1

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
March 23, 1916
G.R. No. 9984
PETRONA JAVIER, plaintiff-appellee,
vs.
LAZARO OSMEA, as administrator of the estate of the
deceased Tomas Osmea, defendant-appellant.
Haussermann, Cohn and Fisher for appellant.
Southworth, Hargis, Adams and Jordain for appellee.
ARELLANO, C.J.:
Florentino Collantes, husband of Petrona Javier, became
indebted to the estate of Tomas Osmea in the sum of
P26,467.94. On June 15, 1913, judgment for this amount
was rendered in behalf of the estate and the sheriff
executed it by selling at public auction all the right, title,
interest or share which the judgment debtor, Collantes,
had or might have in two parcels of improved real estate
situated in this city of Manila, and especially the
usufructuary interest therein of Pascuala Santos, the
surviving widow of Felix Javier y Sanchez, which interest
was acquired by Petrona Javier, Collantes' wife, on March
20, 1911.
Petrona Javier, Collantes' wife, was the only daughter of
Felix Javier and Matea Corunan, the latter of whom died in
1901, and the former ion 1908. Felix Javier, after the death

of his wife Matea Corunan, married Pascuala Santos. It was

in the year 1890 that Florentino Collantes and Petrona
Javier had contracted marriage. Felix Javier and his wife
Matea Corunan left at their death, as an inheritance to
their only daughter Petrona Javier, two urban properties
situated one on Calle Carriedo, and the other on Calle San
Sebastian. For the purpose of consolidating her full
ownership in and to both properties, Petrona Javier
acquired from her father's second wife, Pascuala Santos,
the latter's usufructuary right in her deceased husband's
estate for the sum of P3,000, which amount, it appears,
Javier was obliged to borrow, giving as security for the loan
a mortgage on the property she had inherited.
These properties that were inherited by Petrona Javier from
her parents were those levied upon by the sheriff in the
execution of the judgment against Florentino Collantes,
and notwithstanding her protests the sale was carried out.
The successful bidder therein was the Osmea estate itself
which paid P500 for each parcel of property, that is,
P1,000 for Collantes' right in both parcels and in the
usufructuary interest acquired by his wife from Pascuala
Santos.
Inasmuch as Petrona Javier claimed that her husband
Collantes had no rights whatever in said two pieces of
property or in the usufructuary interest acquired by her,
she filed claim of intervention in order to recover her
ownership of the properties and her right to usufruct after
the sheriff's sale should be annulled.
The defendant Osmea estate, in answer to the complaint,
admitted plaintiff's exclusive right of ownership in the said
two aforementioned parcels of real estate, subject to the
usufructuary right of the second wife of plaintiff's father,

and also admitted the purchase of this right by plaintiff.

Defendant claimed, however, that the money with which
said usufructuary interest was purchased belonged to the
conjugal partnership and therefore that the right of
usufruct so acquired belonged to the said conjugal
partnership. Defendant concluded by praying that the
court rendered judgment holding that the revenues from
both properties are conjugal partnership property of the
married couple Collantes and Javier; that said revenues be
made liable for the payment of the judgment rendered in
behalf of the Osmea estate; that for this purpose a
receiver be appointed to take charge of said two properties
and manage them with the object of applying the
revenues obtained therefrom to the payment of the
judgment obtained by the Osmea estate against
Collantes.
The Court of First Instance of Manila rendered judgment
annulling only the sale of the two properties and ordering
the cancellation of their registration in the property
registry, with the costs of the suit.
Defendant appealed.
The question raised in this appeal is whether the sum
owed by the husband to the Osmea estate can and
should be paid out of the fruits and revenues of the two
aforementioned parcels of real estate that exclusively
belong to the wife, the herein plaintiff, as prayed for by the
appellant in his written answer.
To decide this question the nature of the debt must be
inquired into the defined. The appellee herself, in this
instance, describes it thus:

A short while prior to 1892, Collantes was employed by

appellee's father, Felix Javier, in a commission business
which the latter conducted in Manila. In 1902, Felix Javier
retired from the business and was succeeded therein by
Collantes who, as a consequence, changed his commercial
status as an employee of his father-in-law to that of an
independent commission merchant, and continued that
business for six years, or until 1908. One of the chief
clients (principals) both of Javier and Collantes, was
Thomas Osmea , a merchant of Cebu, whom Javier, and
later Collantes, had represented as his agents in Manila for
the sale of tobacco consigned to them by Osmea from
Cebu and for the investment of the profits, in Osmea 's
name and as his agent in Manila, in merchandise which
these agents consigned to him at Cebu (record, p. 2).
When Javier retired from the commission business in 1902,
it appears that he was indebted to Tomas Osmea in the
sum of four or five thousand pesos, and that this debt was
assumed by this successor Collantes. How this debt
originated, the record does not show. In 1908, Collantes
rendered a statement (they probably were accounts) to
Osmea which showed that his debt to the latter
amounted to fourteen or fifteen thousand pesos. No steps
were taken by Osmea during his lifetime to collect this
debt, but after his death a judgment for the same was
obtained by the administrator of his estate in June, 1913.
This judgment was founded on the statement made by
Collantes in 1908 in which he admitted is debt, together
with interest thereon at the rate of 12 per centum per
annum.
Although the appellee admits that the debt arose out of
the business conducted by her father and subsequently by
her husband, there is no evidence that throws any light on
the particular transaction which was the cause of the

indebtedness . . . . It must be observed that there is the

natural presumption of fact that whatever he (Collantes)
may have contributed toward defraying the expenses of
his family, was contributed by him out of what he earned
by the commission paid him for the services he rendered
to his clients as a broker (as commission merchant). It has
not been proven or alleged that any part of the debt to
Osmea was originated by Collantes' having paid the
family expenses as they are defined in paragraph 5 of
article 1408 of the Civil Code. (Appellee's brief, pp. 3 and
4.)
The appellee herself having set forth the origin of the debt,
which is none other than the balance against Collantes
resulting from the accounts rendered by him as
commission-merchant to his principal Osmea ; and the
appellee also having set forth that "there is the natural
presumption of fact what whatever Collantes contributed
by him out of what he earned by the commission paid him
for the services he rendered to his clients as commission
merchant," it is decisive and conclusive that the debt must
be paid out of the community property of the marriage,
since, article 1408 of the Civil Code provides:
The conjugal partnership shall be liable for:
1. All the debts and obligations contracted during the
marriage by the husband,
xxx

xxx

xxx

5. The support of the family . . . .

And inasmuch as "the fruits, revenue, or interest collected
or accrued during the marriage coming from the

partnership property, or from that which belongs to either

one of the spouses," is community property, according to
article 1401; and, further, as the law expressly provides
that "the fruits of the paraphernal property form a part of
the assets of the conjugal partnership, and are liable for
the payment of the marriage expenses" (art. 1385), hence
it follows that the creditor of the husband may bring his
action, not against the paraphernal property, but against
the fruits and revenues of this private property of the wife.
This conclusion is not barred by the provision of article
1386, to wit, that "the personal obligation of the husband
cannot be paid out of the fruits of the paraphernal
property unless it be proven that they were incurred for
the benefit of the family." It is chiefly upon this article that
appellee's whole brief is based.
The antecedents of this article of the Civil Code are not
only the laws embraced in some of the codes enacted prior
thereto, but principally the numerous cases decided by the
supreme court of Spain which interpret the old law which
the appellee says is identical with article 1386 of the
present Civil Code. Among the various decisions which
might be cited, the most important is that of June 9, 1883,
because it covers the entire question at issue in this case:
Quirico Casanovas was a creditor of Jose Gimiso for the
value of certain drafts protested for nonpayment; he
brought suit to recover and attached various properties
belonging to the marriage partnership, for Gimiso was
married, and also several parcels of real estate that
belonged to the debtor's wife, Antonia Carruana. The latter
filed a third party claim and alleged that this real estate
was her paraphernal property and that the fruits thereof
were subject to the payment of the marriage expenses;
that the husband could dispose of such fruits only after the

payment of such expenses, among which his personal

debts were not included; that this doctrine was sanctioned
by the decisions of the supreme court of March 1, 1867,
and June 20, 1879, which hold that the rights in the dowry
and paraphernal fruits or revenue, granted by law to the
husband as the head of the family and manager of the
conjugal partnership, are understood to be subordinate to
the preferred obligation of paying the marriage partnership
expenses with such fruits or revenue. Casanovas answered
the complaint alleging, among other reasons, that Gimiso's
debt arose from shipments of paper and other articles
connected with the business in which he was engaged,
and that the supreme court itself, in its decisions of
October 26, 1863, November 25, 1864, October 8, 1866,
and March 1 and October 27, 1867, had laid down the rule
that, although the management of the wife's paraphernal
property pertains to her, it is understood to be without
prejudice to the husband's collecting and disposing of the
products of such property, as the head of the family and
for the purpose of attending to its needs. The Audiencia of
Valencia decided the suit in favor of Casanovas. But
Carruana took it in cassation to the supreme court,
alleging that it violated (second assignment of error) "The
well-established rule reaffirmed by the supreme court in its
decision of February 21, 1881, and several others, to the
effect that in order that a creditor may secure preference
over the rights of the wife with respect to the products and
revenue of the paraphernal property, he must prove at
trial that the debt, the payment of which he demands, was
contracted by the husband to meet obligations of the
conjugal partnership; that this was not proven in the case
at bar, and it is insufficient to say, as it is said in the
judgment appealed from, that among the resources
declared by the husband and those for which the revenue
from the wife's property is liable, should be included the

credit, that is, the debts, for, according to well-settled

jurisprudence of that supreme court, any money or sums
borrowed by the husband must by invested in business of
the conjugal partnership."
The decision of the supreme court did not sustain the
appeal in cassation:
Considering that the debts contracted by the husband
during the marriage, for and in the exercise of the industry
or profession by which he contributes toward the support
of his family, cannot be deemed his personal and private
debts, nor consequently, can they be excepted from
payment out of the products or revenue of the wife's own
property which are liable, like those of her husband's, for
the discharge of the liabilities of the marriage couple; and
considering that the debt claimed by Don Quirico
Casanovas, for the payment of which attachment has been
levied on certain property belonging to the petitioner, is of
this nature, inasmuch as it was contracted in the exercise
of the industry or business carried on by her husband;
therefore, the doctrine cited in the second assignment of
error of the appeal, is inapplicable, and has not been
violated by the judgment appealed from, in holding, as it
does, that intervention prayed for by the wife, cannot be
allowed.
The appellee herself established the presumption that
whatever the husband contributed toward the support of
his family, he gave out of what he earned from his
commissions and profession. In conformity, then, with the
aforecited decision on cassation, the debts contracted for
and in the exercise of such industry or profession cannot
be considered as his personal and private debts, nor can
they be excepted from payment out of the products or

revenue of the wife's own property, which, like that of her

husband's, is liable for the discharge of the marriage
liabilities. So far were they from being personal debts of
the husband, that the wife herself avers that the payment
to Osmea of four or five thousand pesos of the twenty-six
and odd thousand pesos of the total debt, had been
assumed by her husband, relieving her father therefrom.
He would not have assumed the payment for private
purposes of his own, for his purely personal satisfaction,
and in the eyes of the law, notwithstanding his having
assumed payment, relieving her father-in-law therefrom,
he was a perfect creditor of the latter's heir in the
settlement of her father's estate and could have deducted
the amount of that credit of four or five thousand pesos
from her entire inheritance, that is, from that same
property, subsequently called paraphernal, that his wife
inherited intact.
Subrogation transfers to the subrogated the credit, with
the corresponding rights, either against the debtor or
against third persons, be they sureties or holders of
mortgages. (Art. 1212, Civ. Code.)
It is undeniable that if in the same manner as the 26,000
and odd pesos were a loss, the had been a gain, the
husband would not have been permitted to call the
amount his personal and private gain; in the same way,
the debts or losses resulting from the business cannot be
called his personal and private debts or losses.
The petition of the defendant in his answer to the
complaint, to wit, that the sum owed by the husband to
the Osmea estate can and ought to be paid out of the
fruits or revenue of the two parcels of real estate
mentioned, which belong exclusively to the wife, now the

plaintiff, is proper and in accordance with the law.

Defendant also prayed in his answer that a receiver be
appointed to take charge of the management of the said
two properties and apply their revenue to the payment of
the judgment rendered in behalf of the Osmea estate
against Collantes.
According to article 1384, the wife shall have the
management of her paraphernal property. Pursuant to
article 1412, the husband is the administrator of the
community property of the conjugal partnership and of the
conjugal capital in general, and we have already said that
the fruits of the paraphernal property form a part of the
assets of the conjugal partnership (art. 1385). To confide
the management of the property and of its revenue to a
receiver would be to deprive the husband and the wife of
their respective rights. In the case at bar, the wife has
given no cause for being deprived, nor has any reason
whatever been advanced for depriving her, of her right to
manage her own property. The same may be said of the
husband with respect to the community property of the
marriage. There is no reason to change the present status
of affairs. Neither has any sufficient reason been offered
for the appointment of a receiver, nor has any of the cases
enumerated in section 174 of the Code of Civil Procedure,
been invoked.
Therefore, the appellant's petition for the appointment of a
receiver must be denied.
The lower court having failed to make any ruling on the
declaration and the appointment prayed for by appellant,
the judgment appealed from is reversed in so far as
regards this omission, and we hold that the fruits and

revenue from the two properties belonging to the wife,

described in the judgment appealed from, are liable for the
payment of the debt owing by the husband, the judgment
debtor, and that there is no need for the appointment of a
receiver. Without special finding as to costs, it is so
ordered.

Republic of the Philippines

SUPREME COURT Manila
EN BANC

Torres, Trent, and Araullo, JJ., concur.

Moreland, J., concurs in the result.
DECISION

October 31, 1982

G.R. No. ,
Socorro L. Vda. de Sta. Romana
vs.
The Philippine Commercial and Industrial Bank, et al., .
, J.:
In this petition for review by certiorari, petitioner seeks to
annul and set aside an Order of the respondent Judge of
the Court of First Instance of Iloilo, Branch I, which
dismissed Civil Case No. 13533, entitled Socorro L. Vda. de
Sta. Romana, Plaintiff, versus The Philippine Commercial
and Industrial Bank, et al., Defendants. The petition was
given due course in the Resolution dated July 29, 1981 and
the parties have submitted their respective memoranda.
Civil Case No. 13533 is an offshoot of Civil Case No. 7678,
entitled "PCIB, et al. versus Ramon. Sta. Romana" which
was filed way back on August 6, 1968. Civil Case No. 7678
was an action for rescission with damages filed by herein
private respondent PCIB as Administrator of the estate of
the deceased C.N. Hodges, and for the recovery of a parcel

of land known as Lot No. 1258-G which Ramon Sta.

Romana purchased from the late C. N. Hodges under a
Contract to Sell. On motion of private respondent PCIB, a
writ of preliminary attachment was issued in said case by
virtue of which the Sheriff levied on August 23, 1968 on
the rights and interests of Ramon Sta. Romana over Lot
No. 1258-F and the improvements existing thereon, which
lot Ramon Sta. Romana also purchased from C. N, Hodges
under another Contract to Sell. A third party claim was
filed by a certain Emilio Sta. Romana who claimed that Lot
No. 1258-F and its improvements had been sold to him by
Ramon Sta. Romana on August 16,1963.
The trial court rendered its decision in Civil Case No. 7678
on June 16, 1975 rescinding the Contract to Sell and
ordering Ramon Sta. Romana to return the possession of
Lot No. 1258-G to the herein private respondent, as well as
to pay rentals or damages for use and occupation thereof.
The decision was appealed to the Court of Appeals which
affirmed the same and further ordered Ramon Sta.
Romana to pay the land taxes and the interest thereon.
On October 5, 1979, the trial judge issued a writ of
execution by virtue of which the Sheriff issued a notice of
sale at public auction of the rights and interests of Ramon
Sta. Romana as defendant in the case over Lot No. 1258-F
and its improvements for the satisfaction of the damages
awarded in the decision.
Ramon Sta. Romana died intestate on October 21, 1979.
On November 26, 1949, herein petitioner Socorro L. Vda.
de Sta. Romana, the surviving spouse of Ramon Sta.
Romana, filed a motion to quash the writ of execution
alleging principally that the proceedings in Civil Case No.
7678 did not affect her rights and interests over Lot No.
1258-G and Lot No. 1258-F inasmuch as she was not a
party in said action. The trial court denied the said motion
to quash the writ of execution. The public auction sale was

held and the private respondent was issued the

corresponding certificate of sale. A Motion for
Reconsideration filed by the herein petitioner was likewise
denied in the Order dated May 15, 1980.
On September 1, 1980, herein petitioner instituted Civil
Case No. 13533 praying therein that the writ of execution
and the levy on execution made on Lot No. 1258-F and the
improvements existing thereon be annulled insofar as her
ONE HALF (1/2) share in the said properties is concerned,
and that she be declared the lawful and absolute owner of
said ONE-HALF (1/2) share of the said properties. Private
respondent filed a motion to dismiss the complaint in Civil
Case No. 13533 on the ground of res judicata. After the
petitioner filed her opposition to the motion to dismiss, the
respondent court, in its Order dated November 30, 1980,
granted the motion to dismiss on the grounds of res
judicata and laches. This is the order that the petitioner
seeks to annul in the present proceeding.
Petitioner assails the pronouncement by the respondent
court that Civil Case No. 13533 is barred by res judicata on
the principal ground that, not being a party in Civil Case
No. 7678, she could not be bound by the judgment
rendered in said case and, consequently, the writ of
attachment and the consequent writ of execution which
levied on Lot No. 1258-F, together with its existing
improvements, are null and void insofar as her ONE-HALF
(1/2) interest in said properties is concerned.
We find no merit in this contention of the petitioner.
The action filed by private respondent against the
petitioner Ramon Sta. Romana was clearly a suit to enforce
an obligation of the conjugal partnership. Civil Case No.
7678 arose out of the failure of Ramon Sta. Romana to pay

the purchase price of a lot he bought from C. N. Hodges

presumably in behalf of the conjugal partnership.
Petitioner does not deny the conjugal nature of both Lots
Nos. 1258-G and 1258-F. Indeed, she bases her contention
on the claim that at least Lot No. 1258-F, together with its
improvements existing thereon, constitutes property of the
conjugal partnership. It may not be denied, therefore, that
the liability incurred by Ramon Sta. Romana is chargeable
against the conjugal partnership assets, it being
undisputed that the said obligation was contracted by the
husband for the benefit of the conjugal partnership. (Art.
161 [1], Civil Code.)

respondent court in connection with the execution

proceedings in Civil Case No. 7678. After the writ of
execution was issued on October 5, 1979 (Annex E,
Petition), herein petitioner filed a motion to quash the said
writ of execution (Annex F, Petition), In said motion, the
petitioner raised the following issues:

The non-inclusion of the herein petitioner as a partydefendant in Civil Case No. 7678 is immaterial. There is no
rule or law requiring that in a suit against the husband to
enforce an obligation, either pertaining to him alone or one
chargeable against the conjugal partnership, the
defendant husband must be joined by his wife. The
contrary rule is prescribed in Section 4, Rule 3, of the Rules
of Court and Article 113 of the Civil Code, but not the other
way around, obviously in recognition of the legal status of
the husband as the administrator of the conjugal
partnership. (Art. 112, Civil Code.) There was, therefore, no
need of including the petitioner as a party in Civil Case No.
7678 for the purpose of binding the conjugal partnership
properties for the satisfaction of the judgment that could
be rendered therein.

4. That on the other hand, it would appear from Exh. A,

contract to sell dated October 6, 1956, that the property in
question, having been transacted and/or bought by the
defendant during his marriage life with the herein movant
is a sort of a conjugal property or asset of the defendant
and the herein movant:

We likewise agree with the view that the issues raised by

the petitioner in Civil Case No. 13533 may not be litigated
anew, if not by the principle of res judicata but at least by
conclusiveness of judgment. The record reveals that the
contentions being raised by the petitioner in Civil Case No.
13533 were squarely placed before and ruled upon by the

xxx xxx xxx

3. That as will be noted from the records, the herein
movant as spouse of the defendant was not impleaded as
a defendant in the above entitled case;

5. That accordingly, the herein movant would have been

an indispensable party in the case at bar; specially when
the aforesaid transaction was perfected at the time the
Civil Code of the Philippines had already taken effect;
6. That the herein movant having been not impleaded in
the case at bar; no jurisdiction over his person had been
vested in the proceedings; therefore whatever acts of levy
on the property of which she is or presumed to be a coowner and which has never been liquidated yet is an ultra
vires following a well-known principle that a person who is
not a party in a given case cannot be reached by any
process or order of the given court;
7. Thus, the rule is well-settled in this jurisdiction that"on

the contention that at least one-half of the conjugal

partnership belongs to the husband, and therefore could
be validly levied upon to satisfy the money judgment
against said husband, it must be said that as long as the
conjugal partnership subsists, there can be no one-half
share of the husband or the wife. Only when the conjugal
partnership is dissolved and liquidated between husband
and wife. In the meantime, the interest of each in the
conjugal partnership property is inchoate and is a mere
expectancy. Therefore, any levy on the conjugal
partnership property to satisfy the money judgment
against the husband is null and void. (Quintos Ansaldo vs.
Sheriff of Manila, 64 Phil. 116). Conformably to the
foregoing doctrine, it is therefore respectfully submitted
that the writ of execution, notice of levy if one has been
made and the notice of sale in public auction are null and
void. (Rollo, pp. 38-39.)
The respondent court ruled on this motion by issuing the
Order dated March 5, 1980 denying the same for lack of
merit. (Annex B, Petition, Rollo, p. 41.) The petitioner did
not seek a further review of the said order of denial either
in the respondent court or in any other tribunal; instead,
she resorted to the remedy of filing on June 10, 1980 Civil
Case No. 13533.
Technically speaking, if may be said that the judgment
rendered in the main action Civil Case No. 7678 does not
constitute res judicata with respect to Civil Case No.
13533. The causes of action in the two (2) cases are not
the same; neither is there Identity of the subject-matter
involved. Civil Case No. 7678 was essentially an action to
rescind the Contract to Sell Lot No. 1258-G and to recover
Possession thereof plus damages. Civil Case No. 13533, on
the other hand, is to annul the levy and execution sale of

Lot No. 1258-F and the improvements existing thereon

with respect to the ONE- HALF (1/2) interest claimed by
the petitioner.
However, it may not be denied that the issues raised by
the petitioner in Civil Case No. 13533 had already been
litigated and finally decided in the subsequent proceedings
taken to enforce the judgment in Civil Case No. 7678. The
parties involved in said proceedings are the same, and so
are the subject-matter involved and the cause of action
relied upon by the petitioner in Civil Case No. 13533. The
only possible doubt as to whether res judicata may be
utilized as a bar to the filing of Civil Case No. 13533 is that
the pronouncement constituting the bar to a new action
was not in the main judgment in Civil Case No. 7678 but
only in a subsequent incident therein.
It is Our considered opinion that such circumstance does
not militate against the existence of res judicata if all the
requisites for its application are otherwise present. The
order denying the petitioner's motion to quash the writ of
execution issued in Civil Case No. 7678 is not merely an
interlocutory order. It attained finality due to the failure of
the petitioner to appeal or seek a review of the same. It is
not questioned that the trial court had jurisdiction to take
cognizance of the motion to quash the writ of execution
and over the parties litigating the same. The order of
denial is on the merits of the motion. There was also
Identity of parties involved in the motion to quash the writ
of execution, Identity of subject-matter and Identity of
causes of action. The requisites of res judicata being all
present in the incident concerning the issuance of the writ
of execution, We feel no hesitancy in declaring that the
filing of Civil Case No. 13533 is barred by the principle of
res judicata, The underlying philosophy of this doctrine is:

10

... that parties ought not to be permitted to litigate the

same issue more than once; that, when a right or fact has
been judicially tried and determined by a court of
competent jurisdiction, or an opportunity for such trial has
been given the judgment of the court, so long as it
remains unreversed, should be conclusive upon the parties
and those in privity with them in law or estat........ (2
Moran Rules of Court, p. 362, citing Sta. Ana v. Narvades,
L-24390, Nov. 28, 1969, 30 SCRA 454, 463.)
To sanction the filing of Civil Case No. 13533 is to nullify
altogether the proceedings had in connection with the
petitioner's motion to quash the writ of execution and the
ruling made by the respondent court thereon which had
already attained the status of finality.
In the least, the institution of Civil Case No. 13533 may be
deemed barred by the principle of conclusiveness of
judgment which is expressed in the Rules in the following
terms:
Effect of judgments. ? The effect of a judgment or final
order rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order,
may be as follows:
xxx xxx xxx
(c) In any other litigation between the same parties or
their successors in interest, that only is deemed to have an
adjudged in a former judgment which appears upon its
face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto. (SEC.
49, Rule 39, New Rules of Court.)

Even assuming, therefore, that Civil Case No. 13533 is on

a different cause of action than that involved in Civil Case
No. 7678, the ruling in the latter on the motion for the
quashing of the levy on execution made on Lot 1258- F
which involved the same subject-matter and parties
litigating Civil Case No. 13533 is rendered conclusive
under the doctrine of conclusiveness of judgment.
Petitioner has further argued that her having filed the
motion to quash the writ of execution in Civil Case No.
7678 to assert her claim over ONE- HALF (1/2) interest in
Lot No. 1258-F and its improvements does not preclude
her from filing a separate civil action to pursue the same
claim. She cites the case of Manila Fidelity and Surety
Company vs. Teodoro, et al., 20 SCRA 463, which holds
that "'a third party claim is not an exclusive remedy; the
same rule (Section 17, Rule 29), provides that nothing
therein shall prevent such third person from vindicating his
claim to the property by any proper action.'"
We find no merit in this argument. The petitioner did not
merely file a third party claim on the property levied upon
in connection with the writ of execution issued in Civil Case
No. 7678. Instead of a third party claim which, under the
rules, must be filed with the "officer making the levy and a
copy thereof upon the judgment creditor" (Sec. 17, Rule
39, Rules of Court), the petitioner filed a "Motion to Quash
Writ of Execution and All Subsequent Proceedings" (Record
on Appeal, p. 17) to which private respondent filed its
Opposition (Ibid, pp. 20-24), and to which in turn the
petitioner filed her Reply to Opposition (Ibid, pp. 25-31).
When the respondent court issued its Order dated May 5,
1980 denying the aforesaid Motion to Quash Execution for
lack of merit (Ibid, p. 32), the petitioner filed a Motion for
Reconsideration (Ibid, pp. 33-34) which was opposedly the

11

private respondent in writing (Ibid, pp. 35-35-B) and which

in turn a Reply to Opposition, was filed by the petitioner
(Ibid., pp. 36-38). In said motions, oppositions and replies
repeatedly filed by the parties, the same issues sought to
be reopened by the petitioner in Civil Case No, 13533 had
been fully and exhaustively ventilated. It was in the basis
of such exposure of those issues that the respondent court
issued its Order denying the motion to quash the writ of
execution, and also the Order denying a motion for a
reconsideration of the same.
WHEREFORE, the Petition is DENIED, and the Orders of the
respondent Judge issued in Civil Case No. 13533 dated
March 5, 1980 and May 15, 1980 are hereby AFFIRMED.
With costs against the petitioner.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova
and Gutierrez, JJ., concur.

12

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
DECISION
January 31, 1985
G.R. No. , ,
G-Tractors
Vs.
Court of Appeals
, J.:
Assailed and challenged in this Petition for Review is the
Decision dated April 29, 1977 of the then Court of Appeals
in its CA-G.R. No. SP-05920, the dispositive portion of
which reads as follows ?
WHEREFORE, the petition is hereby granted. The levy on
execution dated February 11, 1976, the sheriff's certificate
of sale dated March 25, 1975 and final deed of sale, and
the orders of the respondent judge dated April 26, 1976,
July 12, 1976 and August 26, 1976, are set aside and
declared null and void. The writ of preliminary injunction
heretofore in force is made permanent. Costs against
private respondent.
SO ORDERED.

Private respondent Luis R. Narciso is a businessman. He is

engaged in business as a producer and exporter of
Philippine mahogany logs and operates a logging
concession at del Gallego, Camarines Sur. He is legally
married to the other private respondent Josefina Salak
Narciso.
Petitioner G-Tractors, Inc. upon the other hand, is a
domestic corporation engaged primarily in the business of
leasing heavy equipments such as tractors, bulldozers,
and the like.
Sometime in February 26, 1973, private respondent Luis R.
Narciso entered into a Contract of Hire of Heavy
Equipment with petitioner G-Tractors under the terms of
which the latter leased to the former tractors for the
purpose of constructing switchroads and hauling felled
trees at the jobsite of Narciso's logging concession at del
Gallego, Camarines Sur. The contract provided for
payment of rental for the use of said tractors.
Luis R. Narciso defaulted in his rental payments. Hence, on
August 15, 1974, G-Tractors instituted an action against
him to collect the total amount of P155,410.25 with legal
interest thereon, representing unpaid rentals for the leased
tractors, 25% thereof as liquidated damages, P30,000.00
as and for attorney's fees, and the costs of suit, before the
then Court of First Instance of Rizal, Quezon City, Branch
IX. The case was docketed thereat as Civil Case No. Q19173.
Luis R. Narciso was declared in default. On his
representations, however, G-Tractors accepted his offer for
a compromise agreement. A compromise agreement was

13

thereupon signed by G-Tractors and Luis R. Narciso and on

the basis thereof, judgment thereon was rendered on
October 10, 1974.

the Registry of Deeds of Quezon City 2 which parcel of

land is allegedly the conjugal property of the spouses Luis
R. Narciso and Josefina Salak Narciso.

The compromise agreement stipulated for payment by Luis

R. Narciso of the total claim of G-Tractors on an installment
plan. Luis R. Narciso failed to comply and so on November
29, 1974, G-Tractors filed a motion for execution. This was
opposed by Luis R. Narciso who asked for the suspension
of the issuance of a writ of execution on the ground that
he allegedly has a pending loan with a banking institution.
The lower court, finding the allegation without legal basis,
denied the request for suspension and ordered the
issuance of a writ of execution to enforce the judgment
based on the compromise agreement. The writ of
execution was issued on February 7, 1975. 1 Levy was
accrdingly made on February 19, 1975 by the City Sheriff
of Quezon City on certain personal properties of private
respondents-at their residence at 208 Retiro Street,
Quezon City. Auction sale was held on March 1, 1975, and
G-Tractors, being the highest bidder, was awarded the sale
by the City Sheriff of Quezon City of all the personal
properties listed under the levy, for the total amount of
P4,090.00.

On February 22, 1975, the Sheriff notified the general

public, in his Notice of Sheriff's sale, that on March 25,
1975 he would sell at public auction to the highest bidder
for cash "the rights, interest and participation of the
aforementioned defendant Luis R. Narciso in the aforesaid
real estate property covered by Transfer Certificate of Title
No. 120923, together with all the improvements existing
thereon" to satisfy the aforementioned writ of execution. 3

On March 5, 1975, Luis R. Narciso offered to redeem and/or

buy back all the personal properties sold to G-Tractors for
the same amount of P4,090.00 which the latter agreed and
for which a Deed of Reconveyance was executed by GTractors.
Likewise, on February 12, 1975, the Sheriff of Quezon City
made a levy on "all rights, interest, title, participation
which the defendant Luis R. Narciso" may have over a
parcel of residential land covered by TCT No. 120923 of

On March 25, 1975, a "Certificate of Sale" was issued to

the effect that "on said date (March 25, 1975) by virtue of
the writ of execution issued by the Honorable Ulpiano
Sarmiento in Civil Case No. Q-19173, the ex-oficio Sheriff
of Quezon City sold at public auction to the highest bidder
(plaintiff G-Tractors, Inc.) for P180,000.00 the real estate
property covered by TCT No. 120923, Quezon City, and
levied upon on February 12, 1975, together with all the
improvements thereon. 4 At that time, however, TCT No.
120923
was
mortgaged
to
Mercantile
Financing
Corporation to guarantee an outstanding unpaid account
of Luis R. Narciso and his wife in the amount of
P74,327.52.
Soon after the issuance of the aforesaid Certificate of Sale,
Luis R. Narciso and G-Tractors, Inc. executed a contract of
lease over the aforesaid property whereby the former
obligated himself to pay a monthly rental of P1,000.00 and
by virtue of the said contract of lease, Luis R. Narciso
actually paid to G-Tractors, Inc. the amount of P12,000.00
as rental for one year.

14

On March 31, 1976, Josefina Salak Narciso and her

husband Luis R. Narciso filed a complaint in the same
Court of First Instance of Quezon City for "declaration of
nullity of levy on execution and auction sale of plaintiff's
conjugal property with damages and injunction," docketed
as Civil Case No. Q-21267. Among other things, the
complaint alleged that whatever transpired in Civil Case
No. Q-19173 could be binding only on the husband Luis R.
Narciso and could not affect or bind the plaintiff-wife
Josefina Salak Narciso who was not a party to that case;
that the nature of the Sheriff's sale clearly stated that only
the property of the husband may be sold to satisfy the
money judgment against him; that the conjugal property
of the plaintiffs-spouses could not be made liable for the
satisfaction of the judgment in Civil Case No. Q-19173
considering that the subject matter of said case was never
used for the benefit of the conjugal partnership or of the
family; and that the levy of the wife's share in the conjugal
property to satisfy the money judgment against her
husband is null and void. 5
On April 5, 1976, the President of G-Tractors, Inc. executed
an affidavit of consolidation of ownership and on the next
day, April 6, 1976, the sheriff issued a Sheriff's Final Deed
of Sale. 6
On April 12, 1976, G-Tractors, Inc. filed in Civil Case No. Q19173, a "Motion for Entry and Issuance of New Torrens
Certificate of Title" asking the Court to direct the Register
of Deeds of Quezon City to cancel TCT No. 120923 and to
allow the entry and issuance of a new torrens title in the
name of G-Tractors, Inc.
On April 22, 1976, Luis R. Narciso filed an opposition to the
aforesaid motion calling attention to the fact that he and

his wife had filed a complaint which was docketed as Civil

Case No. Q-21267 and pointing out that the Sheriff's final
deed of sale and affidavit of consolidation of ownership
would have no effect should the levy on execution and the
subsequent auction sale of the conjugal property be
nullified. 7
Civil Case No. Q-21267 was subsequently transferred to
Branch IX of the same Court of First Instance which tried
Civil Case No. Q-19173.
On April 26, 1976, Judge Sarmiento issued an Order
cancelled TCT No. 120923 and directing the Register of
Deeds of Quezon City to issue in lieu thereof a new title in
the name of G-Tractors, Inc. 8
Luis R. Narciso move to reconsider the aforesaid order of
April 26, 1976. This was followed by a motion filed by the
Narciso spouses for a preliminary injunction in Civil Case
No. Q-21267. Meanwhile, immediately after receiving a
copy of the order of April 26, 1976, G-Tractors, Inc. caused
the cancellation of TCT No. 120923 and the issuance of
TCT No. 218552 in its name.
On May 21, 1976, the lower court enjoined G-Tractors, Inc.
from transferring, conveying or in any manner alienating
the property covered by TCT No. 218552 until the motion
for reconsideration of the order of April 26, 1976 has been
resolved.
On July 12, 1976, two (2) orders were issued by the lower
court, one denying the motion for reconsideration and the
other denying the motion for preliminary injunction. A
motion to reconsider the order denying the preliminary
injunction was likewise denied.

15

Hence, on October 2, 1976, the spouses Luis R. Narciso

and Josefina Salak Narciso filed before the then Court of
Appeals, a petition for certiorari with Preliminary
Injunction, docketed in the said court as CA-G.R. No. SP05920, seekingA ? To annul, set aside and declare null and void the
following:
(1) Levy on execution dated February 11, 1975;
(2) Sheriff's Certificate of sale dated March 25, 1975;
(3) Sheriff's Final Deed of Sale dated April 6, 1976;
(4) Order of respondent Judge dated April 26, 1976;
(5) Orders of the respondent Judge both dated July 12,
1976; and
(6) Order of the respondent Judge dated August 26, 1976.
B ? To restrain and enjoin the respondent from further
giving force and effect to the levy and sale on execution
and to the disputed orders; the private respondent GTractors, Inc. from alienating the Lot covered by TCT No.
218552 and from dispossessing the petitioners of said Lot
and the house standing thereon; the respondent Judge
from further proceeding in Civil Case Nos. Q-19173 and Q21267; and
C ? To direct the Register of Deeds of Quezon City to
cancel TCT No. 218552 in the name of G-Tractors, Inc. and
to issue a new one in the name of petitioners-spouses.

On April 29, 1977, the then Court of Appeals rendered its

now assailed Decision, annulling the levy on execution
dated February 11, 1975, the sheriff's certificate of sale
dated March 25, 1975, as well as the sheriff's final deed of
sale; and the Orders dated April 26, July 12 and August
26,1976.
G-Tractors, Inc.'s motion for reconsideration having been
denied, the instant petition for Review on certiorari was
filed before this Court, petitioner contending that
respondent Court of Appeals erred ?
1. In holding that a levy on a residential land does not
include the residential house or any improvement erected
and existing thereon;
2. In holding that the judgment debt of private respondent
Luis R. Narciso, subject of Civil Case No. Q-19173, entitled
G-Tractors, Inc. vs. Luis R. Narciso, Court of First Instance of
Rizal, Quezon City, Branch IX was not the conjugal debt of
private respondents-spouses Luis R. Narciso and Josefina
Salak Narciso;
3. In not holding that there was laches and delay in the
firing by private respondents-spouses of CA-G.R. No.
05920-SP with the respondent Court of Appeals.
4. In granting the writs applied for by private respondents
spouses in CA-G.R. No. 05920, the petition itself not being
the proper remedy.
The crucial issue that poses itself for our resolution in the
instant petition is-whether or not the judgment debt of
private respondent Luis R. Narciso is a conjugal debt for

16

which the conjugal partnership property can be held

answerable.
Article 161 of the New Civil Code provides that the
conjugal partnership shall be liable for:
(1) All the debts and obligations contracted by the
husband for the benefit of the conjugal partnership, and
those contracted by the wife, also for the same purpose, in
the cases where she may legally bind the partnership.
There is no question that private respondent Luis R.
Narciso is engage in business as a producer and exporter
of Philippine mahogany logs. He operates a logging
concession at del Gallego, Camarines Sur and holds office
right in the conjugal dwelling at 208 Retiro Street, Talayan
Village, Quezon City, Metro Manila, where he and his
family reside. His account with petitioner G-Tractors, Inc.
represents rentals for the use of petitioner's tractors which
he leased for the purpose of constructing switchroads and
hauling felled trees at the jobsite of the logging concession
at del Gallego, Camarines Sur which is not his exclusive
property but that of his family. There is no doubt then that
his account with the petitioner was brought about in order
to enhance the productivity of said logging business, a
commercial enterprise for gain which he had the right to
embark the conjugal partnership.

