Same; Division of total mass of properties between the two conjugal partnerships in
216 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
Nos. L-32820-21. January 30, 1976.*
DOROTEA DE OCAMPO VDA. DE DELIZO and her nine (9) children, named
REGINO, CRISPINA, CARMEN, BASILIO, HILARIO, MACARIO, SENDON,
MARCIANO and HERMOGENES, all surnamed DELIZO y OCAMPO,
petitioners-appellants, vs. URBANA DELIZO, assisted by her husband,
AMBROCIO FLORA, SEVERINO DELIZO and the Heirs of FRANCISCO
DELIZO, namely, RANCIVILLANO, SOLTRIFILO, JOSEFINA, EUFROCINA,
AUREA, EDITA and FE, all surnamed DELIZO, and ROSENDA GENOVE VDA.
DE DELIZO, respondents-appellees.
Public lands; Homestead; Right of homesteader to patent becomes absolute only until
after compliance with all requirements of law.—Under Act 926, then the applicable law, the
right of the homesteader to the patent does not become absolute until after he has complied
with all the requirements of the law. One of the most important requirements is that the
“person filing the application shall prove by two credible witnesses that tie has resided upon
and cultivated the land for the term of five years immediately succeeding the time of filing
the application aforesaid, and shall make affidavit that no part of said land has been
alienated or encumbered.
217
VOL. 69, JANUARY 30, 1976 217
Vda. de Delizo vs. Delizo
Same; Same; Conveyance or encumbrance by homesteader of land before compliance
with requirements of law.—Prior to the fulfillment of the requirements of law, the applicant
has no complete equitable estate over the homestead which he can sell and convey,
mortgage or lease. Until a homestead right is established and registered under Section 3 of
Act 926, there is only an inchoate right to the property and it has not ceased to be a part of
the public domain and, therefore, not susceptible to alienation as such. Conversely, when it
“homesteader has complied with all the terms and conditions which entitled him to a patent
for a particular tract of public land, he acquires a vested interest therein and has to be
regarded an equitable owner thereof.”
Same; Same; Effect of; Case at bar.—Having neither legal nor equitable title thereon,
what was transferred were not rights of ownership, but inchoate rights as applicants for
homesteads over portions of the public domain.
Conjugal partnership; Time of fulfillment of requirements of law the decisive factor in
determination of whether land, acquired by homestead conjugal property of first or second
marriage.—The decisive factor in the determination of whether a parcel of land acquired by
way of homestead is conjugal property of the first or the second marriage, is not necessarily
the time of the issuance of the homestead patent but the time of the fulfillment of the
requirements of the public land law for the acquisition of such right to the patent.
Same; Apportionment of land acquired by homestead to parties in proportion to extent
to which requirements of law had been complied with during existence of each conjugal
partnership.—Considering that about twenty hectares were cultivated and rendered
productive during the period from 1905 to 1909, justice and equity demand that the rights
to said properties be apportioned to the parties in proportion to the extent to which the
requirements of the public land laws has been complied with during the existence of each
conjugal partnership.
proportion to duration of each partnership; Reason; Case at bar.—There is the established
fact that the produce of the lands acquired by homestead contributed considerably to the
acquisition of the properties acquired during the existence of the second marriage. Also the
children of the first marriage, as a matter of equity, should share in the properties acquired
by homestead. To deny the children of the first marriage a share in such properties would
have exacerbated discord instead of enhancing family solidarity and understanding.
Considering these circumstances and
218
2 SUPREME COURT REPORTS ANNOTATED
18
Vda. de Delizo vs. Delizo
since the capital of either marriage or the contribution of each spouse cannot be
determined with mathematical precision, the total mass of these properties should be
divided between the two conjugal partnerships in proportion to the duration of each
partnership.
PETITION for review of the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Leandro C. Sevilla for petitioners-appellants.
Romeo J. Callejo respondents-appellees.
ANTONIO, J.:
These two cases involve the partition of the conjugal partnership properties of two
marriages contracted by Nicolas Delizo. The first, was with Rosa Villasfer, which
lasted from April 20, 1891 until Rosa’s death on December 7, 1909, or a period of
eighteen (18) years; and the second, with Dorotea de Ocampo, which existed for a
period of forty-six (46) years, or from October, 1911 until the death of Nicolas
Delizo on May 3, 1957 at the age of ninety (90) years. The action for partition was
instituted on April 15, 1957 by a daughter and a son of the first marriage,
namely, Urbana Delizo and Severino Delizo, and the heirs of Francisco Delizo,
another son, who died in 1943, specifically, Rancivillano, Soltrifilo, Josefina,
Eufrosina, Aurea, Edita, and Fe, all surnamed Delizo (the last three being minors
were represented by their mother, Rosenda Genove) all against their father,
Nicolas Delizo, and his second wife, Dorotea de Ocampo, and their nine (9)
children, the herein petitioners-appellants, namely Regino, Crispina, Carmen,
Basilio, Hilario, Macario, Sendon, Marciano, and Hermogenes, all surnamed
Delizo.
