REPUBLICACTNo.

10572
ANACTESTABLISHINGTHELIABILITYOFTHEABSOLUTECOMMUNITYORCONJUGALPARTNERSHIPFOR
ANOBLIGATIONOFASPOUSEWHOPRACTICESAPROFESSIONANDTHECAPABILITYOFEITHERSPOUSE
TODISPOSEOFANEXCLUSIVEPROPERTYWITHOUTTHECONSENTOFTHEOTHERSPOUSE,AMENDING
FORTHEPURPOSEARTICLES73AND111OFEXECUTIVEORDERNO.209,ALSOKNOWNASTHEFAMILY
CODEOFTHEPHILIPPINES
BeitenactedbytheSenateandHouseofRepresentativesofthePhilippinesinCongressassembled:
Section1.Article73oftheFamilyCode,asamended,isherebyfurtheramendedtoreadasfollows:
"Art.73.Eitherspousemayexerciseanylegitimateprofession,occupation,businessoractivitywithouttheconsentofthe
other.Thelattermayobjectonlyonvalid,serious,andmoralgrounds.
"Incaseofdisagreement,thecourtshalldecidewhetherornot:
"(1)Theobjectionisproper,and
"(2)Benefithasaccruedtothefamilypriortotheobjectionorthereafter.Ifthebenefitaccruedpriortothe
objection,theresultingobligationshallbeenforcedagainstthecommunityproperty.Ifthebenefitaccrued
thereafter,suchobligationshallbeenforcedagainsttheseparatepropertyofthespousewhohasnotobtained
consent.
"Theforegoingprovisionsshallnotprejudicetherightsofcreditorswhoactedingoodfaith."
Section2.Article111oftheFamilyCode,asamended,isherebyfurtheramendedtoreadasfollows:
"Art.111.Eitherspousemaymortgage,encumber,alienateorotherwisedisposeofhisorherexclusiveproperty."
Section3.SeparabilityClause.Ifanyprovisionorparthereofisheldinvalidorunconstitutional,theremainderofthelaworthe
provisionnototherwiseaffectedshallremainvalidandsubsisting.1wphi1
Section4.RepealingClause.Anylaw,presidentialdecreeorissuance,executiveorder,letterofinstruction,administrativeorder,
ruleorregulationcontrarytoorinconsistentwiththeprovisionsofthisActisherebyrepealed,modifiedoramendedaccordingly.
Section5.EffectivityClause.ThisActshalltakeeffectfifteen(15)daysafteritspublicationinatleasttwo(2)newspapersof
generalcirculation.
Approved,

(Sgd.)JUANPONCEENRILE
PresidentoftheSenate

(Sgd.)FELICIANOBELMONTEJR.
SpeakeroftheHouseofRepresentatives

VIRGILIOMAQUILANv.DITAMAQUILAN
G.R.No.155409,8June2007,AustriaMartinez,J.(ThirdDivision)
Separationofpropertymaybeeffectedvoluntarilyorforsufficientcause,subjecttojudicialapprovaleveniftheproceedings for
DeclarationofNullityofMarriagearestillpending.Thevoluntaryseparation,however,issubjecttotherightsofallcreditorsof
theconjugalpartnershipofgainsandotherpersonswithpecuniaryinterest.
VirgilioMaquilanfiledacriminalcaseagainsthisspouseDitaMaquilanandherparamouronthegroundofadultery.Thetwo
accusedwereconvictedandsentencedtosufferimprisonmentforoneyearandeightmonthstothreeyears,sixmonthsandtwentyone
days.OnJanuary15,2001,aftertheadulterycasehasbeendecided,VirgilioMaquilanfiledaPetitionforDeclarationofNullityof
Marriage,DissolutionandLiquidationofConjugalPartnershipofGainsandDamageswiththeregionaltrialcourtonthegroundof
DitaMaquilanspsychologicalincapacity.However,duringthepretrialofthecase,theMaquilanspousesvoluntarilyenteredintoa
CompromiseAgreement partiallydividing their properties among themselves and theironlyson.OnJanuary2,2002,the
CompromiseAgreement wasgivenaJudicial ImprimaturbytheRegionalTrial Court(RTC)butonJanuary15,2002,Virgilio
MaquilanfiledanOmnibusMotiontorepudiatetheCompromiseAgreementandreconsiderthejudgmentrenderedonthegroundthat
hisformerlawyerfailedtointelligentlyandjudiciouslyapprisehimoftheagreementsconsequentialeffects.
TheRTCjudgedeniedthemotion.MaquilanfiledaMotionforReconsiderationbutwasalsodeniedsohefiledaPetitionfor
Certiorari andProhibitiontotheCourtofAppeals(CA)claimingthat theRTCcommittedgrave errorandabuseof discretion
amountingtolackorexcessofjurisdictioninholdingthevalidityoftheCompromiseAgreement;whenitheldthattheCompromise
Agreementwasmadeduringthecoolingoffperiod;whenitdeniedhisMotiontoRepudiatetheCompromiseAgreementandto
reconsiderthejudgmentrendered;andwhenitconductedtheproceedingswithouttheappearanceandparticipationoftheOfficeof
theSolicitorGeneralandortheProvincialProsecutor.TheCAdismissedthepetitionforlackofmerit.
Thereafter, Virgilio Maquilan filed aPetitionfor Review on Certiorari with the Supreme Court seeking toassail the judgment
renderedbytheCourtofAppealsontheCompromiseAgreementwhichhesoughttonullify.
ISSUES:
Whetherornotthepartialvoluntaryseparationofpropertymadebythespousespendingthepetitionfordeclarationofnullityof
marriagevalid
HELD:
ThepetitionisDENIED.
TheSupremeCourtruledthattheCompromiseAgreemententeredintobythepartiesisanexampleofaseparationofproperty
allowedbylaw.Article143oftheFamilyCodeprovidesthatseparationofpropertymaybeeffectedvoluntarilyorforsufficientcause
subjecttojudicial
approval.Suchisapplicableeveniftheproceedingforthedeclarationofnullityofmarriageisstillpending.However,pursuantto
Article136oftheFamilyCode,voluntaryseparationofpropertyissubjecttotherightsofallcreditorsoftheconjugalpartnershipof
gainsandotherpersonswithpecuniaryinterest.
TheCourtalsoheldthatthepurposeoftheactiveparticipationofthepublicprosecutorortheSolicitorGeneralincasesof
annulmentanddeclarationofnullityofmarriageistoensurethattheinterestoftheStateisprotectedbypreventingthecollusion
oftheparties,andfabricationorsuppressionofevidence.AlthoughtheappearancesoftheSolicitorGeneraland/orthe
PublicProsecutorare mandatory,the failure ofthe RTCto requiretheirappearance doesnotpersenullifytheCompromise
Agreement.Thesubjectagreementisjust an agreementbetweenthepartiestopartiallyseparatetheirproperties and does not
includeanythinginthemeritsofthecaseofDeclarationofNullityofMarriagefortheCourttowaryanypossiblecollusion.
Theconvictionofadulterydoesnotcarrytheaccessorypenaltyofcivilinterdictionwhichdeprivesthepersonfromtherightto
managehispropertyanddisposesuchintervivosasprovidedforintheRevisedPenalCode.
Maquilans contention that he was not intelligently and judiciously informed of the consequential effects of the Compromise
Agreementisalsountenable.AsstatedinSalongavs.CourtofAppeals,theCourtruledthatnegligenceofthecounselbindstheclient
andtherecognizedexceptionstothisrulearecaseswherethereisrecklessgrossnegligenceofcounseltherebydenyingtheclientof
thedueprocessoflaworwhen itsapplication resultsin theoutrightdeprivationofonespropertythroughtechnicality.Such
exceptionsarenotevidentinthecase