Philippine mahogany logs and that the bulldozers leased to

him was used for the construction of switchroads for
logging. It is very clear, therefore, that the obligations
were contracted in connection with his legitimate business
as a producer and exporter in mahogany logs and certainly
benefited the conjugal partnership. Justice J.B.L. Reyes is
very liberal in interpreting Art. 161 of the Civil Code when
he declared in Luzon Surety Co., Inc. versus de Garcia (30
SCRA 118) that the words in said article "all debts and
obligations contracted by the husband for the benefit of
the conjugal partnership "do not require that actual profit
or benefit must accrue to the conjugal partnership from
the husband's transaction", but it suffices that the
transaction should be one that normally would produce
such benefit for the partnership. 9
In the case of Cobb-Perez vs. Lantin, 10 citing the case of
Abella de Diaz vs- Erlanger and Galinger, 11 and Javier vs.
Osmena, 12 this court ruled-

This is the finding of the trial court and we find no cogent

reason to deviate therefrom. It held:

The aforesaid obligation was contracted in the purchase of

leather used in the shoe manufacturing business of the
petitioner husband. Said business is an ordinary
commercial enterprise for gain, in the pursuit of which
Damaso Perez had the right to embark the partnership. It
is well settled that the debts contracted by the husband
for and in the exercise of the industry or profession by
which he contributes to the support of the family cannot
be deemed to be his exclusive and private debts.
(Emphasis supplied)

Lastly, the contention that the conjugal partnership is not

liable because the obligation contracted by the husband is
personal in nature is not applicable in this case. The record
shows that Luis R. Narciso is a producer and exporter of

The husband is the administrator of the conjugal

partnership and as long as he believes he is doing right to
his family, he should not be made to suffer and answer
alone. 13 So that, if he incurs an indebtedness in the

17

legitimate pursuit of his career or profession or suffers

losses in a legitimate business, the conjugal partnership
must equally bear the indebtedness and the losses, unless
he deliberately acted to the prejudice of his family. Such is
the nature of the judgment debt of private respondent Luis
R. Narciso to petitioner. Consequently, the conjugal
partnership of gains of private respondents Narcisos, must
answer for the same. 14 Necessarily the sale at public
auction by the Sheriff of Quezon City of TCT No. 120923
belonging to the conjugal partnership of gains of the
private respondents Narcisos in order to satisfy the
judgment debt of the private respondent Luis R. Narciso
with petitioner, was validly and legally made in accordance
with law and not legally assailable as held in the analogous
case of Vda. de Sta. Romana vs. Philippine Commercial
and Industrial Bank 15 where We laid down the following
dictum :
Petitioner assails the pronouncement by the respondent
court that Civil Case No. 13553 is barred by res judicata on
the principal ground that, not being a party in Civil Case
No. 7678, she could not be bound by the judgment
rendered in said case and, consequently, the writ of
attachment and the consequent writ of execution which
levied on Lot No. 1258-F, together with its existing
improvements, are null and void insofar as her ONE-HALF
(?) interest in said properties is concerned.
We find no merit in this contention of the petitioner.
The action filed by private respondent against the
petitioner Ramon Sta. Romana was clearly a suit to enforce
an obligation of the conjugal partnership. Civil Case No.
7678 arose out of the failure of Ramon Sta. Romana to pay
the purchase price of a lot he bought from C.N. Hodges

presumably in behalf of the conjugal partnership.

Petitioner does not deny the conjugal nature of both Lots
Nos. 1258-G and 1258-F. Indeed, she bases her contention
on the claim that at least Lot No. 1258-F, together with its
improvements existing thereon, constitutes property of the
conjugal partnership. It may not be denied, therefore, that
the liability incurred by Ramon Sta. Romana is chargeable
against the conjugal partnership assets, it being
undisputed that the said obligation was contracted by the
husband for the benefit of the conjugal partnership. (Art.
161(l), Civil Code)
The non-inclusion of the herein petitioner as a partydefendant in Civil Case No. 7678 is immaterial. There is no
rule or law requiring that in a suit against the husband to
enforce an obligation, either pertaining to him alone or one
chargeable against the conjugal partnership, the
defendant husband must be joined by his wife. The
contrary rule is prescribed in Sec. 4, Rule 3, of the Rules of
Court and Article 113 of the Civil Code, but not the other
way around, obviously in recognition of the legal status of
the husband as the administrator of the conjugal
partnership. (Art. 112, Civil Code) There was therefore, no
need of including the petitioner as a party in Civil Case No.
7678 for the purpose of binding the conjugal partnership
properties for the satisfaction of the judgment that could
be rendered thereon. (Emphasis supplied)
WHEREFORE, the Decision of the then Court of Appeals
sought to be reviewed is hereby REVERSED and SET
ASIDE. No pronouncement as to costs.
SO ORDERED.
Makasiar, Aquino, Concepcion Jr., Abad Santos and Escolin

18

JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-48889

May 11, 1989

DEVELOPMENT BANK OF THE PHILIPPINES (DBP),

petitioner,
vs.
THE HONORABLE MIDPAINTAO L. ADIL, Judge of the Second
Branch of the Court of First Instance of Iloilo and SPOUSES
PATRICIO
CONFESOR
and
JOVITA
VILLAFUERTE,
respondents.
GANCAYCO, J.:
The issue posed in this petition for review on certiorari is
the validity of a promissory note which was executed in
consideration of a previous promissory note the
enforcement of which had been barred by prescription.

19

On February 10, 1940 spouses Patricio Confesor and Jovita

Villafuerte obtained an agricultural loan from the
Agricultural and Industrial Bank (AIB), now the
Development of the Philippines (DBP), in the sum of
P2,000.00, Philippine Currency, as evidenced by a
promissory note of said date whereby they bound
themselves jointly and severally to pay the account in ten
(10) equal yearly amortizations. As the obligation
remained outstanding and unpaid even after the lapse of
the aforesaid ten-year period, Confesor, who was by then a
member of the Congress of the Philippines, executed a
second promissory note on April 11, 1961 expressly
acknowledging said loan and promising to pay the same
on or before June 15, 1961. The new promissory note
reads as follows

Jovita Villafuerte Confesor to pay the plaintiff Development

Bank of the Philippines, jointly and severally, (a) the sum
of P5,760.96 plus additional daily interest of P l.04 from
September 17, 1970, the date Complaint was filed, until
said amount is paid; (b) the sum of P576.00 equivalent to
ten (10%) of the total claim by way of attorney's fees and
incidental expenses plus interest at the legal rate as of
September 17,1970, until fully paid; and (c) the costs of
the suit.
Defendants-spouses appealed therefrom to the Court of
First Instance of Iloilo wherein in due course a decision was
rendered on April 28, 1978 reversing the appealed
decision and dismissing the complaint and counter-claim
with costs against the plaintiff.

Said spouses not having paid the obligation on the

specified date, the DBP filed a complaint dated September
11, 1970 in the City Court of Iloilo City against the spouses
for the payment of the loan.

A motion for reconsideration of said decision filed by

plaintiff was denied in an order of August 10, 1978. Hence
this petition wherein petitioner alleges that the decision of
respondent judge is contrary to law and runs counter to
decisions of this Court when respondent judge (a) refused
to recognize the law that the right to prescription may be
renounced or waived; and (b) that in signing the second
promissory note respondent Patricio Confesor can bind the
conjugal partnership; or otherwise said respondent
became liable in his personal capacity. The petition is
impressed with merit. The right to prescription may be
waived or renounced. Article 1112 of Civil Code provides:

After trial on the merits a decision was rendered by the

inferior court on December 27, 1976, the dispositive part
of which reads as follows:

Art. 1112. Persons with capacity to alienate property may

renounce prescription already obtained, but not the right
to prescribe in the future.

WHEREFORE, premises considered, this Court renders

judgment, ordering the defendants Patricio Confesor and

Prescription is deemed to have been tacitly renounced

when the renunciation results from acts which imply the

I hereby promise to pay the amount covered by my

promissory note on or before June 15, 1961. Upon my
failure to do so, I hereby agree to the foreclosure of my
mortgage. It is understood that if I can secure a certificate
of indebtedness from the government of my back pay I will
be allowed to pay the amount out of it.

20

abandonment of the right acquired.

There is no doubt that prescription has set in as to the first
promissory note of February 10, 1940. However, when
respondent Confesor executed the second promissory note
on April 11, 1961 whereby he promised to pay the amount
covered by the previous promissory note on or before June
15, 1961, and upon failure to do so, agreed to the
foreclosure of the mortgage, said respondent thereby
effectively and expressly renounced and waived his right
to the prescription of the action covering the first
promissory note.
This Court had ruled in a similar case that
... when a debt is already barred by prescription, it cannot
be enforced by the creditor. But a new contract
recognizing and assuming the prescribed debt would be
valid and enforceable ... . 1
Thus, it has been held
Where, therefore, a party acknowledges the correctness of
a debt and promises to pay it after the same has
prescribed and with full knowledge of the prescription he
thereby waives the benefit of prescription. 2
This is not a mere case of acknowledgment of a debt
has prescribed but a new promise to pay the debt.
consideration of the new promissory note is the
existing obligation under the first promissory note.
statutory limitation bars the remedy but does
discharge the debt.

that
The
preThe
not

A new express promise to pay a debt barred ... will take

the case from the operation of the statute of limitations as

this proceeds upon the ground that as a statutory
limitation merely bars the remedy and does not discharge
the debt, there is something more than a mere moral
obligation to support a promise, to wit a pre-existing debt
which is a sufficient consideration for the new the new
promise; upon this sufficient consideration constitutes, in
fact, a new cause of action. 3
... It is this new promise, either made in express terms or
deduced from an acknowledgement as a legal implication,
which is to be regarded as reanimating the old promise, or
as imparting vitality to the remedy (which by lapse of time
had become extinct) and thus enabling the creditor to
recover upon his original contract. 4
However, the court a quo held that in signing the
promissory note alone, respondent Confesor cannot
thereby bind his wife, respondent Jovita Villafuerte, citing
Article 166 of the New Civil Code which provides:
Art. 166.
Unless the wife has been declared a non
compos mentis or a spend thrift, or is under civil
interdiction or is confined in a leprosarium, the husband
cannot alienate or encumber any real property of the
conjugal partnership without, the wife's consent. If she ay
compel her to refuses unreasonably to give her consent,
the court m grant the same.
We disagree. Under Article 165 of the Civil Code, the
husband is the administrator of the conjugal partnership.
As such administrator, all debts and obligations contracted
by the husband for the benefit of the conjugal partnership,
are chargeable to the conjugal partnership. 5 No doubt, in
this case, respondent Confesor signed the second

21

promissory note for the benefit of the conjugal

partnership. Hence the conjugal partnership is liable for
this obligation.
WHEREFORE, the decision subject of the petition is
reversed and set aside and another decision is hereby
rendered reinstating the decision of the City Court of Iloilo
City of December 27, 1976, without pronouncement as to
costs in this instance. This decision is immediately
executory and no motion for extension of time to file
motion for reconsideration shall be granted.
SO ORDERED.
Narvasa and Cruz, JJ., concur.
Grio-Aquino, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

22

G.R. No. L-51283

June 7, 1989

LOURDES MARIANO, petitioner,

vs.
COURT OF APPEALS, and DANIEL SANCHEZ, respondents.
Jose V. Natividad & Associates for petitioner .
Arturo S. Santos for respondents.
NARVASA, J.:
The proceedings at bar concern (1) an attempt by a
married man to prevent execution against conjugal
property of a judgment rendered against his wife, for
obligations incurred by the latter while engaged in a
business that had admittedly redounded to the benefit of
the family, and (2) the interference by a court with the
proceedings on execution of a co-equal or coordinate
court. Both acts being proscribed by law, correction is
called for and will hereby be effected.
The proceedings originated from a suit filed by Esther
Sanchez against Lourdes Mariano in the Court of First
Instance at Caloocan City, 1 for recovery of the value of
ladies' ready made dresses allegedly purchased by and
delivered to the latter. 2
A writ of preliminary attachment issued at Esther Sanchez'
instance, upon a bond posted by Veritas Insurance
Company in the amount of P 11,000.00, and resulted in
the seizure of Lourdes Mariano's property worth P
15,000.00 or so. 3 Her motion for the discharge of the
attachment having been denied, 4 Lourdes Mariano went
up to the Court of Appeals on certiorari. That Court

ordered 5 the Trial Court to receive evidence on whether or

not the attachment had been improvidently or irregularly
issued. 6 The Trial Court did so, came to the conclusion
that the attachment had indeed been improperly issued,
and consequently dissolved it. 7
Trial then ensued upon the issues arising from the
complaint as well as Lourdes Mariano's answer with
counterclaim-which included a claim for damages resulting
from wrongful attachment. Thereafter judgment was
rendered in favor of defendant Lourdes Mariano and
against plaintiff Esther Sanchez containing the following
dispositions, to wit: 8
1. On the complaint, defendant is ordered to pay unto the
plaintiff for the value of the dishonored check (Exhs. G-1, H
and I) in the total amount of P 1,512.00.
2. On the counterclaim, the plaintiff is ordered to pay
unto defendant the following, as follows:
a) P 7,500.00 for loss of income of the defendant for 75
days;
b) P 16,000.00 for the value of attached goods;
c) P 25,000.00 for moral and exemplary damages;
d) P 5,000.00 as attorney's fees plus costs of suit.
The Veritas Insurance Company which issued the
attachment bond is ordered to pay unto the defendant the
full insurance coverage of P 11,000.00 to answer for the
total liability of the plaintiff thereof

23

Esther Sanchez sought to perfect an appeal by filing a

notice of appeal, an appeal bond and a record on appeal. 9
Pending approval of the record on appeal, Lourdes Mariano
filed a motion for the immediate execution of the
judgment which the Court granted. 10 In virtue of the writ
of execution which afterwards issued in due course, the
sheriff garnished the sum of P 11,000.00 from Veritas
Insurance Company, and levied on real and personal
property belonging to the conjugal partnership of Esther
Sanchez and her husband, Daniel Sanchez. Esther Sanchez
then filed a petition for certiorari with the Court of Appeals,
praying for the annulment of the execution pending appeal
authorized by the Trial Court; but her petition was
adjudged to be without merit and was accordingly
dismissed. 11
Daniel Sanchez, Esther's husband, now made his move. He
filed a complaint for annulment of the execution in the
Court of First Instance at Quezon City in his capacity as
administrator of the conjugal partnership. 12 He alleged
that the conjugal assets could not validly be made to
answer for obligations exclusively contracted by his wife,
and that, moreover, some of the personal property levied
on, such as household appliances and utensils necessarily
used in the conjugal dwelling, were exempt from
execution. He also applied for a preliminary injunction
pending adjudication of the case on the merits. 13
The Quezon City Court issued an order setting the matter
of the injunction for hearing, and commanding the sheriff,
in the meantime, to desist from proceeding with the
auction sale of the property subject of Daniel Sanchez'
claim. 14 Lourdes Mariano filed a motion to dismiss the
action; this, the Court denied. 15 She then instituted a

special civil action of certiorari in the Court of Appeals 16

where she initially enjoyed some measure of success: her
petition was given due course, and the Quezon City Court
was restrained by the Appellate Court's Seventh Division
17 from further proceeding with the case. 18 Eventually,
however, the Eighth Division 19 came to the conclusion
that there was no merit in her cause and dismissed her
petition. 20 It ruled that the Quezon City Court had not
interfered with the execution process of the Caloocan
Court because Daniel Sanchez's action in the former court
raised an issue-the validity of the sheriffs levy on the
conjugal partnership assets of the Sanchez spouses
different from those adjudicated in the Caloocan Court,
and Sanchez was not a party to the case tried by the
latter.
From this verdict Lourdes Mariano has appealed to this
Court, contending that the Appellate Court committed
reversible error1) in ruling that the conjugal partnership of Daniel and
Esther Sanchez could not be made liable for Esther's
judgment obligation arising from the spouses' joint
business with Lourdes Mariano;
2) in ruling that the Quezon City Court of First Instance
had not interfered with the execution process of the
Caloocan Court of First Instance; and
3) when its Eighth Division decided the petition of
Lourdes Mariano although the case had been raffled to the
Seventh Division and the latter had in fact given due
course to the petition.
1.

There is no dispute about the fact that Esther Sanchez

24

was engaged in business not only without objection on the

part of her husband, Daniel, but in truth with his consent
and approval. 21 It is also established that, as expressly
acknowledged by Esther herself and never denied by
Daniel, the profits from the business had been used to
meet, in part at least, expenses for the support of her
family, i.e., the schooling of the children, food and other
household expenses. 22 Under the circumstances, Lourdes
Mariano action against Esther Sanchez was justified, the
litigation being "incidental to the ... business in which she
is engaged 23 and consequently, the conjugal partnership
of Daniel and Esther Sanchez was liable for the debts and
obligations contracted by Esther in her business since the
income derived therefrom, having been used to defray
some of the expenses for the maintenance of the family
and the education of the children, had redounded to the
benefit of the partnership. 24 It was therefore error for the
Court of Appeals to have ruled otherwise.
2. It was also error for the Court of Appeals to have held
that there was no interference by the Quezon City Court of
First Instance with the execution process of the Caloocan
Court.
The rule, one of great importance in the administration of
justice, is that a Court of First Instance has no power to
restrain by means of injunction the execution of a
judgment or decree of another judge of concurrent or
coordinate jurisdictions. 25 But this is precisely what was
done by the Quezon City Court of First Instance: it enjoined
the execution of a judgment authorized and directed by a
co-equal and coordinate court, the Caloocan City Court of
First Instance. It did so on the claim of Daniel Sanchez that
the property being levied on belonged to the conjugal
partnership and could not be made liable for the wife's

obligations.
The question that arises is whether such a claim that
property levied on in execution of a judgment is not
property of the judgment debtor, Daniel Sanchez's wife,
but of the conjugal partnership of the Sanchez Spouses is
properly cognizable by a Court other than that which
rendered judgment adversely to the wife.
To be sure, Section 17, Rule 39 of the Rules of Court,
authorizes a "third person," i.e., "any other person than
the judgment debtor or his agent," to vindicate "his claim
to the property by any proper action." The section reads as
follows: 26
SEC. 17. Proceedings where property claimed by third
person.-If property levied on be claimed by any other
person than the judgment debtor or his agent, and such
person make an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or
title, and serve the same upon the officer making the levy,
and a copy thereof upon the judgment creditor, the officer
shall not be bound to keep the property, unless such
judgment creditor or his agent, on demand of the officer,
indemnify the officer against such claim by a bond in a
sum not greater than the value of the property levied on.
In case of disagreement as to such value, the same shall
be determined by the court issuing the writ of execution.
The officer is not liable for damages, for the taking or
keeping of the property, to any third-party claimant, unless
a claim is made by the latter and unless an action for
damages is brought by him against the officer within one
hundred twenty (120) days from the date of the filing of
the bond. But nothing herein contained shall prevent such

25

claimant or any third person from vindicating his claim to

the property by any proper action.
xxx xxx xxx
The "proper action" referred to in the section "is and
should be an entirely separate and distinct action from
that in which execution has issued, if instituted by a
stranger to the latter suit:" 27 and in "such separate
action, the court may issue a writ of preliminary injunction
against the sheriff enjoining him from proceeding with the
execution sale." 28 "Upon the other hand, if the claim of
impropriety on the part of the sheriff in the execution
proceedings is made by a party to the action, not a
stranger thereto, any relief therefrom may be applied for
with, and obtained from, only the executing court; and this
is true even if a new party has been impleaded in the suit."
29
In the case at bar, the husband of the judgment debtor
cannot be deemed a "stranger" to the case prosecuted
and adjudged against his wife. A strikingly similar situation
was presented in a case decided by this Court as early as
1976, Rejuso v. Estipona. 30 There, the sheriff tried to
evict petitioner Rejuso and his family from their house and
lot which had been sold in execution of a money judgment
rendered by the Court of First Instance of Davao against
Rejuso. What Rejuso did was to institute, together with his
wife, Felisa, a separate suit in the same court against the
sheriff and the judgment creditor, Estipona, for the
purpose of annulling the levy, execution sale, and writ of
possession issued in the first action in respect of their
residential house and lot, on the theory that that property
was conjugal in character and "hence, not subject to such
proceedings considering that Felisa was not a party to the

previous case." The action was however dismissed by the

court on the ground that it had "no jurisdiction over the
subject matter of the action or the nature of the action and
of the relief sought." 31 The dismissal was had on motion
of Estipona who argued that the court had no jurisdiction
to "vacate or annul and/or enjoin the enforcement of the
process issued by another branch in another case," and
since Rejuso had already raised the same issues in the first
case, without success, he should not be allowed to "get
from another branch ... what he failed to get ... (from)
Branch l." This Court affirmed that judgment of dismissal,
32 holding that Rejuso's action was barred by res
adjudicata; and "(a)s regards Felisa Rejuso, who is a new
party in Civil Case No. 5102" (the second action) it was
ruled that... her remedy, if it has not yet been barred by the statute
of limitations or become stale in some other way, is within
Civil Case No. 4435 (the first suit). Indeed, it is superfluous
to start a new action on a matter which can be more
simply and conveniently litigated within a former
proceeding of which it is more logically and legally an
integral part. (Ipekdjian Merchandising Co., Inc, v. CTA, 8
SCRA 59 [1963]). Actually, the court in which the former
proceeding was pending has exclusive jurisdiction thereof
(De Leon vs. Salvador, 36 SCRA 567), the fact that the two
cases are in the same Branch of the same Court of First
Instance and presided over by the same Judge
notwithstanding. After all, it is simpler and more
convenient to observe such practice, which insures also
consistency in the resolutions of related questions because
they are to be determined in most if not all instances by
the same judge.
In any case, whether by intervention in the court issuing

26

the writ, or by separate action, it is unavailing for either

Esther Sanchez or her husband, Daniel, to seek preclusion
of the enforcement of the writ of possession against their
conjugal assets. For it being established, as aforestated,
that Esther had engaged in business with her husband's
consent, and the income derived therefrom had been
expended, in part at least, for the support of her family,
the liability of the conjugal assets to respond for the wife's
obligations in the premises cannot be disputed.
The petitioner's appeal must therefore be sustained.
However, the petitioner's theory that the Eighth Division of
the Appellate Court had improperly taken cognizance of
the case which had been raffled to the Seventh Division,
must be rejected. It is without foundation, and was
evidently made without attempt to ascertain the relevant
facts and applicable rules. The case had originally been
assigned to Mr. Justice Isidro C. Borromeo for study and
report while he was still a member of the Seventh Division.
The case was brought by him to the Eighth Division when
he was subsequently transferred thereto; and he had
ultimately written the opinion for the division after due
deliberation with his colleagues. All of this took place in
accordance with the Rules of the Court of Appeals.
WHEREFORE, the Decision of the Court of Appeals subject
of the petition is REVERSED AND SET ASIDE, and the
Regional Trial Court (formerly Court of First Instance) at
Quezon City is ORDERED to dismiss Civil Case No. 20415
entitled "Daniel P. Sanchez v. Deputy Sheriff Mariano V.
Cachero, et al.," with prejudice. Costs against private
respondents.
SO ORDERED.

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

27

LUZON SURETY CO., INC., petitioner,

vs.
JOSEFA AGUIRRE DE GARCIA, VICENTE GARCIA and the
FOURTH DIVISION OF THE COURT OF APPEALS,
respondents.
Tolentino and Garcia and D. R. Cruz for petitioner.
Rodolfo J. Herman for respondents.
FERNANDO, J.:
The crucial question in this petition for the review of a
decision of the Court of Appeals, to be passed upon for the
first time, is whether or not a conjugal partnership, in the
absence of any showing of benefits received, could be held
liable on an indemnity agreement executed by the
husband to accommodate a third party in favor of a surety
company. The Court of Appeals held that it could not.
Petitioner Luzon Surety Co., Inc., dissatisfied with such a
judgment, which was an affirmance of a lower court
decision, would have us reverse. We do not see it that way.
The Court of Appeals adjudicated the matter in accordance
with law. We affirm what it did.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
October 31, 1969
G.R. No. L-25659

As noted in the brief of petitioner Luzon Surety Co., Inc., on

October 18, 1960, a suit for injunction was filed in the
Court of First Instance of Negros Occidental against its
Provincial Sheriff by respondents-spouses, Josefa Aguirre
de Garcia and Vicente Garcia "to enjoin [such Sheriff] from
selling the sugar allegedly owned by their conjugal
partnership, pursuant to a writ of garnishment issued by
virtue of a writ of execution issued in Civil Case No. 3893
of the same Court of First Instance ... against the
respondent Vicente Garcia ... ."[[1]]

28

There was a stipulation of facts submitted. There is no

question as to one Ladislao Chavez, as principal, and
petitioner Luzon Surety Co., Inc., executing a surety bond
in favor of the Philippine National Bank, Victorias Branch,
to guaranty a crop loan granted by the latter to Ladislao
Chavez in the sum of P9,000.00. On or about the same
date, Vicente Garcia, together with the said Ladislao
Chavez and one Ramon B. Lacson, as guarantors, signed
an indemnity agreement wherein they bound themselves,
jointly and severally, to indemnify now petitioner Luzon
Surety Co., Inc. against any and all damages, losses, costs,
stamps, taxes, penalties, charges and expenses of
whatsoever kind and nature which the petitioner may at
any time sustain or incur in consequence of having
become guarantor upon said bond, to pay interest at the
rate of 12% per annum, computed and compounded
quarterly until fully paid; and to pay 15% of the amount
involved in any litigation or other matters growing out of or
connected therewith for attorney's fees.
It was likewise stipulated that on or about April 27, 1956,
the Philippine National Bank filed a complaint before the
Court of First Instance of Negros Occidental, docketed as
its Civil Case No. 3893, against Ladislao Chavez and Luzon
Surety Co., Inc. to recover the amount of P4,577.95, in
interest, attorney's fees, and costs of the suit. On or about
August 8, 1957, in turn, a third-party complaint against
Ladislao Chavez, Ramon B. Lacson and Vicente Garcia,
based on the indemnity agreement, was instituted by
Luzon Surety Co., Inc.
Then, as set forth by the parties, on September 17, 1958,
the lower court rendered a decision condemning Ladislao
Chavez and Luzon Surety Co., Inc., to pay the plaintiff
jointly and severally the amount of P4,577.95 representing

the principal and accrued interest of the obligation at the

rate of 6% per annum as of January 6, 1956, with a daily
interest of P0.7119 on P4,330.91 from January 6, 1956,
until fully paid, plus the sum of P100.00 as attorney's fees,
and to pay the costs. The same decision likewise ordered
the third party defendants, Ladislao Chavez, Vicente
Garcia, and Ramon B. Lacson, to pay Luzon Surety Co.,
Inc., the total amount to be paid by it to the plaintiff
Philippine National Bank.
On July 30, 1960, pursuant to the aforesaid decision, the
Court of First Instance of Negros Occidental issued a writ of
execution against Vicente Garcia for the satisfaction of the
claim of petitioner in the sum of P8,839.97. Thereafter, a
writ of garnishment was issued by the Provincial Sheriff of
Negros Occidental dated August 9, 1960, levying and
garnishing the sugar quedans of the now respondentspouses, the Garcias, from their sugar plantation,
registered in the names of both of them.[[2]] The suit for
injunction filed by the Garcia spouses was the result.
As noted, the lower court found in their favor. In its
decision of April 30, 1962, it declared that the garnishment
in question was contrary to Article 161 of the Civil Code
and granted their petition, making the writ of preliminary
injunction permanent. Luzon Surety, Inc. elevated the
matter to the Court of Appeals, which, as mentioned at the
outset, likewise reached the same result. Hence this
petition for review.
We reiterate what was set forth at the opening of this
opinion. There is no reason for a reversal of the judgment.
The decision sought to be reviewed is in accordance with
law.

29

As explained in the decision now under review: "It is true

that the husband is the administrator of the conjugal
property pursuant to the provisions of Art. 163 of the New
Civil Code. However, as such administrator the only
obligations incurred by the husband that are chargeable
against the conjugal property are those incurred in the
legitimate pursuit of his career, profession or business with
the honest belief that he is doing right for the benefit of
the family. This is not true in the case at bar for we believe
that the husband in acting as guarantor or surety for
another in an indemnity agreement as that involved in this
case did not act for the benefit of the conjugal partnership.
Such inference is more emphatic in this case, when no
proof is presented that Vicente Garcia in acting as surety
or guarantor received consideration therefor, which may
redound to the benefit of the conjugal partnership."[[3]]
In the decision before us, the principal error assigned is
the above holding of the Court of Appeals that under
Article 161 of the Civil Code no liability was incurred by the
conjugal partnership. While fully conscious of the express
language of Article 161 of the Civil Code, petitioner, in its
well-written brief submitted by its counsel, would impress
on us that in this case it could not be said that no benefit
was received by the conjugal partnership. It sought to lend
some semblance of plausibility to this view thus: "The
present case involves a contract of suretyship entered into
by the husband, the respondent Vicente Garcia, in behalf
of a third person. A transaction based on credit through
which, by our given definitions, respondent Vicente Garcia,
by acting as guarantor and making good his guaranty,
acquires the capacity of being trusted, adds to his
reputation or esteem, enhances his standing as a citizen in
the community in which he lives, and earns the confidence
of the business community. He can thus secure money

with which to carry on the purposes of their conjugal

partnership."[[4]]
While not entirely, without basis, such an argument does
not carry conviction. Its acceptance would negate the plain
meaning of what is expressly provided for in Article 161. In
the most categorical language, a conjugal partnership
under that provision is liable only for such "debts and
obligations contracted by the husband for the benefit of
the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued to
the welfare of the spouses. There is none in this case. Nor
could there be, considering that the benefit was clearly
intended for a third party, one Ladislao Chavez. While the
husband by thus signing the indemnity agreement may be
said to have added to his reputation or esteem and to
have earned the confidence of the business community,
such benefit, even if hypothetically accepted, is too
remote and fanciful to come within the express terms of
the provision.
Its language is clear; it does not admit of doubt. No
process of interpretation or construction need be resorted
to. It peremptorily calls for application. Where a
requirement is made in explicit and unambiguous terms,
no discretion is left to the judiciary. It must see to it that its
mandate is obeyed. So it is in this case. That is how the
Court of Appeals acted, and what it did cannot be
impugned for being contrary to law.[[5]]
Moreover, it would negate the plain object of the additional
requirement in the present Civil Code that a debt
contracted by the husband to bind a conjugal partnership
must redound to its benefit. That is still another provision
indicative of the solicitude and tender regard that the law

30

manifests for the family as a unit. Its interest is

paramount; its welfare uppermost in the minds of the
codifiers and legislators.
This particular codal provision in question rightfully
emphasizes the responsibility of the husband as
administrator.[[6]] He is supposed to conserve and, if
possible, augment the funds of the conjugal partnership,
not dissipate them. If out of friendship or misplaced
generosity on his part the conjugal partnership would be
saddled with financial burden, then the family stands to
suffer. No objection need arise if the obligation thus
contracted by him could be shown to be for the benefit of
the wife and the progeny if any there be. That is but fair
and just. Certainly, however, to make a conjugal
partnership respond for a liability that should appertain to
the husband alone is to defeat and frustrate the avowed
objective of the new Civil Code to show the utmost
concern for the solidarity and well-being of the family as a
unit.[[7]] The husband, therefore, as is wisely thus made
certain, is denied the power to assume unnecessary and
unwarranted risks to the financial stability of the conjugal
partnership.
No useful purpose would be served by petitioner assigning
as one of the errors the observation made by the Court of
Appeals as to the husband's interest in the conjugal
property being merely inchoate or a mere expectancy in
view of the conclusion thus reached as to the absence of
any liability on the part of the conjugal partnership. Nor
was it error for the Court of Appeals to refuse to consider a
question raised for the first time on appeal. Now as to the
question of jurisdiction of the lower court to entertain this
petition for injunction against the Provincial Sheriff, to
which our attention is invited, neither the Court of Appeals

nor the lower court having been asked to pass upon it. Of
course, if raised earlier, it ought to have been seriously
inquired into. We feel, however, that under all the
circumstances of the case, substantial justice would be
served if petitioner be held as precluded from now
attempting to interpose such a barrier. The conclusion that
thereby laches had intervened is not unreasonable. Such a
response on our part can be predicated on the
authoritative holding in Tijam v. Sibonghanoy.[[8]]
WHEREFORE, the decision of the Court of Appeals of
December 17, 1965, now under review, is affirmed with
costs against petitioner Luzon Surety Co., Inc.
Concepcion, C.J., Dizon, Makalintal, Zaldivar Sanchez,
Castro, Teehankee and Barredo, JJ., concur.
Separate Opinions
REYES, J., concurring:
I concur in the result, but would like to make of record
that, in my opinion, the words "all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership" used in Article 161 of the Civil Code of the
Philippines in describing the charges and obligations for
which the conjugal partnership is liable, do not require that
actual profit or benefit must accrue to the conjugal
partnership from the husband's transactions; but that it
suffices that the transaction should be one that normally
would produce such benefit for the partnership. This is the
ratio behind our ruling in Javier vs. Osmea, 34 Phil. 336,
that obligations incurred by the husband in the practice of
his profession are collectible from the conjugal
partnership.

31

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-61464

May 28, 1988

BA FINANCE CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO YULO,
LILY YULO (doing business under the name and style of A &
L INDUSTRIES), respondents.
GUTIERREZ, JR., J.:
This is a petition for review seeking to set aside the

32

decision of the Court of Appeals which affirmed the

decision of the then Court of First Instance of Manila,
dismissing the complaint instituted by the petitioner and
ordering it to pay damages on the basis of the private
respondent's counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured
a loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own
behalf and as representative of the A & L Industries.
Respondent Yulo presented an alleged special power of
attorney executed by his wife, respondent Lily Yulo, who
manages A & L Industries and under whose name the said
business is registered, purportedly authorizing Augusto
Yulo to procure the loan and sign the promissory note.
About two months prior to the loan, however, Augusto Yulo
had already left Lily Yulo and their children and had
abandoned their conjugal home. When the obligation
became due and demandable, Augusto Yulo failed to pay
the same.
On October 7, 1975, the petitioner filed its amended
complaint against the spouses Augusto and Lily Yulo on
the basis of the promissory note. It also prayed for the
issuance of a writ of attatchment alleging that the said
spouses were guilty of fraud in contracting the debt upon
which the action was brought and that the fraud consisted
of the spouses' inducing the petitioner to enter into a
contract with them by executing a Deed of Assignment in
favor of the petitioner, assigning all their rights, titles and
interests over a construction contract executed by and
between the spouses and A. Soriano Corporation on June
19, 1974 for a consideration of P615,732.50 when, in truth,
the spouses did not have any intention of remitting the
proceeds of the said construction contract to the petitioner

because despite the provisions in the Deed of Assignment

that the spouses shall, without compensation or costs,
collect and receive in trust for the petitioner all payments
made upon the construction contract and shall remit to the
petitioner all collections therefrom, the said spouses failed
and refuse to remit the collections and instead,
misappropriated the proceeds for their own use and
benefit, without the knowledge or consent of the
petitioner.
The trial court issued the writ of attachment prayed for
thereby enabling the petitioner to attach the properties of
A & L Industries. Apparently not contented with the order,
the petitioner filed another motion for the examination of
attachment debtor, alleging that the properties attached
by the sheriff were not sufficient to secure the satisfaction
of any judgment that may be recovered by it in the case.
This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with
counterclaim, alleging that although Augusta Yulo and she
are husband and wife, the former had abandoned her and
their children five (5) months before the filing of the
complaint; that they were already separated when the
promissory note was executed; that her signature in the
special power of attorney was forged because she had
never authorized Augusto Yulo in any capacity to transact
any business for and in behalf of A & L Industries, which is
owned by her as a single proprietor, that she never got a
single centavo from the proceeds of the loan mentioned in
the promissory note; and that as a result of the illegal
attachment of her properties, which constituted the assets
of the A & L Industries, the latter closed its business and
was taken over by the new owner.

33

After hearing, the trial court rendered judgment dismissing

the petitioner's complaint against the private respondent
Lily Yulo and A & L Industries and ordering the petitioner to
pay the respondent Lily Yulo P660,000.00 as actual
damages; P500,000.00 as unrealized profits; P300,000.00
as exemplary damages; P30,000.00 as and for attorney's
fees; and to pay the costs.
The petitioner appealed. The Court of
trial court's decision except for the
which it reduced from P300,000.00 to
attorney's fees which were reduced
P20,000.00.

Appeals affirmed the

exemplary damages
P150,000.00 and the
from P30,000.00 to

In resolving the question of whether or not the trial court

erred in holding that the signature of respondent Lily Yulo
in the special power of attorney was forged, the Court of
Appeals said:
The crucial issue to be determined is whether or not the
signatures of the appellee Lily Yulo in Exhibits B and B-1
are forged. Atty. Crispin Ordoa, the Notary Public,
admitted in open court that the parties in the subject
documents did not sign their signatures in his presence.
The same were already signed by the supposed parties
and their supposed witnesses at the time they were
brought to him for ratification. We quote from the records
the pertinent testimony of Atty. Ordoa, thus:
Q. This document marked as Exhibit B-1, when this was
presented to you by that common friend, June Enriquez, it
was already typewritten, it was already accomplished, all
typewritten.?
A. Yes, sir.

Q And the parties had already affixed their signatures in

this document?
A.

Yes, sir.