The aforesaid defendants opposed the partition, claiming that the properties
described in the complaint were those of the second marriage. On May 3, 1957,
Nicolas Delizo died and was substituted by his children in the second marriage as
party defendants. In the meantime, Special Proceedings No. 1058 (Intestate
Estate of the late Nicolas Delizo) was filed by Dorotea de Ocampo on June 3,
1957. Thereafter, or on August 23, 1971, Severino Delizo died intestate and is now
represented by his children, namely, Federico, Severina, Angelina, Segundina,
Rosalina, and Brigida, all surnamed Delizo. Involved are the properties acquired
by Nicolas Delizo, among which are sixty-six (66) hectares of agricultural lands in
San Jose City, Nueva Ecija; fifty-eight (58) hectares of riceland in Muñoz, of the
219
VOL. 69, JANUARY 30, 1976 219
Vda. de Delizo vs. Delizo
same province; and a 150-square meter lot at 1056-58 P. Campa, Sampaloc,
Manila. The properties are specifically described as follows:
1. (1)Lots Nos. 210, 211, 388, 389, 390, and 407 of the San Jose Cadastre
situated in Rizal, San Jose with a combined area of about sixty-six (66)
hectares covered by OCT No. 6176-N.E. issued in the name of Nicolas
Delizo, married to Dorotea de Ocampo (Exh. F or 11);
2. (2)Lot No. 1915 of the San Jose Cadastre with an area of about 1,056
square meters and covered by OCT No. 5783 in the name of Nicolas
Delizo, married to Dorotea de Ocampo (Exh. G or 12);
3. (3)Lot No. 498 of the San Jose Cadastre with an area of about 3,366
square meters and covered by OCT No. 5622-N.E. issued in the name of
Nicolas Delizo, married to Dorotea de Ocampo (Exh. H. or 13);
4. (4)A parcel of land in San Jose, Nueva Ecija containing an area of
13.2948 hectares and covered by TCT No. 2985-N.E. (Exh. I. or 13-A);
5. (5)An agricultural land of about 17.4753 hectares situated in sitio
Rangayan, Muñoz, and covered by TCT No. 5162 (Exh. J or 14);
6. (6)A parcel of land in Barrio Caanawan, San Jose, with an area of about
14.0354 hectares and covered by TCT No. 11910 (Exh. K or 10);
7. (7)A cornland in Barrio Rangayan, Muñoz, Nueva Ecija, of about 1,500
square meters and covered by Tax Declaration No. 5476;
8. (8)Riceland in Barrio San Andres, Muñoz, of about 5,083 square meters
and covered by Tax Declaration No. 7083;
9. (9)Riceland in Barrio Rangayan, Muñoz, Nueva Ecija, containing an area
of about 17.4755 hectares and covered by Tax Declaration No. 812;
10. (10)Lot No. 847—a riceland in Barrio Bayan, Muñoz, with an area of
about 13.0902 hectares and covered by TCT No. 3585 issued in the
name of Nicolas Delizo, married to Dorotea de Ocampo on April 25,
1929 (Exhs. L or 15 & 15-A);
11. (11)A camarin of strong materials, with galvanized iron roofing in San
Jose, Nueva Ecija, about eight (8) meters by twelve (12) meters;
12. (12)A residential house and lot at Sanchez Street, San Jose, Nueva
Ecija;
13. (13)Lot No. 1790 of San Jose Cadastre of about 2,840 square meters and
covered by Original Certificate of Title No. 8131 in
220
220 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
1. the names of spouses Silvestre Batara and Maria Soriano issued on
November 16, 1927 (Exh. M or 16), superseded by Transfer Certificate
of Title No. NT-29524 issued in the name of Juan T. Gualberto on May
25, 1959 (Exh. N or 17) claimed by the heirs of Nicolas Delizo and
Dorotea de Ocampo pursuant to deed of sale (Exh.N-1);
2. (14)An urban lot and coconut plantation in San Fabian, Pangasinan;
3. (15)A lot and residential house consisting of a two-door accessoria at No.
1056-58 (formerly 562) P. Campa, Sampaloc, Manila;
4. (16)A sawmill with accessories, bulldozers, etc. in San Jose, Nueva Ecija
(bulldozer is now in Gordon, Isabela in the possession of Regino Delizo
and Basilio Delizo); and
5. (17)Several heads of carabaos.
After trial, the lower court rendered judgment on April 27, 1964,
distributing the aforesaid properties as follows: (a) one-half (1/2) pro
indiviso to the three (3) children of the first marriage, namely, Urbana
Delizo, Severino Delizo, and the heirs of the deceased Francisco Delizo,
viz.: Ranciviliano, Soltrifilo, Josefina, Eufrocina, Aurea, Edita, and Fe;
(b) one-fourth (1/4) pro indiviso to the surviving spouse, Dorotea de
Ocampo; and (c) one-fourth (1/4) pro indiviso, in equal shares to the
children of both marriages, nine (9) of whom were begotten during the
second marriage, or into thirteen (13) parts.
From said judgment, petitioners-appellants appealed to the Court of Appeals. On
August 12, 1970, the Appellate Court rendered judgment, affirming with
modifications the trial court’s decision.
The facts as found by the Appellate Court are as follows:
“As regards the Caanawan lands situated in Caanawan, San Jose, Nueva Ecija, comprising
some 66 hectares, defendants capitalize on the undisputed fact that Original Certificate of
Title No. 6176 (Exh. F or 11) issued on August 21, 1924, covering these lands is in the name
of Nicolas Delizo, married to Dorotea de Ocampo.Defendants further point out that the
testimonies of defendant Dorotea de Ocampo and octogenarian Moises Patricio prove that
these lands were acquired during the second marriage.
“However, the fact that the disputed lands situated in Caanawan were registered in the
name of ‘Nicolas Delizo, married to Dorotea de Ocampo’ is no proof that the property is
owned by the second conjugal partnership. The phrase ‘married to’ is merely descriptive of
the civil status of Nicolas Delizo (Gonzales vs. Miller, 69 Phil. 340; De Jesus vs. Padilla, CA-
G.R. No. 12191-R, April 19, 1955; Muñoz & Tan Co., Inc.