ValdesvsRTC
Thepetitionforreviewbewails,purelyonaquestionoflaw,anallegederrorcommittedbytheRegionalTrialCourtinCivil
CaseNo.Q9212539.Petitioneraversthatthecourtaquohasfailedtoapplythecorrectlawthatshouldgovernthedispositionofa
familydwellinginasituationwhereamarriageisdeclaredvoidabinitiobecauseofpsychologicalincapacityonthepartofeitheror
bothofthepartiestothecontract.
Thepertinentfactsgivingrisetothisincidentare,byandlarge,notindispute.
AntonioValdesandConsueloGomezweremarriedon05January1971.Begottenduringthemarriagewerefivechildren.Ina
petition,dated22June1992,ValdessoughtthedeclarationofnullityofthemarriagepursuanttoArticle36oftheFamilyCode
(docketedCivilCaseNo.Q9212539,RegionalTrialCourtofQuezonCity,Branch102).Afterhearingthepartiesfollowingthe
joinderofissues,thetrialcourt,[1]initsdecisionof29July1994,grantedthepetition;viz:
"WHEREFORE,judgmentisherebyrenderedasfollows:
"(1)ThemarriageofpetitionerAntonioValdesandrespondentConsueloGomezValdesisherebydeclarednullandvoidunder
Article36oftheFamilyCodeonthegroundoftheirmutualpsychologicalincapacitytocomplywiththeiressentialmarital
obligations;
"(2)Thethreeolderchildren,CarlosEnriqueIII,AntonioQuintinandAngelaRosarioshallchoosewhichparenttheywouldwant
tostaywith.
"StellaEloisaandJoaquinPedroshallbeplacedinthecustodyoftheirmother,hereinrespondentConsueloGomezValdes.
"Thepetitionerandrespondentshallhavevisitationrightsoverthechildrenwhoareinthecustodyoftheother.
"(3)Thepetitionerandrespondentaredirectedtostartproceedingsontheliquidationoftheircommonpropertiesasdefined
byArticle147oftheFamilyCode,andtocomplywiththeprovisionsofArticles50,51and52ofthesamecode,withinthirty(30)
daysfromnoticeofthisdecision.
"LetacopyofthisdecisionbefurnishedtheLocalCivilRegistrarofMandaluyong,MetroManila,forproperrecordingintheregistry
ofmarriages."[2](Italicsours)
ConsueloGomezsoughtaclarificationofthatportionofthedecisiondirectingcompliancewithArticles50,51and52ofthe
FamilyCode.SheassertedthattheFamilyCodecontainednoprovisionsontheprocedurefortheliquidationofcommonpropertyin
"unionswithoutmarriage."Parenthetically,duringthehearingonthemotion,thechildrenfiledajointaffidavitexpressingtheirdesire
toremainwiththeirfather,AntonioValdes,hereinpetitioner.
InanOrder,dated05May1995,thetrialcourtmadethefollowingclarification:
"Consequently,consideringthatArticle147oftheFamilyCodeexplicitlyprovidesthatthepropertyacquiredbybothpartiesduring
theirunion,intheabsenceofprooftothecontrary,arepresumedtohavebeenobtainedthroughthejointeffortsofthepartiesandwill
beownedbytheminequalshares,plaintiffanddefendantwillowntheir'familyhome'andalltheirotherpropertiesforthatmatterin
equalshares.
"Intheliquidationandpartitionofthepropertiesownedincommonbytheplaintiffanddefendant,theprovisionsoncoownership
foundintheCivilCodeshallapply."[3](Italicssupplied)
Inaddressingspecificallytheissueregardingthedispositionofthefamilydwelling,thetrialcourtsaid:
"ConsideringthatthisCourthasalreadydeclaredthemarriagebetweenpetitionerandrespondentasnullandvoidabinitio,pursuant
toArt.147,thepropertyregimeofpetitionerandrespondentshallbegovernedbytherulesoncoownership.
"TheprovisionsofArticles102and129oftheFamilyCodefindsnoapplicationsinceArticle102referstotheprocedureforthe
liquidationoftheconjugalpartnershippropertyandArticle129referstotheprocedurefortheliquidationoftheabsolutecommunity
ofproperty."[4]
Petitionermovedforareconsiderationoftheorder.Themotionwasdeniedon30October1995.
InhisrecoursetothisCourt,petitionersubmitsthatArticles50,51and52oftheFamilyCodeshouldbeheldcontrolling;he
arguesthat:
"I
"Article147oftheFamilyCodedoesnotapplytocaseswherethepartiesarepsychologicalincapacitated.
"II

"Articles50,51and52inrelationtoArticles102and129oftheFamilyCodegovernthedispositionofthefamilydwellingincases
whereamarriageisdeclaredvoidabinitio,includingamarriagedeclaredvoidbyreasonofthepsychologicalincapacityofthe
spouses.
"III
"AssumingarguendothatArticle147appliestomarriagesdeclaredvoidabinitioonthegroundofthepsychologicalincapacityofa
spouse,thesamemaybereadconsistentlywithArticle129.
"IV
"Itisnecessarytodeterminetheparentwithwhommajorityofthechildrenwishtostay." [5]
Thetrialcourtcorrectlyappliedthelaw.Inavoidmarriage,regardlessofthecausethereof,thepropertyrelationsoftheparties
duringtheperiodofcohabitationisgovernedbytheprovisionsofArticle147orArticle148,suchasthecasemaybe,oftheFamily
Code.Article147isaremakeofArticle144oftheCivilCodeasinterpretedandsoappliedinpreviouscases; [6]itprovides:
"ART.147.Whenamanandawomanwhoarecapacitatedtomarryeachother,liveexclusivelywitheachotherashusbandandwife
withoutthebenefitofmarriageorunderavoidmarriage,theirwagesandsalariesshallbeownedbytheminequalsharesandthe
propertyacquiredbybothofthemthroughtheirworkorindustryshallbegovernedbytherulesoncoownership.
"Intheabsenceofprooftothecontrary,propertiesacquiredwhiletheylivedtogethershallbepresumedtohavebeenobtainedbytheir
jointefforts,workorindustry,andshallbeownedbytheminequalshares.ForpurposesofthisArticle,apartywhodidnot
participateintheacquisitionbytheotherpartyofanypropertyshallbedeemedtohavecontributedjointlyintheacquisitionthereofif
theformer'seffortsconsistedinthecareandmaintenanceofthefamilyandofthehousehold.
"Neitherpartycanencumberordisposebyactsintervivosofhisorhershareinthepropertyacquiredduringcohabitationandowned
incommon,withouttheconsentoftheother,untilaftertheterminationoftheircohabitation.
"Whenonlyoneofthepartiestoavoidmarriageisingoodfaith,theshareofthepartyinbadfaithinthecoownershipshallbe
forfeitedinfavoroftheircommonchildren.Incaseofdefaultoforwaiverbyanyorallofthecommonchildrenortheirdescendants,
eachvacantshareshallbelongtotherespectivesurvivingdescendants.Intheabsenceofdescendants,suchshareshallbelongtothe
innocentparty.Inallcases,theforfeitureshalltakeplaceuponterminationofthecohabitation."
Thispeculiarkindofcoownershipapplieswhenamanandawoman,sufferingnolegalimpedimenttomarryeachother,so
exclusivelylivetogetherashusbandandwifeunderavoidmarriageorwithoutthebenefitofmarriage.Theterm"capacitated"inthe
provision(inthefirstparagraphofthelaw)referstothelegalcapacityofapartytocontractmarriage,i.e.,any"maleorfemaleofthe
ageofeighteenyearsorupwardsnotunderanyoftheimpedimentsmentionedinArticles37and38"[7]oftheCode.
Underthispropertyregime,propertyacquiredbybothspousesthroughtheirworkandindustryshallbegovernedbytherules
onequalcoownership.Anypropertyacquiredduringtheunionisprimafaciepresumedtohavebeenobtainedthroughtheirjoint
efforts.Apartywhodidnotparticipateintheacquisitionofthepropertyshallstillbeconsideredashavingcontributedtheretojointly
ifsaidparty's"effortsconsistedinthecareandmaintenanceofthefamilyhousehold." [8]Unliketheconjugalpartnershipofgains,the
fruitsofthecouple'sseparatepropertyarenotincludedinthecoownership.
Article147oftheFamilyCode,insubstanceandtotheaboveextent,hasclarifiedArticle144oftheCivilCode;inaddition,the
lawnowexpresslyprovidesthat
(a)Neitherpartycandisposeorencumberbyactintervivoshisorhershareincoownershipproperty,withoutthe
consentoftheother,duringtheperiodofcohabitation;and
(b)Inthecaseofavoidmarriage,anypartyinbadfaithshallforfeithisorhershareinthecoownershipinfavoroftheir
commonchildren;indefaultthereoforwaiverbyanyorallofthecommonchildren,eachvacantshareshallbelongtotherespective
survivingdescendants,orstillindefaultthereof,totheinnocentparty.Theforfeitureshalltakeplaceupontheterminationofthe
cohabitation[9]ordeclarationofnullityofthemarriage. [10]
Whenthecommonlawspousessufferfromalegalimpedimenttomarryorwhentheydonotliveexclusivelywitheachother(as
husbandandwife),onlythepropertyacquiredbybothofthemthroughtheiractualjointcontributionofmoney,propertyorindustry
shallbeownedincommonandinproportiontotheirrespectivecontributions.Suchcontributionsandcorrespondingshares,however,
areprimafaciepresumedtobeequal.Theshareofanypartywhoismarriedtoanothershallaccruetotheabsolutecommunityor
conjugalpartnership,asthecasemaybe,ifsoexistingunderavalidmarriage.Ifthepartywhohasactedinbadfaithisnotvalidly
marriedtoanother,hisorhershareshallbeforfeitedinthemanneralreadyheretoforeexpressed. [11]
Indecidingtotakefurthercognizanceoftheissueonthesettlementoftheparties'commonproperty,thetrialcourtactedneither
imprudentlynorprecipitately;acourtwhichhasjurisdictiontodeclarethemarriageanullitymustbedeemedlikewiseclothedwith
authoritytoresolveincidentalandconsequentialmatters.Nordiditcommitareversibleerrorinrulingthatpetitionerandprivate
respondentownthe"familyhome"andalltheircommonpropertyinequalshares,aswellasinconcludingthat,intheliquidationand