Q. In this document marked as Exhibit B although it

appears here that this is an acknowledgment, you have
not stated here that the principal actually acknowledged
this document to be her voluntary act and deed?
A This in one of those things that escaped my attention.
Actually I have not gone over the second page. I believed
it was in order I signed it. (TSN pp. 13-14, Hearing of Nov.
26, 1976).
The glaring admission by the Notary Public that he failed
to state in the acknowledgment portion of Exhibit B-1 that
the appellee Lily Yulo acknowledged the said document to
be her own voluntary act and deed, is a very strong and
commanding circumstance to show that she did not
appear personally before the said Notary Public and did
not sign the document.
Additionally, the Notary Public admitted that, while June
Enriquez is admittedly a mutual friend of his and the
defendant Augusta Yulo, and who is also an instrumental
witness in said Exhibit B-1., he could not recognize or tell
which of the two signatures appearing therein, was the
signature of this June Enriquez.
Furthermore, as the issue is one of credibility of a witness,
the findings and conclusions of the trial court before whom
said witness, Atty. Crispin Ordoa, the Notary Public before
whom the questioned document was supposedly ratified

34

and acknowledged, deserve great respect and are seldom

disturbed on appeal by appellate tribunals, since it is in
the best and peculiar advantage of determining and
observing the conduct, demeanor and deportment of a
particular witness while he is testifying in court, an
opportunity not enjoyed by the appellate courts who
merely have to rely on the recorded proceedings which
transpired in the court below, and the records are bare of
any circumstance of weight, which the trial court had
overlooked and which if duly considered, may radically
affect the outcome of the case.
On the other hand, the appellee Lily Yulo, to back up her
claim of forgery of her signature in Exhibit B-1, presented
in court a handwriting expert witness in the person of
Police Captain Yakal Giron of the Integrated National Police
Training Command, and who is also a Document Examiner
of the same Command's Crime Laboratory at Fort
Bonifacio, Metro Manila. His experience as an examiner of
questioned and disputed documents, in our mind, is quite
impressive. To qualify him as a handwriting expert, he
declared that he underwent extensive and actual studies
and examination of disputed or questioned document,
both at the National Bureau of Investigation Academy and
National Bureau of Investigation Questioned Document
Laboratory, respectively, from July 1964, up to his
appointment as Document Examiner in June, 1975, and, to
further his experience along this line, he attended the
297th Annual Conference of the American Society of
Questioned Docurnent Examiners held at Seattle,
Washington, in August 1971, as a representative of the
Philippines, and likewise conducted an observation of the
present and modern trends of crime laboratories in the
West Coast, U.S.A., in 1971; that he likewise had
conducted actual tests and examination of about 100,000

documents, as requested by the different courts,

administrative, and governmental agencies of the
Government, substantial portions of which relate to actual
court cases.
In concluding that the signatures of the appellee Lily Yulo,
in the disputed document in question (Exh. B-1), were all
forgeries, and not her genuine signature, the expert
witness categorically recited and specified in open court
what he observed to be about twelve (12) glaring and
material significant differences, in his comparison of the
signatures appearing in the genuine specimen signatures
of the said appellee and with those appearing in the
questioned document (Exhibit B-1). Indeed, we have
likewise seen the supposed notable differences, found in
the standard or genuine signatures of the appellee which
were lifted and obtained in the official files of the
government, such as the Bureau of Internal Revenue on
her income tax returns, as compared to the pretended
signature of the appellee appearing in Exhibits B, B-1. It is
also noteworthy to mention that the appellant did not even
bother to conduct a cross-examination of the handwriting
expert witness, Capt. Giron, neither did the appellant
present another handwriting expert, at least to counter-act
or balance the appellee's handwriting expert.
Prescinding from the foregoing facts, we subscribe fully to
the lower court's observations that the signatures of the
appellee Lily Yulo in the questioned document (Exh. B-1)
were forged. Hence, we find no factual basis to disagree.
(pp. 28-30, Rollo)
As to the petitioner's contention that even if the signature
of Lily Yulo was forged or even if the attached properties
were her exclusive property, the same can be made

35

answerable to the obligation because the said properties

form part of the conjugal partnership of the spouses Yulo,
the appellate court held that these contentions are without
merit because there is strong preponderant evidence to
show that A & L Industries belongs exclusively to
respondent Lily Yulo, namely: a) The Certificate of
Registration of A & L Industries, issued by the Bureau of
Commerce, showing that said business is a single
proprietorship, and that the registered owner thereof is
only Lily Yulo; b) The Mayor's Permit issued in favor of A &
L Industries, by the Caloocan City Mayor's Office showing
compliance by said single proprietorship company with the
City Ordinance governing business establishments; and c)
The Special Power of Attorney itself, assuming but without
admitting its due execution, is tangible proof that Augusto
Yulo has no interest whatsoever in the A & L Industries,
otherwise, there would have been no necessity for the
Special Power of Attorney if he is a part owner of said
single proprietorship.
With regard to the award of damages, the Court of Appeals
affirmed the findings of the trial court that there was bad
faith on the part of the petitioner as to entitle the private
respondent to damages as shown not only by the fact that
the petitioner did not present the Deed of Assignment or
the construction agreement or any evidence whatsoever to
support its claim of fraud on the part of the private
respondent and to justify the issuance of a preliminary
attachment, but also by the following findings:
Continuing and elaborating further on the appellant's mala
fide actuations in securing the writ of attachment, the
lower court stated as follows:
Plaintiff not satisfied with the instant case where an order

for attachment has already been issued and enforced, on

the strength of the same Promissory Note (Exhibit"A"),
utilizing the Deed of Chattel Mortgage (Exhibit "4"), filed a
foreclosure proceedings before the Office of the Sheriff of
Caloocan (Exhibit"6") foreclosing the remaining properties
found inside the premises formerly occupied by the A & L
Industries. A minute examination of Exhibit "4" will show
that the contracting parties thereto, as appearing in par. 1
thereof, are Augusto Yulo, doing business under the style
of A & L Industries (should be A & L Glass Industries
Corporation), as mortgagor and BA Finance Corporation as
mortgagee, thus the enforcement of the Chattel Mortgage
against the property of A & L Industries exclusively owned
by Lily T. Yulo appears to be without any factual or legal
basis whatsoever. The chattel mortgage, Exhibit "4" and
the Promissory Note, Exhibit A, are based on one and the
same obligation. Plaintiff tried to enforce as it did enforce
its claim into two different modes a single obligation.
Aware that defendant Lily Yulo, filed a Motion to Suspend
Proceedings by virtue of a complaint she filed with the
Court of First Instance of Caloocan, seeking annulment of
the Promissory Note, the very basis of the plaintiff in filing
this complaint, immediately after the day it filed a Motion
for the Issuance of an Alias Writ of Preliminary
Attachment . . .Yet, inspite of the knowledge and the filing
of this Motion to Suspend Proceedings, the Plaintiff still
filed a Motion for the Issuance of a Writ of Attachment
dated February 6, 1976 before this court. To add insult to
injury, plaintiff even filed a Motion for Examination of the
Attachment Debtor, although aware that Lily Yulo had
already denied participation in the execution of Exhibits
"A" and "B". These incidents and actions taken by plaintiff,
to the thinking of the court, are sufficient to prove and
establish the element of bad faith and malice on the part

36

of plaintiff which may warrant the award of damages in

favor of defendant Lily Yulo. (Ibid., pp. 102-103).<re||
an1w>

genuine to the satisfaction of the judge," and that there is

no evidence on record which proves or tends to prove the
genuineness of the standards used.

Indeed, the existence of evident bad faith on the

appellant's part in proceeding against the appellee Lily
Yulo in the present case, may likewise be distressed on the
fact that its officer Mr. Abraham Co, did not even bother to
demand the production of at least the duplicate original of
the Special Power of Attorney (Exhibit B) and merely
contended himself with a mere xerox copy thereof, neither
did he require a more specific authority from the A & L
Industries to contract the loan in question, since from the
very content and recitals of the disputed document, no
authority, express or implied, has been delegated or
granted to August Yulo to contract a loan, especially with
the appellant. (pp. 33-34, Rollo)

There is no merit in this contention.

Concerning the actual damages, the appellate court ruled

that the petitioner should have presented evidence to
disprove or rebut the private respondent's claim but it
remained quiet and chose not to disturb the testimony and
the evidence presented by the private respondent to prove
her claim.
In this petition for certiorari, the petitioner raises three
issues. The first issue deals with the appellate court's
affirmance of the trial court's findings that the signature of
the private respondent on the Special Power of Attorney
was forged. According to the petitioner, the Court of
Appeals disregarded the direct mandate of Section 23,
Rule 132 of the Rules of Court which states in part that
evidence of handwriting by comparison may be made
"with writings admitted or treated as genuine by the party
against whom the evidence is offered, or proved to be

The records show that the signatures which were used as

"standards" for comparison with the alleged signature of
the private respondent in the Special Power of Attorney
were those from the latter's residence certificates in the
years 1973, 1974 and 1975, her income tax returns for the
years 1973 and 1975 and from a document on long bond
paper dated May 18, 1977. Not only were the signatures in
the foregoing documents admitted by the private
respondent as hers but most of the said documents were
used by the private respondent in her transactions with
the government. As was held in the case of Plymouth
Saving & Loan Assn. No. 2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the authorities to
be that the genuineness of a "standard" writing may be
established (1) by the admission of the person sought to
be charged with the disputed writing made at or for the
purposes of the trial or by his testimony; (2) by witnesses
who saw the standards written or to whom or in whose
hearing the person sought to be charged acknowledged
the writing thereof; (3) by evidence showing that the
reputed writer of the standard has acquiesced in or
recognized the same, or that it has been adopted and
acted upon by him his business transactions or other
concerns....
Furthermore, the judge found such signatures to be
sufficient as standards. In the case of Taylor-Wharton Iron
& Steel Co. v. Earnshaw (156 N.E. 855, 856), it was held:

37

strives to master some similarities.

When a writing is offered as a standard of comparison it is
for the presiding judge to decide whether it is the
handwriting of the party to be charged. Unless his finding
is founded upon error of law, or upon evidence which is, as
matter of law, insufficient to justify the finding, this court
will not revise it upon exceptions." (Costelo v. Crowell, 139
Mass. 588, 590, 2 N.E. 648; Nuez v. Perry, 113 Mass, 274,
276.)
We cannot find any error on the part of the trial judge in
using the above documents as standards and also in
giving credence to the expert witness presented by the
private respondent whose testimony the petitioner failed
to rebut and whose credibility it likewise failed to impeach.
But more important is the fact that the unrebutted
handwriting expert's testimony noted twelve (12) glaring
and material differences in the alleged signature of the
private respondent in the Special Power of Attorney as
compared with the specimen signatures, something which
the appellate court also took into account. In Cesar v.
Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant divergences and
distinctive characteristics between the sample signatures
and the signatures on the questioned checks in his report
which the court's Presiding Justice kept mentioning during
Maniwang's testimony.
In the course of his cross-examination, NBI expert
Tabayoyong admitted that he saw the differences between
the exemplars used and the questioned signatures but he
dismissed the differences because he did not consider
them fundamental. We rule that significant differences are
more fundamental than a few similarities. A forger always

The second issue raised by the petitioner is that while it is

true that A & L Industries is a single proprietorship and the
registered owner thereof is private respondent Lily Yulo,
the said proprietorship was established during the
marriage and its assets were also acquired during the
same. Therefore, it is presumed that this property forms
part of the conjugal partnership of the spouses Augusto
and Lily Yulo and thus, could be held liable for the
obligations contracted by Augusto Yulo, as administrator of
the partnership.
There is no dispute that A & L Industries was established
during the marriage of Augusta and Lily Yulo and therefore
the same is presumed conjugal and the fact that it was
registered in the name of only one of the spouses does not
destroy its conjugal nature (See Mendoza v. Reyes, 124
SCRA 161, 165). However, for the said property to be held
liable, the obligation contracted by the husband must have
redounded to the benefit of the conjugal partnership under
Article 161 of the Civil Code. In the present case, the
obligation which the petitioner is seeking to enforce
against the conjugal property managed by the private
respondent Lily Yulo was undoubtedly contracted by
Augusto Yulo for his own benefit because at the time he
incurred the obligation he had already abandoned his
family and had left their conjugal home. Worse, he made it
appear that he was duly authorized by his wife in behalf of
A & L Industries, to procure such loan from the petitioner.
Clearly, to make A & L Industries liable now for the said
loan would be unjust and contrary to the express provision
of the Civil Code. As we have ruled in Luzon Surety Co.,
Inc. v. De Gracia (30 SCRA 111, 115-117):

38

As explained in the decision now under review: "It is true

that the husband is the administrator of the conjugal
property pursuant to the provisions of Art. 163 of the new
Civil Code. However, as such administrator the only
obligations incurred by the husband that are chargeable
against the conjugal property are those incurred in the
legitimate pursuit of his career, profession or business with
the honest belief that he is doing right for the benefit of
the family. This is not true in the case at bar for we believe
that the husband in acting as guarantor or surety for
another in an indemnity agreement as that involved in this
case did not act for the benefit of the conjugal partnership.
Such inference is more emphatic in this case, when no
proof is presented that Vicente Garcia in acting as surety
or guarantor received consideration therefore, which may
redound to the benefit of the conjugal partnership.(Ibid,
pp. 46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a conjugal partnership
under that provision is liable only for such "debts and
obligations contracted by the husband for the benefit of
the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued to
the welfare of the spouses. There is none in this case.
xxx xxx xxx
Moreover, it would negate the plain object of the additional
requirement in the present Civil Code that a debt
contracted by the husband to bind a conjugal partnership
must redound to its benefit. That is still another provision

indicative of the solicitude and tender regard that the law

manifests for the family as a unit. Its interest is
paramount; its welfare uppermost in the minds of the
codifiers and legislators.
We, therefore, rule that the petitioner cannot enforce the
obligation contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo. Thus, it follows that
the writ of attachment cannot issue against the said
properties.
Finally, the third issue assails the award of actual damages
according to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties
referred to are still subject to a levy on attachment. They
are, therefore, still under custodia legis and thus, the
assailed decision should have included a declaration as to
who is entitled to the attached properties and that
assuming arguendo that the attachment was erroneous,
the lower court should have ordered the sheriff to return to
the private respondent the attached properties instead of
condemning the petitioner to pay the value thereof by way
of actual damages.
In the case of Lazatin v. Twao (2 SCRA 842, 847), we
ruled:
xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59, does not
prescribed the remedies available to the attachment
defendant in case of a wrongful attachment, but merely
provides an action for recovery upon the bond, based on
the undertaking therein made and not upon the liability
arising from a tortuous act, like the malicious suing out of

39

an attachment. Under the first, where malice is not

essential, the attachment defendant, is entitled to recover
only the actual damages sustained by him by reason of the
attachment. Under the second, where the attachment is
maliciously sued out, the damages recoverable may
include a compensation for every injury to his credit,
business or feed (Tyler v. Mahoney, 168 NC 237, 84 SE
362; Pittsburg etc. 5 Wakefield, etc., 135 NC 73, 47 SE
234). ...
The question before us, therefore, is whether the
attachment of the properties of A & L Industries was
wrongful so as to entitle the petitioner to actual damages
only or whether the said attachment was made in bad faith
and with malice to warrant the award of other kinds of
damages. Moreover, if the private respondent is entitled
only to actual damages, was the court justified in ordering
the petitioner to pay for the value of the attached
properties instead of ordering the return of the said
properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was
bad faith on the part of the petitioner in securing the writ
of attachment. We do not think so. "An attachment may be
said to be wrongful when, for instance, the plaintiff has no
cause of action, or that there is no true ground therefore,
or that the plaintiff has a sufficient security other than the
property attached, which is tantamout to saying that the
plaintiff is not entitled to attachment because the
requirements of entitling him to the writ are wanting. (7
C.J.S., 664)" (p. 48, Section 4, Rule 57, Francisco, Revised
Rules of Court).
Although the petitioner failed to prove the ground relied
upon for the issuance of the writ of attachment, this failure

cannot be equated with bad faith or malicious intent. The

steps which were taken by the petitioner to ensure the
security of its claim were premised, on the firm belief that
the properties involved could be made answerable for the
unpaid obligation due it. There is no question that a loan in
the amount of P591,003.59 was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual
damages and not for exemplary damages and attorney's
fees. Respondent Lily Yulo has manifested before this
Court that she no longer desires the return of the attached
properties since the said attachment caused her to close
down the business. From that time she has become a mere
employee of the new owner of the premises. She has
grave doubts as to the running condition of the attached
machineries and equipments considering that the
attachment was effected way back in 1975. She states as
a matter of fact that the petitioner has already caused the
sale of the machineries for fear that they might be
destroyed due to prolonged litigation. We, therefore, deem
it just and equitable to allow private respondent Lily Yulo
to recover actual damages based on the value of the
attached properties as proven in the trial court, in the
amount of P660,000.00. In turn, if there are any remaining
attached properties, they should be permanently released
to herein petitioner.
We cannot, however, sustain the award of P500,000.00
representing unrealized profits because this amount was
not proved or justified before the trial court. The basis of
the alleged unearned profits is too speculative and
conjectural to show actual damages for a future period.
The private respondent failed to present reports on the
average actual profits earned by her business and other
evidence of profitability which are necessary to prove her

40

claim for the said amount (See G. A. Machineries, Inc. v.

Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the
petitioner liable for P500,000.00 actual damages
representing unrealized profits, P150,000.00 for exemplary
damages and P20,000.00 for attorney's fees. As stated
earlier, the attached properties, should be released in
favor of the petitioner.
WHEREFORE, the decision of the Court of Appeals is
hereby SET ASIDE and the petitioner is ordered to pay the
private respondent Lily Yulo the amount of SIX HUNDRED
SIXTY THOUSAND PESOS (P660,000.00) as actual
damages. The remaining properties subject of the
attachment are ordered released in favor of the petitioner.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
August 28, 1969
G.R. No. L-25355
THE PEOPLE OF THE PHILIPPINES, plaintiff,
vs.
FROILAN LAGRIMAS, accused,
HEIRS OF PELAGIO CAGRO, heirs-appellants,
MERCEDES AGUIRRE DE LAGRIMAS, movant-appellee.
Socrates G. Desales for heirs-appellants.
Marciano Chitongco for movant-appellee.
FERNANDO, J.:
The Civil Code, under the conditions therein specified,

41

recognizes the liability of the conjugal partnership for fines

and indemnities imposed upon either husband or wife
"after the responsibilities enumerated in article 161 have
been covered," in the absence of any separate property of
the offending spouse or its insufficiency.[[1]] How such an
obligation "may be enforced against the partnership
assets" is the question, one of first impression, raised in
this appeal from a lower court order, based on the
assumption of the total exemption of the conjugal
partnership from the liability thus incurred, prior to the
stage of liquidation. The result was to set aside the
preliminary attachment and thereafter the writ of
execution in favor of the heirs of the murdered victim,
appellants before us, the judgment against the accused
imposing not only the penalty of reclusion perpetua but
also the indemnification to such heirs having attained the
status of finality. In view of the failure, apparent on the
face of the appealed order, to respect what the Civil Code
ordains, we reverse and remand the case for further
proceedings.
The brief of appellants, the heirs of Pelagio Cagro, the
murdered victim, discloses that on February 19, 1960 an
information was filed against the accused, Froilan
Lagrimas, for the above murder committed on February
15, 1960 in Pambujan, Samar. Thereafter, appellants as
such heirs, filed on February 27, 1960 a motion for the
issuance of a writ of preliminary attachment on the
property of the accused, such motion being granted in an
order of March 5, 1960. After trial, the lower court found
the accused guilty of the crime charged and sentenced
him to suffer the penalty of reclusion perpetua and to
indemnify the appellants as such heirs in the sum of
P6,000.00 plus the additional sum of P10,000.00 in the
concept of damages, attorney's fees and burial expenses.

An appeal from the judgment was elevated to this Court by

the accused but thereafter withdrawn, the judgment,
therefore, becoming final on October 11, 1962.
A writ of execution to cover the civil indemnity was issued
by the lower court upon motion of appellants. A levy was
had on eleven parcels of land in the province declared for
tax purposes in the name of the accused. The sale thereof
at public auction was scheduled on January 5, 1965 but on
December 29, 1964 the wife of the accused, Mercedes
Aguirre de Lagrimas, filed a motion to quash the writ of
attachment as well as the writ of execution with the
allegation that the property levied upon belonged to the
conjugal partnership and, therefore, could not be held
liable for the pecuniary indemnity the husband was
required to pay. The then judge of the lower court granted
such motion declaring null and void the order of
attachment and the writ of execution, in accordance with
Article 161 of the new Civil Code. Another judge of the
same lower court set aside the above order, sustaining the
legality of the preliminary attachment as well as the writ of
execution. Thereafter, upon appellee filing a motion for the
reconsideration of the above order giving due course to
the writ of execution, a third judge, then presiding over
such court, the Hon. Ignacio Mangosing, revived the
original order of March 5, 1960, declaring such attachment
and the writ of execution thereafter issued as null and
void.
This order of August 7, 1965, now on appeal, was
premised on the following considerations: "It can be
readily seen from the above-quoted provisions of law that
only debts contracted by the husband or the wife before
the marriage, and those of fines and indemnities imposed
upon them, may be enforced against the partnership

42

assets after the charges enumerated in article 161 have

been covered. So that as long as the obligations
mentioned in said article 161 have not been paid, the
assets of the partnership cannot be made to answer for
indemnities like the one being sought to be enforced in the
instant case. And, before the obligations enumerated in
said article 161 can be paid, the conjugal partnership
properties should first, by necessity, be liquidated, and
liquidation can take place only after the dissolution of the
partnership thru the occurrence of any of the causes
mentioned in article 175 of the same Code, one of which is
death of one of the spouses. Since both are still living
there cannot be any dissolution, imprisonment for life of
the husband notwithstanding, in the absence of a judicial
separation of properly decreed in accordance with the
provisions of article 191 thereof. Moreover, the fines and
indemnities sought to be charged against the ganancial
properties of the accused and his wife are not such debts
and obligations contracted by said accused for the benefit
of the conjugal partnership."[[2]]
The conclusion arrived at by Judge Mangosing follows: "We
sympathize with the predicament of the widow and other
heirs of the deceased Pelagio Cagro, but the law is clear on
the matter. The indemnities adjudged by the Court in their
favor may only be charged against the exclusive
properties of the accused if he has any, or against his
share in the partnership assets after liquidation thereof if
any still remains after the payment of all the items
enumerated in article 161 of the said Civil Code."[[3]]
Hence, this appeal, the heirs of Pelagio Cagro assigning as
sole error the quashing and annulling of the writs of
attachment and execution aforesaid. As stated at the
outset, we find the appeal meritorious.

The applicable Civil Code provision[[4]] is not lacking in

explicitness. Fines and indemnities imposed upon either
husband or wife "may be enforced against the partnership
assets after the responsibilities enumerated in article 161
have been covered, if the spouse who is bound should
have no exclusive property or if it should be insufficient; ...
." It is quite plain, therefore, that the period during which
such a liability may be enforced presupposes that the
conjugal partnership is still existing. The law speaks of
"partnership
assets."
It
contemplates
that
the
responsibilities to which enumerated in Article 161,
chargeable against such assets, must be complied with
first. It is thus obvious that the termination of the conjugal
partnership is not contemplated as a prerequisite.
Whatever doubt may still remain should be erased by the
concluding portion of this article which provides that "at
the time of the liquidation of the partnership such spouse
shall be charged for what has been paid for the purposes
above-mentioned."
What other conclusion can there be than that the
interpretation placed upon this provision in the challenged
order is at war with the plain terms thereof? It cannot elicit
our acceptance. Nor is the reason for such a codal
provision difficult to discern. It is a fundamental postulate
of our law that every person criminally liable for felony is
also civilly liable.[[5]] The accused, Froilan Lagrimas, was,
as noted, found guilty of the crime of murder and
sentenced to reclusion perpetua as well as to pay the
indemnification to satisfy the civil liability incumbent upon
him. If the appealed order were to be upheld, he would be
in effect exempt therefrom, the heirs of the offended party
being made to suffer still further.

43

It would follow, therefore, that the Civil Code provision, as

thus worded, precisely minimizes the possibility that such
additional liability of an accused would be rendered
nugatory. In doing justice to the heirs of the murdered
victim, no injustice is committed against the family of the
offender. It is made a condition under this article of the
Civil Code that the responsibilities enumerated in Article
161, covering primarily the maintenance of the family and
the education of the children of the spouses or the
legitimate children of one of them as well as other
obligations of a preferential character, are first satisfied. It
is thus apparent that the legal scheme cannot be
susceptible to the charge that for a transgression of the
law by either husband or wife, the rest of the family may
be made to bear burdens of an extremely onerous
character.
The next question is how practical effect would be given
this particular liability of the conjugal partnership for the
payment of fines and indemnities imposed upon either
husband or wife? In the brief for appellants, the heirs of
Pelagio Cagro, they seek the opportunity to present
evidence as to how the partnership assets could be made
to respond, this on the assumption that the property levied
upon does not belong exclusively to the convicted spouse.
In Lacson v. Diaz,[[6]] which deals with the satisfaction of
the debt contracted by husband or wife before marriage by
the conjugal partnership, likewise included in this
particular article, it was held: "Considering that the
enforceability of the personal obligations of the husband or
wife, against the conjugal assets, forms the exception to
the general rule, it is incumbent upon the one who invokes
this provision or the creditor to show that the requisites for
its applicability are obtaining."

Without departing from the principle thus announced, we

make this further observation. Considering that the
obligations mentioned in Article 161 are peculiarly within
the knowledge of the husband or of the wife whose
conjugal partnership is made liable, the proof required of
the beneficiaries of the indemnity should not be of the
most exacting kind, ordinary credibility sufficing.
Otherwise, the husband or the wife, as the case may be,
representing the conjugal partnership, may find the
temptation to magnify its obligation irresistible so as to
defeat the right of recovery of the family of the offended
party. That result is to be avoided. The lower court should
be on the alert, therefore, in the appraisal of whatever
evidence may be offered to assure compliance with this
codal provision.
WHEREFORE, the appealed order of August 7, 1965 is set
aside and the case remanded to the court of origin for the
reception of evidence in accordance with this opinion. With
costs against appellee Mercedes Aguirre de Lagrimas.
Concepcion, C.J., Dizon, Makalintal, Sanchez,
Capistrano, Teehankee and Barredo, JJ., concur.
Reyes, J.B.L. and Zaldivar, JJ., are on leave.

Castro,

44

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 143382

November 29, 2006

SECURITY BANK and TRUST COMPANY, Petitioner,

vs.
MAR TIERRA CORPORATION, WILFRIDO C. MARTINEZ,
MIGUEL J. LACSON and RICARDO A. LOPA, Respondents.
DECISION
CORONA, J.:

themselves jointly and severally with

corporation for the payment of the loan.

respondent

On July 2, 1980, the credit line agreement was amended

and increased to P14,000,000. Individual respondents
correspondingly executed a new indemnity agreement in
favor of the bank to secure the increased credit line.
On September 25, 1981, respondent corporation availed of
its credit line and received the sum of P9,952,000 which it
undertook to pay on or before November 30, 1981. It was
able to pay P4,648,000 for the principal loan and
P2,729,195.56 for the interest and other charges.
However, respondent corporation was not able to pay the
balance as it suffered business reversals, eventually
ceasing operations in 1984.

May the conjugal partnership be held liable for an

indemnity agreement entered into by the husband to
accommodate a third party?

Unable to collect the balance of the loan, petitioner filed a

complaint for a sum of money with a prayer for preliminary
attachment against respondent corporation and individual
respondents in the Regional Trial Court (RTC) of Makati,
Branch 66. It was docketed as Civil Case No. 3947.

This issue confronts us in this petition for review on

certiorari assailing the November 9, 1999 decision1 of the
Court of Appeals (CA) in CA-G.R. CV No. 48107.

Subsequently, however, petitioner had the case dismissed

with respect to individual respondents Lacson and Lopa,2
leaving Martinez as the remaining individual respondent.

On May 7, 1980, respondent Mar Tierra Corporation,

through its president, Wilfrido C. Martinez, applied for a
P12,000,000 credit accommodation with petitioner
Security Bank and Trust Company. Petitioner approved the
application and entered into a credit line agreement with
respondent corporation. It was secured by an indemnity
agreement executed by individual respondents Wilfrido C.
Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound

On August 10, 1982, the RTC issued a writ of attachment

on all real and personal properties of respondent
corporation and individual respondent Martinez. As a
consequence, the conjugal house and lot of the spouses
Wilfrido and Josefina Martinez in Barrio Calaanan, Caloocan
City covered by Transfer Certificate of Title (TCT) No.
49158 was levied on.

45

The RTC rendered its decision3 on June 20, 1994. It held

respondent corporation and individual respondent Martinez
jointly and severally liable to petitioner for P5,304,000 plus
12% interest per annum and 5% penalty commencing on
June 21, 1982 until fully paid, plus P10,000 as attorneys
fees. It, however, found that the obligation contracted by
individual respondent Martinez did not redound to the
benefit of his family, hence, it ordered the lifting of the
attachment on the conjugal house and lot of the spouses
Martinez.
Dissatisfied with the RTC decision, petitioner appealed to
the CA but the appellate court affirmed the trial courts
decision in toto. Petitioner sought reconsideration but it
was denied. Hence, this petition.
Petitioner makes two basic assertions: (1) the RTC and CA
erred in finding that respondent corporation availed of
P9,952,000 only from its credit line and not the entire
P14,000,000 and (2) the RTC and CA were wrong in ruling
that the conjugal partnership of the Martinez spouses
could not be held liable for the obligation incurred by
individual respondent Martinez.
We uphold the CA.

when it alleged in paragraph seven of its complaint that

respondent corporation "borrowed and received the
principal sum of P9,952,000."6 Petitioner was therefore
bound by the factual finding of the appellate and trial
courts, as well as by its own judicial admission, on this
particular point.
At any rate, the issue of the amount actually availed of by
respondent corporation is factual. It is not within the ambit
of this Courts discretionary power of judicial review under
Rule 45 of the Rules of Court which is concerned solely
with questions of law.7
We now move on to the principal issue in this case.
Under Article 161(1) of the Civil Code,8 the conjugal
partnership is liable for "all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership." But when are debts and obligations
contracted by the husband alone considered for the
benefit of and therefore chargeable against the conjugal
partnership? Is a surety agreement or an accommodation
contract entered into by the husband in favor of his
employer within the contemplation of the said provision?

Factual findings of the CA, affirming those of the trial court,

will not be disturbed on appeal but must be accorded great
weight.4 These findings are conclusive not only on the
parties but on this Court as well.5

We ruled as early as 1969 in Luzon Surety Co., Inc. v. de

Garcia9 that, in acting as a guarantor or surety for
another, the husband does not act for the benefit of the
conjugal partnership as the benefit is clearly intended for a
third party.

The CA affirmed the finding of the RTC that the amount

availed of by respondent corporation from its credit line
with petitioner was only P9,952,000. Both courts correctly
pointed out that petitioner itself admitted this amount

In Ayala Investment and Development Corporation v. Court

of Appeals,10 we ruled that, if the husband himself is the
principal obligor in the contract, i.e., the direct recipient of
the money and services to be used in or for his own

46

business or profession, the transaction falls within the term

"obligations for the benefit of the conjugal partnership." In
other words, where the husband contracts an obligation on
behalf of the family business, there is a legal presumption
that such obligation redounds to the benefit of the
conjugal partnership.11

the Civil Code to protect the solidarity and well being of

the family as a unit.15 The underlying concern of the law
is the conservation of the conjugal partnership.16 Hence,
it limits the liability of the conjugal partnership only to
debts and obligations contracted by the husband for the
benefit of the conjugal partnership.

On the other hand, if the money or services are given to

another person or entity and the husband acted only as a
surety or guarantor, the transaction cannot by itself be
deemed an obligation for the benefit of the conjugal
partnership.12 It is for the benefit of the principal debtor
and not for the surety or his family. No presumption is
raised that, when a husband enters into a contract of
surety or accommodation agreement, it is for the benefit
of the conjugal partnership. Proof must be presented to
establish the benefit redounding to the conjugal
partnership.13 In the absence of any showing of benefit
received by it, the conjugal partnership cannot be held
liable on an indemnity agreement executed by the
husband to accommodate a third party.14

WHEREFORE, the petition is hereby DENIED.

In this case, the principal contract, the credit line

agreement
between
petitioner
and
respondent
corporation, was solely for the benefit of the latter. The
accessory contract (the indemnity agreement) under
which individual respondent Martinez assumed the
obligation of a surety for respondent corporation was
similarly for the latters benefit. Petitioner had the burden
of proving that the conjugal partnership of the spouses
Martinez benefited from the transaction. It failed to
discharge that burden.
To hold the conjugal partnership liable for an obligation
pertaining to the husband alone defeats the objective of

Costs against petitioner.

SO ORDERED.
RENATO C. CORONA
Associate Justice

47

ABAD SANTOS, J.:

Maximo Aldon married Gimena Almosara in 1936. The
spouses bought several pieces of land sometime between
1948 and 1950. In 1960-62, the lands were divided into
three lots, 1370, 1371 and 1415 of the San Jacinto Public
Land Subdivision, San Jacinto, Masbate.
In 1951, Gimena Almosara sold the lots to the spouses
Eduardo Felipe and Hermogena V. Felipe. The sale was
made without the consent of her husband, Maximo.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-60174

February 16, 1983

EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE V.

FELIPE, petitioners,
vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA ALMOSARA,
SOFIA ALDON, SALVADOR ALDON, AND THE HONORABLE
COURT OF APPEALS, respondents.
Romulo D. San Juan for petitioner.
Gerundino Castillejo for private respondent.

On April 26, 1976, the heirs of Maximo Aldon, namely his

widow Gimena and their children Sofia and Salvador Aldon,
filed a complaint in the Court of First Instance of Masbate
against the Felipes. The complaint which was docketed as
Civil Case No. 2372 alleged that the plaintiffs were the
owners of Lots 1370, 1371 and 1415; that they had orally
mortgaged the same to the defendants; and an offer to
redeem the mortgage had been refused so they filed the
complaint in order to recover the three parcels of land.
The defendants asserted that they had acquired the lots
from the plaintiffs by purchase and subsequent delivery to
them. The trial court sustained the claim of the defendants
and rendered the following judgment:
a. declaring the defendants to be the lawful owners of
the property subject of the present litigation;
b. declaring the complaint in the present action to be
without merit and is therefore hereby ordered dismissed;

48

c. ordering the plaintiffs to pay to the defendants the

amount of P2,000.00 as reasonable attorney's fees and to
pay the costs of the suit.
The plaintiffs appealed the decision to the Court of Appeals
which rendered the following judgment:
PREMISES CONSIDERED, the decision appealed from is
hereby REVERSED and SET ASIDE, and a new one is
hereby RENDERED, ordering the defendants-appellees to
surrender the lots in question as well as the plaintiffs'appellants' muniments of title thereof to said plaintiffsappellants, to make an accounting of the produce derived
from the lands including expenses incurred since 1951,
and to solidarity turn over to the plaintiffs-appellants the
NET monetary value of the profits, after deducting the sum
of P1,800.00. No attorney's fees nor moral damages are
awarded for lack of any legal justification therefor. No.
costs.
The ratio of the judgment is stated in the following
paragraphs of the decision penned by Justice Edgardo L.
Paras with the concurrence of Justices Venicio Escolin and
Mariano A. Zosa:
One of the principal issues in the case involves the nature
of the aforementioned conveyance or transaction, with
appellants claiming the same to be an oral contract of
mortgage or antichresis, the redemption of which could be
done anytime upon repayment of the P1,800.00 involved
(incidentally the only thing written about the transaction is
the aforementioned receipt re the P1,800). Upon the other
hand, appellees claim that the transaction was one of sale,
accordingly, redemption was improper. The appellees

claim that plaintiffs never conveyed the property because

of a loan or mortgage or antichresis and that what really
transpired was the execution of a contract of sale thru a
private document designated as a 'Deed of Purchase and
Sale' (Exhibit 1), the execution having been made by
Gimena Almosara in favor of appellee Hermogena V.
Felipe.
After a study of this case, we have come to the conclusion
that the appellants are entitled to recover the ownership of
the lots in question. We so hold because although Exh. 1
concerning the sale made in 1951 of the disputed lots is, in
Our opinion, not a forgery the fact is that the sale made by
Gimena Almosara is invalid, having been executed without
the needed consent of her husband, the lots being
conjugal. Appellees' argument that this was an issue not
raised in the pleadings is baseless, considering the fact
that the complaint alleges that the parcels 'were
purchased by plaintiff Gimena Almosara and her late
husband Maximo Aldon' (the lots having been purchased
during the existence of the marriage, the same are
presumed conjugal) and inferentially, by force of law, could
not, be disposed of by a wife without her husband's
consent.
The defendants are now the appellants in this petition for
review. They invoke several grounds in seeking the
reversal of the decision of the Court of Appeals. One of the
grounds is factual in nature; petitioners claim that
"respondent Court of Appeals has found as a fact that the
'Deed of Purchase and Sale' executed by respondent
Gimena Almosara is not a forgery and therefore its
authenticity and due execution is already beyond
question." We cannot consider this ground because as a
rule only questions of law are reviewed in proceedings

49

under Rule 45 of the Rules of Court subject to well-defined

exceptions not present in the instant case.
The legal ground which deserves attention is the legal
effect of a sale of lands belonging to the conjugal
partnership made by the wife without the consent of the
husband.
It is useful at this point to re-state some elementary rules:
The husband is the administrator of the conjugal
partnership. (Art. 165, Civil Code.) Subject to certain
exceptions, the husband cannot alienate or encumber any
real property of the conjugal partnership without the wife's
consent. (Art. 166, Idem.) And the wife cannot bind the
conjugal partnership without the husband's consent,
except in cases provided by law. (Art. 172, Idem.)
In the instant case, Gimena, the wife, sold lands belonging
to the conjugal partnership without the consent of the
husband and the sale is not covered by the phrase "except
in cases provided by law." The Court of Appeals described
the sale as "invalid" - a term which is imprecise when used
in relation to contracts because the Civil Code uses
specific names in designating defective contracts, namely:
rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et
seq.), unenforceable (Arts. 1403, et seq.), and void or
inexistent (Arts. 1409 et seq.)
The sale made by Gimena is certainly a defective contract
but of what category? The answer: it is a voidable
contract.
According to Art. 1390 of the Civil Code, among the
voidable contracts are "[T]hose where one of the parties is
incapable of giving consent to the contract." (Par. 1.) In the

instant case-Gimena had no capacity to give consent to

the contract of sale. The capacity to give consent belonged
not even to the husband alone but to both spouses.
The view that the contract made by Gimena is a voidable
contract is supported by the legal provision that contracts
entered by the husband without the consent of the wife
when such consent is required, are annullable at her
instance during the marriage and within ten years from the
transaction questioned. (Art. 173, Civil Code.)
Gimena's contract is not rescissible for in such contract all
the essential elements are untainted but Gimena's consent
was tainted. Neither can the contract be classified as
unenforceable because it does not fit any of those
described in Art. 1403 of the Civil Code. And finally, the
contract cannot be void or inexistent because it is not one
of those mentioned in Art. 1409 of the Civil Code. By
process of elimination, it must perforce be a voidable
contract.
The voidable contract of Gimena was subject to annulment
by her husband only during the marriage because he was
the victim who had an interest in the contract. Gimena,
who was the party responsible for the defect, could not ask
for its annulment. Their children could not likewise seek
the annulment of the contract while the marriage
subsisted because they merely had an inchoate right to
the lands sold.
The termination of the marriage and the dissolution of the
conjugal partnership by the death of Maximo Aldon did not
improve the situation of Gimena. What she could not do
during the marriage, she could not do thereafter.