221
VOL. 69, JANUARY 30, 1976 221
Vda. de Delizo vs. Delizo
vs. Santos, CA-G.R. No. “27759-R, October 3, 1963; Pratts vs. Sheriff of Rizal, 53 Phil. 51,
53). Neither is the testimony of Dorotea de Ocampo that the said lands were acquired by her
and her spouse, altogether clear and persuasive. For while the admitted fact is that she and
Nicolas Delizo were married in 1911, she declared on the witness stand that the aforesaid
properties were given by Pedro Salvador to her and her spouse in 1908 (t.s.n., p. 288, March
8, 1963), thereby leading the trial court to infer an admission that these lands were acquired
during the first marriage of Nicolas Delizo. It may likewise be noted that as per her
testimony, she and her father arrived in Caanawan, San Jose, Nueva Ecija, when Rosa
Villasfer was still alive. That would be sometime before 1911. But she admitted that her
father then was not able to acquire lands from Pedro Salvador, their grantor, because he
had no more lands to distribute to settlers. Accordingly, it is farfetched that after Rosa’s
death and the subsequent marriage of Nicolas Delizo to Dorotea de Ocampo, Pedro Salvador
would still have those 67 hectares which defendants claimed were acquired by the spouses
Nicolas Delizo and Dorotea de Ocampo by grant from Pedro Salvador (t.s.n., pp. 459-46,
March 15, 1963).
“Moises Patricio tried to confirm the widow, declaring that Nicolas Delizo was married
to defendant Dorotea de Ocampo, when he was given lands in Caanawan by Pedro Salvador
(t.s.n., p, 493, June 7, 1963). However, he placed the acquisition sometime during the
founding of Barrio Sto. Tomas, San Jose, Nueva Ecija (Id., p, 492) which took place some
four years after the Spanish-Filipino revolution of 1896 (t.s.n., pp. 548-549, June 21, 1963),
or approximately 1900. Therefore, it could not be Dorotea de Ocampo, but Rosa Villasfer,
who was admittedly still alive and the wife of Nicolas Delizo at the time of the acquisition.
“Ranged against these unreliable testimonies for the defendants, is the testimony of
Lorenzo Delizo, who being a brother of deceased Nicolas Delizo, stands in equal relationship
to the plaintiffs, who were Nicolas’ children by the first marriage, and the defendants, who
were children of Nicolas in his second marriage. His testimony therefore carries great
weight. This witness averred that 16 hectares were acquired as homestead by his deceased
brother, Nicolas Delizo, from Pedro Salvador and Mauricio Salvador, who were then
‘cabecillas’ distributing lands to homesteaders in 1905 (t.s.n., p. 12, January 20, 1961); that
Nicolas acquired by sale the 16-hectare homestead of Nicolas Dacquel in 1906, another 16-
hectare homestead of Mariano Antolin in 1907 and the 16-hectare homestead of Francisco
Pascua in 1908 (id., pp. 14-15), Lorenzo’s declarations are supported by the testimonies of
(1) Urbana Delizo, a daughter of Nicolas by his first marriage and who was already 17 when
her mother, Rosa Villasfer, died in 1909 (id., p. 19); (2) Sabiniano Villanueva, a son of one of
Nicolas’ tenants on the controverted Caanawan lands (id., pp. 93-168) and (3) Raymundo
Eugenio, a former clerk in the municipal
222
222 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
treasurer’s office who used to collect taxes on the land belonging to Nicolas and later became
municipal “president of San Jose, Nueva Ecija (t.s.n., pp. 367-368, Jan. 31, 1964), although
these Caanawan lands cannot be traced back to TD 431, Exhibit P-9 issued in 1906, cited by
appellants (see notations at bottom of reverse side of alleged succeeding TDs), aside from
the fact that the notations on the reverse side thereof are suspicious (see years when tax
commenced and when issued) and the discrepancy between areas (8 Ha. in Exhibit P-9 and
57 Ha. for lots 210 and 211).
“Accordingly, we find with the trial court that the Caanawan lands, comprising lots Nos.
210, 211, 388, 390, 398 and 407 under Original Certificate of Title No. 6176 (Exh. F or 11)
were acquired during the existence of the first marriage of Nicolas Delizo to Rosa Villasfer,
and there being no affirmative showing that they belonged exclusively to said Nicolas
Delizo, should therefore correspond to the first conjugal partnership of Nicolas Delizo and
Rosa Villasfer. So with the lot and house at 562 P. Campa St., Sampaloc, Manila, known as
Lot 47, Block 83 covered by TOT No. 9616-Manila which was ceded during the second
marriage in payment of, or substitution for, the Caanawan property, because the Asiatic
Petroleum Company to which it had been mortgaged as bond for Juan Par as agent
foreclosed the mortgage, when the agent defaulted in his obligation to the company,
Exhibits 6, 7 & 19 (Art. 153 [formerly, 140], par. 1, new Civil Code).