partitionofthepropertyownedincommonbythem,theprovisionsoncoownershipundertheCivilCode,notArticles50,51and52,
inrelationtoArticles102and129, [12]oftheFamilyCode,shouldaptlyprevail.Therulessetuptogoverntheliquidationofeitherthe
absolutecommunityortheconjugalpartnershipofgains,thepropertyregimesrecognizedforvalidandvoidablemarriages(inthe
lattercase untilthecontract isannulled),are irrelevant totheliquidationofthecoownershipthat existsbetween commonlaw
spouses.ThefirstparagraphofArticle50oftheFamilyCode,applyingparagraphs(2),(3),(4)and(5)ofArticle43, [13]relatesonly,
byitsexplicitterms,tovoidablemarriagesand,exceptionally,tovoidmarriagesunderArticle40[14]oftheCode,i.e.,thedeclaration
ofnullityofasubsequentmarriagecontractedbyaspouseofapriorvoidmarriagebeforethelatterisjudiciallydeclaredvoid.The
latterisaspecialrulethatsomehowrecognizesthephilosophyandanolddoctrinethatvoidmarriagesareinexistentfromthevery
beginningandnojudicialdecreeisnecessarytoestablishtheirnullity.Innowrequiringforpurposesofremarriage,thedeclarationof
nullitybyfinaljudgmentofthepreviouslycontractedvoidmarriage,thepresentlawaimstodoawaywithanycontinuinguncertainty
onthestatusofthesecondmarriage.ItisnotthenillogicalfortheprovisionsofArticle43,inrelationtoArticles41 [15]and42,[16]of
theFamilyCode,ontheeffectsoftheterminationofasubsequentmarriagecontractedduringthesubsistenceofapreviousmarriage
tobemadeapplicableprohacvice.Inallothercases,itisnottobeassumedthatthelawhasalsomeanttohavecoincidentproperty
relations,ontheonehand,betweenspousesinvalidandvoidablemarriages(beforeannulment)and,ontheother,betweencommon
lawspousesorspousesofvoidmarriages,leavingtoordain,inthelattercase,theordinaryrulesoncoownershipsubjecttothe
provisionofArticle147andArticle148oftheFamilyCode.Itmustbestressed,nevertheless,evenasitmaymerelystatetheobvious,
thattheprovisionsoftheFamilyCodeonthe"familyhome,"i.e.,theprovisionsfoundinTitleV,Chapter2,oftheFamilyCode,
remaininforceandeffectregardlessofthepropertyregimeofthespouses.
WHEREFORE,thequestionedorders,dated05May1995and30October1995,ofthetrialcourtareAFFIRMED.Nocosts.
SOORDERED.

JOHNABINGvs.JULIETWAEYAN
G.R.No.146294
July31,2006
SecondDivision

Facts:
Inthemain,thecontroversyisbetweenamanandawomanwho,duringthegoodolddays,livedtogetherashusbandandwife
withoutthebenefitofmarriage.Duringtheircohabitation,theyacquiredproperties.Later,theypartedways,andwithitthislitigation
betweentheminvolvingoneoftheircommonproperties.
Sometimein1986,JohnandrespondentJulietWaeyan(Juliet,forshort)metandfellinlovewitheachother.Intime,theduo
cohabitedashusbandandwifewithoutthebenefitofmarriage.Together,thecoupleboughta2storeyresidentialhousefromone
BenjaminMacuawhichwaserectedonalotownedbyacertainAlejandroDioonAuroraStreet,Mankayan,Benguet.OnDecember
2,1991,JulietleftforoverseasemploymentinKorea.ShewouldsendmoneytoJohnwhodepositedthesameintheirjointbank
account.In1992,theoriginal2storeyresidentialhouseunderwentrenovation.Toitwasannexedanewstructurewhichhoused
asarisaristore.
Thisnewstructureandthesarisaristorethereatarethepropertiesinvolvedinthiscase.In1994,JulietreturnedfromKoreaand
continuedtolivewithJohn.ShemanagedthesarisaristorewhileJohnworkedasamineemployeeoftheLepantoConsolidated
Mining,Inc.In1995,therelationshipbetweenthetwoturnedfrombadtoworse.Hence,theydecidedtopartitiontheirproperties.For
thepurpose,theyexecutedonOctober7,1995aMemorandumofAgreement.Unfortunately,thedocumentwasleftunsignedbythe
partiesalthoughsignedbythewitnessesthereto.
InadecisiondatedMarch15,1997,theMTC,onitsfindingthatthemoneyusedintheconstructionofthestructureinquestionsolely
camefromJohn,ruledthatthesameexclusivelypertainedtothelatter,andaccordinglyorderedJuliet'sevictiontherefrom,including
thesarisaristorethereat,andrequiredhertosurrenderpossessionthereoftoJohn,thus:judgmentisrenderedinfavoroftheplaintiff
(John)andagainstthedefendant(Juliet).
Issue:
Whetherornotthepropertysubjectofthesuitpertainstotheexclusiveownershipofpetitioner,John.
Held:Thelawisclear.Intheabsence,ashere,ofproofstothecontrary,anypropertyacquiredbycommonlawspousesduringtheir
periodofcohabitationispresumedtohavebeenobtainedthrutheirjointeffortsandisownedbytheminequalshares.Theirproperty

relationshipisgovernedbytherulesoncoownership.Andunderthisregime,theyownedtheirpropertiesincommon"inequal
shares."Beingherselfacoownerofthestructureinquestion,Juliet,ascorrectlyruledbytheCA,maynotbeejectedtherefrom.
PetitionDENIEDandCADecisionisAFFIRMED.Costsagainstpetitioner.

METROPOLITANBANKANDG.R.No.163744
TRUSTCO.,

NICHOLSONPASCUALa.k.a.Promulgated:
NELSONPASCUAL,
Respondent.February29,2008
xx

DECISION

VELASCO,JR.,J.:

RespondentNicholsonPascualandFlorenciaNevalgaweremarriedonJanuary19,1985.Duringtheunion,Florencia
bought from spouses Clarito and Belen Sering a 250square meter lot with a threedoor apartment standing thereon located
inMakatiCity.Subsequently,TransferCertificateofTitle(TCT)No.S101473/T510coveringthepurchasedlotwascanceledand,
inlieuthereof,TCTNo.156283[1]oftheRegistryofDeedsofMakatiCitywasissuedinthenameofFlorencia,marriedtoNelson
Pascuala.k.a.NicholsonPascual.

In1994,FlorenciafiledasuitforthedeclarationofnullityofmarriageunderArticle36oftheFamilyCode,docketedas
CivilCaseNo.Q9523533.Aftertrial,theRegionalTrialCourt(RTC),Branch94inQuezonCityrendered,onJuly31,1995,a
Decision,[2]declaringthemarriageofNicholsonandFlorencianullandvoidonthegroundofpsychologicalincapacityonthepartof
Nicholson.Inthesamedecision,theRTC,interalia,orderedthedissolutionandliquidationoftheexspousesconjugalpartnership
ofgains.Subsequenteventssawthecouplegoingtheirseparatewayswithoutliquidatingtheirconjugalpartnership.