50

The case of Sofia and Salvador Aldon is different. After the

death of Maximo they acquired the right to question the
defective contract insofar as it deprived them of their
hereditary rights in their father's share in the lands. The
father's share is one-half (1/2) of the lands and their share
is two-thirds (2/3) thereof, one-third (1/3) pertaining to the
widow.
The petitioners have been in possession of the lands since
1951. It was only in 1976 when the respondents filed
action to recover the lands. In the meantime, Maximo
Aldon died.
Two questions come to mind, namely: (1) Have the
petitioners acquired the lands by acquisitive prescription?
(2) Is the right of action of Sofia and Salvador Aldon barred
by the statute of limitations?
Anent the first question, We quote with approval the
following statement of the Court of Appeals:
We would like to state further that appellees [petitioners
herein] could not have acquired ownership of the lots by
prescription in view of what we regard as their bad faith.
This bad faith is revealed by testimony to the effect that
defendant-appellee Vicente V. Felipe (son of appellees
Eduardo Felipe and Hermogena V. Felipe) attempted in
December 1970 to have Gimena Almosara sign a readymade document purporting to self the disputed lots to the
appellees. This actuation clearly indicated that the
appellees knew the lots did not still belong to them,
otherwise, why were they interested in a document of sale
in their favor? Again why did Vicente V. Felipe tell Gimena
that the purpose of the document was to obtain Gimena's
consent to the construction of an irrigation pump on the

lots in question? The only possible reason for purporting to

obtain such consent is that the appellees knew the lots
were not theirs. Why was there an attempted
improvement (the irrigation tank) only in 1970? Why was
the declaration of property made only in 1974? Why were
no attempts made to obtain the husband's signature,
despite the fact that Gimena and Hermogena were close
relatives? An these indicate the bad faith of the appellees.
Now then, even if we were to consider appellees'
possession in bad faith as a possession in the concept of
owners, this possession at the earliest started in 1951,
hence the period for extraordinary prescription (30 years)
had not yet lapsed when the present action was instituted
on April 26, 1976.
As to the second question, the children's cause of action
accrued from the death of their father in 1959 and they
had thirty (30) years to institute it (Art. 1141, Civil Code.)
They filed action in 1976 which is well within the period.
WHEREFORE, the decision of the Court of Appeals is
hereby modified. Judgment is entered awarding to Sofia
and Salvador Aldon their shares of the lands as stated in
the body of this decision; and the petitioners as possessors
in bad faith shall make an accounting of the fruits
corresponding to the share aforementioned from 1959 and
solidarity pay their value to Sofia and Salvador Aldon;
costs against the petitioners.
SO ORDERED.
Concepcion Jr., Guerrero and De Castro, JJ., concur.
Makasiar, (Chairman), J., In the result.

51

Escolin J., took no part.

Separate Opinions

action to have it declared void or inexistent does not

prescribe.
Moreover, there are indications that the contract between
the parties was an antichresis, a transaction which is very
common in rural areas.
Separate Opinions

AQUINO, J., concurring:

I concur in the result. The issue is whether the wife's sale
in 1651 of an unregistered sixteen-hectare conjugal land,
without the consent of her husband (he died in 1959), can
be annulled in 1976 by the wife and her two children.
As a rule, the husband cannot dispose of the conjugal
realty without the wife's consent (Art. 166, Civil Code).
Thus, a sale by the husband of the conjugal realty without
the wife's consent was declared void (Tolentino vs.
Cardenas, 123 Phil. 517; Villocino vs. Doyon, L-19797,
December 17, 1966, 18 SCRA 1094 and L-28871, April 25,
1975, 63 SCRA 460; Reyes vs. De Leon, L-22331, June
6,1967, 20 SCRA 369; Bucoy vs. Paulino, L-25775, April 26,
1968, 23 SCRA 248; Tinitigan vs. Tinitigan, L-45418,
October 30,1980, 100 SCRA 619).
With more reason, the wife cannot make such a disposition
without the husband's consent since the husband is the
administrator of the conjugal assets.
In the instant case, the Court of Appeals did not err in
voiding the wife's sale of the conjugal land without the
husband's consent. As that sale is contrary to law, the

AQUINO, J., concurring:

I concur in the result. The issue is whether the wife's sale
in 1651 of an unregistered sixteen-hectare conjugal land,
without the consent of her husband (he died in 1959), can
be annulled in 1976 by the wife and her two children.
As a rule, the husband cannot dispose of the conjugal
realty without the wife's consent (Art. 166, Civil Code).
Thus, a sale by the husband of the conjugal realty without
the wife's consent was declared void (Tolentino vs.
Cardenas, 123 Phil. 517; Villocino vs. Doyon, L-19797,
December 17, 1966, 18 SCRA 1094 and L-28871, April 25,
1975, 63 SCRA 460; Reyes vs. De Leon, L-22331, June
6,1967, 20 SCRA 369; Bucoy vs. Paulino, L-25775, April 26,
1968, 23 SCRA 248; Tinitigan vs. Tinitigan, L-45418,
October 30,1980, 100 SCRA 619).
With more reason, the wife cannot make such a disposition
without the husband's consent since the husband is the
administrator of the conjugal assets.
In the instant case, the Court of Appeals did not err in
voiding the wife's sale of the conjugal land without the
husband's consent. As that sale is contrary to law, the
action to have it declared void or inexistent does not

52

prescribe.
Moreover, there are indications that the contract between
the parties was an antichresis, a transaction which is very
common in rural areas.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 92245

June 26, 1991

MELANIA A. ROXAS, petitioner,

vs.
THE HON. COURT OF APPEALS and ANTONIO M. CAYETANO,
respondents.
Agustin V. Velante for petitioner.
Manuel M. Katapang for private respondent.
PARAS, J.:
The only issue before Us is whether or not a husband, as
the administrator of the conjugal partnership, may legally
enter into a contract of lease involving conjugal real
property without the knowledge and consent of the wife.
According to the Decision * rendered by the respondent
Court of Appeals, the pertinent facts of the case as alleged
in plaintiff-petitioner's complaint indicate:

53

1. That plaintiff is of legal age, married but living

separately from husband, one of the defendants herein
and presently residing at No. 4 Ambrocia St., Quezon City;
while defendant Antonio S. Roxas is likewise of legal age
and living separately from his wife, plaintiff herein, with
residence at No. 950 Quirino Highway, Novaliches, Quezon
City where he may be served with summons; and
defendant Antonio M. Cayetano is of legal age and residing
at No. 28 Mariano Olondriz Street, BF Homes, Paranaque,
Metro Manila where he may be served with summons;
2. That only recently, plaintiff discovered that her
estranged husband, defendant Antonio S. Roxas, had
entered into a contract of lease with defendant Antonio M.
Cayetano sometime on March 30, 1987 covering a portion
of their conjugal lot situated at 854 Quirino Highway,
Novaliches, Quezon City, described in T.C.T. No. 378197
(formerly T.C.T. No. 23881) of the Land Registry for Quezon
City without her previous knowledge, much less her
marital consent-xerox; copy of which lease contract is
hereto attached as Annex "A", and made an integral part
hereof.
3. That on the same lot, plaintiff had planned to put up
her flea market with at least twenty (20) stalls and minimart for grocery and dry goods items for which she had
filed an application for the corresponding Mayor's Permit
and Municipal License which had been approved since
1986, but when she attempted to renew it for 1986, the
same was disapproved last month due to the complaint
lodged by defendant Antonio M. Cayetano whose
application for renewal of Mayor's Permit and License for
the same business of putting up a flea market, had been
allegedly earlier approved;

4. That for the planning and initial construction of

plaintiffs project to put up her own business of flea market
and mini-mart grocery and wet and dry stores which she
had intended to operate partly by herself and lease the
rest of the twenty (20) stalls thereon, she had spent some
P135,000.00 for the said construction, including materials
and labor, where she had expected to earn as daily net
income in the minimum amount of P500.00 daily;
5. That due to the illegal lease contract entered into
between the herein defendants and the resultant unlawful
deprivation of plaintiff from operating her own legitimate
business on the same lot of which she is a conjugal owner,
plaintiff has been compelled to seek redress and ventilate
her grievance to the court for which she has to engage the
services of counsel with whom she agreed to pay as and
for attorney's fees the sum of P10,000.00; plus the amount
equivalent to 20% of whatever damages may be awarded
to her in addition to the sum of P500.00 per appearance in
court.
xxx

xxx

xxx

xxx

xxx

xxx

Dated July 31, 1989 defendant Antonio M. Cayetano

moved to dismiss the complaint on the sole ground that
the complaint states no cause of action, to which an
Opposition was filed by plaintiff (now petitioner herein),
while defendant Antonio S. Roxas, estranged husband of
plaintiff-petitioner, filed an answer.
Confronted with the private respondent's Motion to
Dismiss, on August 16, 1989, respondent Judge resolved
said Motion by dismissing plaintiff-petitioner's complaint in

54

its Order dated August 16, 1989, the dispositive portion of

which reads, as follows:
It is said that the test of sufficiency of the cause of action
is whether admitting the facts alleged to be true, the court
could render a valid judgment in accordance with the
prayer in the complaint. After examining the material
allegations in the complaint, the Court finds that the
complaint failed to satisfy the test of sufficiency.
WHEREFORE, the complaint is dismissed for failure to state
a sufficient cause of action.
IT IS SO ORDERED. (p. 2 Order, dated August 16, 1989).

support of the wife and the rest of the family. If the

conjugal partnership does not have enough assets, it is the
husband's capital that is responsible for such support, not
the paraphernal property. Responsibility should carry
authority with it.
The husband is not an ordinary administrator, for while a
mere administrator has no right to dispose of, sell, or
otherwise alienate the property being administered, the
husband can do so in certain cases allowed by law. He is
not required by law to render an accounting. Acts done
under administration do not need the prior consent of the
wife.

Hence, this petition.

However, administration does not include acts of

ownership. For while the husband can administer the
conjugal assets unhampered, he cannot alienate or
encumber the conjugal realty. Thus, under Art. 166 of NCC
"unless the wife has been declared a non-compos mentis
or a spendthrift, or is under civil interdiction or is confined
in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
the wife's consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same."
This rule prevents abuse on the part of the husband, and
guarantees the rights of the wife, who is partly responsible
for the acquisition of the property, particularly the real
property. Contracts entered into by the husband in
violation of this prohibition are voidable and subject to
annulment at the instance of the aggrieved wife. (Art. 173
of the Civil Code)

Under the New Civil Code (NCC), "Art. 165. The husband is
the administrator of the conjugal partnership," in view of
the fact that the husband is principally responsible for the

As stated in Black's Law Dictionary, the word "alienation"

means 'the transfer of the property and possession of
lands, tenements, or other things from one person to

Plaintiff-petitioner filed a Motion for Reconsideration, which

was denied by respondent Judge in its Order dated
September 29, 1989. (Decision of Court of Appeals, pp. 14; Rollo, Annex "A", pp. 26-29)
Petitioner directly appealed the Decision of the lower court
to the Supreme Court.
On November 27, 1989, the Second Division of this Court
referred this case to the Court of Appeals for "proper
determination and disposition."
Respondent Court of Appeals rendered judgment affirming
in toto the Order of the trial court.

55

another . . . The act by which the title to real estate is

voluntarily assigned by one person to another and
accepted by the latter, in the form prescribed by law. Cf. In
re Enrhardt U.S.D.C. 19 F. 2d 406, 407 . . . ." While
encumbrance "has been defined to be every right to, or
interest in, the land which may subsist in third persons, to
the diminution of the value of the land, but consistent with
the passing of the fee by the conveyance; any (act) that
impairs the use or transfer of property or real estate . . ."
(42 C.J.S., p. 549).

broadly to include not only liens such as mortgages and

taxes, but also attachment, LEASES, inchoate dower rights,
water rights, easements, and other RESTRICTIONS on
USE." (Capitalization is Ours) (533 Pacific Reporter [second
series] 9, 12).

The pivotal issue in this case is whether or not a lease is

an encumbrance and/or alienation within the scope of Art.
166 of the New Civil Code.
Under Art. 1643 of the New Civil Code "In the lease of
things, one of the parties binds himself to give to another
the enjoyment or use of a thing for a price certain, and for
a period which may be definite or indefinite. However, no
lease for more than ninety-nine years shall be valid."
Under the law, lease is a grant of use and possession: it is
not only a grant of possession as opined by the Court of
Appeals. The right to possess does not always include the
right to use. For while the bailee in the contract of deposit
holds the property in trust, he is not granted by law the
right to make use of the property in deposit.

Thus, the joinder of the wife, although unnecessary for an

oral lease of conjugal realty which does not exceed one
year in duration, is required in a lease of conjugal realty for
a period of more than one year, such a lease being
considered a conveyance and encumbrance within the
provisions of the Civil Code requiring the joinder of the
wife in the instrument by which real property is conveyed
or encumbered (See also 41 C.J.S., p. 1149). In case the
wife's consent is not secured by the husband as required
by law, the wife has the remedy of filing an action for the
annulment of the contract. Art. 173 of the Civil Code states
"the wife may, during the marriage and within ten years
from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required. . . .

In the contract of lease, the lessor transfers his light of use

in favor of the lessee. The lessor's right of use is impaired,
therein. He may even be ejected by the lessee if the lessor
uses the leased realty. Therefore, lease is a burden on the
land, it is an encumbrance on the land. The opinion of the
Court of Appeals that lease is not an encumbrance is not
supported by law. The concept of encumbrance includes
lease, thus "an encumbrance is sometimes construed

In the case at bar, the allegation in paragraph 2 of the

complaint indicates that petitioner's estranged husband,
defendant Antonio S. Roxas had entered into a contract of
lease with defendant Antonio M. Cayetano without her
marital consent being secured as required by law under
Art. 166 of the Civil Code. Petitioner, therefore, has a
cause of action under Art. 173 to file a case for annulment
of the contract of lease entered into without her consent.

Moreover, lease is not only an encumbrance but also a

"qualified alienation, with the lessee becoming, for all legal
intents and purposes, and subject to its terms, the owner
of the thing affected by the lease." (51 C C.J.S., p. 522)

56

Petitioner has a cause of action not only against her

husband but also against the lessee, Antonio M. Cayetano,
who is a party to the contract of lease.
PREMISES CONSIDERED, the decision of the Court of
Appeals is hereby SET ASIDE and this case is hereby
REMANDED to the Regional Trial court for further
proceedings.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

57

G.R. No. 96227 February 1, 1993

TELESFORO OPENA, petitioner,
vs.
HONORABLE COURT OF APPEALS AND PEOPLE OF THE
PHILIPPINES, respondents.
Simplicio M. Sevilleja for petitioner.
NOCON, J.:
This is a Petition for Review by certiorari of the decision
rendered by the Court of Appeals dated January 2, 1989 in
CA-G.R. CR No. 06576, affirming in toto the judgment of
conviction rendered by Branch 48 of the Regional Trial
Court of Pangasinan in Criminal Case No. U-3011, entitled
"People of the Philippines vs. Telesforo Opena" for
falsification of public document by a private individual. In
the same light, petitioner seeks to annul the order of the
Court of Appeals dated November 5, 1990 issued in the
same case denying their motion for reconsideration.

However, when spouses Gotgotao went to the Bank to

check on their Certificate of Title, they got the shock of
their life when the bank employees said that Telesforo
Opena, the half brother of Guillerma Opena, withdrew the
said Certificate of Title from the bank by presenting a
Special Power of Attorney purportedly executed by the
Gotgotao spouses in favor of Telesforo Opena.
Upon verification with the Register of Deeds of Pangasinan
in Lingayen to check on their title, they were informed that
Telesforo Opena had caused the transfer of the title in his
name by presenting a Deed of Absolute Sale allegedly
executed by them. They also discovered that their Transfer
Certificate of Title No. 61957 had been cancelled and a
new one, Transfer Certificate of Title
No. 131474 had been issued in the name of Telesforo
Opena, married to Carolina Sanidad. 3
Consequently, a complaint for falsification of public
documents was filed against Telesforo Opena resulting in
his conviction of said crime. On appeal to the Court of
Appeals, accused-appellant's conviction was affirmed in
toto.

The facts of the case are as follows:

Hence, this appeal.

Spouses Julian Gotgotao and Guillerma Opena are the

registered owners of Lot No. 1584-B located at Barangay
Cayambanan, Urdaneta, Pangasinan, as evidenced by
Transfer Certificate of Title No. 61957 duly issued by the
Register of Deeds of Pangasinan, which property they
mortgaged 1 to the Rural Bank of Mangaldan, Inc. for the
sum of Two Thousand (P2,000.00) Pesos and which
mortgage was annotated on the second page of the title. 2

The errors presented by herein petitioner are the following:

1. That the appellate court and the trial court erred in not
acquitting petitioner when they found him not to have
forged the thumbmark of Julian Gotgotao nor is there solid
evidence that petitioner forged the signature of Guillerma
Opena Gotgotao.

58

2. That both the appellate court and the trial court erred
in finding that the defense is guilty of suppression of
evidence.
3. That said courts erred in not finding that spouses Julian
Gotgotao and Guillerma Opena validly conveyed the land
in question in favor of petitioner; and
4. In annulling the Deed of Sale dated April 10, 1978
executed by spouses Julian Gotgotao and Guillerma Opena
in favor of petitioner and his wife.
We find no merit in the instant petition.
Petition contends that the crime of falsification of public
documents has not been committed in this case,
considering that the thumbmark of Julian Gotgotao on the
Absolute Deed of Sale was declared to be genuine and not
a forgery by Questioned Document Expert Arturo B.
Marasigan of the P.C. Crime Laboratory who issued a
dactyloscopy report thereon. 4
But while this may be true with respect to Julian
Gotgotao's thumbmark on the Deed of Sale, the fact
remains that Guillerma Gotgotao's signature on the same
document was indubitably confirmed to be counterfeit and
forged, both by the testimony of Guillerma herself and by
the testimony of the handwriting expert Jovito R. Gutierrez
of the P.C. Crime Laboratory who examined the same. 5
We agree with the trial court when it said:
With respect to the questioned signature of complaining
witness Guillerma Opea, (sic) the Court believes that the
accuses Telesforo Opea (sic) either forged the signature

himself or caused it to be forged on the questioned deed

of absolute sale dated April 10, 1978 (Exh. "B" and "2").
The said belief of the Court is based on the findings that
the questioned signature of complaining witness Guillerma
Opea (sic) appearing in the questioned deed of absolute
sale dated April 10, 1978 is nothing but a forgery
(Questioned Document Report No. 125-82, Exh. "E"). The
Court relied on the aforesaid findings of the examining
handwriting expert from the Philippine Constabulary Crime
Laboratory, Camp Crame, Quezon City in the light of the
accused Telesforo Opea's (sic) and former Barangay
Captain Esteban Valdez's testimonies that both did not see
the complaining witness Guillerma Opea (sic) sign her
name on the aforesaid deed of absolute sale because she
was not present during the preparation and execution of
the said deed of absolute sale at the law office of
Atty. Caoayan in Poblacion, Urdaneta, Pangasinan. Further,
said complaining witness denied having executed a deed
of absolute sale in favor of the herein accused.
Even
assuming
arguendo
that
Julian
Gotgotao's
thumbmark on the subject document is genuine, still the
counterfeit signature of Guillerma Gotgotao invalidates the
whole instrument, since her signature thereon is essential
to the validity of the alleged deed of sale, as warranted by
Article 165 and 166 of the Civil Code which provides:
Art. 165 The husband is the administrator of the
conjugal partnership.
Article 166 Unless the wife has been declared a non
compos mentis or a spendthrift, or is under civil
interdiction or is confined in a leprosarium, the husband
cannot alienate or encumber any real property of the

59

conjugal partnership without the wife's consent. If she

refuses unreasonably to give her consent, the court may
compel her to grant the same.
Petitioner's argument that the prosecution failed to
establish the counterfeit nature of Guillerma Gotgotao's
signature in the Deed of Absolute Sale, because "she could
not identify and recognize her signature in said exhibit
because she could not read and she had poor and
defective eyesight" had already been disposed of correctly
by the trial court, as follows:
The Court finds the said objection bereft of merit. There is
no need for the complaining witness Guillerma Opea (sic)
to identify her forged signature appearing in the
questioned deed of absolute sale because her denial of not
having executed the said deed of absolute sale in favor of
Telesforo Opea (sic) goes to show that she did not affix
her signature in the said document. 6
As aptly found by the Court of Appeals:
The signature used as "standards" are compared with the
questioned signature of appellee Guillerma Opea (sic) in
the Deed of Absolute Sale were her voter's I.D. Card,
Promissory Note to the Letter of the Land Bank, Discount
and Computation Slip issued by the Rural Bank of
Mangaldan, Residence Certificate, and a long bond paper
containing her signatures 1 to 25. These signatures are
admitted by the appellee as hers and were used by her in
her business transactions and her transactions with the
government. This case thus falls squarely within the third
method referred to by the High Tribunal.
Appellant, moreover, did not rebut the testimony of the

expert witness Jovito Gutierrez and likewise did not

impeach him. In fact, appellant and his witnesses hewed
their testimonies to his findings by admitting that they did
not see appellee Guillerma Opea (sic) sign the questioned
document. Hence, the trial court correctly gave credence
to the expert witness and his findings that the signature of
Guillerma Opea (sic) is a forgery. 7
As to the claim that the trial court and the Court of
Appeals erred in stating that his counsel suppressed
evidence which would otherwise have been material to his
defense, We find nothing in the records to justify the same.
The trial court ruled:
Noteworthy is the dispensation by the defense of the
testimony of Atty. Anastacio Caoayan, the Notary Public of
the questioned deed of absolute sale dated April 10, 1978
despite the issuance of several subpoena duces tecum
issued upon him, on November 4, 1983, December 12,
1983, December 21, 1983, February 15, 1984, April 10,
1984, May 28, 1984, July 18, 1984 and August 8, 1984.
The unexplained facts leads to the presumption that the
defense's counsel suppressed evidence which is
detrimental to his client's cause. 8
Atty. Caoayan's testimony could have weighed heavily in
favor of the petitioner's defense, if petitioner is to be
believed, since Atty. Caoayan was ostensibly the lawyer
who notarized the alleged deed of absolute sale, and could
therefore have validated petitioner's claim that Guillerma
Gotgotao's signature on the said document was genuine.
Thus, petitioner's failure to present this material witness
creates the presumption that if such testimony had been
given, it would have been adverse to the petitioner's

60

claim.

Court:.

Likewise, the Court of Appeals concurred with the trial

court's assessment of the situation, to wit:

As if you do not want to present him anymore. It is up to

you.

The trial court was justified in holding the appellant as

having suppressed evidence when it dispensed with the
testimony of the notary public who notarized the
questioned Deed of Sale (Exh. "2", "B"). It appears that
Atty. Anastacio Caoayan was subpoenaed no less than
eight times (November 14, 1983; December 12, 1983;
December 21, 1983; February 15, 1984; April 10, 1984;
May 28, 1984; July 18, 1984 and August 8, 1984). At the
hearing on April 5, 1984, indications that the defense was
not really interested in presenting Atty. Caoayan was
shown, thus:

Atty. Sevilleja:

Atty. Sevilleja:

You will present Atty. Caoayan? He is here finally.

Yes, Your Honor. Your Honor, may we request that a

subpoena be issued to Emilio Latore of Poblacion, Villasis,
Pangasinan?

Atty. Sevilleja:

Court:
What about Atty. Caoayan. There as a subpoena issued to
him. He comes here every now and then. He should be
punished for contempt of court for his failure to come
despite subpoena duly served to him.

No. Your Honor, We will just subpoena him, Your Honor. 9

However, on August 7, 1984, when by coincidence, Atty.
Caoayan happened to be in the sala of the judge hearing
the falsification case and the judge called the attention of
the appellant's counsel to present him as a witness, the
latter refused. Thus:
Court:

We will present the other witness from Villasis, Emilio

Latore, Your Honor.
Court:
Latore?
Atty. Sevilleja:

Atty. Sevilleja:

Yes, Your Honor.

We just subpoena him in the next hearing. In fact I talked

with him only this morning.

Court:
You are dispensing with the testimony of Atty. Caoayan?

61

He is finally here because this is in a coincidence he has a

case.
Atty. Sevilleja:
I will talk with him first, Your Honor.
Court:
The court has issued several subpoena duces tecum. Now
he is here, take the chance.
xxx xxx xxx
Atty. Sevilleja:
Your Honor, after minutely studying the case and our
documentary evidence which are voluminous, we can
prove the innocence of the accused without the testimony
of Atty. Caoayan, Your Honor.
Court:
So you are now dispensing with his testimony?
Atty. Sevilleja:
We are now dispensing the testimony of Atty. Caoayan,
Your
Honor. 10
Furthermore, the Court of Appeals likewise correctly
concluded that even Julian Gotgotao's admittedly genuine
thumbmark appearing on the questioned Deed is
questionable, thus:

[E]ven granting hypothetically, that Julian Gotgotao may

have had some knowledge of the forgery, we do not
believe he has the required cunning to, by himself and
without appellant's instigation and active participation,
develop the idea and proceed to have his wife's signature
forged, considering the level of his intelligence as
demonstrated in his testimony at the trial. (T.S.N., August
13, 1987, September 15, 1987) We are convinced, as was
the trial court, that it was appellant himself, the one who
used, took advantage, and profited by the forged signature
who authored the same. Besides, while the finding is that
Julian Gotgotao's thumbmark is genuine, he denied having
knowingly thumbmarked any document selling their land.
11
The Court of Appeals observed further:
It is likewise alleged that the appellee did not dispute or
deny the contract of sale dated November 5, 1976 (Exh.
"11") allegedly thumbmarked by Julian Gotgotao and the
receipt dated June 20, 1977
(Exh. "12"). In fact, the prosecution witnesses have denied
these documents when appellees and their witnesses
asserted that they never borrowed money from the
accused-appellant in 1976 or in 1977 (T.S.N., April 11,
1983, p. 10; October 22, 1986, pp. 15-18; December 9,
1987, pp. 21-23; June 25, 1987, pp. 3-5; August 13, 1987,
p. 4), when Julian Gotgotao denied that there was ever a
time he agreed to sell the land to the accused (T.S.N.,
August 13, 1987, p. 12) or that he delivered a deed of sale
on April 11, 1978 to appellant in his house for which the
alleged borrowings were part of the consideration (T.S.N.,
September 15, 1978, p. 2); and when appellee Guillerma
Opena testified that appellant had no right and had no

62

authority to take the owner's copy of the title to the land in

question from the bank (T.S.N., April 11, 1983, pp. 7-8). 12
Finally, petitioner's claim that spouses Gotgotao conveyed
the subject property in his favor in view of previous loans
extended to them has been resolved by the trial court in
this wise, to which We concur:
In an effort to justify the due execution of the deed of sale
dated April 10, 1978, the accused Telesforo Opea (sic)
claimed that the consideration in the amount of
P18,000.00 represents the total borrowings of the
Gotgotao family from him. However, the aggregate
amount shelled out by the herein accused (P6,370.00, Exh.
11; P12,300.00, Exh. 12; P4,700.00 given after the
execution of the said deed of absolute sale and P2,138.10,
Exh. 13 or a total of P25,508.10) is more than what the
herein accused bargained with the Gotgotao family at
P3.00 per square meter of the said lot in dispute
containing an area of 6,190 square meters and 6,190
multiplied by P3.00 amounts to P18,570.00. The conflicting
amounts of money testified to by the herein accused gives
truth to the saying that "No falsification is perfect in all its
parts." Further, "defense evidence which is replete with
inconsistencies does not inspire belief" (People vs.
Radomes, 141 SCRA 548) "Contradictory and inconsistent
on material points render testimonies doubtful." (People
vs. Quison, 142 SCRA 362).
WHEREFORE, there being no reversible error in the
decision appealed herefrom, the same is hereby AFFIRMED
in toto. Costs against appellant.
SO ORDERED.

Narvasa, C.J., Feliciano, Regalado and Campos, Jr., JJ.,

concur.

63

vs.
ANDRES GONZALES, RAMON EAMIGUEL NICASIO PARILLA
and COURT OF APPEALS, respondents.
Antonio R. Rabago for petitioners.
Federico V. Noel for Andres Gonzales.
Francisco E. F. Remorigue for Eamiguel and Parilla.
FERNAN, C.J.:

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-48184

March 12, 1990

PAULA GARCIA, FRANCISCO GARCIA, JUSTO GARCIA,

CLAUDIA GARCIA, CRISPINA GARCIA, CATALINA GARCIA,
BASILISA GARCIA, ZACARIAS GARCIA, AGUSTIN GARCIA,
CANDIDA GARCIA, PABLEO PACULAN, ANECITA PACULAN,
AGAPITO PACULAN, MARCOSA PACULAN, and ILUMINADO
SOLITE, petitioners,

In this petition on for review on certiorari, petitioners seek

the reversal of the May 5, 1977 decision of the Court of
Appeals in CA-GR No. 48032-R entitled "Paula Garcia, et al.
v. Andres Gonzales, et al." modifying the decision of the
Court of First Instance of Leyte in Civil Case No. B-0134
which among others adjudicated the whole parcel No. 2 in
favor of Andres Gonzales and ordered the plaintiffs therein
jointly and severally to pay moral damages and attorney's
fees.
This case arose from the complaint for recovery of real
properties, partition and accounting filed by the nephews
and nieces of a deceased childless couple against the
transferees of two parcels of land which said couple had
sold during their lifetime and another parcel of land which
the wife sold to her own nephew after her husband's
death.
The record shows that on July 3, 1911, Agustin Manco
Garcia donated to the spouses Fructuoso Garcia and
Quintina Gonzales two parcels of land. One parcel, with an
area of more than three hectares, is located in barrio

64

Caraycaray in Naval, Leyte (parcel No. 3) and the other lot,

with an area of more than two hectares, is located in sitio
Calumpang, also in barrio Caraycaray (parcel No. 4). On
December 4, 1921, Fructuoso and his wife executed an
"escritura de venta" over said two parcels of land in favor
of Sergio Eamiguel, a parish priest, in consideration of the
amount of P2,500. 1 The following year, 1922, Fructuoso
died.
In 1930, Father Eamiguel declared as his own parcel No. 3
under tax declaration No. 7370 2 and parcel No. 4 under
tax declaration No. 7389. 3 On June 5, 1937, he executed
an "escritura de donacion" bestowing ownership over said
property to his nephews, Pedro and Ramon Eamiguel. 4
Pedro later exchanged his share over parcel No. 3 with
another parcel owned by his brother Rosendo thereby
making the latter a co-owner of said property. 5 While thus
in possession of parcel No. 3, the Eamiguel brothers,
through Ramon, executed deeds of sale with right to
repurchase over portions of the property in favor of
different persons. 6
On October 24, 1954, after the properties had been
repurchased, Rosendo sold a one-half portion of parcel No.
3 to the spouses Nicasio Parilla and Purificacion Manco for
P3,200. 7 On October 31, 1954, Ramon also sold his onehalf portion of the property to the Parilla spouses for
P3,500. 8 Since then, the Parilla spouses have been in
possession of the 3-hectare property paying taxes thereon.
On the other hand, parcel No. 4 remained in the
possession of Ramon.
Fructuoso Garcia also owned a 1.7 hectare lot in Anas,
Antipolo, also in the municipality of Naval (parcel No. 1)

and another 2.3 hectare land in the same municipality

(parcel No. 2). On January 26, 1945, Fructuoso's widow,
Quintina Gonzales Garcia, who was then a centenarian,
sold parcel No. 2 to her nephew, Andres Gonzales, in
consideration of the amount of P400. 9 Since then,
Gonzales has declared said property as his own and paid
taxes thereon. 10
On June 15, 1967, the herein petitioners, nephews and
nieces of Fructuoso, filed the aforementioned complaint
against Andres Gonzales for the recovery of parcels Nos. 1
and 2, on the premise that under Article 995 of the New
Civil Code, as such relatives of Fructuoso, they are entitled
to one-half of the intestate estate of Quintina who
allegedly misrepresented in the deed of sale in favor of
Gonzales that parcels Nos. 1 and 2 were her paraphernal
properties. The complaint was later amended to include
parcels Nos. 3 and 4 as subjects of the complaint and to
include Ramon Eamiguel and Nicasio Parilla as defendants.
With regard to these two defendants, the complaint
alleged that Eamiguel a grandnephew of Quintina, took
possession of parcel No. 4 after Quintina's death on March
16, 1945 and that Parilla was also unlawfully in possession
of parcel No. 3.
The trial court ruled that since nobody claimed parcel No.
1, "the same has remained the property of the plaintiffs."
11 In holding that parcel No. 2 rightfully belongs to Andres
Gonzales, the court stated that except for their oral
testimonies, the plaintiffs failed to successfully assail the
validity and due execution of the deed of sale in favor of
Gonzales. The trial court also ruled that the plaintiffs may
no longer question the validity of the sale to Father
Eamiguel of parcels Nos. 3 and 4 because after a copy of
the December 4, 1921 deed of sale was furnished the

65

plaintiffs, "nothing has been done thereabout" and that

said document, being more than 47 years old and a public
instrument, is in full force and effect unless impugned by
strong complete and conclusive proof. 12 The dispositive
portion of the trial court's June 1970 decision 13 reads:
WHEREFORE, decision is hereby rendered in favor of the
defendants and against the plaintiffs, hereby declaring and
adjudicating Parcel No. 2 in favor of defendant Andres
Gonzales; Parcel No. 3 in favor of Nicasio Parilla; Parcel No.
4 in favor of defendant Ramon Eamiguel further ordering
the plaintiffs jointly and severally to pay each of the
defendants the sum of P1,000.00 for and as moral
damages, plus the sum of P500.00 for and as attorney's
fees, with costs against the plaintiffs.
SO ORDERED. 14
The plaintiffs appealed to the Court of Appeals. In its
decision of May 5, 1977, 15 said appellate court ruled that
as to parcels Nos. 3 and 4, prescription has set in to herein
petitioners' prejudice. As to parcel No. 2, the Court of
Appeals held that since Article 837 of the Spanish Civil
Code entitled the surviving spouse to inherit only one-half
of the estate, the sale of parcel No. 2 to Andres Gonzales
was valid only with respect to Quintina'a one-half (1/2)
share thereof. The dispositive portion of the decision
states:
WHEREFORE, the appealed decision is hereby modified, as
follows:
1. Declaring Andres Gonzales as owner of one-half
portion of Parcel No. 2 and plaintiffs herein as the owners
of the other half,

2. Ordering Andres Gonzales to deliver and convey the

one-half portion of Parcel No. 2 to the plaintiffs; and
3. Eliminating the award of moral damages as well as
attorney's fees.
The rest of the judgment appealed from is affirmed.
Without costs.
SO ORDERED. 16
Their motion for reconsideration praying for the
amendment of the said decision and the award of
damages having been denied, the plaintiffs interposed the
instant petition for review on certiorari alleging that the
Court of Appeals: (a) "hastily entered its judgment"
without adjudicating in their favor one-half of the
equivalent of the fruits of parcel No. 2 since January 26,
1945; (b) "gravely failed to give justice" to them by
depriving them of the "chance to own and possess" onehalf of parcels Nos. 3 and 4 and their fruits; and (c)
"gravely failed to give clearance" as to their absolute
ownership over parcel No. 1. 17
The failure to make a declaration as to the ownership of
parcel No. 1 is attributable to the trial court rather than to
the appellate court. In their brief submitted before the
latter, herein petitioners as appellants therein categorically
stated that "originally four parcels were involved but
defendants in their answer later waived any claim over
parcel 1 . . . ." 18 Since the ownership of parcel 1 was not
an issue in the appeal, the appellate court could not be
expected to, and should not, in fact, make any declaration
pertaining to parcel 1.

66

It was the trial court which should have included in the

dispositive portion of its decision a declaration as to the
ownership of parcel 1 consistent with the statement in its
decision that "it appears from the evidence presented that
nobody is claiming parcel 1 so that the same has remained
the property of the plaintiffs" (herein petitioners). 19
Be that as it may, no prejudicial error resulted from this
inadvertence on the part of the trial court, no claim
adverse to petitioners' over said parcel 1 having been
presented by any party.
As to parcel No. 2, we disagree with the Court of Appeals
that Gonzales is entitled to only one-half thereof. The deed
of sale was personally acknowledged before Pedro Mate,
then justice of the peace, as Quintina's free act and deed.
Although the petitioners attempted to question the validity
and due execution of said deed of sale through oral
testimony, they were unable to buttress it with other
evidence which might obviate the apparent biased nature
of the testimony.
The deed of sale having been executed before the
effectivity of the New Civil Code, the law governing the
transaction was the Code of Civil Procedure, which
specifically provides:
Sec. 685. Community Property. When the marriage is
dissolved by the death of the husband or wife, the
community property shall be inventoried, administered,
and liquidated, and the debts thereof shall be paid, in the
testamentary or intestate proceedings of the deceased
spouse, in accordance with the provisions of this Code
relative to the administration and liquidation of the estates

of deceased persons, unless the parties being all of age

and legally capacitated, avail themselves of the right
granted them by this Code for proceeding to an
extrajudicial partition and liquidation of said property.
In case it is necessary to sell any portion of said
community property in order to pay the outstanding debts
and obligations of the same, such sale shall be made in
the manner and with the formalities established by this
Code for the sale of the property of deceased persons. Any
sale, transfer, alienation or disposition of said property
effected without said formalities shall be null and void,
except as regards the portion that belonged to the vendor
at the time the liquidation and partition was made
(Emphasis supplied).
Inasmuch as no liquidation of the conjugal partnership had
been made in accordance with Articles 1418 and 1481 of
the Civil Code, 20 the last sentence of Section 685 maybe
applied. More so because there is no proof that the sale of
parcel No. 2 was necessary to pay the partnership debts
and obligations. Pursuant to said law, therefore, the sale to
Andres Gonzales may be considered as valid only with
respect to the one-half portion of parcel No. 2 rightfully
belonging to Quintina.
Notwithstanding this, petitioners may not validly lay claim
to the other half portion of the property corresponding to
their share as heirs of Fructuoso considering that for fortyfive (45) years after Fructuoso's death and twenty-two (22)
from the execution of the deed of sale, petitioners slept on
their rights. Granting that there was a mistake or fraud * in
the execution of the deed of sale so much so that under
Article 1456 of the Civil Code an implied or constructive
trust was constituted in favor of the petitioners, still,

67

laches barred them from filing the complaint for the

recovery of parcel No. 2. 21 Although the records do not
show that Gonzales had been issued a Torrens title to
parcel No. 2 and hence, the 10 year prescriptive period
may not be invoked against petitioners, their inordinate
and undue delay in asserting their claim to said parcel of
land led to their undoing.
With regard to parcels Nos. 3 and 4, both the trial court
and the Court of Appeals found that the controverted sale
of said parcels of land was embodied in a public document,
executed with all the formalities and solemnities of law.
The evidence therefore that is required to overthrow it
must
be
clear,
convincing
and
beyond
mere
preponderance of evidence. 22 Such evidence is not
obtaining in the case at bar and there is no valid ground
on which petitioners' claim to said parcels of land could
stand. They failed to successfully attack the validity of the
transfer of said properties to Father Eamiguel, the
predecessor-in-interest of Ramon Eamiguel and Nicasio
Parilla. Additionally, the transaction was executed by both
Fructuoso and Quintina, and therefore must be respected.
More importantly, as correctly found by the Court of
Appeals, prescription has set in. It was only after more
than 45 years after the sale on December 4, 1921 that this
case was filed by the petitioners on June 15, 1967.
Lastly, we make no award of damages to any of the
parties. In this regard, we quote with approval the
following portion of the Court of Appeals decision:
As to the award of damages, we find that the evidence on
record does not justify the same. It appears that appellants
have tenaciously fought for their cause in order to protect
their rights. Moreover, their case is partially meritorious.