“However, with regard to the other properties in question, like lot No. 498 of the San
Jose Cadastre, under Original Certificate of Title No. 5622, likewise issued in the name of
‘Nicolas Delizo, married to Dorotea de Ocampo’; a parcel of land in San Jose, Nueva Ecija
under TCT No. 2985 (Exh, I or 13)’ and agricultural land of about 17.4753 hectares in Sitio
Rangayan, Muñoz, Nueva Ecija under TCT No. 5162 (Exh. J or 14); another parcel of land in
Caanawan, San Jose, with an area of about 14.0354 hectares under TCT No. 11910 (Exh. K
or 10); a corn land in barrio Rangayan, Muñoz, Nueva Ecija, of about 1,500 square meters
under Tax Declaration No. 5476; a riceland in barrio San Andres, Muñoz, Nueva Ecija, of
about 5,083 square meters under Tax Dec. 7083; another riceland in Rangayan, Muñoz, of
about 17.4755 hectares under Tax Dec. No. 812; a riceland, lot No. 847, of about 13.0902
hectares covered by TCT No. 3585 issued on April 29, 1929 in the name of ‘Nicolas Delizo,
married to Dorotea de Ocampo’ (Exh. L or 15); a camarin of strong materials with
galvanized iron roofing in San Jose, Nueva Ecija, about 8 meters by 12 meters; a residential
lot at Sanches Street, San Jose, Nueva Ecija; lot No. 1790 of the San Jose Cadastre,
consisting of 2,840 square meters, more or less, under Original Certificate of Title No. 8131
in another name but claimed by the heirs under deed of sale, Exhibit N-l; a sugar cane mill
in San Jose. Nueva Ecija and several heads of carabaos (Exh. O); Lots Nos. “495 and 496 of
the San Jose Cadastre, possessed by defendants
223
VOL. 69, JANUARY 30, 1976 223
Vda. de Delizo vs. Delizo
although adjudicated in the name of Marcelo Tomas and Guillermo Cabiso, respectively; lot
No. 494-A, of the San Jose Cadastre, adjudicated in the name of Nicolas Delizo and Dorotea
de Ocampo (RA, pp. 96-97),—there is no controversy that these were all acquired during the
existence of the second marriage of Nicolas Delizo.”
On the basis of the foregoing facts, the Court of Appeals rendered judgment as
follows:
“But the trial court held that because there was no liquidation of the conjugal partnership
property of the first marriage, upon the death of the first wife, ‘the conjugal partnership was
converted into one of co-ownership between Nicolas Delizo and his children of the first
marriage x x x. Hence, all the fruits or increase of the properties acquired thereafter shall
belong to such co-ownership.’ We cannot agree with this legal conclusion. One-half of the
conjugal properties of the first marriage constituted the separate property of the husband at
the formation of the second conjugal partnership upon his remarriage in October 1911 (Art.
145, NCC). Moreover, the fruits of the Caanawan property were acquired through the labor
and industry of Nicolas Delizo and Dorotea Ocampo; and indeed, two witnesses for the
plaintiffs admitted that at the time of the death of Rosa Villasfer, only about 20 hectares of
the Caanawan property had been cleared and cultivated (pp. 22-23; 113, 117, 383-4, t.s.n.).
This property was practically virgin land, and the rest thereof or about 47 hectares were
therefore cleared and cultivated only during the marriage of Nicolas Delizo and Dorotea
Ocampo. This is impliedly admitted in plaintiffs’ complaint that ‘from the time of death of
the said Rosa Villasfer, the defendants x x x have WORKED upon, TILLED and
CULTIVATED, or otherwise offered in tenancy the whole of the agricultural lands
described’ (par. 2). The Caanawan property left to itself could not produce any fruits for they
did not have any permanent improvements thereon. What was produced according to the
evidence was palay, and the production of palay requires tilling, cultivation, seedlings,
gathering, preservation and marketing. It was thru the labor and industry of Nicolas Delizo
and Dorotea de Ocampo that the Caanawan property was able to produce fruits. Whatever it
produced tliru the labor and industry of the spouses belongs to their conjugal partnership.
While it is true that to the owner of the land belongs the fruits, whether natural, industrial
or civil (Art. 441, N.C.C. formerly Art. 354, Spanish Civil Code), this does not mean that all
that is produced belongs to the owner of the land. The owner, according to Art. 443, N.C.C.
(formerly Art. 356, Spanish Civil Code) who receives the fruits, has the obligation to pay the
expenses made by a person in their production, gathering and preservation. When Dorotea
Ocampo admitted that the Muñoz property was purchased partly with the fruits of the
Caanawan property, she was referring to the gross production, not deducting therefrom
what could have pertained to the
224
224 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
person who produced the fruits. So it seems “that if we are to determine with mathematical
certainty what portion of the Muñoz property and other properties acquired during the
second marriage should pertain to the first marriage as corresponding to the value of its
share in the fruits of the Caanawan property, and what should belong to the second
marriage as corresponding to the value of the labor and industry of the spouses Delizo and
Ocampo, we have to find how much was produced during the second marriage and
determine what will be the share of the owner of the land what will correspond to the one
who produced the fruits. The burden of proof lies upon the plaintiffs under the rules of
evidence. But, of course, this is an impossibility. For no records have been kept and it is not
in accordance with the Filipino customs for the surviving spouse—whether he remarries or
not—to keep the record of the produce of the properties left by the deceased spouse. In
addition thereto, according to Dorotea Ocampo, part of the price used in the purchase of
Muñoz property was the proceeds of a loan which, together with the properties purchased
with it, belongs to the conjugal partnership of Nicolas Delizo and Dorotea Ocampo. Under
these circumstances, it would be impossible to determine with mathematical precision what
portion of the properties acquired during the second marriage of Nicolas Delizo should
belong to the second conjugal partnership and what portion should belong to the heirs of the
first conjugal partnership, one half of which pertains to the husband. However, considering
that—
1. “1.At the time of the dissolution of the first marriage or about five years after
acquisition, according to plaintiffs’ evidence, only about 20 hectares of the
Caanawan property had been cultivated, the remaining 47 hectares were
therefore cleared and improved during the second marriage thru the labor and
industry of the spouses Nicolas Delizo and Dorotea Ocampo for 46 years (1911-
1957). These improvements were made in good faith considering that Nicolas
Delizo administered the properties of the first marriage. The second marriage is
entitled to reimbursement for the increase in value of these 47 hectares (Art.