OnApril30,1997,Florencia,togetherwithspousesNorbertoandElviraOliveros,obtainedaPhP58millionloanfrom
petitionerMetropolitanBankandTrustCo.(Metrobank).Tosecuretheobligation,FlorenciaandthespousesOliverosexecuted
severalrealestatemortgages(REMs)ontheirproperties,includingoneinvolvingthelotcoveredbyTCTNo.156283.Amongthe
documentsFlorenciasubmittedtoprocuretheloanwereacopyofTCTNo.156283,aphotocopyofthemarriagenullifyingRTC
decision,andadocumentdenominatedasWaiverthatNicholsonpurportedlyexecutedonApril9,1995.Thewaiver,madein
favorofFlorencia, covered theconjugal properties oftheexspouseslistedtherein,but didnot incidentallyinclude thelotin
question.

Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation when it fell due, Metrobank,
onNovember29,1999,initiatedforeclosureproceedingsunderActNo.3135,asamended,beforetheOfficeoftheNotaryPublicof
MakatiCity.Subsequently,MetrobankcausedthepublicationofthenoticeofsaleonthreeissuesofRemate.[3]Attheauctionsale
onJanuary21,2000,Metrobankemergedasthehighestbidder.

Getting wind of the foreclosure proceedings, Nicholson filed onJune 28, 2000, before the RTC inMakatiCity, a
Complainttodeclarethenullityofthemortgageofthedisputedproperty,docketedasCivilCaseNo.00789andeventuallyraffled
toBranch65ofthecourt.Init,Nicholsonallegedthattheproperty,whichisstillconjugalproperty,wasmortgagedwithouthis

consent.

Metrobank, in itsAnswer with Counterclaim and CrossClaim,[4]alleged that the disputed lot, being registered in
Florenciasname,wasparaphernal.Metrobankalsoassertedhavingapprovedthemortgageingoodfaith.

Florenciadidnotfileananswerwithinthereglementaryperiodand,hence,wassubsequentlydeclaredindefault.

TheRTCDeclaredtheREMInvalid

Aftertrialonthemerits,theRTCrendered,onSeptember24,2001,judgmentfindingforNicholson.Thefalloreads:

PREMISESCONSIDERED,theCourtrendersjudgmentdeclaringtherealestatemortgageontheproperty
coveredby[TCT]No.156283oftheRegistryofDeedsfortheCityofMakatiaswellasallproceedingsthereonnull
andvoid.

The Court further orders defendants [Metrobank and Florencia] jointly and severally to pay plaintiff
[Nicholson]:

1.PhP100,000.00bywayofmoraldamages;
2.PhP75,000.00bywayofattorneysfees;and
3.Thecosts.

SOORDERED.[5]

Evenasitdeclaredtheinvalidityofthemortgage,thetrialcourtfoundthesaidlottobeconjugal,thesamehavingbeen
acquiredduringtheexistenceofthemarriageofNicholsonandFlorencia.Insoruling,theRTCinvokedArt.116oftheFamily
Code,providingthatallpropertyacquiredduringthemarriage,whethertheacquisitionappearstohavebeenmade,contractedor
registered inthenameofoneorbothspouses,ispresumedtobeconjugal unlessthecontrary isproved. Tothetrial court,
Metrobankhadnotovercomethepresumptiveconjugalnatureofthelot.Andbeingconjugal,theRTCconcludedthatthedisputed
propertymaynotbevalidlyencumberedbyFlorenciawithoutNicholsonsconsent.

TheRTCalsofoundthedeedofwaiverFlorenciasubmittedtoMetrobanktobefatallydefective.Forletalonethefactthat
Nicholsondeniedexecutingthesameandthatthesignatureofthenotarizingofficer wasaforgery,thewaiver documentwas
allegedlyexecutedonApril9,1995oralittleoverthreemonthsbeforetheissuanceoftheRTCdecisiondeclaringthenullityof
marriagebetweenNicholsonandFlorencia.

ThetrialcourtalsodeclaredMetrobankasamortgageeinbadfaithonaccountofnegligence,statingtheobservationthat
certaindataappearedinthesupportingcontractdocuments,which,ifproperlyscrutinized,wouldhaveputthebankonguardagainst
approvingthemortgage.Amongthedatareferredtowasthedateofexecutionofthedeedofwaiver.

TheRTCdismissedMetrobankscounterclaimandcrossclaimagainsttheexspouses.

Metrobanksmotionforreconsiderationwasdenied.Undeterred,MetrobankappealedtotheCourtofAppeals(CA),the
appealdocketedasCAG.R.CVNo.74874.

TheCAAffirmedwithModificationtheRTCsDecision

OnJanuary28,2004,theCArenderedaDecisionaffirmatoryofthatoftheRTC,exceptfortheawardthereinofmoral
damagesandattorneysfeeswhichtheCAordereddeleted.ThedispositiveportionoftheCAsDecisionreads:

WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED WITH

MODIFICATIONwithrespecttotheawardofmoraldamagesandattorneysfeeswhichisherebyDELETED.

SOORDERED.[6]

LiketheRTCearlierheld,theCAruledthatMetrobankfailedtooverthrowthepresumptionestablishedinArt.116ofthe
Family Code. And also decreed as going against Metrobank was Florencias failure to comply with the prescriptions of the
succeedingArt.124oftheCodeonthedispositionofconjugalpartnershipproperty.Art.124states:


Art.124.Theadministrationandenjoyment oftheconjugal partnership propertyshall belongtoboth
spousesjointly.Incaseofdisagreement,thehusbandsdecisionshallprevail,subjecttorecoursetothecourtbythe
wifeforproperremedyxxx.

Intheeventthatonespouseisincapacitatedorotherwiseunabletoparticipateintheadministrationofthe
conjugal properties,theotherspousemayassumesolepowersofadministration.Thesepowersdonotinclude
dispositionorencumbrancewithoutauthorityofthecourtorwrittenconsentoftheotherspouse.Intheabsenceof
suchauthorityorconsent,thedispositionorencumbranceshallbevoid.However,thetransactionshallbeconstrued
asacontinuingofferonthepartoftheconsentingspouseandthethirdperson,andmaybeperfectedasabinding
contractupontheacceptancebytheotherspouseorauthorizationbythecourtbeforetheofferiswithdrawnby
eitherorbothofferors.

Astothedeletionoftheawardofmoraldamagesandattorneysfees,theCA,ingist,heldthatMetrobankdidnotenterinto
themortgagecontractoutofillwillorforsomefraudulentpurpose,moralobliquity,orlikedishonestconsiderationsastojustify
damages.

MetrobankmovedbutwasdeniedreconsiderationbytheCA.
Thus,MetrobankfiledthisPetitionforReviewonCertiorariunderRule45,raisingthefollowingissuesforconsideration:

a.Whetherornotthe[CA]erredindeclaringsubjectpropertyasconjugalbyapplyingArticle116ofthe
FamilyCode.

b.Whetherornotthe[CA]erredinnotholdingthatthedeclarationofnullityofmarriagebetweenthe
respondent NicholsonPascual andFlorencia Nevalgaipsofactodissolvedtheregime ofcommunityof
propertyofthespouses.

c.Whetherornotthe[CA]erredinrulingthatthepetitionerisaninnocentpurchaserforvalue. [7]

OurRuling

AmodificationoftheCAsDecisionisinorder.

TheDisputedPropertyisConjugal

It is Metrobanks threshold posture that Art. 160 of the Civil Code providing that [a]ll property of the marriage is
presumedtobelongtotheconjugalpartnership,unlessitbeprove[n]thatitpertainsexclusivelytothehusbandortothewife,
applies.ToMetrobank,Art.116oftheFamilyCodecouldnotbeofgoverningapplicationinasmuchasNicholsonandFlorencia
contractedmarriagebeforetheeffectivityoftheFamilyCodeonAugust3,1988.CitingManongsongv.Estimo,[8]Metrobankasserts
thatthepresumptionofconjugalownershipunderArt.160oftheCivilCodeapplieswhenthereisproofthatthepropertywas
acquiredduringthemarriage.Metrobankadds,however,thatforthepresumptionofconjugalownershiptooperate,evidencemust
be adduced to prove that not only was the propertyacquired during the marriage but that conjugal funds were used for the
acquisition,aburdenNicholsonallegedlyfailedtodischarge.

To bolster its thesis on the paraphernal nature of the disputed property, Metrobank citesFrancisco v. Court of
Appeals[9]andJocsonv.CourtofAppeals,[10]amongothercases,wherethisCourtheldthatapropertyregisteredinthenameofa
certainpersonwithadescriptionofbeingmarriedisnoproofthatthepropertywasacquiredduringthespousesmarriage.