The anxiety claimed by the defendant-appellee was not

due to a case which was maliciously instituted by the
appellants. They are not, therefore, the moral damages
contemplated by law (Ramos v. Ramos, 61 SCRA 284, 405
citing Solis v. Salvador, 14 SCRA 887). The adverse result
of an action does not per se make the act wrongful and
subject the actor to the payment of moral damages. The
law could not have meant to impose a penalty on the right
to litigate, such right is so precious that moral damages
may not be charged on those who may even exercise it
erroneously. (Ramos v. Ramos, 61 SCRA 284, 305-306).
And an adverse decision does not ipso facto justify the
award of attorney's fee to the winning party. 23
WHEREFORE, the decision of the Court of Appeals is
hereby affirmed insofar as it eliminates the award of moral
damages as well as attorney's fees. It is modified as
follows: (a) parcel No. 1 is hereby declared as absolutely
owned by petitioners in their respective capacities as heirs
of Fructuoso Garcia; (b) parcel No. 2 shall exclusively
belong to Andres Gonzales; and (c) parcels Nos. 3 and 4
shall be under the absolute ownership of Nicasio Parilla
and Ramon Eamiguel respectively. No costs.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 153802. March 11, 2005
HOMEOWNERS SAVINGS & LOAN BANK, Petitioner,

68

vs.
MIGUELA C. DAILO, Respondents.
DECISION
TINGA, J.:
This is a petition for review on certiorari under Rule 45 of
the Revised Rules of Court, assailing the Decision1 of the
Court of Appeals in CA-G.R. CV No. 59986 rendered on June
3, 2002, which affirmed with modification the October 18,
1997 Decision2 of the Regional Trial Court, Branch 29, San
Pablo City, Laguna in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were
married on August 8, 1967. During their marriage, the
spouses purchased a house and lot situated at Barangay
San Francisco, San Pablo City from a certain Sandra Dalida.
The subject property was declared for tax assessment
purposes under Assessment of Real Property No. 94-0512802. The Deed of Absolute Sale, however, was executed
only in favor of the late Marcelino Dailo, Jr. as vendee
thereof to the exclusion of his wife.3
On December 1, 1993, Marcelino Dailo, Jr. executed a
Special Power of Attorney (SPA) in favor of one Lilibeth
Gesmundo, authorizing the latter to obtain a loan from
petitioner Homeowners Savings and Loan Bank to be
secured by the spouses Dailos house and lot in San Pablo
City. Pursuant to the SPA, Gesmundo obtained a loan in the
amount of P300,000.00 from petitioner. As security
therefor, Gesmundo executed on the same day a Real
Estate Mortgage constituted on the subject property in

favor of petitioner. The abovementioned transactions,

including the execution of the SPA in favor of Gesmundo,
took place without the knowledge and consent of
respondent.4
Upon maturity, the loan remained outstanding. As a result,
petitioner instituted extrajudicial foreclosure proceedings
on the mortgaged property. After the extrajudicial sale
thereof, a Certificate of Sale was issued in favor of
petitioner as the highest bidder. After the lapse of one year
without the property being redeemed, petitioner, through
its vice-president, consolidated the ownership thereof by
executing on June 6, 1996 an Affidavit of Consolidation of
Ownership and a Deed of Absolute Sale.5
In the meantime, Marcelino Dailo, Jr. died on December 20,
1995. In one of her visits to the subject property,
respondent learned that petitioner had already employed a
certain Roldan Brion to clean its premises and that her car,
a Ford sedan, was razed because Brion allowed a boy to
play with fire within the premises.
Claiming that she had no knowledge of the mortgage
constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court,
Branch 29, San Pablo City, Civil Case No. SP-2222 (97) for
Nullity of Real Estate Mortgage and Certificate of Sale,
Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latters Answer with
Counterclaim, petitioner prayed for the dismissal of the
complaint on the ground that the property in question was
the exclusive property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision

69

on October 18, 1997. The dispositive portion thereof reads

as follows:
WHEREFORE, the plaintiff having proved by the
preponderance of evidence the allegations of the
Complaint, the Court finds for the plaintiff and hereby
orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and
void:
(a) The Deed of Real Estate Mortgage dated December 1,
1993 executed before Notary Public Romulo Urrea and his
notarial register entered as Doc. No. 212; Page No. 44,
Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public
Reynaldo Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed by
the defendant
(c) The Affidavit of Consolidation of Ownership executed by
the defendant over the residential lot located at Brgy. San
Francisco, San Pablo City, covered by ARP No. 95-091-1236
entered as Doc. No. 406; Page No. 83, Book No. III, Series
of 1996 of Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property
subject of this complaint to the plaintiff.

ON THE SECOND CAUSE OF ACTION

1. The defendant to pay the plaintiff the sum of
P40,000.00 representing the value of the car which was
burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of
P25,000.00 as attorneys fees;
2. The defendant to pay plaintiff P25,000.00 as moral
damages;
3. The defendant to pay the plaintiff the sum of
P10,000.00 as exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
SO ORDERED.6
Upon elevation of the case to the Court of Appeals, the
appellate court affirmed the trial courts finding that the
subject property was conjugal in nature, in the absence of
clear and convincing evidence to rebut the presumption
that the subject property acquired during the marriage of
spouses Dailo belongs to their conjugal partnership.7 The
appellate court declared as void the mortgage on the
subject property because it was constituted without the
knowledge and consent of respondent, in accordance with
Article 124 of the Family Code. Thus, it upheld the trial
courts order to reconvey the subject property to
respondent.8 With respect to the damage to respondents

70

car, the appellate court found petitioner to be liable

therefor because it is responsible for the consequences of
the acts or omissions of the person it hired to accomplish
the assigned task.9 All told, the appellate court affirmed
the trial courts Decision, but deleted the award for
damages and attorneys fees for lack of basis.10
Hence, this petition, raising the following issues for this
Courts consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY
THE LATE MARCELINO DAILO, JR. ON THE SUBJECT
PROPERTY AS CO-OWNER THEREOF IS VALID AS TO HIS
UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS
LIABLE FOR THE PAYMENT OF THE LOAN OBTAINED BY THE
LATE MARCELINO DAILO, JR. THE SAME HAVING
REDOUNDED TO THE BENEFIT OF THE FAMILY.11
First, petitioner takes issue with the legal provision
applicable to the factual milieu of this case. It contends
that Article 124 of the Family Code should be construed in
relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:

ART. 124. The administration and enjoyment of the

conjugal partnership property shall belong to both spouses
jointly. . . .
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition
or encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family
Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law
could not have intended to curtail the right of a spouse
from exercising full ownership over the portion of the
conjugal property pertaining to him under the concept of
co-ownership.12 Thus, petitioner would have this Court
uphold the validity of the mortgage to the extent of the
late Marcelino Dailo, Jr.s share in the conjugal partnership.
In Guiang v. Court of Appeals,13 it was held that the sale
of a conjugal property requires the consent of both the
husband and wife.14 In applying Article 124 of the Family
Code, this Court declared that the absence of the consent
of one renders the entire sale null and void, including the
portion of the conjugal property pertaining to the husband
who contracted the sale. The same principle in Guiang
squarely applies to the instant case. As shall be discussed
next, there is no legal basis to construe Article 493 of the
Civil Code as an exception to Article 124 of the Family
Code.

71

Respondent and the late Marcelino Dailo, Jr. were married

on August 8, 1967. In the absence of a marriage
settlement, the system of relative community or conjugal
partnership of gains governed the property relations
between respondent and her late husband.15 With the
effectivity of the Family Code on August 3, 1988, Chapter 4
on Conjugal Partnership of Gains in the Family Code was
made applicable to conjugal partnership of gains already
established before its effectivity unless vested rights have
already been acquired under the Civil Code or other
laws.16
The rules on co-ownership do not even apply to the
property relations of respondent and the late Marcelino
Dailo, Jr. even in a suppletory manner. The regime of
conjugal partnership of gains is a special type of
partnership, where the husband and wife place in a
common fund the proceeds, products, fruits and income
from their separate properties and those acquired by
either or both spouses through their efforts or by
chance.17 Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory
manner,18 the conjugal partnership shall be governed by
the rules on contract of partnership in all that is not in
conflict with what is expressly determined in the chapter
(on conjugal partnership of gains) or by the spouses in
their marriage settlements.19 Thus, the property relations
of respondent and her late husband shall be governed,
foremost, by Chapter 4 on Conjugal Partnership of Gains of
the Family Code and, suppletorily, by the rules on
partnership under the Civil Code. In case of conflict, the
former prevails because the Civil Code provisions on
partnership apply only when the Family Code is silent on
the matter.

The basic and established fact is that during his lifetime,

without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject
property, which formed part of their conjugal partnership.
By express provision of Article 124 of the Family Code, in
the absence of (court) authority or written consent of the
other spouse, any disposition or encumbrance of the
conjugal property shall be void.
The aforequoted provision does not qualify with respect to
the share of the spouse who makes the disposition or
encumbrance in the same manner that the rule on coownership under Article 493 of the Civil Code does. Where
the law does not distinguish, courts should not
distinguish.20 Thus, both the trial court and the appellate
court are correct in declaring the nullity of the real estate
mortgage on the subject property for lack of respondents
consent.
Second, petitioner imposes the liability for the payment of
the principal obligation obtained by the late Marcelino
Dailo, Jr. on the conjugal partnership to the extent that it
redounded to the benefit of the family.21
Under Article 121 of the Family Code, "[T]he conjugal
partnership shall be liable for: . . . (3) Debts and
obligations contracted by either spouse without the
consent of the other to the extent that the family may
have been benefited; . . . ." For the subject property to be
held liable, the obligation contracted by the late Marcelino
Dailo, Jr. must have redounded to the benefit of the
conjugal partnership. There must be the requisite showing
then of some advantage which clearly accrued to the
welfare of the spouses. Certainly, to make a conjugal

72

partnership respond for a liability that should appertain to

the husband alone is to defeat and frustrate the avowed
objective of the new Civil Code to show the utmost
concern for the solidarity and well-being of the family as a
unit.22
The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such.23 Ei incumbit
probatio qui dicit, non qui negat (he who asserts, not he
who denies, must prove).24 Petitioners sweeping
conclusion that the loan obtained by the late Marcelino
Dailo, Jr. to finance the construction of housing units
without a doubt redounded to the benefit of his family,
without adducing adequate proof, does not persuade this
Court. Other than petitioners bare allegation, there is
nothing from the records of the case to compel a finding
that, indeed, the loan obtained by the late Marcelino Dailo,
Jr. redounded to the benefit of the family. Consequently,
the conjugal partnership cannot be held liable for the
payment of the principal obligation.
In addition, a perusal of the records of the case reveals
that during the trial, petitioner vigorously asserted that the
subject property was the exclusive property of the late
Marcelino Dailo, Jr. Nowhere in the answer filed with the
trial court was it alleged that the proceeds of the loan
redounded to the benefit of the family. Even on appeal,
petitioner never claimed that the family benefited from the
proceeds of the loan. When a party adopts a certain theory
in the court below, he will not be permitted to change his
theory on appeal, for to permit him to do so would not only
be unfair to the other party but it would also be offensive
to the basic rules of fair play, justice and due process.25 A
party may change his legal theory on appeal only when

the factual bases thereof would not require presentation of

any further evidence by the adverse party in order to
enable it to properly meet the issue raised in the new
theory.26
WHEREFORE,
petitioner.

the

petition

is

DENIED.

Costs

against

SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and ChicoNazario, JJ., concur.

73

appellant.
CASTRO, J.:
The plaintiff Estrella de la Cruz filed a complaint on July 22,
1958 with the Court of First Instance of Negros Occidental,
alleging in essence that her husband, the defendant
Severino de la Cruz, had not only abandoned her but as
well was mismanaging their conjugal partnership
properties, and praying for (1) separation of property, (2)
monthly support of P2,500 during the pendency of the
action, and (3) payment of P20,000 as attorney's fees, and
costs.
The court a quo forthwith issued an order allowing the
plaintiff the amount prayed for as alimony pendente lite,
which however, upon defendant's motion, was reduced to
P2,000.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-19565

January 30, 1968

ESTRELLA DE LA CRUZ, plaintiff-appellee,

vs.
SEVERINO DE LA CRUZ, defendant-appellant.
Estacion and Paltriguera for plaintiff-appellee.
Manuel O. Soriano and Pio G. Villoso for defendant-

On June 1, 1961 the trial court rendered judgment ordering

separation and division of the conjugal assets, and
directing the defendant to pay to the plaintiff the sum of
P20,000 as attorney's fees, with legal interest from the
date of the original complaint, that is, from July 22, 1958,
until fully paid, plus costs. From this judgment the
defendant appealed to the Court of Appeals, which
certified the case to us, "it appearing that the total value
of the conjugal assets is over P500,000".
The basic facts are not controverted. The plaintiff and the
defendant were married in Bacolod City on February 1,
1938. Six children were born to them, namely, Zenia
(1939), Ronnie (1942), Victoria (1944), Jessie 1945), Bella
(1946), and Felipe (1948). During their coverture they
acquired seven parcels of land of the Bacolod Cadastre, all

74

assessed at P45,429, and three parcels of the Silay

Cadastre, all assessed at P43,580. All these parcels are
registered in their names. The hacienda in Silay yielded for
the year 1957 a net profit of P3,390.49.
They are also engaged in varied business ventures with
fixed assets valued as of December 31, 1956 at
P496,006.92, from which they obtained for that year a net
profit of P75,655.78. The net gain of the Philippine
Texboard Factory, the principal business of the spouses,
was P90,454.48 for the year 1957. As of December 31,
1959, the total assets of the various enterprises of the
conjugal partnership were valued at P1,021,407.68, not
including those of the Top Service Inc., of which firm the
defendant has been the president since its organization in
1959 in Manila with a paid-up capital of P50,000, P10,000
of which was contributed by him. This corporation was the
Beverly Hills Subdivision in Antipolo, Rizal, the Golden
Acres Subdivision and the Green Valley Subdivision in Las
Pias, Rizal, and a lot and building located at M. H. del
Pilar, Manila purchased for P285,000, an amount borrowed
from the Manufacturer's Bank and Trust Company.
The spouses are indebted to the Philippine National Bank
and the Development Bank of the Philippines for loans
obtained, to secure which they mortgaged the Philippine
Texboard Factory, the Silay hacienda, their conjugal house,
and all their parcels of land located in Bacolod City.
The essential issues of fact may be gleaned from the nine
errors the defendant imputes to the court a quo, namely,
1. In finding that the only visit, from May 15, 1955 to the
rendition of the decision, made by the defendant to the
conjugal abode to see his wife was on June 15, 1955;

2. In finding that the letter exh. 3 was written by one

Nenita Hernandez and that she and the defendant are
living as husband and wife;
3. In finding that since 1951 the relations between the
plaintiff and the defendant were far from cordial, and that
it was from 1948 that the former has been receiving an
allowance from the latter;
4. In finding that the defendant has abandoned the
plaintiff;
5. In finding that the defendant since 1956 has not
discussed with his wife the business activities of the
partnership, and that this silence constituted "abuse of
administration of the conjugal partnerships";
6. In declaring that the defendant mortgaged the conjugal
assets without the knowledge of the plaintiff and thru false
pretences to which the latter was prey;
7. In allowing the plaintiff, on the one hand, to testify on
facts not actually known by her, and, on the other hand, in
not allowing the defendant to establish his special
defenses;
8. In ordering separation of the conjugal partnership
properties; and
9. In sentencing the defendant to pay to the plaintiff
attorney's fees in the amount of P20,000, with interest at
the legal rate.1wph1.t
Two issues of law as well emerge, requiring resolution

75

petition: (1) Did the separation of the defendant from the

plaintiff constitute abandonment in law that would justify a
separation of the conjugal partnership properties? (2) Was
the defendant's failure and/or refusal to inform the plaintiff
of the state of their business enterprises such an abuse of
his powers of administration of the conjugal partnership as
to warrant a division of the matrimonial assets?
The plaintiff's evidence may be summarized briefly. The
defendant started living in Manila in 1955, although he
occasionally returned to Bacolod City, sleeping in his office
at the Philippine Texboard Factory in Mandalagan, instead
of in the conjugal home at 2nd Street, Bacolod City. Since
1955 the defendant had not slept in the conjugal dwelling,
although in the said year he paid short visits during which
they engaged in brief conversations. After 1955 up to the
time of the trial, the defendant had never visited the
conjugal abode, and when he was in Bacolod, she was
denied communication with him. He has abandoned her
and their children, to live in Manila with his concubine,
Nenita Hernandez. In 1949 she began to suspect the
existence of illicit relations between her husband and
Nenita. This suspicion was confirmed in 1951 when she
found an unsigned note in a pocket of one of her
husband's polo shirt which was written by Nenita and in
which she asked "Bering" to meet her near the church. She
confronted her husband who forthwith tore the note even
as he admitted his amorous liaison with Nenita. He then
allayed her fears by vowing to forsake his mistress.
Subsequently, in November 1951, she found in the iron
safe of her husband a letter, exh. C, also written by Nenita.
In this letter the sender (who signed as "D") apologized for
her conduct, and expressed the hope that the addressee
("Darling") could join her in Baguio as she was alone in the
Patria Inn and lonely in "a place for honeymooners".

Immediately after her husband departed for Manila the

following morning, the plaintiff enplaned for Baguio, where
she learned that Nenita had actually stayed at the Patria
Inn, but had already left for Manila before her arrival. Later
she met her husband in the house of a relative in Manila
from whence they proceeded to the Avenue Hotel where
she again confronted him about Nenita. He denied having
further relations with this woman.
Celia Baez, testifying for the plaintiff, declared that she
was employed as a cook in the home of the spouses from
May 15, 1955 to August 15, 1958, and that during the
entire period of her employment she saw the defendant in
the place only once. This declaration is contradicted,
however, by the plaintiff herself who testified that in 1955
the defendant "used to have a short visit there," which
statement implies more than one visit.
The defendant, for his part, denied having abandoned his
wife and children, but admitted that in 1957, or a year
before the filing of the action, he started to live separately
from his wife. When he transferred his living quarters to
his office in Mandalagan, Bacolod City, his intention was
not, as it never has been, to abandon his wife and
children, but only to teach her a lesson as she was
quarrelsome and extremely jealous of every woman. He
decided to live apart from his wife temporarily because at
home he could not concentrate on his work as she always
quarreled with him, while in Mandalagan he could pass the
nights in peace. Since 1953 he stayed in Manila for some
duration of time to manage their expanding business and
look for market outlets for their texboard products. Even
the plaintiff admitted in both her original and amended
complaints that "sometime in 1953, because of the
expanding business of the herein parties, the defendant

76

established an office in the City of Manila, wherein some of

the goods, effects and merchandise manufactured or
produced in the business enterprises of the parties were
sold or disposed of". From the time he started living
separately in Mandalagan up to the filing of the complaint,
the plaintiff herself furnished him food and took care of his
laundry. This latter declaration was not rebutted by the
plaintiff.
The defendant, with vehemence, denied that he has
abandoned his wife and family, averring that he has never
failed, even for a single month, to give them financial
support, as witnessed by the plaintiff's admission in her
original and amended complaints as well as in open court
that during the entire period of their estrangement, he was
giving her around P500 a month for support. In point of
fact, his wife and children continued to draw allowances
from his office of a total ranging from P1,200 to P1,500 a
month. He financed the education of their children, two of
whom were studying in Manila at the time of the trial and
were not living with the plaintiff. While in Bacolod City, he
never failed to visit his family, particularly the children. His
wife was always in bad need of money because she played
mahjong, an accusation which she did not traverse,
explaining that she played mahjong to entertain herself
and forget the infidelities of her husband.
Marcos V. Ganaban, the manager of the Philippine
Texboard Factory, corroborated the testimony of the
defendant on the matter of the support the latter gave to
his family, by declaring in court that since the start of his
employment in 1950 as assistant general manager, the
plaintiff has been drawing an allowance of P1,000 to
P1,500 monthly, which amount was given personally by
the defendant or, in his absence, by the witness himself.

The defendant denied that he ever maintained a mistress

in Manila. He came to know Nenita Hernandez when she
was barely 12 years old, but had lost track of her
thereafter. His constant presence in Manila was required
by the pressing demands of an expanding business. He
denied having destroyed the alleged note which the
plaintiff claimed to have come from Nenita, nor having
seen, previous to the trial, the letter exh. C. The allegation
of his wife that he had a concubine is based on mere
suspicion. He had always been faithful to his wife, and not
for a single instance had he been caught or surprised by
her with another woman.
On the matter of the alleged abuse by the defendant of his
powers of administration of the conjugal partnership, the
plaintiff declared that the defendant refused and failed to
inform her of the progress of their various business
concerns. Although she did not allege, much less prove,
that her husband had dissipated the conjugal properties,
she averred nevertheless that her husband might
squander and dispose of the conjugal assets in favor of his
concubine. Hence, the urgency of separation of property.
The defendant's answer to the charge of mismanagement
is that he has applied his industry, channeled his
ingenuity, and devoted his time, to the management,
maintenance and expansion of their business concerns,
even as his wife threw money away at the mahjong tables.
Tangible proof of his endeavors is that from a single cargo
truck which he himself drove at the time of their marriage,
he had built up one business after another, the Speedway
Trucking Service, the Negros Shipping Service, the Bacolod
Press, the Philippine Texboard Factory, and miscellaneous
other business enterprises worth over a million pesos; that

77

all that the spouses now own have been acquired through
his diligence, intelligence and industry; that he has
steadily expanded the income and assets of said business
enterprises from year to year, contrary to the allegations
of the complainant, as proved by his balance sheet and
profit and loss statements for the year 1958 and 1959
(exhibits 1 and 2); and that out of the income of their
enterprises he had purchased additional equipment and
machineries and has partially paid their indebtedness to
the Philippine National Bank and the Development Bank of
the Philippines.
It will be noted that the plaintiff does not ask for legal
separation. The evidence presented by her to prove
concubinage on the part of the defendant, while pertinent
and material in the determination of the merits of a
petition for legal separation, must in this case be regarded
merely as an attempt to bolster her claim that the
defendant had abandoned her, which abandonment, if it
constitutes abandonment in law, would justify separation
of the conjugal assets under the applicable provisions of
article 178 of the new Civil Code which read: "The
separation in fact between husband and wife without
judicial approval, shall not affect the conjugal partnership,
except that . . . if the husband has abandoned the wife
without just cause for at least one year, she may petition
the court for a receivership, or administration by her of the
conjugal partnership property, or separation of property".
In addition to abandonment as a ground, the plaintiff also
invokes article 167 of the new Civil Code in support of her
prayer for division of the matrimonial assets. This article
provides that "In case of abuse of powers of administration
of the conjugal partnership property by the husband, the
courts, on the petition of the wife, may provide for a
receivership, or administration by the wife, or separation

of property". It behooves us, therefore, to inquire, in the

case at bar, whether there has been abandonment, in the
legal sense, by the defendant of the plaintiff, and/or
whether the defendant has abused his powers of
administration of the conjugal partnership property, so as
to justify the plaintiff's plea for separation of property.
We have made a searching scrutiny of the record, and it is
our considered view that the defendant is not guilty of
abandonment of his wife, nor of such abuse of his powers
of administration of the conjugal partnership, as to warrant
division of the conjugal assets.
The extraordinary remedies afforded to the wife by article
178 when she has been abandoned by the husband for at
least one year are the same as those granted to her by
article 167 in case of abuse of the powers of
administration by the husband. To entitle her to any of
these remedies, under article 178, there must be real
abandonment, and not mere separation. 1 The
abandonment must not only be physical estrangement but
also amount to financial and moral desertion.
Although an all-embracing definition of the term
"abandonment " is yet to be spelled out in explicit words,
we nevertheless can determine its meaning from the
context of the Law as well as from its ordinary usage. The
concept of abandonment in article 178 may be established
in relation to the alternative remedies granted to the wife
when she has been abandoned by the husband, namely,
receivership, administration by her, or separation of
property, all of which are designed to protect the conjugal
assets from waste and dissipation rendered imminent by
the husband's continued absence from the conjugal abode,
and to assure the wife of a ready and steady source of

78

support. Therefore, physical separation alone is not the full

meaning of the term "abandonment", if the husband,
despite his voluntary departure from the society of his
spouse, neither neglects the management of the conjugal
partnership nor ceases to give support to his wife.
The word "abandon", in its ordinary sense, means to
forsake entirely; to forsake or renounce utterly. 2 The
dictionaries trace this word to the root idea of "putting
under a bar". The emphasis is on the finality and the
publicity with which some thing or body is thus put in the
control of another, and hence the meaning of giving up
absolutely, with intent never again to resume or claim
one's rights or interests. 3 When referring to desertion of a
wife by a husband, the word has been defined as "the act
of a husband in voluntarily leaving his wife with intention
to forsake her entirely, never to return to her, and never to
resume his marital duties towards her, or to claim his
marital rights; such neglect as either leaves the wife
destitute of the common necessaries of life, or would leave
her destitute but for the charity of others." 4 The word
"abandonment", when referring to the act of one consort
of leaving the other, is "the act of the husband or the wife
who leaves his or her consort wilfully, and with an
intention of causing per perpetual separation." 5 Giving to
the word "abandoned", as used in article 178, the meaning
drawn from the definitions above reproduced, it seems
rather clear that to constitute abandonment of the wife by
the husband, there must be absolute cessation of marital
relations and duties and rights, with the intention of
perpetual separation.
Coming back to the case at bar, we believe that the
defendant did not intend to leave his wife and children
permanently. The record conclusively shows that he

continued to give support to his family despite his absence

from the conjugal home. This fact is admitted by the
complainant, although she minimized the amount of
support given, saying that it was only P500 monthly. There
is good reason to believe, however, that she and the
children received more than this amount, as the
defendant's claim that his wife and children continued to
draw from his office more than P500 monthly was
substantially corroborated by Marcos Ganaban, whose
declarations were not rebutted by the plaintiff. And then
there is at all no showing that the plaintiff and the children
were living in want. On the contrary, the plaintiff admitted,
albeit reluctantly, that she frequently played mahjong,
from which we can infer that she had money; to spare.
The fact that the defendant never ceased to give support
to his wife and children negatives any intent on his part
not to return to the conjugal abode and resume his marital
duties and rights. In People v. Schelske, 6 it was held that
where a husband, after leaving his wife, continued to make
small contributions at intervals to her support and that of
their minor child, he was not guilty of their
"abandonment", which is an act of separation with intent
that it shall be perpetual, since contributing to their
support negatived such intent. In re Hoss' Estate, supra, it
was ruled that a father did not abandon his family where
the evidence disclosed that he almost always did give his
wife part of his earnings during the period of their
separation and that he gradually paid some old rental and
grocery bills.
With respect to the allegation that the defendant
maintained a concubine, we believe, contrary to the
findings of the court a quo, that the evidence on record
fails to preponderate in favor of the plaintiff's thesis. The

79

proof that Nenita Hernandez was the concubine of the

defendant and that they were living as husband and wife
in Manila, is altogether too indefinite. Aside from the
uncorroborated statement of the plaintiff that she knew
that Nenita Hernandez was her husband's concubine,
without demonstrating by credible evidence the existence
of illicit relations between Nenita and the defendant, the
only evidence on record offered to link the defendant to
his alleged mistress is exh. C. The plaintiff however failed
to connect authorship of the said letter with Nenita, on the
face whereof the sender merely signed as "D" and the
addressee was one unidentified "Darling". The plaintiff's
testimony on cross-examination, hereunder quoted,
underscores such failure:
Q. You personally never received any letter from Nenita?
A. No.
Q. Neither have you received on any time until today from
1949 from Nenita?
A. No.
Q. Neither have you written to her any letter yourself until
now?
A. Why should I write a letter to her.
Q. In that case, Mrs. De la Cruz, you are not familiar with
the handwriting of Nenita. Is that right?
A. I can say that Nenita writes very well.
Q. I am not asking you whether she writes very well or not

but, my question is this: In view of the fact that you have

never received a letter from Nenita, you have ot sent any
letter to her, you are not familiar with her handwriting?
A. Yes.
Q. You have not seen her writing anybody?
A. Yes.
Anent the allegation that the defendant had mismanaged
the conjugal partnership property, the record presents a
different picture. There is absolutely no evidence to show
that he has squandered the conjugal assets. Upon the
contrary, he proved that through his industry and zeal, the
conjugal assets at the time of the trial had increased to a
value of over a million pesos.
The lower court likewise erred in holding that mere refusal
or failure of the husband as administrator of the conjugal
partnership to inform the wife of the progress of the family
businesses constitutes abuse of administration. For
"abuse" to exist, it is not enough that the husband perform
an act or acts prejudicial to the wife. Nor is it sufficient that
he commits acts injurious to the partnership, for these
may be the result of mere inefficient or negligent
administration. Abuse connotes willful and utter disregard
of the interests of the partnership, evidenced by a
repetition of deliberate acts and/or omissions prejudicial to
the latter. 7
If there is only physical separation between the spouses
(and nothing more), engendered by the husband's leaving
the conjugal abode, but the husband continues to manage
the conjugal properties with the same zeal, industry, and

80

efficiency as he did prior to the separation, and religiously

gives support to his wife and children, as in the case at
bar, we are not disposed to grant the wife's petition for
separation of property. This decision may appear to
condone the husband's separation from his wife; however,
the remedies granted to the wife by articles 167 and 178
are not to be construed as condonation of the husband's
act but are designed to protect the conjugal partnership
from waste and shield the wife from want. Therefore, a
denial of the wife's prayer does not imply a condonation of
the husband's act but merely points up the insufficiency or
absence of a cause of action.1wph1.t
Courts must need exercise judicial restraint and reasoned
hesitance in ordering a separation of conjugal properties
because the basic policy of the law is homiletic, to
promote healthy family life and to preserve the union of
the spouses, in person, in spirit and in property.
Consistent with its policy of discouraging a regime of
separation as not in harmony with the unity of the family
and the mutual affection and help expected of the
spouses, the Civil Code (both old and new) requires that
separation of property shall not prevail unless expressly
stipulated in marriage settlements before the union is
solemnized or by formal judicial decree during the
existence of the marriage (Article 190, new Civil Code,
Article 1432, old Civil Code): and in the latter case, it may
only be ordered by the court for causes specified in Article
191 of the new Civil Code. 8
Furthermore, a judgment ordering the division of conjugal
assets where there has been no real abandonment, the
separation not being wanton and absolute, may altogether
slam shut the door for possible reconciliation. The

estranged spouses may drift irreversibly further apart; the

already broken family solidarity may be irretrievably
shattered; and any flickering hope for a new life together
may be completely and finally extinguished.
The monthly alimony in the sum of P2,000 which was
allowed to the wife in 1958, long before the devaluation of
the Philippine peso in 1962, should be increased to P3,000.
On the matter of attorney's fees, it is our view that
because the defendant, by leaving the conjugal abode, has
given cause for the plaintiff to seek redress in the courts,
and ask for adequate support, an award of attorney's fees
to the plaintiff must be made. Ample authority for such
award is found in paragraphs 6 and 11 of article 2208 of
the new Civil Code which empower courts to grant
counsel's fees "in actions for legal support" and in cases
"where the court deems it just and equitable that
attorney's fees . . . should be recovered." However, an
award of P10,000, in our opinion, is, under the
environmental circumstances, sufficient.
This Court would be remiss if it did not, firstly, remind the
plaintiff and the defendant that the law enjoins husband
and wife to live together, and, secondly, exhort them to
avail of mutually, earnestly and steadfastly all
opportunities for reconciliation to the end that their marital
differences may be happily resolved, and conjugal
harmony may return and, on the basis of mutual respect
and understanding, endure.
ACCORDINGLY, the judgment a quo, insofar as it decrees
separation of the conjugal properties, is reversed and set
aside. Conformably to our observations, however, the
defendant is ordered to pay to the plaintiff, in the concept

81

of support, the amount of P3,000 per month, until he shall

have rejoined her in the conjugal home, which amount
may, in the meantime, be reduced or increased in the
discretion of the court a quo as circumstances warrant.
The award of attorney's fees to the plaintiff is reduced to
P10,000, without interest. No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon,
J.P., Zaldivar, Sanchez, Angeles and Fernando, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 82606 December 18, 1992
PRIMA PARTOSA-JO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and HO HANG (with
aliases JOSE JO and CONSING), respondents.

CRUZ, J.:
The herein private respondent, Jose Jo, admits to having
cohabited with three women and fathered fifteen children.
The first of these women, the herein petitioner, claims to
be his legal wife whom he begot a daughter, Monina Jo.
The other women and their respective offspring are not

parties of these case.

In 1980, the petitioner filed a complaint against Jo for
judicial separation of conjugal property, docketed as Civil
Case No. 51, in addition to an earlier action for support,
also against him and docketed as Civil Case No. 36, in the
Regional Trial Court of Negros Oriental, Branch 35.
The two cases were consolidated and tried jointly. On
November 29, 1983, Judge German G. Lee, Jr. rendered an
extensive decision, the dispositive portion of which read:
WHEREFORE, in view of all the foregoing arguments and
considerations, this court hereby holds that the plaintiff
Prima Partosa was legally married to Jose Jo alias Ho Hang,
alias Consing, and, therefore, is entitled to support as the
lawfully wedded wife and the defendant is hereby ordered
to give a monthly support of P500.00 to the plaintiff Prima
Partosa, to be paid on or before the 5th day of every
month, and to give to the plaintiff the amount of
P40,000.00 for the construction of the house in
Zamboanguita, Negros Oriental where she may live
separately from the defendant being entitled under the
law to separate maintenance being the innocent spouse
and to pay the amount of P19,200.00 to the plaintiff by
way of support in arrears and to pay the plaintiff the
amount of P3,000.00 in the concept of attorney's fees.
As will be noticed, there was a definite disposition of the
complaint for support but none of the complaint for judicial
separation of conjugal property.
Jo elevated the decision to the Court of Appeals, which
affirmed the ruling of the trial court in the complaint for
support. 1 The complaint for judicial separation of conjugal

82

property was dismissed for lack of a cause of action and on

the ground that separation by agreement was not covered
by Article 178 of the Civil Code.
When their motions for reconsideration were denied, both
parties came to this Court for relief. The private
respondent's petition for review on certiorari was
dismissed for tardiness in our resolution dated February
17, 1988, where we also affirmed the legality of the
marriage between Jose and Prima and the obligation of the
former to support her and her daughter.
This petition deals only with the complaint for judicial
separation of conjugal property.
It is here submitted that the Court of Appeals erred in
holding that: a) the judicial separation of conjugal property
sought was not allowed under Articles 175, 178 and 191 of
the Civil Code; and b) no such separation was decreed by
the trial court in the dispositive portion of its decision.
The private respondent contends that the decision of the
trial court can longer be reviewed at this time because it
has a long since become final and executory. As the
decretal portion clearly made no disposition of Civil Case
No. 51, that case should be considered impliedly
dismissed. The petitioner should have called the attention
of the trial court to the omission so that the proper
rectification could be made on time. Not having done so,
she is now concluded by the said decision, which can no
longer be corrected at this late hour.
We deal first with the second ground.
While admitting that no mention was made of Civil Case

No. 51 in the dispositive portion of the decision of the trial

court, the petitioner argues that a disposition of the case
was nonetheless made in the penultimate paragraph of
the decision reading as follows:
It is, therefore, hereby ordered that all properties in
question are considered properties of Jose Jo, the
defendant in this case, subject to separation of property
under Article 178, third paragraph of the Civil Code, which
is subject of separate proceedings as enunciated herein.
The petitioner says she believed this to be disposition
enough and so did not feel it was necessary for her to
appeal, particularly since the order embodied in that
paragraph was in her favor. It was only when the
respondent court observed that there was no dispositive
portion regarding that case and so ordered its dismissal
that she found it necessary to come to this Court for relief.
The petitioner has a point.
The dispositive portion of the decision in question was
incomplete insofar as it carried no ruling on the complaint
for judicial separation of conjugal property although it was
extensively discussed in the body of the decision. The
drafting of the decision was indeed not exactly careful. The
petitioner's counsel, noting this, should have taken
immediate steps for the rectification for the omission so
that the ruling expressed in the text of the decision could
have been embodied in the decretal portion. Such
alertness could have avoided this litigation on a purely
technical issue.
Nevertheless, the technicality invoked in this case should
not be allowed to prevail over considerations of

83

substantive justive. After all, the technical defect is not

insuperable. We have said time and again that where there
is an ambiguity caused by an omission or a mistake in the
dispositive portion of the decision, this Court may clarify
such an ambiguity by an amendment even after the
judgment have become final. 2 In doing so, the Court may
resort to the pleading filed by the parties and the findings
of fact and the conclusions of law expressed in the text or
body of the decision. 3

Dumaguete City, where she and Jo were living together

"because that was our agreement." It held that a
agreement to live separately without just cause was void
under Article 221 of the Civil Code and could not sustain
any claim of abandonment by the aggrieved spouse. Its
conclusion was that the only remedy availabe to the
petitioner was legal separation under Article 175 of the
Civil Code, 4 by virtue of which the conjugal partnership of
property would be terminated.

The trial court made definite findings on the complaint for

judicial separation of conjugal property, holding that the
petitioner and the private respondent were legally married
and that the properties mentioned by the petitioner were
acquired by Jo during their marriage although they were
registered in the name of the apparent dummy.

The petitioner contends that the respondent court has

misinterpreted Articles 175, 178 and 191 of the Civil Code.
She submits that the agreement between her and the
private respondent was for her to temporarily live with her
parents during the initial period of her pregnancy and for
him to visit and support her. They never agreed to
separate permanently. And even if they did, this
arrangement was repudiated and ended in 1942, when she
returned to him at Dumaguete City and he refused to
accept her.