516, N.C.C.). Even the Muñoz property acquired during the second marriage had
to be improved by the spouses Nicolas Delizo and Dorotea Ocampo.
2. “2.The one-half of the fruits of the Caanawan property which should pertain to the
heirs of Rosa Villasfer refers only to one-half of the net after deducting the
expenses of clearing the land, cultivating, gathering and preservation. Forty-
seven hectares of the Caanawan property were cleared and cultivated only
during the second marriage. Even under a liberal apportionment of the produce,
the heirs of the second marriage could not be entitled to more than 30% of the
gross produce.
3. “3.Part of the price used in the purchase of the properties acquired during the
second marriage were the proceeds of a loan. This
225
VOL. 69, JANUARY 30, 1976 225
Vda. de Delizo vs. Delizo
1. is conjugal property of the “second marriage (Palanca vs. Smith, Bell and Co., 9
Phil. 131, 133; Castillo Jr. vs. Pasco, 11 SCRA 102, 106-7).
2. “4.The improvements on 47 hectares of the Caanawan property and on the Muñoz
property were made at the expense of the second conjugal partnership of Nicolas
Delizo and Dorotea Ocampo, and thru their labor and industry which lasted for
46 years, whereas the first conjugal partnership had the Caanawan property for
less than 6 years.
“Taking into account all the foregoing circumstances and equities of the case, an
adjudication of 20% of all the properties acquired during the second marriage, including the
Muñoz property, to the children of the first marriage, and 80% to the conjugal partnership
of Nicolas Delizo and Dorotea Ocampo is fair and equitable. So the properties of the estate
should be partitioned thus:
“One-half of the Caanawan property and the house and lot at 562 P. Campa Street, Manila, covered by
TCT No. 9616 as the share of Rosa Villasfer in the first conjugal partnership of Nicolas Delizo and Rosa
Villasfer or 1/6 thereof for each child of the first marriage; and 20% of all the other properties or 1/15
thereof for each such child. To Nicolas Delizo should be adjudicated one-half of the Caanawan property
and the house and lot on P. Campa, but in view of the death of Nicolas Delizo his share descends to all
the children, both of the first and second marriages and the surviving spouse, Dorotea Ocampo, and
should therefore be divided by the number of children plus one or 1/26 thereof for each heir. Eighty per
cent of all the properties acquired during the marriage of Nicolas Delizo and Dorotea Ocampo constitute
the conjugal partnership of Nicolas Delizo and Dorotea Ocampo; one-half thereof is the share of Nicolas
Delizo, to be divided among his heirs in accordance with the preceding statement, or 2/65 thereof for each
heir; the other half constitutes the share of Dorotea Ocampo in the conjugal partnership, or 2/5 thereof.
“WHEREFORE, paragraph 1 of the judgment appealed from is hereby modified as
follows:
1. Declaring that (a) of the Caanawan property and the house and lot at 562 P. Campa
“
Street, Manila covered by TCT No. 9616—8/39 (1/6 + 1/26) thereof pro indiviso shall pertain
to each of the children of Nicolas Delizo “of the first marriage, namely: Urbana, Severino
and the late Francisco Delizo (the last represented by his children Rancivillano, Soltrifilo,
Josefina, Eufrocina, Aurea, Edita and Fe); and 1/26 thereof pro indiviso shall pertain to each
of the children of the second marriage and their mother Dorotea Ocampo; (a) of all other
properties acquired during the second marriage—19/195 thereof pro indiviso shall pertain to
each of the three children by the first marriage, 2/65 thereof pro indiviso shall pertain to
each of the nine children of the second marriage, while 28/65 thereof pro indiviso shall
226
226 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
pertain to the widow Dorotea Ocampo. The rest of the judgment particularly paragraphs 2
and 3 are affirmed; without pronouncement as to costs in both instances.”
From this adverse judgment, petitioners-appellants interposed the present
petition for review. The thrust of petitioners-appellants’ petition is that the
Appellate Court acted under a misapprehension of the facts or decided the legal
issues in a way which is not in consonance with law and with the applicable
decisions of this Court, (a) since the 67-hectare Caanawan properties could not
have been properties of the first marriage because they were then public lands
being homesteads, and while the first conjugal partnership may have had
possessory rights over said properties, it was only during the second marriage
that the requirements of the public land law were complied with, resulting in the
confirmation, registration and issuance of the Torrens Title over said properties
to Nicolas Delizo and his second wife, Dorotea de Ocampo; (b) apart from the fact
that the legal presumption that all properties of the marriage belong to the
conjugal partnership of Nicolas Delizo and Dorotea de Ocampo were not
sufficiently rebutted, these properties were actually in the adverse possession
under claim of title of petitioners-appellants continuously for a period of 47 years
(1911 to 1957), and consequently, the claim of respondents-appellees for partition
should have been considered barred by acquisitive and extinctive prescription,
laches and estoppel; and (c) in any event, there being serious doubts as to whether
said properties belong to the first marriage, it would have been more equitable if
the said partnership properties were divided between the different partnerships
in proportion to the duration of each and the capital of the spouses, pursuant to
Article 189 of the Civil Code.