Ontheotherhand,Nicholson,bankingonDeLeonv.RehabilitationFinanceCorporation [11]andWongv.IAC,[12]contends
that Metrobank failed to overcome the legal presumption that the disputed property is conjugal.He asserts that Metrobanks
argumentsonthematterofpresumptionaremisleadingasonlyonepostulateneedstobeshownforthepresumptioninfavorof
conjugal ownership to arise, that is, the fact of acquisition during marriage. Nicholson dismisses, as
inapplicable,FranciscoandJocson,notingthattheyarerelevantonlywhenthereisnoindicationastotheexactdateofacquisition
ofthepropertyallegedtobeconjugal.

Asafinalpoint,NicholsoninvitesattentiontothefactthatMetrobankhadvirtuallyrecognizedtheconjugalnatureofthe
propertyinatleastthreeinstances.Thefirst waswhenthebanklumpedhimwithFlorencia inCivilCaseNo.00789asco

mortgagorsandwhentheywerereferredtoasspousesinthepetitionforextrajudicialforeclosureofmortgage.Thencamethe
publishednoticeofforeclosuresalewhereNicholsonwasagaindesignatedascomortgagor.Andthird,initsdemandletter [13]to
vacatethedisputedlot,MetrobankaddressedNicholsonandFlorenciaasspouses,albeitthefinalityofthedecreeofnullityof
marriagebetweenthemhadlongsetin.

WefindforNicholson.

First,whileMetrobankiscorrect insayingthat Art.160oftheCivilCode,notArt.116oftheFamilyCode,isthe

applicablelegalprovisionsincethepropertywasacquiredpriortotheenactmentoftheFamilyCode,iterrsinitstheorythat,before
conjugalownershipcouldbelegallypresumed,theremustbeashowingthatthepropertywasacquiredduringmarriageusing
conjugalfunds.ContrarytoMetrobankssubmission,theCourtdidnot,inManongsong,[14]addthematteroftheuseofconjugal
fundsasanessentialrequirementforthepresumptionofconjugalownershiptoarise.Nicholsoniscorrectinpointingoutthatonly
proofofacquisitionduringthemarriageisneededtoraisethepresumptionthatthepropertyisconjugal. Indeed,ifproofontheuse
ofconjugalisstillrequiredasanecessaryconditionbeforethepresumptioncanarise,thenthelegalpresumptionsetforthinthelaw
wouldveritablybeasuperfluity.AswestressedinCastrov.Miat:

PetitionersalsooverlookArticle160oftheNewCivilCode.Itprovidesthatallpropertyofthemarriage
ispresumedtobeconjugalpartnership,unlessitbeprove[n]thatitpertainsexclusivelytothehusbandortothe
wife.Thisarticledoesnotrequireproofthatthepropertywasacquiredwithfundsofthepartnership.The
presumption applies even when the manner in which the property was acquired does not appear. [15](Emphasis
supplied.)

Second,FranciscoandJocsondonotreinforceMetrobankstheory.MetrobankwouldthrustontheCourt,invokingthetwo
cases,theargumentthattheregistrationofthepropertyinthenameofFlorenciaNevalga,marriedtoNelsonPascualoperatesto
describeonlythemaritalstatusofthetitleholder,butnotasproofthatthepropertywasacquiredduringtheexistenceofthe
marriage.

Metrobankiswrong.AsNicholsonaptlypointsout,ifproofobtainsontheacquisitionofthepropertyduringtheexistence
ofthemarriage,thenthepresumptionofconjugalownershipapplies.ThecorrectlessonofFranciscoandJocsonisthatproofof
acquisitionduringthemarital coverture isa conditionsinequanonforthe operation ofthepresumptioninfavor of conjugal
ownership.Whenthereisnoshowingastowhenthepropertywasacquiredbythespouse,thefactthatatitleisinthenameofthe
spouseisanindicationthatthepropertybelongsexclusivelytosaidspouse. [16]

TheCourt,tobesure,hastakenstockofNicholsonsargumentsregardingMetrobankhavingimplicitlyacknowledged,thus
beinginvirtualestoppeltoquestion,theconjugalownershipofthedisputedlot,thebankhavingnamedtheformerintheforeclosure
proceedingsbelowaseitherthespouseofFlorenciaorhercomortgagor.Itisfelt,however,thatthereisnocompellingreasonto
delveintothematterofestoppel,thesamehavingbeenraisedonlyforthefirsttimeinthispetition.Besides,howeverNicholson
wasdesignatedbelowdoesnotreallychange,onewayoranother,theclassificationofthelotinquestion.

TerminationofConjugalPropertyRegimedoes
notipsofactoEndtheNatureofConjugalOwnership

Metrobanknextmaintainsthat,contrarytotheCAsholding,Art.129oftheFamilyCodeisinapplicable. Art.129inpart
reads:

Art.129.Uponthedissolutionoftheconjugalpartnershipregime,thefollowingprocedureshallapply:

xxxx

(7)Thenetremainderoftheconjugalpartnershippropertiesshallconstitutetheprofits,whichshallbe
dividedequallybetweenhusbandandwife,unlessadifferentproportionordivisionwasagreeduponinthemarriage
settlementsorunlesstherehasbeenavoluntarywaiverorforfeitureofsuchshareasprovidedinthisCode.

Apropostheaforequotedprovision,MetrobankassertsthatthewaiverexecutedbyNicholson,effectedasitwerebeforethe
dissolutionoftheconjugalpropertyregime,vestedonFlorenciafullownershipofallthepropertiesacquiredduringthemarriage.

Nicholsoncountersthatthemeredeclarationofnullityofmarriage,withoutmore,doesnotautomaticallyresultinaregime
ofcompleteseparationwhenitisshownthattherewasnoliquidationoftheconjugalassets.

WeagainfindforNicholson.

WhilethedeclarednullityofmarriageofNicholsonandFlorenciaseveredtheirmaritalbondanddissolvedtheconjugal
partnership,thecharacterofthepropertiesacquiredbeforesuchdeclarationcontinuestosubsistasconjugalpropertiesuntilandafter
theliquidationandpartitionofthepartnership.Thisconclusionholdstruewhether weapplyArt.129oftheFamilyCodeon
liquidationoftheconjugalpartnershipsassetsandliabilitieswhichisgenerallyprospectiveinapplication,orSection7,Chapter4,
TitleIV,BookI(Arts.179to185)oftheCivilCodeonthesubject,ConjugalPartnershipofGains.For,therelevantprovisionsof
bothCodesfirstrequiretheliquidationoftheconjugalpropertiesbeforearegimeofseparationofpropertyreigns.

InDael v. Intermediate Appellate Court, we ruled that pending its liquidation following its dissolution, the conjugal
partnershipofgainsisconvertedintoanimpliedordinarycoownershipamongthesurvivingspouseandtheotherheirsofthe
deceased.[17]

Inthispreliquidationscenario,Art.493oftheCivilCodeshallgovernthepropertyrelationshipbetweentheformer
spouses,where:

Eachcoownershallhavethefullownershipofhispartandofthefruitsandbenefitspertainingthereto,and
hemaythereforealienate,assignormortgageit,andevensubstituteanotherpersoninitsenjoyment,exceptwhen
personalrightsareinvolved.Buttheeffectofthealienationorthemortgage,withrespecttothecoowners,
shallbelimitedtotheportionwhichmaybeallottedtohiminthedivisionupontheterminationoftheco
ownership.(Emphasissupplied.)

Inthecaseatbar,Florenciaconstitutedthemortgageonthedisputedloton April30,1997,oralittlelessthantwoyears
afterthedissolutionoftheconjugalpartnershiponJuly31,1995,butbeforetheliquidationofthepartnership.Bethatasitmay,what
governedthepropertyrelationsoftheformerspouseswhenthemortgagewasgivenistheaforequotedArt.493.Underit,Florencia
hastherighttomortgageorevensellheronehalf(1/2)undividedinterestinthedisputedpropertyevenwithouttheconsentof
Nicholson.However,therightsofMetrobank,asmortgagee,arelimitedonlytothe1/2undividedportionthatFlorenciaowned.
Accordingly,themortgagecontractinsofarasitcoveredtheremaining1/2undividedportionofthelotisnullandvoid,Nicholson
nothavingconsentedtothemortgageofhisundividedhalf.