There is no question therefore that the penultimate

paragraph of the decision of the trial court was a ruling
based upon such findings and so should have been
embodied in the dispositive portion. The respondent court
should have made the necessary modification instead of
dismissing Civil Case No. 51 and thus upholding mere form
over substance.

The petitioner invokes Article 178 (3) of the Civil Code,

which reads:

In the interest of substantive justice, and to expedite these

proceedings, we hereby make such modification.

Art. 178.
The separation in fact between husband and
wife without judicial approval, shall not affect the conjugal
partnership, except that:

And now to the merits of Civil Case No. 51.

xxx xxx xxx

The Court of Appeals dismissed the complaint on the

ground that the separation of the parties was due to their
agreement and not because of abondonment. The
respondent court relied mainly on the testimony of the
petitioner, who declared under oath that she left

(3) If the husband has abandoned the wife without just

cause for at least one year, she may petition the court for
a receivership, or administration by her of the conjugal
partnership property or separation of property.

84

The above-quoted provision has been superseded by

Article 128 of the Family Code, which states:
Art. 128.
If a spouse without just cause abandons the
other or fails to comply with his or her obligations to the
family, the aggrieved spouse may petition the court for
receivership, for judicial separation of property, of for
authority to be the sole administrator of the conjugal
partnership property, subject to such precautionary
conditions as the court may impose.
The obligations to the family mentioned in the preceding
paragraph refer to martial, parental or property relations.
A spouse is deemed to have abondoned the other when he
or she has left the conjugal dwelling without any intention
of returning. The spouse who has left the conjugal dwelling
for a period of three months or has failed within the same
period to give any information as to his or her
whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.
Under the this provision, the aggrieved spouse may
petition for judicial separation on either of these grounds:
1. Abondonment by a spouse of the other without just
cause; and
2. Failure of one spouse to comply with his or her
obligations to the family without just cause, even if she
said spouse does not leave the other spouse.
Abandonment implies a departure by one spouse with the
avowed intent never to return, followed by prolonged
absence without just cause, and without in the meantime

providing in the least for one's family although able to do

so. 5 There must be absolute cessation of marital relations,
duties and rights, with the intention of perpetual
separation. 6 This idea is clearly expressed in the abovequoted provision, which states that "a spouse is deemed to
have abandoned the other when he or she has left the
conjugal dwelling without any intention of returning."
The record shows that as early as 1942, the private
respondent had already rejected the petitioner, whom he
denied admission to their conjugal home in Dumaguete
City when she returned from Zamboanguita. The fact that
she was not accepted by Jo demonstrates all too clearly
that he had no intention of resuming their conjugal
relationship. Moreover, beginning 1968 until the
determination by this Court of the action for support in
1988, the private respondent refused to give financial
support to the petitioner. The physical separation of the
parties, coupled with the refusal by the private respondent
to give support to the petitioner, sufficed to constitute
abandonment as a ground for the judicial separation of
their conjugal property.
In addition, the petitioner may also invoke the second
ground allowed by Article 128, for the fact is that he has
failed without just cause to comply with his obligations to
the family as husband or parent. Apart form refusing to
admit his lawful wife to their conjugal home in Dumaguete
City, Jo has freely admitted to cohabiting with other
women and siring many children by them. It was his
refusal to provide for the petitioner and their daughter that
prompted her to file the actions against him for support
and later for separation of the conjugal property, in which
actions, significantly, he even denied being married to her.
The private respondent has not established any just cause

85

for his refusal to comply with his obligations to his wife as

dutiful husband.
Their separation thus falls also squarely under Article 135
of the Family Code, providing as follows:
Art. 135.
Any of the following shall be considered
sufficient cause for judicial separation of property:
xxx xxx xxx
(6) That at the time of the petition, the spouse have been
separated in fact for at least one year and reconciliation is
highly improbable.
The amendments introduced in the Family Code are
applicable to the case before us although they became
effective only on August 3, 1988. As we held in Ramirez v.
Court of Appeals: 7
The greater weight of authority is inclined to the view that
an appellate court, in reviewing a judgment on appeal, will
dispose of a question according to the law prevailing at the
term of such disposition, and not according to the law
prevailing at the time of rendition of the appealed
judgement. The court will therefore reverse a judgement
which was correct at the time it was originally rendered
where, by statute, there has been an intermediate change
in the law which renders such judgement erroneous at the
time the case was finally disposed of on appeal.
The order of judicial separation of the properties in
question is based on the finding of both the trial and
respondent courts that the private respondent is indeed
their real owner. It is these properties that should now be

divided between him and the petitioner, on the

assumption that they were acquired during coverture and
so belong to the spouses half and half. As the private
respondent is a Chinese citizen, the division must include
such properties properly belonging to the conjugal
partnership as may have been registered in the name of
other persons in violation of the Anti-Dummy Law.
The past has caught up with the private respondent. After
his extramarital flings and a succession of illegitimate
children, he must now make an accounting to his lawful
wife of the properties he denied her despite his promise to
their of his eternal love and care.
WHEREFORE, the petition is GRANTED and the assailed
decision of the respondent court is MODIFIED. Civil Case
No. 51 is hereby decided in favor the plaintiff, the
petitioner herein, and the conjugal property of the
petitioner and the private respondent is hereby ordered
divided between them, share and share alike. This division
shall be implemented by the trial court after determination
of all the properties pertaining to the said conjugal
partnership, including those that may have been illegally
registered in the name of the persons.
SO ORDERED.
Padilla, Grio-Aquino and Bellosillo, JJ., concur.

86

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 166496

November 9, 2006

JOSEFA BAUTISTA FERRER, Petitioner,

vs.
SPS. MANUEL M. FERRER & VIRGINIA FERRER and SPS.
ISMAEL M. FERRER and FLORA FERRER, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is an Appeal by Certiorari which assails
the Decision1 of the Court of Appeals dated 16 August
2004 in CA-G.R. SP No. 78525, reversing and setting aside
the Order2 dated 16 December 2002 of the Regional Trial
Court (RTC), Mandaluyong City, Branch 212 in Civil Case
No. MC02-1780. The Court of Appeals ordered the
dismissal of the Complaint3 filed by petitioner Josefa
Bautista Ferrer against respondents Sps. Manuel M. Ferrer
and Virginia Ferrer, and Sps. Ismael M. Ferrer and Flora
Ferrer in the aforesaid Civil Case No. MC02-1780.
In her Complaint for payment of conjugal improvements,
sum of money, and accounting with prayer for injunction

87

and damages, petitioner alleged that she is the widow of

Alfredo Ferrer (Alfredo), a half-brother of respondents
Manuel M. Ferrer (Manuel) and Ismael M. Ferrer (Ismael).
Before her marriage to Alfredo, the latter acquired a piece
of lot, covered by Transfer Certificate of Title (TCT) No.
67927.4 He applied for a loan with the Social Security
System (SSS) to build improvements thereon, including a
residential house and a two-door apartment building.
However, it was during their marriage that payment of the
loan was made using the couples conjugal funds. From
their conjugal funds, petitioner posited, they constructed a
warehouse on the lot. Moreover, petitioner averred that
respondent Manuel occupied one door of the apartment
building, as well as the warehouse; however, in September
1991, he stopped paying rentals thereon, alleging that he
had acquired ownership over the property by virtue of a
Deed of Sale executed by Alfredo in favor of respondents,
Manuel and Ismael and their spouses. TCT No. 67927 was
cancelled, and TCT. No. 2728 was issued and registered in
the names of respondents.
It is petitioners contention that on 2 October 1989, when
her husband was already bedridden, respondents Ismael
and Flora Ferrer made him sign a document, purported to
be his last will and testament. The document, however,
was a Deed of Sale covering Alfredos lot and the
improvements thereon. Learning of this development,
Alfredo filed with the RTC of Pasig, a Complaint for
Annulment of the said sale against respondents, docketed
as Civil Case No. 61327.5 On 22 June 1993, the RTC
dismissed the same.6 The RTC found that the terms and
conditions of the Deed of Sale are not contrary to law,
morals, good customs, and public policy, and should be
complied with by the parties in good faith, there being no
compelling reason

under the law to do otherwise. The dismissal was affirmed

by the Court of Appeals. Subsequently, on 7 November
1994, this Court, in G.R. No. L-117067, finding no
reversible error committed by the appellate court in
affirming the dismissal of the RTC, affirmed the Decision of
the Court of Appeals.7
Further, in support of her Complaint, petitioner alluded to a
portion of the Decision dated 22 June 1993 of the RTC in
Civil Case No. 61327, which stated, to wit:
In determining which property is the principal and which is
the accessory, the property of greater value shall be
considered the principal. In this case, the lot is the
principal and the improvements the accessories. Since
Article 120 of the Family Code provides the rule that the
ownership of accessory follows the ownership of the
principal, then the subject lot with all its improvements
became an exclusive and capital property of Alfredo with
an obligation to reimburse the conjugal partnership of the
cost of improvements at the time of liquidation of [the]
conjugal partnership. Clearly, Alfredo has all the rights to
sell the subject property by himself without need of
Josefas consent.8
According to petitioner, the ruling of the RTC shows that,
when Alfredo died on 29 September 1999, or at the time of
the liquidation of the conjugal partnership, she had the
right to be reimbursed for the cost of the improvements on
Alfredos lot. She alleged that the cost of the
improvements amounted to P500,000.00; hence, one-half
thereof should be reimbursed and paid by respondents as
they are now the registered owners of Alfredos lot. She
averred that respondents cannot claim lack of knowledge

88

about the fact that the improvements were constructed

using conjugal funds as they had occupied one of the
apartment buildings on Alfredos lot, and even paid rentals
to petitioner. In addition, petitioner prayed that
respondents be ordered to render an accounting from
September, 1991, on the income of the boarding house
constructed thereon which they had appropriated for
themselves, and to remit one-half thereof as her share.
Finally, petitioner sought from respondents moral and
exemplary damages, litigation and incidental expenses.
For their part, respondents filed a Motion to Dismiss,9
contending that petitioner had no cause of action against
them, and that the cause of action was barred by prior
judgment.
On 16 December 2002, the RTC rendered an Order,10
denying the Motion to Dismiss. According to the RTC, no
pronouncement as to the improvements constructed on
Alfredos lot has been made in Civil Case No. 61327, and
the payment of petitioners share in the conjugal
partnership constitutes a separate cause of action. A
subsequent Order11 dated 17 January 2003 was issued by
the RTC, denying respondents Motion for Reconsideration.
Aggrieved, respondents elevated the case to the Court of
Appeals by way of a Petition for Certiorari, alleging grave
abuse of discretion amounting to lack or excess of
jurisdiction on the RTC in denying the dismissal.
On 16 August 2004, the Court of Appeals rendered a
Decision granting the Petition. It held that petitioners
Complaint failed to state a cause of action. The appellate
court rationalized as follows:

[W]e believe that the instant complaint is not the proper

action for the respondent to enforce her right of
reimbursement of the cost of the improvement[s] on the
subject property. As correctly pointed out by the
petitioners, the same should be made and directed in the
settlement of estate of her deceased husband Alfredo
Ferrer pursuant to Article 12912 of the Family Code. Such
being the case, it appears that the complaint herein fails to
state a cause of action against the petitioners, the latter
not being the proper parties against whom the subject
action for reimbursement must be directed to. A complaint
states a cause of action where it contains three essential
elements of a cause of action, namely: (1) the legal right of
the plaintiff; (2) the correlative obligation of the defendant,
and (3) the act or omission of the defendant in violation of
said legal right. If these elements are absent, the
complaint becomes vulnerable to a motion to dismiss on
the ground of failure to state a cause of action. Albeit the
respondent herein has the legal right to be reimbursed of
the cost of the improvements of the subject property, it is
not the petitioners but the estate of her deceased husband
which has the obligation to pay the same. The complaint
herein is therefore dismissible for failure to state a cause
of action against the petitioners. Needless to say, the
respondent is not without any further recourse as she may
file her claim against the estate of her deceased husband.
In light of the foregoing, we find that the public respondent
committed grave abuse of discretion in denying the
petitioners motion to dismiss for failure to state a cause of
action.13
Aggrieved, petitioner filed a Motion for Reconsideration
thereon. However, on 17 December 2004, the Court of
Appeals rendered a Resolution14 denying the motion.

89

under whatever law it arises or is created;

Hence, the present recourse.
Petitioner submits the following grounds for the allowance
of the instant Petition, to wit:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT PETITIONERS COMPLAINT FAILS TO STATE A CAUSE
OF ACTION AGAINST THE RESPONDENTS, THE LATTER NOT
BEING THE PROPER PARTIES AGAINST WHOM THE SUBJECT
ACTION FOR REIMBURSEMENT MUST BE DIRECTED TO.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THE PUBLIC RESPONDENT, HON. RIZALINA T. CAPCOUMALI, COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING THE [RESPONDENTS] MOTION TO DISMISS FOR
FAILURE TO STATE A CAUSE OF ACTION.15
Both arguments raise the sole issue of whether the Court
of Appeals erred in dismissing petitioners Complaint for
failure to state a cause of action.
Section 1(g) Rule 1616 of the 1997 Rules of Civil Procedure
makes it clear that failure to make a sufficient allegation of
a cause of action in the complaint warrants the dismissal
thereof. Section 2, Rule 2 of the 1997 Rules of Civil
Procedure defines a cause of action as the act or omission
by which a party violates the right of another. It is the
delict or the wrongful act or omission committed by the
defendant in violation of the primary right of the
plaintiff.17
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means and

(2) An obligation on the part of the named defendant to

respect or not to violate such right; and
(3) Act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff for
which the latter may maintain an action for recovery of
damages or other appropriate relief.18
A complaint states a cause of action only when it has the
three indispensable elements.19
In the determination of the presence of these elements,
inquiry is confined to the four corners of the complaint.
Only the statements in the Complaint may be properly
considered.20 The absence of any of these elements
makes a complaint vulnerable to a Motion to Dismiss on
the ground of a failure to state a cause of action.21
After a reading of the allegations contained in petitioners
Complaint, we are convinced that the same failed to state
a cause of action.
In the case at bar, petitioner asserts a legal right in her
favor by relying on the Decision of the RTC in Civil Case
No. 61327. It can be recalled that the aforesaid case is an
action for Annulment filed by Alfredo and petitioner
against the respondents to seek annulment of the Deed of
Sale, executed by Alfredo in respondents favor and
covering the herein subject premises. The Complaint was
dismissed by the RTC, and subsequently affirmed by the
Court of Appeals and by this Court in G.R. No. L-117067.

90

According to petitioner, while the RTC in Civil Case No.

61327 recognized that the improvements constructed on
Alfredos lots were deemed as Alfredos exclusive and
capital property, the court also held that petitioner, as
Alfredos spouse, has the right to claim reimbursement
from the estate of Alfredo. It is argued by petitioner that
her husband had no other property, and his only property
had been sold to the respondents; hence, she has the legal
right to claim for reimbursement from the respondents
who are now the owners of the lot and the improvements
thereon. In fine, petitioner asseverates that the Complaint
cannot be dismissed on the ground of failure to state a
cause of action because the respondents have the
correlative obligation to pay the value of the
improvements.
Petitioner was not able to show that there is an obligation
on the part of the respondents to respect or not to violate
her right. While we could concede that Civil Case No.
61327 made a reference to the right of the spouse as
contemplated in Article 12022 of the Family Code to be
reimbursed for the cost of the improvements, the
obligation to reimburse rests on the spouse upon whom
ownership of the entire property is vested. There is no
obligation on the part of the purchaser of the property, in
case the property is sold by the owner-spouse.
Indeed, Article 120 provides the solution in determining
the ownership of the improvements that are made on the
separate property of the spouses at the expense of the
partnership or through the acts or efforts of either or both
spouses. Thus, when the cost of the improvement and any
resulting increase in value are more than the value of the
property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal

partnership, subject to reimbursement of the value of the

property of the owner-spouse at the time of the
improvement; otherwise, said property shall be retained in
ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement. The
subject property was precisely declared as the exclusive
property of Alfredo on the basis of Article 120 of the Family
Code.
What is incontrovertible is that the respondents, despite
the allegations contained in the Complaint that they are
the buyers of the subject premises, are not petitioners
spouse nor can they ever be deemed as the owner-spouse
upon whom the obligation to reimburse petitioner for her
costs rested. It is the owner-spouse who has the obligation
to reimburse the conjugal partnership or the spouse who
expended the acts or efforts, as the case may be.
Otherwise stated, respondents do not have the obligation
to respect petitioners right to be reimbursed.
On this matter, we do not find an act or omission on the
part of respondents in violation of petitioners rights. The
right of the respondents to acquire as buyers the subject
premises from Alfredo under the assailed Deed of Sale in
Civil Case No. 61327 had been laid to rest. This is because
the validity of the Deed of Sale had already been
determined and upheld with finality. The same had been
similarly admitted by petitioner in her Complaint. It can be
said, thus, that respondents act of acquiring the subject
property by sale was not in violation of petitioners rights.
The same can also be said of the respondents objection to
reimburse petitioner. Simply, no correlative obligation
exists on the part of the respondents to reimburse the
petitioner. Corollary thereto, neither can it be said that
their refusal to reimburse constituted a violation of

91

petitioners rights. As has been shown in the foregoing, no

obligation by the respondents under the law exists.
Petitioners Complaint failed to state a cause of action
against the respondents, and for this reason, the Court of
Appeals was not in error in dismissing the same.
WHEREFORE, the Petition is DENIED. The Decision dated
16 August 2004 and the Resolution dated 17 December
2004 of the Court of Appeals in CA G.R. SP. No. 78525 are
AFFIRMED. Costs de oficio.
SO ORDERED.

Republic of the Philippines

SUPREME COURT

92

Manila
FIRST DIVISION
G.R. No. 147978

January 23, 2002

THELMA A. JADER-MANALO, petitioner,

vs.
NORMA FERNANDEZ C. CAMAISA and EDILBERTO CAMAISA,
respondents.

spouses. She made a definite offer to buy the properties to

respondent Edilberto Camaisa with the knowledge and
conformity of his wife, respondent Norma Camaisa in the
presence of the real estate broker.3 After some bargaining,
petitioner and Edilberto agreed upon the purchase price of
P1,500,000.00 for the Taytay property and P2,100,000.00
for the Makati property4 to be paid on installment basis
with downpayments of P100,000.00 and P200,000.00,
respectively, on April 15, 1992. The balance thereof was to
be paid as follows5:

KAPUNAN, J.:
The issue raised in this case is whether or not the husband
may validly dispose of a conjugal property without the
wife's written consent.
The present controversy had its beginning when petitioner
Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma
Fernandez C. Camaisa and Edilberto Camaisa, in the
Classified Ads Section of the newspaper BULLETIN TODAY
in its April, 1992 issue, for the sale of their ten-door
apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the
Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated
for the purchase through a real estate broker, Mr. Proceso
Ereno, authorized by respondent spouses.1 Petitioner
made a visual inspection of the said lots with the real
estate broker and was shown the tax declarations, real
property tax payment receipts, location plans, and vicinity
maps relating to the properties.2 Thereafter, petitioner
met with the vendors who turned out to be respondent

Taytay Property
Makati Property
6th month
P200,000.00
P300,000.00
12th month
700,000.00
1,600,000.00
18th month
500,000.00
This agreement was handwritten by petitioner and signed
by Edilberto.6 When petitioner pointed out the conjugal

93

nature of the properties, Edilberto assured her of his wife's

conformity and consent to the sale.7 The formal
typewritten Contracts to Sell were thereafter prepared by
petitioner. The following day, petitioner, the real estate
broker and Edilberto met in the latter's office for the formal
signing of the typewritten Contracts to Sell.8 After
Edilberto signed the contracts, petitioner delivered to him
two checks, namely, UCPB Check No. 62807 dated April
15, 1992 for P200,000.00 and UCPB Check No. 62808 also
dated April 15, 1992 for P100,000.00 in the presence of
the real estate broker and an employee in Edilberto's
office.9 The contracts were given to Edilberto for the
formal affixing of his wife's signature.
The following day, petitioner received a call from
respondent Norma, requesting a meeting to clarify some
provisions of the contracts.10 To accommodate her
queries, petitioner, accompanied by her lawyer, met with
Edilberto and Norma and the real estate broker at Cafe
Rizal in Makati.11 During the meeting, handwritten
notations were made on the contracts to sell, so they
arranged to incorporate the notations and to meet again
for the formal signing of the contracts.12
When petitioner met again with respondent spouses and
the real estate broker at Edilberto's office for the formal
affixing of Norma's signature, she was surprised when
respondent spouses informed her that they were backing
out of the agreement because they needed "spot cash" for
the full amount of the consideration.13 Petitioner
reminded respondent spouses that the contracts to sell
had already been duly perfected and Norma's refusal to
sign the same would unduly prejudice petitioner. Still,
Norma refused to sign the contracts prompting petitioner
to file a complaint for specific performance and damages

against respondent spouses before the Regional Trial Court

of Makati, Branch 136 on April 29, 1992, to compel
respondent Norma Camaisa to sign the contracts to sell.
A Motion to Dismiss14 was filed by respondents which was
denied by the trial court in its Resolution of July 21,
1992.15
Respondents then filed their Answer with Compulsory
Counter-claim, alleging that it was an agreement between
herein petitioner and respondent Edilberto Camaisa that
the sale of the subject properties was still subject to the
approval and conformity of his wife Norma Camaisa.16
Thereafter, when Norma refused to give her consent to the
sale, her refusal was duly communicated by Edilberto to
petitioner.17 The checks issued by petitioner were
returned to her by Edilberto and she accepted the same
without any objection.18 Respondent further claimed that
the acceptance of the checks returned to petitioner
signified her assent to the cancellation of the sale of the
subject properties.19 Respondent Norma denied that she
ever participated in the negotiations for the sale of the
subject properties and that she gave her consent and
conformity to the same.20
On October 20, 1992, respondent Norma F. Camaisa filed a
Motion for Summary Judgment21 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's written consent was not obtained in the contract
to sell, the subject conjugal properties belonging to
respondents; hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary
judgment dismissing the complaint on the ground that

94

under Art. 124 of the Family Code, the court cannot

intervene to authorize the transaction in the absence of
the consent of the wife since said wife who refused to give
consent had not been shown to be incapacitated. The
dispositive portion of the trial court's decision reads:

stressed that the authority of the court to allow sale or

encumbrance of a conjugal property without the consent
of the other spouse is applicable only in cases where the
said spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal property.

WHEREFORE, considering these premises, judgment is

hereby rendered:

Hence, the present recourse assigning the following errors:

1. Dismissing the complaint and ordering the cancellation

of the Notice of Lis Pendens by reason of its filing on TCT
Nos. (464860) S-8724 and (464861) S-8725 of the Registry
of Deeds at Makati and on TCT Nos. 295976 and 295971 of
the Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay defendant
spouses Norma and Edilberto Camaisa, FIFTY THOUSAND
(P50,000.00) as Moral Damages and FIFTY THOUSAND
(P50,000.00) as Attorney's Fees.
Costs against plaintiff.22
Petitioner, thus, elevated the case to the Court of Appeals.
On November 29, 2000, the Court of Appeals affirmed the
dismissal by the trial court but deleted the award of
P50,000.00 as damages and P50,000.00 as attorney's
fees.
The Court of Appeals explained that the properties subject
of the contracts were conjugal properties and as such, the
consent of both spouses is necessary to give effect to the
sale. Since private respondent Norma Camaisa refused to
sign the contracts, the sale was never perfected. In fact,
the downpayment was returned by respondent spouses
and was accepted by petitioner. The Court of Appeals also

THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED

IN RENDERING SUMMARY JUDGMENT IN DISMISSING THE
COMPLAINT ENTIRELY AND ORDERING THE CANCELLATION
OF NOTICE OF LIS PENDENS ON THE TITLES OF THE
SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN FAILING TO CONSIDER THAT THE SALE OF REAL
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER PAID
P300,000.00 DOWNPAYMENT, RESPONDENT MRS. CAMAISA
NEVER OBJECTED TO STIPULATIONS WITH RESPECT TO
PRICE, OBJECT AND TERMS OF PAYMENT IN THE CONTRACT
TO SELL ALREADY SIGNED BY THE PETITIONER,
RESPONDENT MR. CAMAISA AND WITNESSES MARKED AS
ANNEX "G" IN THE COMPLAINT EXCEPT, FOR MINOR
PROVISIONS ALREADY IMPLIED BY LAW, LIKE EJECTMENT
OF TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN
CASE OF NONPAYMENT, WHICH PETITIONER READILY
AGREED AND ACCEDED TO THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
WHEN IT FAILED TO CONSIDER THAT CONTRACT OF SALE
IS CONSENSUAL AND IT IS PERFECTED BY THE MERE
CONSENT OF THE PARTIES AND THE APPLICABLE
PROVISIONS ARE ARTICLES 1157, 1356, 1357, 1358, 1403,
1405 AND 1475 OF THE CIVIL CODE OF THE PHILIPPINES

95

AND GOVERNED BY THE STATUTE OF FRAUD.23

The Court does not find error in the decisions of both the
trial court and the Court of Appeals.

by the husband as administrator in appropriate cases

requires the written consent of the wife, otherwise, the
disposition is void. Thus, Article 124 of the Family Code
provides:

Petitioner alleges that the trial court erred when it entered

a summary judgment in favor of respondent spouses there
being a genuine issue of fact. Petitioner maintains that the
issue of whether the contracts to sell between petitioner
and respondent spouses was perfected is a question of
fact necessitating a trial on the merits.

Art. 124. The administration and enjoyment of the conjugal

partnership property shall belong to both spouses jointly.
In case of disagreement, the husband's decision shall
prevail, subject to recourse to the court by the wife for a
proper remedy, which must be availed of within five years
from the date of the contract implementing such decision.

The Court 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 are no important questions or issues of fact involved,
and that therefore the moving party is entitled to
judgment as a matter of law.24 A perusal of the pleadings
submitted by both parties show that there is no genuine
controversy as to the facts involved therein.

In the event that one spouse is incapacitated or otherwise

unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall
be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors. (Underscoring
ours.)

Both parties admit that there were negotiations for the

sale of four parcels of land between petitioner and
respondent spouses; that petitioner and respondent
Edilberto Camaisa came to an agreement as to the price
and the terms of payment, and a downpayment was paid
by petitioner to the latter; and that respondent Norma
refused to sign the contracts to sell. The issue thus posed
for resolution in the trial court was whether or not the
contracts to sell between petitioner and respondent
spouses were already perfected such that the latter could
no longer back out of the agreement.
The law requires that the disposition of a conjugal property

The properties subject of the contracts in this case were

conjugal; hence, for the contracts to sell to be effective,
the consent of both husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her
written consent to the sale. Even granting that respondent
Norma actively participated in negotiating for the sale of
the subject properties, which she denied, her written

96

consent to the sale is required by law for its validity.

Significantly, petitioner herself admits that Norma refused
to sign the contracts to sell. Respondent Norma may have
been aware of the negotiations for the sale of their
conjugal properties. However, being merely aware of a
transaction is not consent.25
Finally, petitioner argues that since respondent Norma
unjustly refuses to affix her signatures to the contracts to
sell, court authorization under Article 124 of the Family
Code is warranted.
The argument is bereft of merit. Petitioner is correct
insofar as she alleges that if the written consent of the
other spouse cannot be obtained or is being withheld, the
matter may be brought to court which will give such
authority if the same is warranted by the circumstances.
However, it should be stressed that court authorization
under Art. 124 is only resorted to in cases where the
spouse who does not give consent is incapacitated.26
In this case, petitioner failed to allege and prove that
respondent Norma was incapacitated to give her consent
to the contracts. In the absence of such showing of the
wife's incapacity, court authorization cannot be sought.
Under the foregoing facts, the motion for summary
judgment was proper considering that there was no
genuine issue as to any material fact. The only issue to be
resolved by the trial court was whether the contract to sell
involving conjugal properties was valid without the written
consent of the wife.
WHEREFORE, the petition is hereby DENIED and the
decision of the Court of Appeals dated November 29, 2000

in CA-G.R. CV No. 43421 AFFIRMED.

SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and YnaresSantiago, JJ., concur.

97

ONORABLE NORMA C. PERELLO, in her capacity as

Presiding Judge of the Regional Trial Court, Branch 276,
Muntinlupa City, THE EX-OFICIO SHERIFF, REGIONAL TRIAL
COURT, MUNTINLUPA CITY and BERNADINE D. VILLARIN,
respondents.
DECISION
CORONA, J.:
Before us is a petition for certiorari filed by Lincoln L. Yao,
assailing the resolution dated March 22, 2002 and Order
dated May 10, 2002, of the Regional Trial Court of
Paraaque City, Branch 274,1 which respectively granted
private respondent Bernadine D. Villarins petition for
prohibition and denied petitioners motion for intervention.
The present controversy stemmed from a complaint filed
by petitioner before the Housing and Land Use Regulatory
Board (HLURB) against a certain corporation, PR Builders,
Inc. and its managers, Enrico Baluyot and Pablito Villarin,
private respondents husband.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 153828

October 24, 2003

LINCOLN L. YAO, petitioner,

vs.

On September 17, 1999, the HLURB rendered a decision

rescinding the contract to sell between petitioner and PR
Builders, and ordering PR Builders to refund petitioner the
amount of P2,116,103.31, as well as to pay damages in
the amount of P250,000.
Thereafter, the HLURB issued a writ of execution against
PR Builders and its managers, and referred the writ to the
office of the Clerk of Court of Muntinlupa for enforcement.
Pursuant to the writ, the deputy sheriff levied on a parcel
of land in Canlubang, Calamba, Laguna, registered in the

98

names of spouses Pablito Villarin and private respondent,

Bernadine Villarin. The property was scheduled for public
auction on March 20, 2002.
On March 19, 2002, private respondent filed before the
RTC of Paraaque City, a petition for prohibition with
prayer for temporary restraining order and/or writ of
preliminary injunction, seeking to enjoin Sheriff Melvin T.
Bagabaldo from proceeding with the public auction. Private
respondent alleged that she co-owned the property
subject of the execution sale; that the property regime
between private respondent and her husband was
complete separation of property, and that she was not a
party in the HLURB case, hence, the subject property could
not be levied on to answer for the separate liability of her
husband.
On even date, public respondent Judge Norma C. Perrello
issued a 72-hour temporary restraining order and set the
case for raffle and conference on March 22, 2002.
The case was eventually raffled to RTC, Branch 276,
presided by public respondent judge. A conference was
then conducted, after which public respondent judge
issued the assailed resolution of March 22, 2002 granting
private respondents petition for prohibition and declaring
the subject property exempt from execution. Hence, the
scheduled auction sale did not materialize.
On April 25, 2002, or more than a month after public
respondent judge issued the resolution of March 22, 2002,
petitioner filed a motion for intervention. However, public
respondent judge denied the motion in her assailed order
of May 10, 2002:

ORDER
The MOTION FOR INTERVENTION is denied, considering
that this case has long been decided, hence the
intervention is too late. There is no case for them to
intervene.
Let the decision be executed to satisfy the judgment
debt.1awphi1.nt
SO ORDERED in open Court.2
Aggrieved, petitioner filed the instant petition for certiorari
imputing grave abuse of discretion to public respondent
judge in: (a) declaring the subject property exempt from
execution and therefore could not be sold to satisfy the
obligation of private respondents husband, and (b)
denying petitioners motion for intervention on the ground
that the same was filed late.
It is a basic precept that the power of the court in the
execution of judgments extends only to properties
unquestionably belonging to the judgment debtor. The levy
by the sheriff on property by virtue of a writ of attachment
may be considered as made under the authority of the
court only vis-a-vis property belonging to the defendant.
For indeed, "one man's goods shall not be sold for another
man's debts."3 In the case at bar, the property levied on
by the sheriff was clearly not exclusively owned by Pablito
Villarin. It was co-owned by herein private respondent who
was a stranger in the HLURB case. The property relation of
spouses Villarin was governed by the regime of complete
separation of property as decreed in the order4 dated
November 10, 1998 of the Regional Trial Court, Branch 27,
Paraaque City.

99

Articles 145 and 146 of the Family Code governing the

regime of complete separation of property provide:
Art. 145. Each spouse shall own, dispose of, possess,
administer and enjoy his or her own separate estate,
without need of the consent of the other. To each spouse
shall belong all earnings from his or her profession,
business or industry and all fruits, natural, industrial or
civil, due or received during his marriage from his or her
separate property. (214a)
Art. 146. Both spouses shall bear the family expenses in
proportion to their income, or, in case of insufficiency or
default thereof, to the current market value of their
separate properties.
The liability of the spouses to creditors for family expenses
shall, however, be solidary. (215a)1a\^/phi1.net
It is clear from the foregoing that the only time the
separate properties of the spouses can be made to answer
for liabilities to creditors is when those liabilities are
incurred for family expenses. This has not been shown in
the case at bar.
Accordingly, private respondent acted well within her
rights in filing a petition for prohibition against the deputy
sheriff because the latter went beyond his authority in
attaching the subject property. This right is specifically
reserved by Section 17, Rule 39 of the Rules of Court.
Petitioner insists that, in a petition for prohibition, it is
essential that the party who is interested in sustaining the
act or acts sought to be prohibited or enjoined be

impleaded as private respondent. Thus, as the judgment

creditor in the HLURB case, petitioner claims that he was
an indispensable party in the petition for prohibition and
should have been allowed to intervene in the said case. He
was not allowed to do so.
Section 2, Rule 65 of the Rules of Court provides:
SEC. 2 Petition for prohibition. - When the proceedings of
any tribunal, corporation, board, officer or person, whether
exercising judicial, quasi-judicial or ministerial functions,
are without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the
respondent to desist from further proceedings in the action
or matter specified therein, or otherwise granting such
incidental reliefs as law and justice may require.
The petition shall likewise be accompanied by a certified
true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant
and pertinent thereto, and a sworn certification of nonforum shopping as provided in the last paragraph of
Section 3, Rule 46. (2a)
Consequently, petitioners claim that he had the right to
intervene is without basis. Nothing in the said provision
requires the inclusion of a private party as respondent in
petitions for prohibition. On the other hand, to allow
intervention, it must be shown that (a) the movant has a
legal interest in the matter in litigation or otherwise

100

qualified, and (b) consideration must be given as to

whether the adjudication of the rights of the original
parties may be delayed or prejudiced, or whether the
intervenors rights may be protected in a separate
proceeding or not. Both requirements must concur as the
first is not more important than the second.5
In the case at bar, it cannot be said that petitioners right
as a judgment creditor was adversely affected by the
lifting of the levy on the subject real property. Records
reveal that there are other pieces of property exclusively
owned by the defendants in the HLURB case that can be
levied upon.
Moreover, even granting for the sake of argument that
petitioner indeed had the right to intervene, he must
exercise said right in accordance with the rules and within
the period prescribed therefor.
As provided in the Rules of Court, the motion for
intervention may be filed at any time before rendition of
judgment by the trial court.6 Petitioner filed his motion
only on April 25, 2002, way beyond the period set forth in
the rules. The court resolution granting private
respondents petition for prohibition and lifting the levy on
the subject property was issued on March 22, 2002. By
April 6, 2002, after the lapse of 15 days, the said
resolution had already become final and executory.
Besides, the mere fact that petitioner failed to move for
the reconsideration of the trial courts resolution is
sufficient cause for the outright dismissal of the instant
petition. Certiorari as a special civil action will not lie
unless a motion for reconsideration is first filed before the
respondent court to allow it an opportunity to correct its

errors, if any.
Finally, grave abuse of discretion is committed when the
power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility. The Court fails to
find grave abuse of discretion committed by public
respondent judge in rendering the assailed resolution and
order.
WHEREFORE, the petition is hereby dismissed for lack of
merit.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and
Carpio-Morales, JJ., concur.

101

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 151967

February 16, 2005

JOSEFINA C. FRANCISCO, petitioner,

vs.
MASTER IRON WORKS & CONSTRUCTION CORPORATION
and ROBERTO V. ALEJO, Sheriff IV, Regional Trial Court of
Makati City, Branch 142, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the
Decision1 of the Court of Appeals (CA) in CA-G.R. No. CV
No. 59045, which reversed and set aside the Decision2 of
the Regional Trial Court (RTC) of Paraaque, Metro Manila,
Branch 260, in Civil Case No. 94-2260 and the Resolution
of the CA denying the petitioners motion for
reconsideration of the said decision.