From the findings of the Appellate Court that sixty-six (66) hectares of the
Caanawan properties were acquired by Nicolas Delizo as homesteads during the
period of the first marriage, thus: sixteen (16) hectares as a homestead from the
Government in 1905; and the 16-hectare homestead of Nicolas Dacquel, the 16-
hectare homestead of Mariano Antolin, and the 16-hectare homestead of
Francisco Pascua by purchase in 1906, 1907 and 1908, respectively, it does not
necessarily follow that they should be considered as properties of the first
marriage, considering that being homesteads they were part of the public domain,
and it was not shown that all the requirements of the
227
VOL. 69, JANUARY 30, 1976 227
Vda. de Delizo vs. Delizo
Homestead Law to warrant the grant of a patent to the homesteader have been
complied with prior to the death in 1909 of Delia’s first wife, Rosa Villasfer.
Under Act 926, which was then the applicable law, the right of the
1
homesteader to the patent does not become absolute until
_______________
1 The pertinent provisions of Act No. 926, provide, as follows:
“SECTION 1. Any citizen of the Philippine Islands * * * over the age of twenty-one years, or the
head of a family, may, as hereinafter provided, enter a homestead of not exceeding sixteen hectares of
unoccupied, unreserved, unappropriated agricultural public land in the Philippine Islands * * * but no
person who is the owner of more than sixteen hectares of land in said Islands or who has had the benefits
of any gratuitous allotment of sixteen hectares of land since the acquisition of the Islands by the United
States, shall be entitled to the benefits of this chapter.
“SEC 2. Any person applying to enter land under the provisions of this chapter shall file with such
officer as may be designated by law as local land officer, or in case there be no such officer then with the
Chief of the Bureau of Public Lands, an application under oath showing that he has the qualifications
required under section one of this chapter, and that he possesses none of the disqualifications there
mentioned; that such application is made for his exclusive use and benefit; that the same is mode for the
purpose of actual settlement and cultivation, and not either directly or indirectly, for the use or benefit of
any other person, persons, corporation, or association of persons; that the land applied for * * * is more
valuable for agricultural than forestry purposes, and is not occupied by other person; and showing the
location of the land by stating the province, municipality, and barrio in which the same is situated, and
as accurate a description as may be given, showing the boundaries of the land, having reference to
natural objects and permanent monuments, if any. Upon the filing of said application the Chief of the
Bureau of Public Lands shall summarily determine, by inquiry of the Chief of the Bureau of Forestry and
from the available land records, whether the land described is prima facie subject under the law to
homestead settlement, and if he shall find nothing to the contrary, the applicant, upon the payment of
ten pesos, Philippine currency, shall be permitted to enter the quantity of land specified.
“SEC. 3. No certificate shall be given or patent issued for until the expiration of five years from the
date of the filing of the application; and if, at the expiration of such time or at any time within three years
thereafter, the person filing such application shall prove by two credible witnesses that he has resided
upon and cultivated the land for the term of five years immediately succeeding the time of filing the
application aforesaid, and shall make affidavit
228
228 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
after he has complied with all the requirements of the law. One of the most
important requirements is that the “person filing the application shall prove by
two credible witnesses that he has resided upon and cultivated the land for the
term of five years immediately succeeding the time of filing the application
aforesaid, and shall make affidavit that no part of said land has been alienated or
encumbered * * * ” (Section 3 of Act 926.
________________
that no part of said land has been alienated or encumbered, and that he has borne true allegiance to
the Government of the United States and that of the Philippine Islands, then, upon payment of a fee of
ten pesos, Philippine Currency, to such officer as may be designated by law as local land officer, or in case
there be no such officer then to the Chief of the Bureau of Public Lands, he shall be entitled to a
patent; Provided, however, That in the event of the death of an applicant prior to the issuance of a patent,
his widow shall be entitled to have a patent for the land applied for issue to her upon showing that she
has consummated the requirements of law for homesteading the lands as above set out; and in case the
applicant dies before the issuance of the patent and does not leave a widow, then the interest of the
applicant in the land shall descend and patent shall issue to the persons who under the laws of the
Philippine Islands would have taken had the title been perfected by patent before the death of the
applicant, upon proof by the persons thus entitled of compliance with said requirements and conditions.
“SEC. 4. No lands acquired under the provisions of this chapter shall in any event become liable to
the satisfaction of any debt contracted prior to the issuance of patent therefor.
“SEC. 5. If, at any time after the filing of the application as hereinabove provided and before the
expiration of the period allowed by law for the making of final proof, it is proved to the satisfaction of the
Chief of the Bureau of Public Lands, after due notice to the homesteader, that the land entered is not
under the law subject to homestead entry, or that the homesteader has actually changed his. residence,
voluntarily abandoned the land for more than six months at any one time during the five years of
residence herein required, or has otherwise failed to comply with the requirements of law, then in that
event the Chief of the Bureau of Public Lands may cancel the entry, subject to appeal under proper
regulations to the Secretary of the Interior, and the land thereupon shall become subject to disposition as
other public lands of like character.
“SEC. 6. Not more than one homestead entry shall be allowed to any one person.