The conclusion would have, however, been different if Nicholson indeed duly waived his share in the conjugal
partnership.But,asfoundbythecourtsaquo,theApril9,1995deedofwaiverallegedlyexecutedbyNicholsonthreemonthsprior
to the dissolution of the marriage and the conjugal partnership of gains on July 31, 1995 bore his forged signature, not to
mentionthatofthenotarizingofficer.Aspuriousdeedofwaiverdoesnottransferanyrightatall,albeititmaybecometherootofa
validtitleinthehandsofaninnocentbuyerforvalue.

Upontheforegoingperspective,Metrobanksright,asmortgageeandasthesuccessfulbidderattheauctionofthelot,is
confinedonlytothe1/2undividedportionthereofheretoforepertaininginownershiptoFlorencia.Theotherundividedhalfbelongs
toNicholson.Asownerproindivisoofaportionofthelotinquestion,Metrobankmayaskforthepartitionofthelotanditsproperty
rights shall be limited to the portion which may be allotted to [the bank] in the division upon the termination of the co
ownership.[18]Thisdispositionisinlinewiththewellestablishedprinciplethatthebindingforceofacontractmustberecognizedas
farasitislegallypossibletodosoquandoresnonvaletutago,valeatquantumvalerepotest.[19]

InviewofourresolutiononthevalidityoftheauctionofthelotinfavorofMetrobank,thereishardlyaneedtodiscussat
lengthwhetherornotMetrobankwasamortgageeingoodfaith.Sufficeittostateforthenoncethatwherethemortgageeisa
bankinginstitution,thegeneralrulethatapurchaserormortgageeofthelandneednotlookbeyondthefourcornersofthetitleis
inapplicable.[20]Unlike private individuals, it behooves banks toexercise greater care and due diligence before entering intoa
mortgagecontract.Theascertainmentofthestatusorconditionofthepropertyofferedassecurityandthevalidityofthemortgagors
titlemustbestandardandindispensablepart ofthebanksoperation. [21]Abankthatfailedtoobserveduediligencecannotbe
accordedthestatusofabonafidemortgagee,[22]ashere.
ButasfoundbytheCA,however,Metrobanksfailuretocomplywiththeduediligencerequirementwasnottheresultof

adishonestpurpose,somemoralobliquityorbreachofaknowndutyforsomeinterestorillwillthatpartakesoffraudthatwould
justifydamages.

WHEREFORE, the petition isPARTLY GRANTED.The appealed Decision of the CA dated January 28, 2004,
upholdingwithmodificationtheDecisionoftheRTC,Branch65inMakatiCity,inCivilCaseNo.00789,is AFFIRMEDwith
theMODIFICATIONthattheREMoverthelotcoveredbyTCTNo.156283oftheRegistryofDeedsofMakatiCityishereby
declaredvalidonlyinsofarastheproindivisoshareofFlorenciathereonisconcerned.

Asmodified,theDecisionoftheRTCshallread:

PREMISESCONSIDERED,therealestatemortgageonthepropertycoveredbyTCTNo.156283oftheRegistryofDeeds
ofMakatiCityandallproceedingsthereonareNULLandVOIDwithrespecttotheundivided1/2portionofthedisputedproperty
ownedbyNicholson,butVALIDwithrespecttotheotherundivided1/2portionbelongingtoFlorencia.

TheclaimsofNicholsonformoraldamagesandattorneysfeesareDENIEDforlackofmerit.

Nopronouncementastocosts.

SOORDERED.

ALAIN M. DIO v. MA. CARIDAD L. DIO

October 25, 2012 Leave a comment

FACTS:
January 1998 petitioner and respondent got married. On May 2001, petitioner filed an action for Declaration of Niullity
of Marriagw against respondent citing psychological incapacity under article 36. Petitioner alleged that respondent
failed in her marital obligation to give love and support to him, and had abandoned her responsibility to the family,
choosing instead to go on shopping sprees and gallivanting with her friends that depleted the family assets. Petitioner
further alleged that respondent was not faithful, and would at times become violent and hurt him. The trial court
declared their marriage void ab initio.
The court ruled that A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon compliance with
Article[s] 50 and 51 of the Family Code. It later altered it to A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be
issued after liquidation, partition and distribution of the parties properties under Article 147 of the Family Code
ISSUE: WON the trial court erred when it ordered that a decree of absolute nullity of marriage shall only be issued after
liquidation, partition, and distribution of the parties properties under Article 147 of the Family Code
HELD:
The court erred. The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void marriage, regardless of its
cause, the property relations of the parties during the period of cohabitation is governed either by Article 147 or Article
148 of the Family Code.7 Article 147 of the Family Code applies to union of parties who are legally capacitated and not
barred by any impediment to contract marriage, but whose marriage is nonetheless void, such as petitioner and
respondent in the case before the Court.
For Article 147 of the Family Code to apply, the following elements must be present:
1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and
3. Their union is without the benefit of marriage, or their marriage is void
All these elements are present in this case and there is no question that Article 147 of the Family Code applies to the
property relations between petitioner and respondent.

It is clear from Article 50 of the Family Code that Section 19(1) of the Rule applies only to marriages which are declared
void ab initio or annulled by final judgment under Articles 40 and 45 of the Family Code. In short, Article 50 of the
Family Code does not apply to marriages which are declared void ab initio under Article 36 of the Family Code, which
should be declared void without waiting for the liquidation of the properties of the parties.
Since the property relations of the parties in art 40 and 45 are governed by absolute community of property or
conjugal partnership of gains, there is a need to liquidate, partition and distribute the properties before a decree of
annulment could be issued. That is not the case for annulment of marriage under Article 36 of the Family Code
because the marriage is governed by the ordinary rules on co-ownership.
In this case, petitioners marriage to respondent was declared void under Article 3615 of the Family Code and not
under Article 40 or 45. Thus, what governs the liquidation of properties owned in common by petitioner and
respondent are the rules on co-ownership. In Valdes, the Court ruled that the property relations of parties in a void
marriage during the period of cohabitation is governed either by Article 147 or Article 148 of the Family Code. The
rules on co-ownership apply and the properties of the spouses should be liquidated in accordance with the Civil Code
provisions on co-ownership. Under Article 496 of the Civil Code, [p]artition may be made by agreement between the
parties or by judicial proceedings. x x x. It is not necessary to liquidate the properties of the spouses in the same
proceeding for declaration of nullity of marriage.

FIRSTDIVISION
[G.R.No.127358.March31,2005]
NOEL BUENAVENTURA,petitioner, vs.COURT OF APPEALS and ISABEL LUCIA SINGH
BUENAVENTURA,respondents.
[G.R.No.127449.March31,2005]
NOEL BUENAVENTURA,petitioner, vs.COURT OF APPEALS and ISABEL LUCIA SINGH
BUENAVENTURA,respondents.
DECISION
AZCUNA,J.:
Thesecasesinvolveapetitionforthedeclarationofnullityofmarriage,whichwasfiledbypetitionerNoelBuenaventuraonJuly
12,1992,onthegroundoftheallegedpsychologicalincapacityofhiswife,IsabelSinghBuenaventura,hereinrespondent. After
respondent filed her answer, petitioner, with leave of court, amended his petition by stating that both he and his wife were
psychologicallyincapacitatedtocomplywiththeessentialobligationsofmarriage.Inresponse,respondentfiledanamendedanswer
denyingtheallegationthatshewaspsychologicallyincapacitated. [1]
OnJuly31,1995,theRegionalTrialCourtpromulgatedaDecision,thedispositiveportionofwhichreads:
WHEREFORE,judgmentisherebyrenderedasfollows:
1)DeclaringanddecreeingthemarriageenteredintobetweenplaintiffNoelA.BuenaventuraanddefendantIsabelLucia
SinghBuenaventuraonJuly4,1979,nullandvoidabinitio;
4) Ordering the liquidation of the assets of the conjugal partnership property[,] particularly the plaintiffs
separation/retirementbenefitsreceivedfromtheFarEastBank[and]TrustCompany[,]byceding,givingandpaying
toherfiftypercent(50%)ofthenetamountofP3,675,335.79orP1,837,667.89togetherwith12%interestperannum
fromthedateofthisdecisionandonehalf(1/2)ofhisoutstandingsharesofstockwithManilaMemorialParkand
ProvidentGroupofCompanies;
Letcopiesofthisdecisionbefurnishedtheappropriatecivilregistryandregistriesofproperties.
SOORDERED.[2]
3.WHENITORDEREDPLAINTIFFAPPELLANTNOELTOPAYDEFENDANTAPPELLEEONEHALF
ORP1,837,667.89OUTOFHISRETIREMENTBENEFITSRECEIVEDFROMTHEFAREASTBANKANDTRUSTCO.,WITH
12%INTERESTTHEREONFROMTHEDATEOFITSDECISION,NOTWITHSTANDINGTHATSAIDRETIREMENT
BENEFITSAREGRATUITOUSANDEXCLUSIVEPROPERTYOFNOEL,ANDALSOTODELIVERTODEFENDANT
APPELLEEONEHALFOFHISSHARESOFSTOCKWITHTHEMANILAMEMORIALPARKANDTHEPROVIDENT
GROUPOFCOMPANIES,ALTHOUGHSAIDSHARESOFSTOCKWEREACQUIREDBYNOELBEFOREHISMARRIAGE
TORESPONDENTISABELANDARE,THEREFORE,AGAINHISEXCLUSIVEPROPERTIES;AND
Withregardtothefirstissueinthemaincase,theCourtofAppealsarticulated:
AnenttheretirementbenefitsreceivedfromtheFarEastBankandTrustCo.andthesharesofstockintheManilaMemorial
ParkandtheProvidentGroupofCompanies,thetrialcourtsaid:
ThethirdissuethatmustberesolvedbytheCourtiswhattodowiththeassetsoftheconjugalpartnershipintheeventofdeclaration
ofannulmentofthemarriage.TheHonorableSupremeCourthasheldthatthedeclarationofnullityofmarriagecarriesipsofactoa

