 'alang, and %umlos v. ernande/, which involved the issue of co-ownership of propertiesacBuired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that proof of actuacontribution in the acBuisition of the property is essential. The claim of co-ownership of the petitioners therein who wereparties to the bigamous and adulterous union is without basis because they failed to substantiate their allegation that theycontributed money in the purchase of the disputed properties. Also in Adriano v. %ourt of Appeals, we ruled that the factthat the controverted property was titled in the name of the parties to an adulterous relationship is not sufficient proof ofco-ownership absent evidence of actual contribution in the acBuisition of the property

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of thecase, asserts an affirmative issue. %ontentions must be proved by competent evidence and reliance must be had on thestrength of the party=s own evidence and not upon the wea8ness of the opponent=s defense. This applies with more vigorwhere, as in the instant case, the plaintiff was allowed to present evidence e# parte.The plaintiff is not automaticallyentitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove theallegations in the complaint. +avorable relief can be granted only after the court is convinced that the facts proven by theplaintiff warrant such relief. "ndeed, the party alleging a fact has the burden of proving it and a mere allegation is notevidence.

The petitioner asserts herein that she sufficiently proved her actual contributions in the purchase of the condominium unitin the aggregate amount of at least &34*,:61.44, consisting in direct contributions of &:/,461.44, and in repaying theloans Atty. >una had obtained from &remex +inancing and anco +ilipino totaling &0*,)1:.34; and that such aggregatecontributions of &34*,:61.44 corresponded to almost the entire share of Atty. >una in the purchase of the condominiumunit amounting to &3*1,1*0.44 of the unit=s purchase price of &,00/,4:*.44.

The petitioner further asserts that the lawboo8s were paid for solely out of her personal funds, proof of which Atty. >unahad even sent her a Kthan8 youL note; that she had the financial capacity to ma8e the contributions and purchases; andthat Atty. >una could not acBuire the properties on his own due to the meagerness of the income derived from his lawpractice.

<id the petitioner discharge her burden of proof on the co-ownership?

"n resolving the Buestion, the %A entirely debun8ed the petitioner=s assertions on her actual contributions through thefollowing findings and conclusions, namely(

'>#<A< was not able to prove by preponderance of evidence that her own independent funds were used to buy the lawoffice condominium and the law boo8s subject matter in contention in this case R proof that was reBuired for Article 00 ofthe @ew %ivil %ode and Article 0) of the +amily %ode to apply R as to cases where properties were acBuired by a manand a woman living together as husband and wife but not married, or under a marriage which was void ab initio. 7nde

Article 00 of the @ew %ivil %ode, the rules on co-ownership would govern. ut this was not readily applicable to manysituations and thus it created a void at first because it applied only if the parties were not in any way incapacitated or werewithout impediment to marry each other 2for it would be absurd to create a co-ownership where there still exists a prioconjugal partnership or absolute community between the man and his lawful wife5. This void was filled upon adoption of

the +amily %ode. Article 0) provided that( only the property acBuired by both of the parties through their actual jointcontribution of money, property or industry shall be owned in common and in proportion to their respective contributions.uch contributions and corresponding shares were prima facie presumed to be eBual. +owever, for this pres%)ption toarise, proof of act%al contri&%tion was re%ired. The same rule and presumption was to apply to joint deposits ofmoney and evidence of credit. "f one of the parties was validly married to another, his or her share in the co-ownershipaccrued to the absolute community or conjugal partnership existing in such valid marriage. "f the party who acted in badfaith was not validly married to another, his or her share shall be forfeited in the manner provided in the last paragraph ofthe Article 06. The rules on forfeiture applied even if both parties were in bad faith

%o-ownership was the exception while conjugal partnership of gains was the strict rule whereby marriage was aninviolable social institution and divorce decrees are not recogniIed in the &hilippines, as was held by the upreme %ourtin the case of %enchave/ vs. scaBo, .C. >o. 2G5T, >ovember 4G, G5D, D +*CA DD, thusP

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x x x x

As to the 1:J44 pro2indiviso share of ATT. >7@A in the condominium unit, '>#<A< failed to prove that she made anactual contribution to purchase the said property. he failed to establish that the four 205 chec8s that she presented wereindeed used for the acBuisition of the share of ATT. >7@A in the condominium unit. This was aptly explained in the<ecision of the trial court, vi/.(Kx x x The first chec8, #xhibit KML for &::,444.44 payable to Atty. Teresita %ruI ison was issued on anuary 16, /66,which was thirteen 235 months before the Memorandum of Agreement, #xhibit K6L was signed. Another chec8 issued on

April 1/, /6) in the amount of &/6,:)).)/, #xhibit K&L was payable to anco +ilipino. According to the plaintiff, this wasin payment of the loan of Atty. >una. The third chec8 which was for &0/,13*.44 payable to &9#M# was dated May /,/6/, also for payment of the loan of Atty. >una. The fourth chec8, #xhibit KML, for &0,461.44 was dated <ecember 6,/)4. @one of the foregoing prove that the amounts delivered by plaintiff to the payees were for the acBuisition of thesubject condominium unit. The connection was simply not established. x x xL

'>#<A<=s claim that she made a cash contribution of &44,444.44 is unsubstantiated. %learly, there is no basis for'>#<A<=s claim of co-ownership over the 1:J44 portion of the condominium unit and the trial court correctly found thatthe same was acBuired through the sole industry of ATT. >7@A, thus(

KThe <eed of Absolute ale, #xhibit K/L, covering the condominium unit was in the name of Atty. >una, together with hispartners in the law firm. The name of the plaintiff does not appear as vendee or as the spouse of Atty. >una. The samewas acBuired for the use of the >aw firm of Atty. >una. The loans from Allied an8ing %orporation and +ar #ast an8 andTrust %ompany were loans of Atty. >una and his partners and plaintiff does not have evidence to show that she paid for

them fully or partially. x x xL

The fact that %%T @o. 066/ and subseBuently, %%T @o. 16* were in the name of KJOA> O*+ O>A, married to+oledad . unaR was no proof that '>#<A< was a co-owner of the condominium unit. AcBuisition of title andregistration thereof are two different acts. "t is well settled that registration does not confer title but merely confirms onealready existing. The phrase Kmarried toR preceding K+oledad . unaL is merely descriptive of the civil status of ATT>7@A.

'>#<A<, the second wife, was not even a lawyer. o it is but logical that '>#<A< had no participation in the law firm

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