“SEC. 7. Before final proof shall be submitted by any person claiming to have complied with the
provisions of this chapter, due notice, as prescribed by the Chief of the Bureau of Public Lands with
229
VOL. 69, JANUARY 30, 1976 229
Vda. de Delizo vs. Delizo
italics supplied). Prior to the fulfillment of such requirement, the applicant has no
complete equitable estate over the homestead which he can sell and convey,
mortgage or lease . Until a homestead right is established and registered under
2 Considering that Nicolas Dacquel must have been in possession of his
Section 3 of Act 926, there is only an inchoate right to the property and it has not
ceased to be a part of the public domain and, therefore, not susceptible to
alienation as such. Conversely, when a “homesteader has complied with all the
3 Pascua for about three years in 1908 as regards to his homestead, at the time of
terms and conditions which entitled him to a patent for a particular tract of public
land, he acquires a vested interest therein and has to be regarded an equitable
owner thereof.” The decisive factor, therefore, in the determination of whether a
4 any one of them to the issuance of a homestead patent before they sold or
parcel of land acquired by way of homestead is conjugal property of the first or the
second marriage, is not necessarily the time of the issuance of the homestead
patent but the time of the fulfillment of the requirements of the public land law
for the acquisition of such right to the patent. 5 expiration of such time or at any time within three years thereafter, the person
_______________
the approval of the Secretary of the Interior, shall be given to the public of his intention to make
such proof, stating therein the time and place, and giving a description of the land and the names of the
witnesses by whom it is expected that the necessary facts will be established.
*** *** ***
“SEC. 9. No patent shall issue under the provisions of this chapter until the land has been surveyed
under the direction of the Chief of the Bureau of Public Lands and an accurate plat made thereof, the cost
of which survey shall be borne by the Insular Government.” (Italics supplied. This law was later amended
by Acts Nos. 1573, 1699, 1864, 1908, 2051, 2222, 2325, and repealed by Act No. 2874. This law was
replaced completely by Commonwealth Act No. 141 on November 7, 1936.)
Juanico v. American Land Commercial Company, Inc., 97 Phil. 221, citing Simmons v Wagner, 10
2
U.S. 260, 68 C.J.S., 875.
See Uy Un v. Perez and Villaplana, 71 Phil. 508, where the principle was applied to occupants of
3 Vda. de Delizo vs. Delizo
public lands who have not perfected their rights under Section 45 of Act No. 2874.
Balboa v. Farrales, 51 Phil. 498.
4
In Fiel et al., v. Wagner, et al. 48 O.G., 195 (January 9, 1950), Justice Concepcion, citing various
5
authorities, reiterated the doctrine that the decisive factor in order to determine whether a land is
conjugal property or belongs to one only of the spouses, is not the date of the issuance of the homestead
patent but the time of fulfillment of the requirements of the public land law. Although this was a Court of
Appeals decision, the same was sustained by the Supreme Court in its resolution of March 22, 1950.
230
230 SUPREME COURT REPORTS ANNOTATED
Vda. de Delizo vs. Delizo
As testified to by Lorenzo Delizo, his brother, Nicolas Delizo, and the latter’s wife,
Rosa Villasfer, arrived in Barrio Caanawan, San Jose, Nueva Ecija, from Barrio
Ungag, Cuyapo, Nueva Ecija, during the year 1905. It was during that same year
that Pedro Salvador and Mauricio Salvador, who were then the cabecillias, were
distributing lands to homesteaders in Barrio Caanawan. Nicolas Dacquel,
Mariano Antolin and Francisco Pascua must have received their respective
homesteads from the same officers of the government that same year, considering
that their respective homesteads are all adjacent to the homestead of Nicolas
Delizo, and according to the evidence, this was the time when the homesteads in
that barrio were parceled out to the new settlers. Indeed, the Homestead Act was
then of recent vintage, having been enacted by the Philippine Commission by
authority of the United States Government, only on October 7, 1903.
homestead for barely a year when he transferred his rights in 1906, Mariano
Antolin for about two years with respect to his homestead in 1907, and Francisco
their respective conveyances to Nicolas Delizo, it is, therefore, obvious that not
one of them could have complied with the requirements of Act No. 926 to entitle
assigned their rights to Nicolas Delizo. The law was quite specific, that “No
certificate shall be given or patent issued for the land applied for until the
expiration of five years from the date of the filing of the application; and if, at the
filing such application shall prove by two credible witnesses that he has resided
upon and cultivate the land for the term of five years immediately succeeding the
time of filing the application aforesaid, and shall make affidavit that no part of
said land has been alienated or encumbered, and that he has borne true
allegiance to the Government of the United States and that of the Philippine
Islands, then, upon payment of a fee of ten pesos, Philippine currency, to such
officer as may be designated by law as local land officer, or in case there be no
such officer then to the Chief of the Bureau of Lands, he shall be entitled to a
patent.” (Section 3, Act No. 926, italics supplied). Having neither legal nor
equitable title thereon, what was transferred by them to Nicolas Delizo were,
therefore, not
231
VOL. 69, JANUARY 30, 1976 231
rights of ownership, but inchoate rights as applicants for homesteads over
portions of the public domain. Similarly, having received the homestead only in
1905, Nicolas Delizo could not have perfected his rights thereon by the completion
of the five-year occupancy and cultivation requirement of the law, in 1909.
Buttressing the conclusion that Nicolas Delizo could not have perfected his rights
to the four homesteads before 1909 is the specific limitation imposed by section 3
of Act No. 926 which provides that “No person who is the owner of more than
sixteen hectares of land in said Islands or who has had the benefits of any
gratuitous allotment of sixteen hectares of land since the acquisition of the
Islands by the United States, shall be entitled to the benefits of this chapter.”