judgmentfortheliquidationofproperty(Domingov.CourtofAppeals,etal.,G.R.No.104818,Sept.17,1993,226SCRA,pp.572
573,586).Thus,speakingthroughJusticeFleridaRuthP.Romero,itwasruledinthiscase:
Whenamarriageisdeclaredvoidabinitio,thelawstatesthatthefinaljudgmentthereinshallprovidefortheliquidation,partitionand
distributionofthepropertiesofthespouses,thecustodyandsupportofthecommonchildrenandthedeliveryoftheirpresumptive
legitimes,unlesssuchmattershadbeenadjudicatedinthepreviousproceedings.
ThepartiesherewerelegallymarriedonJuly4,1979,andtherefore,allpropertyacquiredduringthemarriage,whetherthe
acquisitionappearstohavebeenmade,contractedorregisteredinthenameofoneorbothspouses,ispresumedtobeconjugalunless
thecontraryisproved(Art.116,NewFamilyCode;Art.160,CivilCode).Art.117oftheFamilyCodeenumerateswhatareconjugal
partnershipproperties.Amongotherstheyarethefollowing:
1)Thoseacquiredbyoneroustitleduringthemarriageattheexpenseofthecommonfund,whethertheacquisitionbeforthe
partnership,orforonlyoneofthespouses;
2)Thoseobtainedfromthelabor,industry,workorprofessionofeitherorbothofthespouses;
3)Thefruits,natural,industrial,orcivil,dueorreceivedduringthemarriagefromthecommonproperty,aswellasthenetfruitsfrom
theexclusivepropertyofeachspouse....
Applyingtheforegoinglegalprovisions,andwithoutprejudicetorequiringaninventoryofwhatarethepartiesconjugalproperties
andwhataretheexclusivepropertiesofeachspouse,itwasdisclosedduringtheproceedingsinthiscasethattheplaintiffwhoworked
firstasBranchManagerandlaterasVicePresidentofFarEastBank&TrustCo.receivedseparation/retirementpackagefromthe
saidbankintheamountofP3,701,500.00whichaftercertaindeductionsamountingtoP26,164.21gavehimanetamount
ofP3,675,335.79andactuallypaidtohimonJanuary9,1995(Exhs.6,7,8,9,10,11).Nothavingshowndebtsorobligationsother
thanthosedeductedfromthesaidretirement/separationpay,underArt.129oftheFamilyCodeThenetremainderoftheconjugal
partnershippropertiesshallconstitutetheprofits,whichshallbedividedequallybetweenhusbandandwife,unlessadifferent
proportionordivisionwasagreeduponinthemarriagesettlementorunlesstherehasbeenavoluntarywaiverorforfeitureofsuch
shareasprovidedinthisCode.Inthisparticularcase,however,therehadbeennomarriagesettlementbetweentheparties,norhad
therebeenanyvoluntarywaiverorvalidforfeitureofthedefendantwifesshareintheconjugalpartnershipproperties.
Thepreviouscessionandtransferbytheplaintiffofhisonehalf(1/2)shareintheirresidentialhouseandlotcoveredbyT.C.T.No.
S35680oftheRegistryofDeedsofParaaque,MetroManila,infavorofthedefendantasstipulatedintheirCompromiseAgreement
datedJuly12,1993,andapprovedbytheCourtinitsPartialDecisiondatedAugust6,1993,wasactuallyintendedtobeinfull
settlementofanyandalldemandsforpastsupport.Inreality,thedefendantwifehadallowedsomeconcessioninfavorofthe
plaintiffhusband,forwerethelawstrictlytobefollowed,intheprocessofliquidationoftheconjugalassets,theconjugaldwelling
andthelotonwhichitissituatedshall,unlessotherwiseagreeduponbytheparties,beadjudicatedtothespousewithwhomtheir
onlychildhaschosentoremain(Art.129,par.9).Here,whatwasdonewasonehalf(1/2)portionofthehousewascededto
defendantsothatshewillnotclaimanymoreforpastunpaidsupport,whiletheotherhalfwastransferredtotheironlychildashis
presumptivelegitime.
Consequently,nothingyethasbeengiventothedefendantwifebywayofhershareintheconjugalproperties,anditisbutjust,lawful
andfair,thatshebegivenonehalf(1/2)shareoftheseparation/retirementbenefitsreceivedbytheplaintiffthesamebeingpartof
theirconjugalpartnershippropertieshavingbeenobtainedorderivedfromthelabor,industry,workorprofessionofsaiddefendant
husbandinaccordancewithArt.117,par.2oftheFamilyCode.Forthesamereason,sheisentitledtoonehalf(1/2)ofthe
outstandingsharesofstockoftheplaintiffhusbandwiththeManilaMemorialParkandtheProvidentGroupofCompanies. [22]
TheCourtofAppealsarticulatedonthismatterasfollows:
OnAssignmentofErrorE,plaintiffappellantassailstheorderofthetrialcourtforhimtogiveonehalfofhisseparation/retirement
benefitsfromFarEastBank&TrustCompanyandhalfofhisoutstandingsharesinManilaMemorialParkandProvidentGroupof
Companiestothedefendantappelleeasthelattersshareintheconjugalpartnership.
OnAugust6,1993,thetrialcourtrenderedaPartialDecisionapprovingtheCompromiseAgreemententeredintobytheparties.In
thesameCompromiseAgreement,thepartieshadagreedthathenceforth,theirconjugalpartnershipisdissolved.Thereafter,nosteps
weretakenfortheliquidationoftheconjugalpartnership.
Findingthatdefendantappelleeisentitledtoatleasthalfoftheseparation/retirementbenefitswhichplaintiffappellantreceivedfrom
FarEastBank&TrustCompanyuponhisretirementasVicePresidentofsaidcompanyforthereasonthatthebenefitsaccruedfrom
plaintiffappellantsserviceforthebankforanumberofyears,mostofwhichwhilehewasmarriedtodefendantappellee,thetrial
courtadjudicatedthesame.ThesameistruewiththeoutstandingsharesofplaintiffappellantinManilaMemorialParkandProvident
GroupofCompanies.Asthesewereacquiredbytheplaintiffappellantatthetimehewasmarriedtodefendantappellee,thelatteris
entitledtoonehalfthereofashershareintheconjugalpartnership.Wefindnoreasontodisturbtherulingofthetrialcourt.[23]