102

Josefina Castillo was only 24 years old when she and

Eduardo G. Francisco were married on January 15, 1983.3
Eduardo was then employed as the vice president in a
private corporation. A little more than a year and seven
months thereafter, or on August 31, 1984, the Imus Rural
Bank, Inc. (Imus Bank) executed a deed of absolute sale
for P320,000.00 in favor of Josefina Castillo Francisco,
married to Eduardo Francisco, covering two parcels of
residential land with a house thereon located at St. Martin
de Porres Street, San Antonio Valley I, Sucat, Paraaque,
Metro Manila. One of the lots was covered by Transfer
Certificate of Title (TCT) No. 36519, with an area of 342
square meters, while the other lot, with an area of 360
square meters, was covered by TCT No. 36518.4 The
purchase price of the property was paid to the Bank via
Check No. 002334 in the amount of P320,000.00 drawn
and issued by the Commercial Bank of Manila, for which
the Imus Bank issued Official Receipt No. 121408 on
August 31, 1984.5 On the basis of the said deed of sale,
TCT Nos. 36518 and 36519 were cancelled and, on
September 4, 1984, the Register of Deeds issued TCT Nos.
87976 (60550) and 87977 (60551) in the name of "Josefina
Castillo Francisco married to Eduardo G. Francisco."6
On February 15, 1985, the Register of Deeds made of
record Entry No. 85-18003 at the dorsal portion of the said
titles. This referred to an Affidavit of Waiver executed by
Eduardo where he declared that before his marriage to
Josefina, the latter purchased two parcels of land, including
the house constructed thereon, with her own savings, and
that he was waiving whatever claims he had over the
property.7 On January 13, 1986, Josefina mortgaged the
said property to Leonila Cando for a loan of P157,000.00.8
It appears that Eduardo affixed his marital conformity to
the deed.9

On June 11, 1990, Eduardo, who was then the General

Manager and President of Reach Out Trading International,
bought 7,500 bags of cement worth P768,750.00 from
Master Iron Works & Construction Corporation (MIWCC) but
failed to pay for the same. On November 27, 1990, MIWCC
filed a complaint against him in the RTC of Makati City for
the return of the said commodities, or the value thereof in
the amount of P768,750.00. The case was docketed as
Civil Case No. 90-3251. On January 8, 1992, the trial court
rendered judgment in favor of MIWCC and against
Eduardo. The fallo of the decision reads:
Accordingly, the Court renders judgment in favor of the
plaintiff Master Iron Works And Construction Corporation
against the defendant [Eduardo] Francisco ordering the
latter as follows:
1. To replace to plaintiff 7,500 bags at 50 kilos/bag of
Portland cement or, in the alternative, to pay the plaintiff
the amount of P768,750.00;
2. In either case, to pay liquidated damages by way of
interest at 12% per annum from June 21, 1990 until fully
paid;
3. To pay P50,000.00 as actual damages; and
4. To pay attorneys fees of P153,750.00 and litigation
expenses of P20,000.00.
SO ORDERED.10
The decision in Civil Case No. 90-3251 became final and
executory and, on June 7, 1994, the court issued a writ of

103

execution.11 On June 14, 1994, Sheriff Roberto Alejo sold

at a public auction one stainless, owner-type jeep for
P10,000.00 to MIWCC.12 Sheriff Alejo issued a Notice of
Levy on Execution/Attachment over the lots covered by
TCT No. 87976 (60550) and 87977 (60551) for the
recovery of the balance of the amount due under the
decision of the trial court in Civil Case No. 90-3251.13 On
June 24, 1994, the sale of the property at a public auction
was set to August 5, 1994.14
On July 3, 1994, Josefina executed an Affidavit of Third
Party Claim15 over the two parcels of land in which she
claimed that they were her paraphernal property, and that
her husband Eduardo had no proprietary right or interest
over them as evidenced by his affidavit of waiver, a copy
of which she attached to her affidavit. She, likewise,
requested Sheriff Alejo to cause the cancellation of the
notice of levy on execution/attachment earlier issued by
him.
On July 7, 1994, Josefina filed the said Affidavit of Third
Party Claim in the trial court and served a copy thereof to
the sheriff. MIWCC then submitted an indemnity bond16 in
the amount of P1,361,500.00 issued by the Prudential
Guarantee and Assurance, Inc. The sale at public auction
proceeded. MIWCC made a bid for the property for the
price of P1,350,000.00.17
On July 28, 1994, Josefina filed a Complaint against MIWCC
and Sheriff Alejo in the RTC of Paraaque for damages with
a prayer for a writ of preliminary injunction or temporary
restraining order, docketed as Civil Case No. 94-2260. She
alleged then that she was the sole owner of the property
levied on execution by Sheriff Alejo in Civil Case No. 903251; hence, the levy on execution of the property was

null and void. She reiterated that her husband, the

defendant in Civil Case No. 90-3251, had no right or
proprietary interest over the said property as evidenced by
his affidavit of waiver annotated at the dorsal portion of
the said title. Josefina prayed that the court issue a
temporary restraining order/writ of preliminary injunction
to enjoin MIWCC from causing the sale of the said property
at public auction. Considering that no temporary
restraining order had as yet been issued by the trial court,
the sheriff sold the subject property at public auction to
MIWCC for P1,350,000.00 on August 5, 1994.18 However,
upon the failure of MIWCC to remit the sheriffs
commission on the sale, the latter did not execute a
sheriffs certificate of sale over the property. The RTC of
Paraaque, thereafter, issued a temporary restraining
order19 on August 16, 1994.
When Josefina learned of the said sale at public auction,
she filed an amended complaint impleading MIWCC, with
the following prayer:
WHEREFORE, premises considered, it is most respectfully
prayed to this Honorable Court that, after hearing,
judgment be rendered in favor of the plaintiff and against
the defendants and the same be in the following tenor:
1. Ordering the defendants, jointly and severally, to pay
the plaintiff the following amounts:
A. The sum of P50,000.00 representing as actual damages;
B. The sum
damages;

of

P200,000.00

representing

as

moral

C. The sum of P50,000.00 or such amount which this

104

Honorable Court deems just as exemplary damages;

D. The sum of P60,000.00 as and for attorneys fees.
2. Declaring the levying and sale at public auction of the
plaintiffs properties null and void;
3. To issue writ of preliminary injunction and makes it
permanent;
4. Order the cancellation of whatever entries appearing at
the titles as a result of the enforcement of the writ of
execution issued in Civil Case No. 90-3251.
Plaintiff further prays for such other reliefs as may be just
under the premises.20
In its answer to the complaint, MIWCC cited Article 116 of
the Family Code of the Philippines and averred that the
property was the conjugal property of Josefina and her
husband Eduardo, who purchased the same on August 31,
1984 after their marriage on January 14, 1983. MIWCC
asserted that Eduardo executed the affidavit of waiver to
evade the satisfaction of the decision in Civil Case No. 903251 and to place the property beyond the reach of
creditors; hence, the said affidavit was null and void.
Before she could commence presenting her evidence,
Josefina filed a petition to annul her marriage to Eduardo in
the RTC of Paraaque, Metro Manila, on the ground that
when they were married on January 15, 1983, Eduardo was
already married to one Carmelita Carpio. The case was
docketed as Civil Case No. 95-0169.
Josefina and Carmelita testified in Civil Case No. 95-0169.

Josefina declared that during her marriage to Eduardo, she

acquired the property covered by TCT Nos. 87976 (60550)
and 87977 (60551), through the help of her sisters and
brother, and that Eduardo had no participation whatsoever
in the said acquisition. She added that Eduardo had five
children, namely, Mary Jane, Dianne, Mary Grace Jo, Mark
Joseph and Mary Cecille, all surnamed Francisco.
On September 9, 1996, the RTC of Paraaque rendered
judgment21 in Civil Case No. 95-0169, declaring the
marriage between Josefina and Eduardo as null and void
for being bigamous.
In the meantime, Josefina testified in Civil Case No. 942260, declaring, inter alia, that she was able to purchase
the property from the Bank when she was still single with
her mothers financial assistance; she was then engaged in
recruitment when Eduardo executed an affidavit of waiver;
she learned that he was previously married when they
already had two children; nevertheless, she continued
cohabiting with him and had three more children by him;
and because of Eduardos first marriage, she decided to
have him execute the affidavit of waiver.
Eduardo testified that when his wife bought the property in
1984, he was in Davao City and had no knowledge of the
said purchases; he came to know of the purchase only
when Josefina informed him a week after his arrival from
Davao;22 Josefinas sister, Lolita Castillo, told him that she
would collect from him the money his wife borrowed from
her and their mother to buy the property;23 when he told
Lolita that he had no money, she said that she would no
longer collect from him, on the condition that he would
have no participation over the property,24 which angered
Eduardo;25 when Josefina purchased the property, he had

105

a gross monthly income of P10,000.00 and gave P5,000.00

to Josefina for the support of his family;26 Josefina decided
that he execute the affidavit of waiver because her mother
and sister gave the property to her.27
On December 20, 1997, the trial court rendered judgment
finding the levy on the subject property and the sale
thereof at public auction to be null and void. The fallo of
the decision reads:
WHEREFORE, PREMISES CONSIDERED, THIS COURT finds
the Levying and sale at public auction of the plaintiffs
properties null and void.
The court orders the defendants to, jointly and severally,
pay plaintiff the following amounts:
a. The sum of P50,000.00 as actual damages;
b. The sum of P50,000.00 representing as moral damages;
c. The sum of P50,000.00 as exemplary damages;

Eduardo Francisco contributed to the acquisition of the

property.
MIWCC appealed the decision to the CA in which it alleged
that:
I. THE TRIAL COURT ERRED IN RULING THAT THE REAL
ESTATE PROPERTIES SUBJECT OF THE AUCTION SALE ARE
PARAPHERNAL PROPERTIES OWNED BY PLAINTIFFAPPELLEE JOSEFINA FRANCISCO;
II. THE TRIAL COURT ERRED IN ALLOWING THE RECEPTION
OF REBUTTAL EVIDENCE WITH REGARD TO THE
ANNULMENT OF PLAINTIFF-APPELLEES MARRIAGE WITH
EDUARDO FRANCISCO;
III. THE TRIAL COURT ERRED IN RULING THAT THE LEVY ON
EXECUTION
OF
PLAINTIFF-APPELLEES
PROPERTIES
SUBJECT OF THE PRESENT CONTROVERSY IS NULL AND
VOID;

d. The sum of P60,000.00 as and for attorneys fees.

IV. THE TRIAL COURT ERRED IN ORDERING DEFENDANTAPPELLANT TO PAY DAMAGES TO PLAINTIFF-APPELLEE FOR
ALLEGED IMPROPER LEVY ON EXECUTION.29

The court orders the cancellation of whatever entries

appearing at the Titles as a result of the enforcement of
the writ of execution issued in Civil Case No. 90-3251.

The CA rendered judgment setting aside and reversing the

decision of the RTC on September 20, 2001. The fallo of
the decision reads:

SO ORDERED.28

WHEREFORE, premises considered, the Decision, dated 20

December 1997, of the Regional Trial Court of Paraaque,
Branch 260, is hereby REVERSED and SETASIDE and a new
one entered dismissing Civil Case No. 94-0126.

The trial court held that the property levied by Sheriff Alejo
was the sole and exclusive property of Josefina, applying
Articles 144, 160, 175 and 485 of the New Civil Code. The
trial court also held that MIWCC failed to prove that

SO ORDERED.30

106

The CA ruled that the property was presumed to be the

conjugal property of Eduardo and Josefina, and that the
latter failed to rebut such presumption. It also held that
the affidavit of waiver executed by Eduardo was contrary
to Article 146 of the New Civil Code and, as such, had no
force and effect. Josefina filed a motion for reconsideration
of the decision, which was, likewise, denied by the CA.
Josefina, now the petitioner, filed the present petition for
review, alleging that:
A. THE HONORABLE COURT OF APPEALS ERRED IN FINDING
THAT THERE EXISTS A CONJUGAL PARTNERSHIP BETWEEN
PETITIONER AND EDUARDO FRANCISCO;
B. THE HONORABLE COURT OF APPEALS ERRED IN
DECLARING THAT THE SUBJECT PROPERTIES WERE NOT
PARAPHERNAL PROPERTIES OF PETITIONER;
C. THE HONORABLE COURT OF APPEALS ERRED IN
DISTURBING THE FINDINGS OF FACTS AND CONCLUSION
BY THE TRIAL COURT IN ITS DECISION OF DECEMBER 20,
1997, THE SAME BEING IN ACCORDANCE WITH LAW AND
JURISPRUDENCE.31
The threshold issues for resolution are as follows: (a)
whether or not the subject property is the conjugal
property of Josefina Castillo and Eduardo Francisco; and (b)
whether or not the subject properties may be held to
answer for the personal obligations of Eduardo.
We shall deal with the issues simultaneously as they are
closely related.

The petitioner asserts that inasmuch as her marriage to

Eduardo is void ab initio, there is no occasion that would
give rise to a regime of conjugal partnership of gains. The
petitioner adds that to rule otherwise would render moot
and irrelevant the provisions on the regime of special coownership under Articles 147 and 148 of the Family Code
of the Philippines, in relation to Article 144 of the New Civil
Code.
The petitioner avers that since Article 148 of the Family
Code governs their property relationship, the respondents
must adduce evidence to show that Eduardo actually
contributed to the acquisition of the subject properties.
The petitioner asserts that she purchased the property
before her marriage to Eduardo with her own money
without any contribution from him; hence, the subject
property
is
her
paraphernal
property.l^vvphi1.net
Consequently, such property is not liable for the debts of
Eduardo to private respondent MIWCC.
The respondents, on the other hand, contend that the
appellate court was correct in ruling that the properties are
conjugal in nature because there is nothing in the records
to support the petitioners uncorroborated claim that the
funds she used to purchase the subject properties were
her personal funds or came from her mother and sister.
The respondents point out that if, as claimed by the
petitioner, the subject properties were, indeed, not
conjugal in nature, then, there was no need for her to
obtain marital (Eduardos) consent when she mortgaged
the properties to two different parties sometime in the first
quarter of 1986, or after Eduardo executed the affidavit of
waiver.
We note that the only questions raised in this case are

107

questions of facts. Under Rule 45 of the Rules of Court,

only questions of law may be raised in and resolved by the
Court. The Court may, however, determine and resolve
questions of facts in cases where the findings of facts of
the trial court and those of the CA are inconsistent, where
highly meritorious circumstances are present, and where it
is necessary to give substantial justice to the parties. In
the present action, the findings of facts and the
conclusions of the trial court and those of the CA are
opposite. There is thus an imperative need for the Court to
delve into and resolve the factual issues, in tandem with
the questions of law raised by the parties.
The petition has no merit.
The petitioner failed to prove that she acquired the
property with her personal funds before her cohabitation
with Eduardo and that she is the sole owner of the
property. The evidence on record shows that the Imus
Bank executed a deed of absolute sale over the property
to the petitioner on August 31, 1984 and titles over the
property were, thereafter, issued to the latter as vendee
on September 4, 1984 after her marriage to Eduardo on
January 15, 1983.1vvphi1.nt
We agree with the petitioner that Article 144 of the New
Civil Code does not apply in the present case. This Court in
Tumlos v. Fernandez32 held that Article 144 of the New
Civil Code applies only to a relationship between a man
and a woman who are not incapacitated to marry each
other, or to one in which the marriage of the parties is void
from the very beginning. It does not apply to a
cohabitation that is adulterous or amounts to concubinage,
for it would be absurd to create a co-ownership where
there exists a prior conjugal partnership or absolute

community between the man and his lawful wife. In this

case, the petitioner admitted that when she and Eduardo
cohabited, the latter was incapacitated to marry her.
Article 148 of the Family Code of the Philippines, on which
the petitioner anchors her claims, provides as follows:
Art. 148. In cases of cohabitation not falling under the
preceding Article, only the properties acquired by both of
the parties through their actual joint contribution of
money, property, or industry shall be owned by them in
common in proportion to their respective contributions. In
the absence of proof to the contrary, their contributions
and corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of
money and evidences of credit.
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in
the manner provided in the last paragraph of the
preceding Article.
The foregoing rules on forfeiture shall, likewise, apply even
if both parties are in bad faith.
Indeed, the Family Code has filled the hiatus in Article 144
of the New Civil Code by expressly regulating in Article 148
the property relations of couples living in a state of
adultery or concubinage. Under Article 256 of the Family
Code, the law can be applied retroactively if it does not
prejudice vested or acquired rights. The petitioner failed to
prove that she had any vested right over the property in

108

question.33
Since the subject property was acquired during the
subsistence of the marriage of Eduardo and Carmelita,
under normal circumstances, the same should be
presumed to be conjugal property.34 Article 105 of the
Family Code of the Philippines provides that the Code shall
apply to conjugal partnership established before the code
took effect, without prejudice to vested rights already
acquired under the New Civil Code or other laws.35 Thus,
even if Eduardo and Carmelita were married before the
effectivity of the Family Code of the Philippines, the
property still cannot be considered conjugal property
because there can only be but one valid existing marriage
at any given time.36 Article 148 of the Family Code also
debilitates against the petitioners claim since, according
to the said article, a co-ownership may ensue in case of
cohabitation where, for instance, one party has a preexisting valid marriage provided that the parents prove
their actual joint contribution of money, property or
industry and only to the extent of their proportionate
interest thereon.37
We agree with the findings of the appellate court that the
petitioner failed to adduce preponderance of evidence that
she contributed money, property or industry in the
acquisition of the subject property and, hence, is not a coowner of the property:
First of all, other than plaintiff-appellees bare testimony,
there is nothing in the record to support her claim that the
funds she used to purchase the subject properties came
from her mother and sister. She did not, for instance,
present the testimonies of her mother and sister who could
have corroborated her claim. Furthermore, in her Affidavit

of Third-Party Claim (Exh. "C"), she stated that the subject

properties "are my own paraphernal properties, including
the improvements thereon, as such are the fruits of my
own exclusive efforts ," clearly implying that she used
her own money and contradicting her later claim that the
funds were provided by her mother and sister. She also
stated in her affidavit that she acquired the subject
properties before her marriage to Eduardo Francisco on 15
January 1983, a claim later belied by the presentation of
the Deed of Absolute Sale clearly indicating that she
bought the properties from Imus Rural Bank on 31 August
1984, or one year and seven months after her marriage
(Exh. "D"). In the face of all these contradictions, plaintiffappellees uncorroborated testimony that she acquired the
subject properties with funds provided by her mother and
sister should not have been given any weight by the lower
court.
It is to be noted that plaintiff-appellee got married at the
age of 23. At that age, it is doubtful if she had enough
funds of her own to purchase the subject properties as she
claimed in her Affidavit of Third Party Claim. Confronted
with this reality, she later claimed that the funds were
provided by her mother and sister, clearly an afterthought
in a desperate effort to shield the subject properties from
appellant Master Iron as judgment creditor.38
Aside from her bare claims, the petitioner offered nothing
to prove her allegation that she borrowed the amount of
P320,000.00 from her mother and her sister, which she
paid to the Imus Bank on August 31, 1984 to purchase the
subject property. The petitioner even failed to divulge the
name of her mother and the sources of her income, if any,
and that of her sister. When she testified in Civil Case No.
95-0169, the petitioner declared that she borrowed part of

109

the purchase price of the property from her brother,39 but

failed to divulge the latters name, let alone reveal how
much money she borrowed and when. The petitioner even
failed to adduce any evidence to prove that her mother
and sister had P320,000.00 in 1984, which, considering
the times, was then quite a substantial amount. Moreover,
the petitioners third-party-claim affidavit stating that the
properties "are the fruits of my own exclusive effort before
I married Eduardo Francisco" belies her testimony in the
trial court and in Civil Case No. 95-0169.1awphi1.nt
We note that, as gleaned from the receipt issued by the
Imus Bank, the payment for the subject property was
drawn via Check No. 002334 and issued by the
Commercial Bank of Manila in the amount of
P320,000.00.40 The petitioner failed to testify against
whose account the check was drawn and issued, and
whether the said account was owned by her and/or
Eduardo Francisco or her mother, sister or brother. She
even failed to testify whether the check was a managers
check and, if so, whose money was used to purchase the
same.
We also agree with the findings of the CA that the affidavit
of waiver executed by Eduardo on February 15, 1985,
stating that the property is owned by the petitioner, is
barren of probative weight. We are convinced that he
executed the said affidavit in anticipation of claims by
third parties against him and hold the property liable for
the said claims. First, the petitioner failed to prove that she
had any savings before her cohabitation with Eduardo.
Second, despite Eduardos affidavit of waiver, he
nevertheless affixed his marital conformity to the real
estate mortgage executed by the petitioner over the
property in favor of Leonila on January 13, 1986.41 Third,

the petitioner testified that she borrowed the funds for the
purchase of the property from her mother and sister.42
Fourth, the petitioner testified that Eduardo executed the
affidavit of waiver because she discovered that he had a
first marriage.43 Lastly, Eduardo belied the petitioners
testimony when he testified that he executed the affidavit
of waiver because his mother-in-law and sister-in-law had
given the property to the petitioner.44
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED
for lack of merit. The Decision of the Court of Appeals
reversing the decision of the Regional Trial Court is
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and ChicoNazario, JJ., concur.

110

FIRST DIVISION
G.R. No. L-45870

May 11, 1984

MARGARET MAXEY assisted by Santiago Magbanua;

FLORENCE MAXEY assisted by Ofrecinio Santos; and
LUCILLE MAXEY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and THE SPOUSES
BEATO C. MACAYRA and ALACOPUE MONDAY, respondents.
Jose B. Guyo for petitioners.
Epifanio Estrellado for private respondents.

GUTIERREZ, JR., J.:

This petition for review involves the rights of a woman
over properties acquired in 1912 principally through the
efforts of the man she was living with and at a time when
the two were not yet legally married.
The facts of the case are briefly stated in the decision of
the Court of Appeals as follows:

Republic of the Philippines

SUPREME COURT
Manila

The record reveals that Melbourne Maxey and Regina

Morales (both deceased) lived together as husband and
wife in Banganga, Davao; that out of said union were born
six (6) children, among them are the herein plaintiffs,
namely: John or Carlos, Lucille, Margaret, Florence, Fred
and George, all surnamed Maxey; that during the period of
their (Melbourne and Regina) cohabitation, or in 1911 and

111

1912, respectively, the late Melbourne Maxey acquired the

parcels of land described under Par. 4 of the com;plaint as
evidenced by the documents of sale marked as Exhibits 4a and 5-1 (same as Exhibits Facts), Melbourne Maxey,
through his attorney-in-fact Julia Pamatluan Maxey, sold in
favor of the defendants-spouses in 1953 the parcels of
land under litigation which fact of sale was not
controverted by the perties (Par. 1, /stipulation of Facts);
that since thereof, the defendants-spouses have taken
immediate possession thereof continuously up to the
present.

then, they have been in possession thereof openly,

exclusively and continuously in concept of owners.
Defendants - spouses further counter for damages and
attorney's fees and in the alternative, for the value of the
improvements they have introduced in the premises.

Plaintiffs instituted the present case on January 26, 1962,

before the Court of First Instance of Davao, praying for the
annulment of the documents of sale covering the subject
parcels of land and to recover possession thereof with
damages from the herein defendants-spouses, alleging,
among others, that the aforesaid realties were common
properties of their parents, having been acquired during
their lifetime and through their joint effort and capital; and
that the sales of the of the said lands in favor of the
defendants-spouses in 1953, after the death of their
mother, Regina Morales, was executed by their father,
Melbourne Maxey, without their knowledge and consent;
and that they came to know of the above mentioned sales
only in 1961.

The couple had several children. John Carlos was born in

1903, followed by Lucille, Margaret, Florence, Fred, and
George. Except for the youngest son, all the children were
born before the disputed properties were acquired. The
father, Melbourne Maxey, was a member of the 1899
American occupation forces who afterwards held high
positions in the provincial government and in the
Philippine public schools system.

On the other hand, defendants-spouses deny the material

allegations of the complaint and assert by way of
affirmative defenses that they are the true and lawful
owners and possessors of the properties 'm question
having purchased the same in good faith and for value
from Melbourne Maxey during his lifetime in 1953, based
upon the reasonable belief that the latter is the me and
exclusive owner of the said parcels of land and that since

Melbourne Maxey and Regina Morales started living

together in 1903. Their children claim that their parents
were united in 1903 in a marriage performed "in the
military fashion". Both the trial court and the appellate
court rejected this claim of a "military fashion" marriage.

As earlier mentioned in the cited statement of facts, the

disputed properties were acquired in 1911 and 1912
before the 1919 church marriage. Regina Morales Maxey
died in 1919 sometime after the church wedding. The
husband remarried and in 1953, his second wife Julia
Pamatluan Maxey, using a power of attorney, sold the
properties to the respondent spouses, Mr. and Mrs. Beato
C. Macayra.
The trial court applied Article 144 of the Civil Code which
provides:
When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void

112

from the beginning, the property acquired by either or

both of them through their work or industry or their wages
and salaries shall be governed by the rules on coownership.
The court stated that "when a man and a woman lived
together as husband and wife, justice demands that the
woman should be entitled to the share of the property.
Certainly she cannot be considered mere adornment or
only for man's comfort and passion." The dispositive
portion of the decision reads:
Evidence, testimonial and document considered the Court
hereby rendered judgment in favor of the plaintiffs and
against defendant declaring that:
1.

Declaring the abovementioned sales as null and void;

2. Ordering defendant-spouses to return the said lands,

and to pay for the value of the use of the same at the rate
of P1,000.00 a year from 1953 until delivered, together
with interests corresponding thereto at the legal rate;
3. Ordering defendant-spouses to pay to plaintiff actual
damages in the sum of P500.00 and attorney fees in the
sum of P3,000.00.
Defendants counterclaim is hereby ordered dismissed.
The Court of Appeals, however, found the parcels of, land
to be exclusive properties of the late Melbourne Maxey. It
set aside the decision of the trial court, decease valid the
deeds of sale, and ruled that the appellants are the
absolute owners of the properties in question.

The appellate decision sustained the following arguments

of the respondent spouses:
Plaintiffs' evidence is completely devoid of any showing
that these properties in question were acquired through
the joint efforts of Melbourne Maxey and Regina Morales.
Indeed, if at all, plaintiffs' evidence tend to establish the
fact that Melbourne Maxey by virtue of his positions as
Deputy Governor of Zamboanga (p. 36, t.s.n. de la
Victoria) School Supervisor in the East Coast of Davao (p.
36, t.s.n., Id.) was more than in a position to purchase
these properties by his own efforts, his own earnings and
without the help of Regina Morales. On the other hand, we
have the declaration of Juana A. Morales, a widow of 68
years of age when she testified, the sister-in-law of Regina
Morales Juana A. Morales confirmed the fact that
Melbourne Maxey held the positions of teacher, provincial
treasurer, deputy governor, district supervisor and lastly
superintendent of schools, respectively (p. 203, t.s.n., de
la Victoria). But more important is her declaration that her
sister-in-law Regina Morales had no property of her own
whence she could have derived any income nor was
Regina gainfully employed. (pp. 203-204, t.s.n., Id.) It must
be remembered that the showing must be CLEAR that
Regina Morales contributed to the acquisition of these
properties. Here the evidence is not only NOT CLEAR,
indeed, there is no evidence at all that Regina Morales
contributed to the acquisition of the properties in question.
In the case of Aznar, et al vs. Garcia, et al, supra, the
Supreme Court had before it the common-law wife's own
testimony claiming that the properties in controversy
were the product of their joint industry. Her assertions
however, were completely brushed aside because aside
from her claim that she took a hand in the management
and/or acquisition of the same, "there appears no evidence

113

to prove her alleged contribution or participation in the,

acquisition of the properties involved therein." (Id. p.
1069). In the case at bar, besides the absence of any
evidence showing that Regina Morales contributed by her
efforts to the acquisition of these properties in
controversy, both plaintiffs and defendants' evidence show
that it was through Melbourne Maxey's efforts alone that
these properties were acquired. Indeed, that Regina
Morales had no means at all to have contributed in any
manner to all its acquisition.
The petitioners raise the following issues in this petition:
1. THE COURT OF APPEALS ERRED IN DECLARING THAT
THE LATE SPOUSES MELBOURNE MAXEY AND REGINA
MORALES WERE MARRIED ONLY IN 1919, BECAUSE THE
TRUTH IS THAT THEY MARRIED AS EARLY AS 1903.
2. THE COURT OF APPEALS, LIKEWISE, ERRED IN
DECLARING THE PROPERTIES IN QUESTION AS THE
EXCLUSIVE PROPERTIES OF THE LATE MELBOURNE MAXEY,
TO THE EXCLUSION OF HIS WIFE REGINA MORALES,
BECAUSE THE MENTIONED PROPERTIES WERE ACTUALLY
ACQUIRED BY THE JOINT EFFORTS AND INDUSTRY OF BOTH
OF THEM AND THEREFORE, THESE PROPERTIES ARE
COMMON PROPERTIES.
3. THE COURT OF APPEALS FINALLY ERRED IN
UNREASONABLY GIVING THE TERM "JOINT EFFORTS" NOT
ONLY A VERY, VERY LIMITED MEANING BUT A CONCEPT
WHICH IS ENTIRELY ABSURD AND UNREALISTIC BECAUSE
IN CONSTRUING THE TERM, THE COURT OF APPEALS HAS
REFUSED TO ACCEPT AN INTERPRETATION WHICH IS MOST
CONSISTENT WITH COMMON PRACTICE AND CUSTOMS AS
WELL AS IN ACCORD WITH THE BEST TRADITION OF THE

FILIPINO WAY OF LIFE.

The Court of First Instance and the Court of Appeals
correctly rejected the argument that Act No. 3613, the
Revised Marriage Law, recognized "military fashion"
marriages as legal. Maxey and Morales were legally
married at a church wedding solemnized on February 16,
1919. Since Act No. 3613 was approved on December 4,
1929 and took effect six months thereafter, it could not
have applied to a relationship commenced in 1903 and
legitimized in 1919 through a marriage performed
according to law. The marriage law in 1903 was General
Order No. 70. There is no provision in General Order No. 68
as amended nor in Act No. 3613 which would recognize as
an exception to the general rule on valid marriages, a so
called "Military fashion" ceremony or arrangement.
The Court of First Instance and the Court of Appeals both
ruled that Melbourne Maxey and Regina Morales were
married only in 1919. This is a finding of fact which we do
not disturb at this stage of the case. There is no showing
that this factual finding is totally devoid of or unsupported
by evidentiary basis or that it is inconsistent with the
evidence of record.
The other issue raised in this Petition questions the Court
of Appeals' finding that the parcels of land in question
were exclusive properties of the late Melbourne Maxey.
The petitioners argue that even assuming that the
marriage of Melbourne Maxey and Regina Morales took
place only in February 17, 1919, still the properties legally
and rightfully belonged in equal share to the two because
the acquisition of the said properties was through their
joint efforts and industry. The second and third errors

114

mentioned by the petitioners are grounded on the alleged

wrong interpretation given by the Court of Appeals to the
phrase "joint efforts". The petitioners suggest that their
mother's efforts in performing her role as mother to them
and as wife to their father were more than sufficient
contribution to constitute the parcels of land in question as
common properties acquired through the joint efforts to
their parents.
The Court of Appeals, however, was of the opinion that
Article 144 of the Civil Code is not applicable to the
properties in question citing the case of Aznar et al. v.
Garcia (102 Phil. 1055) on non-retroactivity of codal
provisions where vested rights may be prejudiced or
impaired. And, assuming that Article 144 of the Civil Code
is applicable, the Court of Appeals held that the disputed
properties were exclusively those of the petitioner's father
because these were not acquired through the joint efforts
of their parents. This conclusion stems from the
interpretation given by the Court of Appeals to the phrase
"joint efforts" to mean "monetary contribution". According
to the Court
... This view with which this ponente personally
wholeheartedly agrees for some time now has been
advocated by sympathizers of equal rights for women,
notably in the Commission on the Status of Women of the
United Nations. In our very own country there is strong
advocacy for the passage of a presidential decree
providing that "the labors of a spouse in managing the
affairs of the household shall be credited with
compensation." Unfortunately, until the happy day when
such a proposal shall have materialized into law, Courts
are bound by existing statutes and jurisprudence, which
rigidly interpret the phrase "joint efforts" as monetary

contributions of the man and woman living together

without benefit of marriage, and to date, the drudgery of a
woman's lifetime dedication to the management of the
household goes unremunerated, and has no monetary
value. Thus, in the case of Aznar vs. Garcia (supra) the
Supreme Court held that the man and the woman have an
equal interest in the properties acquired during the union
and each would be entitled to participate therein if said
properties were the product of their joint effort. In the
same case it was stated that aside` from the observation
of the trial court that the appellee was an illiterate woman,
there appears no evidence to prove appellee's contribution
(in terms of pesos and centavos) or participation in the
acquisition of the properties involved; therefore, following
the aforecited ruling of the Court, appellee's claim for onehalf (1/2) of the properties cannot be granted.
In so concluding, the respondent Court of Appeals
accepted the private respondents' argument that it was
unlikely for the petitioners' mother to have materially
contributed in the acquisition of the questioned properties
since she had no property of her own nor was she gainfully
engaged in any business or profession from which she
could derive income unlike their father who held the
positions of teacher deputy governor, district supervisor,
and superintendent of schools.
We are constrained to adopt a contrary view.
Considerations of justice dictate the retroactive application
of Article 144 of the Civil Code to the case at bar.
Commenting on Article 2252 of the Civil Code which
provides that changes made and new provisions and rules
laid down by the Code which may prejudice or impair
vested or acquired rights in accordance with the old
legislation shall have no retroactive effect, the Code

115

Commission stated:
Laws shall have no retroactive effect, unless the contrary
is provided. The question of how far the new Civil Code
should be made applicable to past acts and events is
attended with the utmost difficulty. It is easy enough to
understand the abstract principle that laws have no
retroactive effect because vested or acquired rights should
be respected. But what are vested or acquired rights? The
Commission did not venture to formulate a definition of a
vested or acquired right seeing that the problem is
extremely committed.
What constitutes a vested or acquired right well be
determined by the courts as each particular issue is
submitted to them, by applying the transitional provisions
set forth, and in case of doubt, by observing Art. 9
governing the silence or obscurity of the law. In this
manner, the Commission is confident that the judiciary
with its and high sense of justice will be able to decide in
what cases the old Civil Code would apply and in what
cases the new one should be binding This course has been
preferred by the Commission, which did not presume to be
able to foresee and adequately provide for each and every
question that may arise. (Report of the Code Commission,
pp. 165-166).
Similarly, with respect to Article 2253 which provides inter
alia that if a right should be declared for the first tune in
the Code, it shall be effective at once, even though the act
or event which gives rise thereto may have been done or
may have occurred under the prior legislation, provided
said new right does not prejudice or impair any vested or
acquired right, of the same origin, the Code Commission
commented:

... But the second sentence gives a retroactive effect to

newly created rights provided they do not prejudice or
impair any vested or acquired right. The retroactive
character of the new right is the result of the exercise of
the sovereign power of legislation, when the lawmaking
body is persuaded that the new right is called for by
considerations of justice and public policy. But such new
right most not encroach upon a vested right. (Report of the
Code Commission, p. 167).
The requirement of non-impairment of vested rights is
clear. It is the opinion of the Court of Appeals that vested
rights were prejudiced. We do not think so.
Prior to the effectivity of the present Civil Code on August
30, 1950, the formation of an informal civil partnership
between a man and wife not legally married and their
corresponding right to an equal share in properties
acquired through their joint efforts and industry during
cohabitation was recognized through decisions of this
Court. (Aznar et al. vs. Garcia, 102 Phil. 1055; Flores vs.
Rehabilitation Finance Corporation, 94 Phil. 451; Marata vs.
Dionio, L-24449, December 31, 1925; Lesaca v. Lesaca, 91
Phil. 135.)
With the enactment of the new Civil Code, Article 144
codified the law established through judicial precedents
but with the modification that the property governed by
the rules on co-ownership may be acquired by either or
both of them through their work or industry. Even if it is
only the man who works, the property acquired during the
man and wife relationship belongs through a fifty-fifty
sharing to the two of them.

116

This new article in the Civil Code recognizes that it would

be unjust and abnormal if a woman who is a wife in all
aspects of the relationship except for the requirement of a
valid marriage must abandon her home and children,
neglect her traditional household duties, and go out to
earn a living or engage in business before the rules on coownership would apply. This article is particularly relevant
in this case where the "common-law" relationship was
legitimated through a valid marriage 34 years before the
properties were sold.
The provisions of the Civil Code are premised on the
traditional and existing, the normal and customary gender
roles of Filipino men and women. No matter how large the
income of a working wife compared to that of her husband,
the major, if not the full responsibility of running the
household remains with the woman. She is the
administrator of the household. The fact that the two
involved in this case were not legally married at the time
does not change the nature of their respective roles. It is
the woman who traditionally holds the family purse even if
she does not contribute to filling that purse with funds. As
pointed out by Dean Irene R. Cortes of the University of
the Philippines, "in the Filipino family, the wife holds the
purse, husbands hand over their pay checks and get an
allowance in return and the wife manages the affairs of the
household. . . . And the famous statement attributed to
Governor General Leonard Wood is repeated: In the
Philippines, the best man is the woman." (Cortes,
"Womens Rights Under the New Constitution". WOMAN
AND THE LAW, U.P. Law Center, p. 10.)
The "real contribution" to the acquisition of property
mentioned in Yaptinchay vs. Torres (28 SCRA 489) must
include not only the earnings of a woman from a

profession, occupation, or business but also her

contribution to the family's material and spiritual goods
through caring for the children, administering the
household, husbanding scarce resources, freeing her
husband from household tasks, and otherwise performing
the traditional duties of a housewife.
Should Article 144 of the Civil Code be applied in this
case? Our answer is "Yes" because there is no showing
that vested rights would be impaired or prejudiced through
its application.
A vested right is defined by this Court as property which
has become fixed and established, and is no longer open
to doubt or controversy; an immediately fixed right of
present or future enjoyment as distinguished from an
expectant or contingent right (Benguet Consolidated
Mining Co. vs. Pineda, 98 Phil. 711; Balbao vs. Farrales, 51
Phil. 498). This cannot be said of the "exclusive" right of
Melbourne Maxey over the properties in question when the
present Civil Code became effective for standing against it
was the concurrent right of Regina Morales or her heirs to
a share thereof. The properties were sold in 1953 when the
new Civil Code was already in full force and effect. Neither
can this be said of the rights of the private respondents as
vendees insofar as one half of the questioned properties
are concerned as this was still open to controversy on
account of the legitimate claim of Regina Morales to a
share under the applicable law.
The disputed properties were owned in common by
Melbourne Maxey and the estate of his late wife, Regina
Morales, when they were sold. Technically speaking, the
petitioners should return one-half of the P1,300.00
purchase price of the land while the private respondents

117

should pay some form of rentals for their use of one-half of

the properties. Equitable considerations, however, lead us
to rule out rentals on one hand and return of P650.00 on
the other.
WHEREFORE, the petition for review on certiorari is hereby
granted. The judgment of the Court of Appeals is reversed
and set aside insofar as one-half of the disputed properties
are concerned. The private respondents are ordered to
return one-half of said properties to the heirs of Regina
Morales. No costs.
SO ORDERED.
Teehankee (Chairman), Escolin, Relova and De la Fuente,
JJ., concur.
Melencio-Herrera, J., took no part.
Plana, J., I reserve my vote.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 104818

September 17, 1993

ROBERTO DOMINGO, petitioner,

vs.
COURT OF APPEALS and DELIA SOLEDAD AVERA
represented by her Attorney-in-Fact MOISES R. AVERA,

respondents.
Jose P.O. Aliling IV for petitioner.
De Guzman, Meneses & Associates for private respondent.
ROMERO, J.:
The instant petition seeks the reversal of respondent
court's ruling finding no grave abuse of discretion in the
lower court's order denying petitioner's motion to dismiss
the petition for declaration of nullity of marriage and
separation of property.
On May 29, 1991, private respondent Delia Soledad A.
Domingo filed a petition before the Regional Trial Court of
Pasig entitled "Declaration of Nullity of Marriage and
Separation of Property" against petitioner Roberto
Domingo. The petition which was docketed as Special
Proceedings No. 1989-J alleged among others that: they
were married on November 29, 1976 at the YMCA Youth
Center Bldg., as evidenced by a Marriage Contract Registry
No. 1277K-76 with Marriage License No. 4999036 issued at
Carmona, Cavite; unknown to her, he had a previous
marriage with one Emerlina dela Paz on April 25, 1969
which marriage is valid and still existing; she came to
know of the prior marriage only sometime in 1983 when
Emerlina dela Paz sued them for bigamy; from January 23
1979 up to the present, she has been working in Saudi
Arabia and she used to come to the Philippines only when
she would avail of the one-month annual vacation leave
granted by her foreign employer since 1983 up to the
present, he has been unemployed and completely
dependent upon her for support and subsistence; out of
her personal earnings, she purchased real and personal

118

properties with a total amount of approximately

P350,000.00, which are under the possession and
administration of Roberto; sometime in June 1989, while
on her one-month vacation, she discovered that he was
cohabiting with another woman; she further discovered
that he had been disposing of some of her properties
without her knowledge or consent; she confronted him
about this and thereafter appointed her brother Moises R.
Avera as her attorney-in-fact to take care of her properties;
he failed and refused to turn over the possession and
administration of said properties to her brother/attorneyin-fact; and he is not authorized to administer and possess
the same on account of the nullity of their marriage. The
petition prayed that a temporary restraining order or a writ
of preliminary injunction be issued enjoining Roberto from
exercising any act of administration and ownership over
said properties; their marriage be declared null and void
and of no force and effect; and Delia Soledad be declared
the sole and exclusive owner of all properties acquired at
the time of their void marriage and such properties be
placed under the proper management and administration
of the attorney-in-fact.

first marriage by a man with another woman is illegal and

void (citing the case of Yap v. Court of Appeals, 145 SCRA
229) and no judicial decree is necessary to establish the
invalidity of a void marriage (citing the cases of People v.
Aragon, 100 Phil. 1033; People v. Mendoza, 95 Phil. 845).
Indeed, under the Yap case there is no dispute that the
second marriage contracted by respondent with herein
petitioner after a first marriage with another woman is
illegal and void. However, as to whether or not the second
marriage should first be judicially declared a nullity is not
an issue in said case. In the case of Vda. de Consuegra v.
GSIS, the Supreme Court ruled in explicit terms, thus:

Petitioner filed a Motion to Dismiss on the ground that the

petition stated no cause of action. The marriage being void
ab initio, the petition for the declaration of its nullity is,
therefore, superfluous and unnecessary. It added that
private respondent has no property which is in his
possession.

Finally, the contention of respondent movant that

petitioner has no property in his possession is an issue that
may be determined only after trial on the merits. 1

On August 20, 1991, Judge Maria Alicia M. Austria issued

an Order denying the motion to dismiss for lack of merit.
She explained:
Movant argues that a second marriage contracted after a

And with respect to the right of the second wife, this Court
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
judicial declaration of its nullity. (37 SCRA 316, 326)
The above ruling which is of later vintage deviated from
the previous rulings of the Supreme Court in the aforecited
cases of Aragon and Mendoza.

A motion for reconsideration was filed stressing the

erroneous application of Vda. de Consuegra v. GSIS 2 and
the absence of justiciable controversy as to the nullity of
the marriage. On September 11, 1991, Judge Austria
denied the motion for reconsideration and gave petitioner
fifteen (15) days from receipt within which to file his
answer.

119

Instead of filing the required answer, petitioner filed a

special civil action of certiorari and mandamus on the
ground that the lower court acted with grave abuse of
discretion amounting to lack of jurisdiction in denying the
motion to dismiss.
On February 7, 1992, the Court of Appeals 3 dismissed the
petition. It explained that the case of Yap v. CA 4 cited by
petitioner and that of Consuegra v. GSIS relied upon by the
lower court do not have relevance in the case at bar, there
being no identity of facts because these cases dealt with
the successional rights of the second wife while the instant
case prays for separation of property corollary with the
declaration of nullity of marriage. It observed that the
separation and subsequent distribution of the properties
acquired during the union can be had only upon proper
determination of the status of the marital relationship
between said parties, whether or not the validity of the
first marriage is denied by petitioner. Furthermore, in order
to avoid duplication and multiplicity of suits, the
declaration of nullity of marriage may be invoked in this
proceeding together with the partition and distribution of
the properties involved. Citing Articles 48, 50 and 52 of the
Family Code, it held that private respondent's prayer for
declaration of absolute nullity of their marriage may be
raised together with other incidents of their marriage such
as the separation of their properties. Lastly, it noted that
since the Court has jurisdiction, the alleged error in
refusing to grant the motion to dismiss is merely one of
law for which the remedy ordinarily would have been to
file an answer, proceed with the trial and in case of an
adverse decision, reiterate the issue on appeal. The
motion for reconsideration was subsequently denied for
lack of merit. 5

Hence, this petition.

The two basic issues confronting the Court in the instant
case are the following.
First, whether or not a petition for judicial declaration of a
void marriage is necessary. If in the affirmative, whether
the same should be filed only for purposes of remarriage.
Second, whether or not SP No. 1989-J is the proper remedy
of private respondent to recover certain real and personal
properties allegedly belonging to her exclusively.
Petitioner, invoking the ruling in People v. Aragon 6 and
People v. Mendoza, 7 contends that SP. No. 1989-J for
Declaration of Nullity of Marriage and Separation of
Property filed by private respondent must be dismissed for
being unnecessary and superfluous. Furthermore, under
his own interpretation of Article 40 of the Family Code, he
submits that a petition for declaration of absolute nullity of
marriage is required only for purposes of remarriage. Since
the petition in SP No. 1989-J contains no allegation of
private respondent's intention to remarry, said petition
should therefore, be dismissed.
On the other hand, private respondent insists on the
necessity of a judicial declaration of the nullity of their
marriage, not for purposes of remarriage, but in order to
provide a basis for the separation and distribution of the
properties acquired during coverture.
There is no question that the marriage of petitioner and
private respondent celebrated while the former's previous
marriage with one Emerlina de la Paz was still subsisting,
is bigamous. As such, it is from the beginning. 8 Petitioner

120

himself does not dispute the absolute nullity of their

marriage. 9
The cases of People v. Aragon and People v. Mendoza
relied upon by petitioner are cases where the Court had
earlier ruled that no judicial decree is necessary to
establish the invalidity of a void, bigamous marriage. It is
noteworthy to observe that Justice Alex Reyes, however,
dissented on these occasions stating that:
Though the logician may say that where the former
marriage was void there would be nothing to dissolve, still
it is not for the spouses to judge whether that marriage
was void or not. That judgment is reserved to the
courts. . . . 10
This dissenting opinion was adopted as the majority
position in subsequent cases involving the same issue.
Thus, in Gomez v. Lipana, 11 the Court abandoned its
earlier ruling in the Aragon and Mendoza cases. In
reversing the lower court's order forfeiting the husband's
share of the disputed property acquired during the second
marriage, the Court stated that "if the nullity, or
annulment of the marriage is the basis for the application
of Article 1417, there is need for a judicial declaration
thereof, which of course contemplates an action for that
purpose."
Citing Gomez v. Lipana, the Court subsequently held in
Vda. de Consuegra v. Government Service Insurance
System, 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
judicial declaration of such nullity."

In Tolentino v. Paras, 12 however, the Court turned around

and applied the Aragon and Mendoza ruling once again. In
granting the prayer of the first wife asking for a
declaration as the lawful surviving spouse and the
correction of the death certificate of her deceased
husband, it explained that "(t)he second marriage that he
contracted with private respondent during the lifetime of
his first spouse is null and void from the beginning and of
no force and effect. No judicial decree is necessary to
establish the invalidity of a void marriage."
However, in the more recent case of Wiegel v. Sempio-Diy
13 the Court reverted to the Consuegra case and held that
there was "no need of introducing evidence about the
existing prior marriage of her first husband at the time
they married each other, for then such a marriage though
void still needs according to this Court a judicial
declaration of such fact and for all legal intents and
purposes she would still be regarded as a married woman
at the time she contracted her marriage with respondent
Karl Heinz Wiegel."
Came the Family Code which settled once and for all the
conflicting jurisprudence on the matter. A declaration of
the absolute nullity of a marriage is now explicitly required
either as a cause of action or a ground for defense. 14
Where the absolute nullity of a previous marriage is sought
to be invoked for purposes of contracting a second
marriage, the sole basis acceptable in law for said
projected marriage be free from legal infirmity is a final
judgment declaring the previous marriage void. 15
The Family Law Revision Committee and the Civil Code
Revision Committee 16 which drafted what is now the
Family Code of the Philippines took the position that

121

parties to a marriage should not be allowed to assume that

their marriage is void even if such be the fact but must
first secure a judicial declaration of the nullity of their
marriage before they can be allowed to marry again. This
is borne out by the following minutes of the 152nd Joint
Meeting of the Civil Code and Family Law Committees
where the present Article 40, then Art. 39, was discussed.
B. Article 39.
The absolute nullity of a marriage may be invoked only on
the basis of a final judgment declaring the marriage void,
except as provided in Article 41.
Justice Caguioa remarked that the above provision should
include not only void but also voidable marriages. He then
suggested that the above provision be modified as follows:
The validity of a marriage may be invoked only . . .
Justice Reyes (J.B.L. Reyes), however, proposed that they
say:
The validity or invalidity of a marriage may be invoked
only . . .
On the other hand, Justice Puno suggested that they say:
The invalidity of a marriage may be invoked only . . .
Justice Caguioa explained that his idea is that one cannot
determine for himself whether or not his marriage is valid
and that a court action is needed. Justice Puno accordingly
proposed that the provision be modified to read:

The invalidity of a marriage may be invoked only on the

basis of a final judgment annulling the marriage or
declaring the marriage void, except as provided in Article
41.
Justice Caguioa remarked that in annulment, there is no
question. Justice Puno, however, pointed out that, even if it
is a judgment of annulment, they still have to produce the
judgment.
Justice Caguioa suggested that they say:
The invalidity of a marriage may be invoked only on the
basis of a final judgment declaring the marriage invalid,
except as provided in Article 41.
Justice Puno raised the question: When a marriage is
declared invalid, does it include the annulment of a
marriage and the declaration that the marriage is void?
Justice Caguioa replied in the affirmative. Dean Gupit
added that in some judgments, even if the marriage is
annulled, it is declared void. Justice Puno suggested that
this matter be made clear in the provision.
Prof. Baviera remarked that the original idea in the
provision is to require first a judicial declaration of a void
marriage and not annullable marriages, with which the
other members concurred. Judge Diy added that annullable
marriages are presumed valid until a direct action is filed
to annul it, which the other members affirmed. Justice
Puno remarked that if this is so, then the phrase "absolute
nullity" can stand since it might result in confusion if they
change the phrase to "invalidity" if what they are referring
to in the provision is the declaration that the marriage is
void.

122

Justice Puno later modified the above as follows:

Prof. Bautista commented that they will be doing away
with collateral defense as well as collateral attack. Justice
Caguioa explained that the idea in the provision is that
there should be a final judgment declaring the marriage
void and a party should not declare for himself whether or
not the marriage is void, while the other members
affirmed. Justice Caguioa added that they are, therefore,
trying to avoid a collateral attack on that point. Prof.
Bautista stated that there are actions which are brought on
the assumption that the marriage is valid. He then asked:
Are they depriving one of the right to raise the defense
that he has no liability because the basis of the liability is
void? Prof. Bautista added that they cannot say that there
will be no judgment on the validity or invalidity of the
marriage because it will be taken up in the same
proceeding. It will not be a unilateral declaration that, it is
a void marriage. Justice Caguioa saw the point of Prof.
Bautista and suggested that they limit the provision to
remarriage. He then proposed that Article 39 be reworded
as follows:
The absolute nullity of a marriage for purposes of
remarriage may be invoked only on the basis of final
judgment . . .
Justice Puno suggested that the above be modified as
follows:
The absolute nullity of a previous marriage may be
invoked for purposes of establishing the validity of a
subsequent marriage only on the basis of a final judgment
declaring such previous marriage void, except as provided
in Article 41.

For the purpose of establishing the validity of a

subsequent marriage, the absolute nullity of a previous
marriage may only be invoked on the basis of a final
judgment declaring such nullity, except as provided in
Article 41.
Justice Caguioa commented that the above provision is too
broad and will not solve the objection of Prof. Bautista. He
proposed that they say:
For the purpose of entering into a subsequent marriage,
the absolute nullity of a previous marriage may only be
invoked on the basis of a final judgment declaring such
nullity, except as provided in Article 41.
Justice Caguioa explained that the idea in the above
provision is that if one enters into a subsequent marriage
without obtaining a final judgment declaring the nullity of
a previous marriage, said subsequent marriage is void ab
initio.
After further deliberation, Justice Puno suggested that they
go back to the original wording of the provision as follows:
The absolute nullity of a previous marriage may be
invoked for purposes of remarriage only on the basis of a
final judgment declaring such previous marriage void,
except as provided in Article 41. 17
In fact, the requirement for a declaration of absolute nullity
of a marriage is also for the protection of the spouse who,
believing that his or her marriage is illegal and void,
marries again. With the judicial declaration of the nullity of

123

his or her first marriage, the person who marries again

cannot be charged with bigamy. 18
Just over a year ago, the Court made the pronouncement
that there is a necessity for a declaration of absolute
nullity of a prior subsisting marriage before contracting
another in the recent case of Terre v. Terre. 19 The Court,
in turning down the defense of respondent Terre who was
charged with grossly immoral conduct consisting of
contracting a second marriage and living with another
woman other than complainant while his prior marriage
with the latter remained subsisting, said that "for purposes
of determining whether a person is legally free to contract
a second marriage, a judicial declaration that the first
marriage was null and void ab initio is essential."
As regards the necessity for a judicial declaration of
absolute nullity of marriage, petitioner submits that the
same can be maintained only if it is for the purpose of
remarriage. Failure to allege this purpose, according to
petitioner's theory, will warrant dismissal of the same.
Article 40 of the Family Code provides:
Art. 40. The absolute nullity of a previous marriage may be
invoked for purposes of remarriage on the basis solely of a
final judgment declaring such previous marriage void. (n)
Crucial to the proper interpretation of Article 40 is the
position in the provision of the word "solely." As it is
placed, the same shows that it is meant to qualify "final
judgment declaring such previous marriage void."
Realizing the need for careful craftsmanship in conveying
the precise intent of the Committee members, the
provision in question, as it finally emerged, did not state

"The absolute nullity of a previous marriage may be

invoked solely for purposes of remarriage . . .," in which
case "solely" would clearly qualify the phrase "for
purposes of remarriage." Had the phraseology been such,
the interpretation of petitioner would have been correct
and, that is, that the absolute nullity of a previous
marriage may be invoked solely for purposes of
remarriage, thus rendering irrelevant the clause "on the
basis solely of a final judgment declaring such previous
marriage void."
That Article 40 as finally formulated included the
significant clause denotes that such final judgment
declaring the previous marriage void need not be obtained
only for purposes of remarriage. Undoubtedly, one can
conceive of other instances where a party might well
invoke the absolute nullity of a previous marriage for
purposes other than remarriage, such as in case of an
action for liquidation, partition, distribution and separation
of property between the erstwhile spouses, as well as an
action for the custody and support of their common
children and the delivery of the latters' presumptive
legitimes. In such cases, evidence needs must be
adduced, testimonial or documentary, to prove the
existence of grounds rendering such a previous marriage
an absolute nullity. These need not be limited solely to an
earlier final judgment of a court declaring such previous
marriage void. Hence, in the instance where a party who
has previously contracted a marriage which remains
subsisting desires to enter into another marriage which is
legally unassailable, he is required by law to prove that the
previous one was an absolute nullity. But this he may do
on the basis solely of a final judgment declaring such
previous marriage void.

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This leads us to the question: Why the distinction? In other

words, for purposes of remarriage, why should the only
legally acceptable basis for declaring a previous marriage
an absolute nullity be a final judgment declaring such
previous marriage void? Whereas, for purposes other than
remarriage, other evidence is acceptable?
Marriage, a sacrosanct institution, declared by the
Constitution as an "inviolable social institution, is the
foundation of the family;" as such, it "shall be protected by
the State." 20 In more explicit terms, the Family Code
characterizes it as "a special contract of permanent union
between a man and a woman entered into in accordance
with law for the establishment of conjugal, and family life."
21 So crucial are marriage and the family to the stability
and peace of the nation that their "nature, consequences,
and incidents are governed by law and not subject to
stipulation . . ." 22 As a matter of policy, therefore, the
nullification of a marriage for the purpose of contracting
another cannot be accomplished merely on the basis of
the perception of both parties or of one that their union is
so defective with respect to the essential requisites of a
contract of marriage as to render it void ipso jure and with
no legal effect and nothing more. Were this so, this
inviolable social institution would be reduced to a mockery
and would rest on very shaky foundations indeed. And the
grounds for nullifying marriage would be as diverse and
far-ranging as human ingenuity and fancy could conceive.
For such a social significant institution, an official state
pronouncement through the courts, and nothing less, will
satisfy the exacting norms of society. Not only would such
an open and public declaration by the courts definitively
confirm the nullity of the contract of marriage, but the
same would be easily verifiable through records accessible
to everyone.

That the law seeks to ensure that a prior marriage is no

impediment to a second sought to be contracted by one of
the parties may be gleaned from new information required
in the Family Code to be included in the application for a
marriage license, viz, "If previously married, how, when
and where the previous marriage was dissolved and
annulled." 23
Reverting to the case before us, petitioner's interpretation
of Art. 40 of the Family Code is, undoubtedly, quite
restrictive. Thus, his position that private respondent's
failure to state in the petition that the same is filed to
enable her to remarry will result in the dismissal of SP No.
1989-J is untenable. His misconstruction of Art. 40
resulting from the misplaced emphasis on the term
"solely" was in fact anticipated by the members of the
Committee.
Dean Gupit commented the word "only" may be
misconstrued to refer to "for purposes of remarriage."
Judge Diy stated that "only" refers to "final judgment."
Justice Puno suggested that they say "on the basis only of
a final judgment." Prof. Baviera suggested that they use
the legal term "solely" instead of "only," which the
Committee approved. 24 (Emphasis supplied)
Pursuing his previous argument that the declaration for
absolute nullity of marriage is unnecessary, petitioner
suggests that private respondent should have filed an
ordinary civil action for the recovery of the properties
alleged to have been acquired during their union. In such
an eventuality, the lower court would not be acting as a
mere special court but would be clothed with jurisdiction to
rule on the issues of possession and ownership. In

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addition, he pointed out that there is actually nothing to

separate or partition as the petition admits that all the
properties were acquired with private respondent's money.
The Court of Appeals disregarded this argument and
concluded that "the prayer for declaration of absolute
nullity of marriage may be raised together with the other
incident of their marriage such as the separation of their
properties."
When a marriage is declared void ab initio, the law states
that the final judgment therein shall provide for "the
liquidation, partition and distribution of the properties of
the spouses, the custody and support of the common
children, and the delivery of their presumptive legitimes,
unless such matters had been adjudicated in previous
judicial proceedings." 25 Other specific effects flowing
therefrom, in proper cases, are the following:
Art. 43. xxx xxx xxx
(2) The absolute community of property or the conjugal
partnership, as the case may be, shall be dissolved and
liquidated, but if either spouse contracted said marriage in
bad faith, his or her share of the net profits of the
community property or conjugal partnership property shall
be forfeited in favor of the common children or, if there are
none, the children of the guilty spouse by a previous
marriage or, in default of children, the innocent spouse;
(3) Donations by reason of marriage shall remain valid,
except that if the donee contracted the marriage in bad
faith, such donations made to said donee are revoked by
operation of law;

(4) The innocent spouse may revoke the designation of

the other spouse who acted in bad faith as a beneficiary in
any insurance policy, even if such designation be
stipulated as irrevocable; and
(5) The spouse who contracted the subsequent marriage
in bad faith shall be disqualified to inherit from the
innocent spouse by testate and intestate succession. (n)
Art. 44. If both spouses of the subsequent marriage acted
in bad faith, said marriage shall be void ab initio and all
donations by reason of marriage and testamentary
disposition made by one in favor of the other are revoked
by operation of law. (n) 26
Based on the foregoing provisions, private respondent's
ultimate prayer for separation of property will simply be
one of the necessary consequences of the judicial
declaration of absolute nullity of their marriage. Thus,
petitioner's suggestion that in order for their properties to
be separated, an ordinary civil action has to be instituted
for that purpose is baseless. The Family Code has clearly
provided the effects of the declaration of nullity of
marriage, one of which is the separation of property
according to the regime of property relations governing
them. It stands to reason that the lower court before whom
the issue of nullity of a first marriage is brought is likewise
clothed with jurisdiction to decide the incidental questions
regarding the couple's properties. Accordingly, the
respondent court committed no reversible error in finding
that the lower court committed no grave abuse of
discretion in denying petitioner's motion to dismiss SP No.
1989-J.
WHEREFORE, the instant petition is hereby DENIED. The

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decision of respondent Court dated February 7, 1992 and

the Resolution dated March 20, 1992 are AFFIRMED.
SO ORDERED.
Bidin and Melo, JJ., concur.
Feliciano, J., is on leave.

VITUG, J.:p
The petition for new bewails, purely on the question of law,
an alleged error committed by the Regional Trial Court in
Civil Case No. Q-92-12539. Petitioner avers that the court
a quo has failed to apply the correct law that should
govern the disposition of a family dwelling in a situation
where a marriage is declared void ab initio because of
psychological incapacity on the part of either or both
parties in the contract.
The pertinent facts giving rise to this incident are, by
large, not in dispute.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

Antonio Valdez and Consuelo Gomez were married on 05

January 1971. Begotten during the marriage were five
children. In a petition, dated 22 June 1992, Valdez sought
the declaration of nullity of the marriage pursuant to
Article 36 of the Family code (docketed Civil Case No. Q92-12539, Regional Trial Court of Quezon City, Branch
102). After the hearing the parties following the joinder of
issues, the trial court, 1 in its decision of 29 July 1994,
granted the petition, viz:
WHEREFORE, judgment is hereby rendered as follows:

G.R. No. 122749

July 31, 1996

ANTONIO A. S. VALDEZ, petitioner,

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

(1) The marriage of petitioner Antonio Valdez and

respondent Consuelo Gomez-Valdez is hereby declared null
and void under Article 36 of the Family Code on the ground
of their mutual psychological incapacity to comply with
their essential marital obligations;
(2) The three older children, Carlos Enrique III, Antonio
Quintin and Angela Rosario shall choose which parent they

127

would want to stay with.

Stella Eloisa and Joaquin Pedro shall be placed in the
custody of their mother, herein respondent Consuelo
Gomez-Valdes.
The petitioner and respondent shall have visitation rights
over the children who are in the custody of the other.
(3) The petitioner and the respondent are directed to start
proceedings on the liquidation of their common properties
as defined by Article 147 of the Family Code, and to
comply with the provisions of Articles 50, 51, and 52 of the
same code, within thirty (30) days from notice of this
decision.
Let a copy of this decision be furnished the Local Civil
Registrar of Mandaluyong, Metro Manila, for proper
recording in the registry of marriages. 2 (Emphasis ours.)
Consuelo Gomez sought a clarification of that portion of
the decision directing compliance with Articles 50, 51 and
52 of the Family Code. She asserted that the Family Code
contained no provisions on the procedure for the
liquidation of common property in "unions without
marriage." Parenthetically, during the hearing of the
motion, the children filed a joint affidavit expressing their
desire to remain with their father, Antonio Valdez, herein
petitioner.
In an order, dated 05 May 1995, the trial court made the
following clarification:
Consequently, considering that Article 147 of the Family
Code explicitly provides that the property acquired by both

parties during their union, in the absence of proof to the

contrary, are presumed to have been obtained through the
joint efforts of the parties and will be owned by them in
equal shares, plaintiff and defendant will own their "family
home" and all their properties for that matter in equal
shares.
In the liquidation and partition of properties owned in
common by the plaintiff and defendant, the provisions on
ownership found in the Civil Code shall apply. 3 (Emphasis
supplied.)
In addressing specifically the issue regarding
disposition of the family dwelling, the trial court said:

the

Considering that this Court has already declared the

marriage between petitioner and respondent as null and
void ab initio, pursuant to Art. 147, the property regime of
petitioner and respondent shall be governed by the rules
on ownership.
The provisions of Articles 102 and 129 of the Family Code
finds no application since Article 102 refers to the
procedure for the liquidation of the conjugal partnership
property and Article 129 refers to the procedure for the
liquidation of the absolute community of property. 4
Petitioner moved for a reconsideration of the order. The
motion was denied on 30 October 1995.
In his recourse to this Court, petitioner submits that
Articles 50, 51 and 52 of the Family Code should be held
controlling: he argues that:
I

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Article 147 of the Family Code does not apply to cases

where the parties are psychologically incapacitated.
II
Articles 50, 51 and 52 in relation to Articles 102 and 129 of
the Family Code govern the disposition of the family
dwelling in cases where a marriage is declared void ab
initio, including a marriage declared void by reason of the
psychological incapacity of the spouses.
III
Assuming arguendo that Article 147 applies to marriages
declared void ab initio on the ground of the psychological
incapacity of a spouse, the same may be read consistently
with Article 129.
IV
It is necessary to determine the parent with whom
majority of the children wish to stay. 5
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of
the parties during the period of cohabitation is governed
by the provisions of Article 147 or Article 148, such as the
case may be, of the Family Code. Article 147 is a remake
of Article 144 of the Civil Code as interpreted and so
applied in previous cases; 6 it provides:
Art. 147.
When a man and a woman who are
capacitated to marry each other, live exclusively with each
other as husband and wife without the benefit of marriage

or under a void marriage, their wages and salaries shall be

owned by them in equal shares and the property acquired
by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof in the former's efforts consisted in the care and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the innocent party. In all cases, the forfeiture
shall take place upon the termination of the cohabitation.
This particular kind of co-ownership applies when a man
and a woman, suffering no illegal impediment to marry
each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of
marriage. The term "capacitated" in the provision (in the
first paragraph of the law) refers to the legal capacity of a

129

party to contract marriage, i.e., any "male or female of the

age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38" 7 of the
Code.
Under this property regime, property acquired by both
spouses through their work and industry shall be governed
by the rules on equal co-ownership. Any property acquired
during the union is prima facie presumed to have been
obtained through their joint efforts. A party who did not
participate in the acquisition of the property shall be
considered as having contributed thereto jointly if said
party's "efforts consisted in the care and maintenance of
the family household." 8 Unlike the conjugal partnership of
gains, the fruits of the couple's separate property are not
included in the co-ownership.
Article 147 of the Family Code, in the substance and to the
above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act
intervivos his or her share in co-ownership property,
without consent of the other, during the period of
cohabitation; and
(b) In the case of a void marriage, any party in bad faith
shall forfeit his or her share in the co-ownership in favor of
their common children; in default thereof or waiver by any
or all of the common children, each vacant share shall
belong to the respective surviving descendants, or still in
default thereof, to the innocent party. The forfeiture shall
take place upon the termination of the cohabitation 9 or
declaration of nullity of the marriage. 10

When the common-law spouses suffer from a legal

impediment to marry or when they do not live exclusively
with each other (as husband and wife), only the property
acquired by both of them through their actual joint
contribution of money, property or industry shall be owned
in common and in proportion to their respective
contributions. Such contributions and corresponding
shares, however, are prima facie presumed to be equal.
The share of any party who is married to another shall
accrue to the absolute community or conjugal partnership,
as the case may be, if so existing under a valid marriage. If
the party who has acted in bad faith is not validly married
to another, his or her share shall be forfeited in the
manner already heretofore expressed. 11
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which
has jurisdiction to declare the marriage a nullity must be
deemed likewise clothed in authority to resolve incidental
and consequential matters. Nor did it commit a reversible
error in ruling that petitioner and private respondent own
the "family home" and all their common property in equal
shares, as well as in concluding that, in the liquidation and
partition of the property owned in common by them, the
provisions on co-ownership under the Civil Code, not
Articles 50, 51 and 52, in relation to Articles 102 and 129,
12 of the Family Code, should aptly prevail. The rules set
up to govern the liquidation of either the absolute
community or the conjugal partnership of gains, the
property regimes recognized for valid and voidable
marriages (in the latter case until the contract is annulled),
are irrelevant to the liquidation of the co-ownership that
exists between common-law spouses. The first paragraph
of Articles 50 of the Family Code, applying paragraphs (2),

130

(3), (4) and 95) of Article 43, 13 relates only, by its explicit
terms, to voidable marriages and, exceptionally, to void
marriages under Article 40 14 of the Code, i.e., the
declaration of nullity of a subsequent marriage contracted
by a spouse of a prior void marriage before the latter is
judicially declared void. The latter is a special rule that
somehow recognizes the philosophy and an old doctrine
that void marriages are inexistent from the very beginning
and no judicial decree is necessary to establish their
nullity. In now requiring for purposes of remarriage, the
declaration of nullity by final judgment of the previously
contracted void marriage, the present law aims to do away
with any continuing uncertainty on the status of the
second marriage. It is not then illogical for the provisions
of Article 43, in relation to Articles 41 15 and 42, 16 of the
Family Code, on the effects of the termination of a
subsequent marriage contracted during the subsistence of
a previous marriage to be made applicable pro hac vice. In
all other cases, it is not to be assumed that the law has
also meant to have coincident property relations, on the
one hand, between spouses in valid and voidable
marriages (before annulment) and, on the other, between
common-law spouses or spouses of void marriages,
leaving to ordain, on the latter case, the ordinary rules on
co-ownership subject to the provisions of the Family Code
on the "family home," i.e., the provisions found in Title V,
Chapter 2, of the Family Code, remain in force and effect
regardless of the property regime of the spouses.
WHEREFORE, the questioned orders, dated 05 May 1995
and 30 October 1995, of the trial court are AFFIRMED. No
costs.
Padilla, Kapunan and Hermosisima, Jr., JJ., concur.

Bellosillo, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 102726

May 27, 1994

TSHIATE L. UY and RAMON UY, petitioners,

vs.
THE COURT OF APPEALS, NATIVIDAD CALAUNAN-UY, and
THE ESTATE OF MENILO B. UY, SR., REPRESENTED BY
MENILO C. UY, JR., NILDA C. UY, MELVIN C. UY and MERLITO
C. UY, respondents.
Abad, Santos and Associates for petitioners.
Cristino C. Abasolo and Jose C. Cordova for Natividad
Calaunan-Uy.
VITUG, J.:
This petition for review on certiorari assails the decision,
dated

131

23 September 1991, of respondent Court of Appeals, which

has reversed the questioned order of the Regional Trial
Court, Branch 58, Makati, Metro Manila.
The facts, hereunder recited, are culled from the findings
of the Court of Appeals.
Private respondent Natividad Calaunan-Uy was the
common-law wife of the late Menilo B. Uy, Sr., for about
thirty-six (36) years. Their union bore four children
Melito, Jr., Nilda, Melvin and Merlito all surnamed Uy. On
31 October 1990, soon after the death of Menilo Uy, Sr.,
herein petitioners Tshiate Uy and Ramon Uy initiated
before the Regional Trial Court (RTC), Branch 65, Makati,
Metro Manila. Special Proceedings No. M-2606, entitled "In
the Matter of the Petition for Letters of Administration of
the Estate of Menilo B. Uy, Sr." On 28 February 1991,
private respondent filed a motion to hold the special
proceedings in abeyance. The day before, or on 27
February 1991, private respondent filed with the RTC,
Branch 58, Makati, Civil Case No. 91-573 for "Partition of
Properties Under Co-ownership," against the Estate of
Menilo Uy, Sr. (supposedly represented by their four
children).
On the day of trial in Civil Case No. 91-573, or on 23 April
1991, the parties, upon the suggestion of the trial court,
submitted a Compromise Agreement. On 24 April 1991, a
judgment, based on that compromise, was rendered, and a
writ of execution was issued on 15 May 1991. On 24 May
1991, petitioner Tshiate Uy filed an omnibus motion,
alleging that by virtue of a Hong Kong marriage, she was
the surviving legal spouse of Menilo, Sr. She prayed that
she and her son Ramon Uy be allowed to intervene in the
civil case, submitting at the same time their answer in

intervention. The intervenors contended, among other

things, that the judgment upon the compromise was a
patent nullity. On 10 June 1991, the trial court issued an
order allowing the intervention and setting aside the
"compromise judgment." Private respondent filed a motion
for reconsideration; it was denied by the trial court in its
order of 08 July 1991. A petition for certiorari was filed with
respondent appellate court, which, on 23 September 1991,
promulgated its decision, the dispositive portion of which
read:
WHEREFORE, the petition is hereby granted and the orders
of respondent court dated June 10, 1991 and July 8, 1991
are hereby SET ASIDE. No costs.
SO ORDERED. 1
A motion for reconsideration filed by petitioners was
denied by the appellate court in its resolution of 06
November 1991.
On 02 January 1992, the instant petition for review on
certiorari was filed with this Court, asserting that:
The finding and the conclusion of the respondent Court of
Appeals that Judge Zosimo Angeles of the Regional Trial
Court of Makati, Branch 58, erred in setting aside the
Judgment by Compromise in Civil Case
No. 91-573 because the same was already final and in fact
partly executed is contrary to law and jurisprudence to the
effect that a Judgment void
ab initio is non-existent and cannot acquire finality; and
The finding and conclusion of the respondent Court of
Appeals to the effect that the intervention of petitioner in

132

Civil Case No. 91-573 came too late is contrary to the

ruling of this Honorable Court in the case of Director of
Lands vs. Court of Appeals, et al., 93 SCRA 238. 2
The appeal has merit.
The action for partition in Civil Case No. 91-573 is
predicated on an alleged co-ownership between private
respondent Natividad Calaunan-Uy and deceased Menilo,
Sr., of property evidently acquired during the period of
their common-law relationship. The governing provisions,
applicable to their case, are now found in Article 147 and
Article 148 of the Family Code, considering that Menilo Uy,
Sr., died on 27 September 1990, well after the effectivity
of Executive Order No. 209 (The Family Code of the
Philippines) on 03 August 1988. Hence

Neither party can encumber or dispose by acts inter vivos

of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the coownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the
common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In
the absence of descendants, such share shall belong to
the innocent party. In all cases, the forfeiture shall take
place upon termination of the cohabitation.

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

Art. 148.
In cases of cohabitation not falling under the
preceding Article, only the properties acquired by both of
the parties through their actual joint contribution of
money, property, or industry shall be owned by them in
common in proportion to their respective contributions. In
the absence of proof to the contrary, their contributions
and corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of
money and evidences of credit.

In the absence of proof to the contrary, properties

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

If one of the parties is validly married to another, his or her

share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in
the manner provided in the last paragraph of the
preceding Article.
The foregoing rules on forfeiture shall likewise apply even

133

if both parties are in bad faith.

Parenthetically, closely intertwined with the legal
questions posed by the parties are factual issues which are
yet to be determined in Special Proceedings No.
M-2606 filed by herein petitioners.
Respondent Court of Appeals set aside the orders of the
trial court on two points: That
(1) The intervention came too late, citing Section 2, Rule
12, of the Revised Rules of Court; and
(2) The court a quo ignored the rule on finality of
judgments.
Section 2, Rule 12 of the Revised Rules of Court provides:
Sec. 2. Intervention. A person may, before or during a
trial, be permitted by the court, in its discretion, to
intervene in an action, if he has legal interest in the matter
in litigation, or in the success of either of the parties, or an
interest against both, or when he is so situated as to be
adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof.
The case Director of Lands vs. Court of Appeals, 3 may not
be on all fours to the case at bench but the rationale
behind the decision can well be applicable. Citing Manila
Railroad Co. vs. Attorney-General, 4 this Court held:
It is quite clear and patent that the motion for intervention
filed by the movants at this stage of the proceedings
where trial has already been concluded, a judgment
thereon had been promulgated in favor of private

respondent and on appeal by the losing party, the Director

of Lands, the same was affirmed by the Court of Appeals
and the instant petition for certiorari to review said
judgment is already submitted for decision by the
Supreme Court, are obviously and manifestly late, beyond
the period prescribed under the aforecoded Section 2, Rule
12 of the Rules of Court.
But Rule 12 of the Rules of Court like all other Rules therein
promulgated, is simply a rule of procedure, the whole
purpose and object of which is to make the powers of the
court fully and completely available for justice. The
purpose of procedure is not to thwart justice. Its proper
aim is to facilitate the application of justice to the rival
claims of contending parties. It was created not to hinder
and delay but to facilitate and promote the administration
of justice. It does not constitute the thing itself which
courts are always striving to secure to litigants. It is
designed as the means best adopted to obtain that thing.
In other words, it is a means to an end.
The denial of the motions for intervention arising from the
strict application of the Rule due to alleged lack of notice
to, or the alleged failure of, movants to act seasonably will
lead the Court to commit an act of injustice to the
movants, to their successors-in-interest and to all
purchasers for value and in good faith and thereby open
the door to fraud, falsehood and misrepresentation, should
intervenors' claims be proven to be true. For it cannot be
gainsaid that if the petition for reconstitution is finally
granted, the chaos and confusion arising from a situation
where the certificates of title of the movants covering
large areas of land overlap or encroach on properties the
title to which is being sought to be reconstituted by private
respondent, who herself indicates in her Opposition that,

134

according to the Director of Lands, the overlapping

embraces some 87 hectares only, is certain and inevitable.
The aggregate area of the property claimed by respondent
covering Lot 1 and Lot 2 is 1,435,062 sq. meters which is
situated in a fast-growing, highly residential sector of
Metro Manila where growth and development are in rapid
progress to meet the demands of an urbanized, exploding
population. Industries, factories, warehouses, plants, and
other commercial infrastructures are rising and spreading
within the area and the owners of these lands and the
valuable improvements thereon will not simply fold their
hands but certainly will seek judicial protection of their
property rights or may even take the law into their own
hands, resulting to multiplicity of suits.
Section 7, Rule 3, of the Revised Rules of Court defines
indispensable parties to be "(p)arties in interest without
whom no final determination can be had of an action . . . ."
Even private respondents, in their complaint in Civil Case
No. 91-573, have acknowledged that petitioners "claim
some interest in the Estate of Menilo B. Uy, Sr." 5 The trial
court itself, in setting aside its previous judgment upon
compromise, has expressed "that the intervenors have
legal interest in the matter in litigation," a statement
which we find hard to brush aside. In the interest of
adjudicating the whole controversy, petitioners' inclusion
in the action for partition, given the circumstances, not
only is preferable but rightly essential in the proper
disposition of the case. It is a settled rule that without the
presence of indispensable parties to a suit or proceeding, a
judgment of the court cannot attain real finality. 6
Private respondents argue that their failure to implead
petitioners in the complaint for partition has been cured by
the filing of petitioners' omnibus motion asking leave to

intervene and attaching thereto an answer in intervention.

Private respondents overlook the fact that the motion has
been filed subsequent to the judgment based upon the
compromise agreement (among private respondents
themselves) that did not include, and thereby cannot be
held to bind, petitioners 7
WHEREFORE, the decision of respondent Court of Appeals
is SET ASIDE and a new one is entered REINSTATING the
order, dated 10 June 1991, of the trial court.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.