Sincethepresentcasedoesnotinvolvetheannulmentofabigamousmarriage,theprovisionsofArticle50inrelationtoArticles
41,42and43oftheFamilyCode,providingforthedissolutionoftheabsolutecommunityorconjugalpartnershipofgains,asthe
casemaybe,donotapply.Rather,thegeneralruleapplies,whichisthatincaseamarriageisdeclaredvoidabinitio,theproperty
regimeapplicableandtobeliquidated,partitionedanddistributedisthatofequalcoownership.
InValdesv.RegionalTrialCourt,Branch102,QuezonCity,[24]thisCourtexpoundedontheconsequencesofavoidmarriageon
thepropertyrelationsofthespousesandspecifiedtheapplicableprovisionsoflaw:
Thetrialcourtcorrectlyappliedthelaw.Inavoidmarriage,regardlessofthecausethereof,thepropertyrelationsoftheparties
duringtheperiodofcohabitationisgovernedbytheprovisionsofArticle147orArticle148,suchasthecasemaybe,oftheFamily
Code.Article147isaremakeofArticle144oftheCivilCodeasinterpretedandsoappliedinpreviouscases;itprovides:
ART.147.Whenamanandawomanwhoarecapacitatedtomarryeachother,liveexclusivelywitheachotherashusbandand
wifewithoutthebenefitofmarriageorunderavoidmarriage,theirwagesandsalariesshallbeownedbytheminequalsharesandthe
propertyacquiredbybothofthemthroughtheirworkorindustryshallbegovernedbytherulesoncoownership.
Intheabsenceofprooftothecontrary,propertiesacquiredwhiletheylivedtogethershallbepresumedtohavebeenobtainedbytheir
jointefforts,workorindustry,andshallbeownedbytheminequalshares.ForpurposesofthisArticle,apartywhodidnot
participateintheacquisitionbytheotherpartyofanypropertyshallbedeemedtohavecontributedjointlyintheacquisitionthereofif
theformer'seffortsconsistedinthecareandmaintenanceofthefamilyandofthehousehold.
Neitherpartycanencumberordisposebyactsintervivosofhisorhershareinthepropertyacquiredduringcohabitationandownedin
common,withouttheconsentoftheother,untilaftertheterminationoftheircohabitation.
Whenonlyoneofthepartiestoavoidmarriageisingoodfaith,theshareofthepartyinbadfaithinthecoownershipshallbe
forfeitedinfavoroftheircommonchildren.Incaseofdefaultoforwaiverbyanyorallofthecommonchildrenortheirdescendants,
eachvacantshareshallbelongtotherespectivesurvivingdescendants.Intheabsenceofdescendants,suchshareshallbelongtothe
innocentparty.Inallcases,theforfeitureshalltakeplaceuponterminationofthecohabitation.
Thispeculiarkindofcoownershipapplieswhenamanandawoman,sufferingnolegalimpedimenttomarryeachother,so
exclusivelylivetogetherashusbandandwifeunderavoidmarriageorwithoutthebenefitofmarriage.Theterm"capacitated"inthe
provision(inthefirstparagraphofthelaw)referstothelegalcapacityofapartytocontractmarriage,i.e.,any"maleorfemaleofthe
ageofeighteenyearsorupwardsnotunderanyoftheimpedimentsmentionedinArticles37and38"oftheCode.
Underthispropertyregime,propertyacquiredbybothspousesthroughtheirworkandindustryshallbegovernedbytherulesonequal
coownership.Anypropertyacquiredduringtheunionisprimafaciepresumedtohavebeenobtainedthroughtheirjointefforts.A
partywhodidnotparticipateintheacquisitionofthepropertyshallstillbeconsideredashavingcontributedtheretojointlyifsaid
party's"effortsconsistedinthecareandmaintenanceofthefamilyhousehold."Unliketheconjugalpartnershipofgains,thefruitsof
thecouple'sseparatepropertyarenotincludedinthecoownership.
Article147oftheFamilyCode,insubstanceandtotheaboveextent,hasclarifiedArticle144oftheCivilCode;inaddition,thelaw
nowexpresslyprovidesthat
(a)Neitherpartycandisposeorencumberbyact[s]intervivos[of]hisorhershareincoownershipproperty,withouttheconsentof
theother,duringtheperiodofcohabitation;and
(b)Inthecaseofavoidmarriage,anypartyinbadfaithshallforfeithisorhershareinthecoownershipinfavoroftheircommon
children;indefaultthereoforwaiverbyanyorallofthecommonchildren,eachvacantshareshallbelongtotherespectivesurviving
descendants,orstillindefaultthereof,totheinnocentparty.Theforfeitureshalltakeplaceupontheterminationofthecohabitationor
declarationofnullityofthemarriage.

Indecidingtotakefurthercognizanceoftheissueonthesettlementoftheparties'commonproperty,thetrialcourtactedneither
imprudentlynorprecipitately;acourtwhichhadjurisdictiontodeclarethemarriageanullitymustbedeemedlikewiseclothedwith
authoritytoresolveincidentalandconsequentialmatters.Nordiditcommitareversibleerrorinrulingthatpetitionerandprivate
respondentownthe"familyhome"andalltheircommonpropertyinequalshares,aswellasinconcludingthat,intheliquidationand
partitionofthepropertyownedincommonbythem,theprovisionsoncoownershipundertheCivilCode,notArticles50,51and52,
inrelationtoArticles102and129,oftheFamilyCode,shouldaptlyprevail.Therulessetuptogoverntheliquidationofeitherthe
absolutecommunityortheconjugalpartnershipofgains,thepropertyregimesrecognizedforvalidandvoidablemarriages(inthe
lattercaseuntilthecontractisannulled),areirrelevanttotheliquidationofthecoownershipthatexistsbetweencommonlaw
spouses.ThefirstparagraphofArticle50oftheFamilyCode,applyingparagraphs(2),(3),(4)and(5)ofArticle43,relatesonly,by
itsexplicitterms,tovoidablemarriagesand,exceptionally,tovoidmarriagesunderArticle40oftheCode,i.e.,thedeclarationof

nullityofasubsequentmarriagecontractedbyaspouseofapriorvoidmarriagebeforethelatterisjudiciallydeclaredvoid.Thelatter
isaspecialrulethatsomehowrecognizesthephilosophyandanolddoctrinethatvoidmarriagesareinexistentfromthevery
beginningandnojudicialdecreeisnecessarytoestablishtheirnullity.Innowrequiringforpurposesofremarriage,thedeclarationof
nullitybyfinaljudgmentofthepreviouslycontractedvoidmarriage,thepresentlawaimstodoawaywithanycontinuinguncertainty
onthestatusofthesecondmarriage.ItisnotthenillogicalfortheprovisionsofArticle43,inrelationtoArticles41and42,ofthe
FamilyCode,ontheeffectsoftheterminationofasubsequentmarriagecontractedduringthesubsistenceofapreviousmarriagetobe
madeapplicableprohacvice.Inallothercases,itisnottobeassumedthatthelawhasalsomeanttohavecoincidentproperty
relations,ontheonehand,betweenspousesinvalidandvoidablemarriages(beforeannulment)and,ontheother,betweencommon
lawspousesorspousesofvoidmarriages,leavingtoordain,inthelattercase,theordinaryrulesoncoownershipsubjecttothe
provisionofArticle147andArticle148oftheFamilyCode.Itmustbestressed,nevertheless,evenasitmaymerelystatetheobvious,
thattheprovisionsoftheFamilyCodeonthe"familyhome,"i.e.,theprovisionsfoundinTitleV,Chapter2,oftheFamilyCode,
remaininforceandeffectregardlessofthepropertyregimeofthespouses.[25]
Sincethepropertiesorderedtobedistributedbythecourtaquowerefound,bothbythetrialcourtandtheCourtofAppeals,to
havebeenacquiredduringtheunionoftheparties,thesamewouldbecoveredbythecoownership. Nofruitsofaseparateproperty
ofoneofthepartiesappeartohavebeenincludedorinvolvedinsaiddistribution.Theliquidation,partitionanddistributionofthe
propertiesownedincommonbythepartieshereinasorderedbythecourtaquoshould,therefore,besustained,butonthebasisofco
ownershipandnotoftheregimeofconjugalpartnershipofgains.
WHEREFORE,theDecisionoftheCourtofAppealsdatedOctober8,1996anditsResolutiondatedDecember10,1996which
arecontestedinthePetitionforReview(G.R.No.127449),areherebyMODIFIED,inthat theawardofmoral andexemplary
damages,attorneysfees,expensesoflitigationandcostsaredeleted.Theordergivingrespondentonehalfoftheretirementbenefits
ofpetitionerfromFarEastBankandTrustCo.andonehalfofpetitionerssharesofstockinManilaMemorialParkandinthe
ProvidentGroupofCompaniesissustainedbutonthebasisoftheliquidation,partitionanddistributionofthecoownershipand
notoftheregimeofconjugalpartnershipofgains.TherestofsaidDecisionandResolutionareAFFIRMED.