The foregoing sufficiently show that the Appellate Court erred in holding that
the entire Caanawan properties belong to the conjugal partnership of Nicolas
Delizo and Rosa Villasfer. Considering, however, that about twenty (20) hectares
were cultivated and rendered productive during the period from 1905 to 1909,
justice and equity demand that the rights to said properties be apportioned to the
parties in proportion to the extent to which the requirements of the public land
laws had been complied with during the existence of each conjugal partnership.
 II
In connection with the other properties, such as Lot No. 498 of the San Jose
Cadastre, under Original Certificate of Title No. 5622; a parcel of land in San
Jose, Nueva Ecija, under Transfer Certificate of Title No. 2985 (Exh. I or 13), and
agricultural land of about 17.4753 hectares in Sitio Rangayan, Muñoz, Nueva
Ecija, under Transfer Certificate of Title No. 5162 (Exh. J or 14); a parcel of land
in Caanawan, San Jose, with an area of about 14.0354 hectares, under Transfer
Certificate of Title No. 11910 (Exh. K or 10); a cornland in Barrio Rangayan,
Muñoz, Nueva Ecija, of about 1,500 square meters under Tax Declaration No.
5476; a riceland in Rangayan, Muñoz, of about 17.4755 hectares, under Tax
Declaration No. 812; a riceland, Lot No. 847, of about 13.0902 hectares covered by
Transfer Certificate of Title No. 3585, issued on April 29, 1929 in the name of
“Nicolas Delizo, married to Dorotea de Ocampo” (Exh. L or 15); a camarin of
strong materials with galvanized iron roofing in San Jose, Nueva Ecija; a
residential lot at Sanchez Street, San Jose,
232
232 SUPREME COURT REPORTS ANNOTATED
Caanawan lands contributed considerably to the acquisition of these properties,
and We have held that the children of the first marriage, as a matter of equity,
should share in the Caanawan properties. To deny the respondents-appellees a
share in such properties would have
_______________
6 Article 1407 provides:
“ART. 1407. All the property of the spouses shall be deemed partnership property in the absence of
proof that it belongs exclusively to the husband or to the wife.”
233
VOL. 69, JANUARY 30, 1978 233
Vda. de Delizo vs. Delizo
exacerbated discord instead of enhancing family solidarity and understanding.
Considering these circumstances and since the capital of either marriage or
the contribution of each spouse cannot be determined with mathematical
precision, the total mass of these properties should be divided between the two
conjugal partnerships in proportion to the duration of each partnership. Under 7

Vda. de Delizo vs. Delizo
Nueva Ecija; Lot No. 1790 of the San Jose Cadastre, consisting of about 2,840
square meters, more or less, under Original Certificate of Title No. 8131 “in
this criterion, the second conjugal partnership should be entitled to 46/64 or 23/32
of the total mass of properties, and the first conjugal partnership to 18/64 or 9/32
thereof pro indiviso. The share of the estate of Nicolas Delizo is one-half (1/2) pro
indiviso of the net remainder of the conjugal partnership of gains of the first and
8

another name but claimed by the heirs under deed of sale, Exhibit N-l”; a sugar second marriages, which would amount to 32/64 or 1/2 of the whole estate. This
mill in San Jose, Nueva Ecija and several heads of carabaos (Exh. 0); Lots Nos. should be distributed in equal shares to his children of both marriages, with the 9

495 and 496 of the San Jose Cadastre, possessed by defendants although widow having the same share as that of legitimate child. The widow. Dorotea de
10

adjudicated in the name of Marcelo Tomas and Guillermo Cabiso, respectively; Ocampo, is entitled to one-half (1/2) of the net remainder of the second conjugal
and another lot, Lot No. 494-A of the San Jose Cadastre adjudicated in the name partnership and to her share as heir of her deceased husband which amounts to
of Nicolas Delizo, married to Dorotea de Ocampo, the Appellate Court decision 23/64 of said properties, plus 1/13 of 32/64 pro indiviso. The share of the heirs of
penned by Justice Arsenio Solidum held that “there is no controversy that these Rosa. Villasfer would be 9/64 thereof.
were all acquired during the existence of the second marriage of Nicolas Delizo”. The foregoing is recapitulated as follows:
The same opinion, however, held that since these properties were acquired
Share of Rosa Villasfer, 1st wife 9/64 of whole estate to be
from the produce of the Caanawan properties although such produce is the result
of the labor and industry of the spouses Nicolas Delizo and Dorotea de Ocampo, divided among three (3) children
only eighty per cent (80%) of said properties acquired during the second marriage Share of Dorotea de Ocampo, 2nd wife 23/64 of whole estate plus her
should appertain to the second conjugal partnership, while twenty per cent (20%)
share in Nicolas Delizo s estate.
thereof adjudicated to the children of the first marriage. The two concurring
Appellate Justices, although of the view that the legal presumption that those Share of Nicolas Delizo, husband 32/64 of whole estate to be
properties acquired during the regime of the second conjugal partnership belong divided into thirteen (13) equal parts.
to said partnership has not been rebutted by respondents-appellees and,
Whole Estate 64/64
therefore, would hold that such after-acquired properties should belong to the
second conjugal partnership, concurred nevertheless in the result aforesaid, in
_______________
order to reach a judgment in the case. It would have been facile to hold that those
after-acquired properties belong to the second conjugal partnership in view of the 7Article 1431, now Article 189, Civil Code.
statutory presumption enunciated in Article 1407 of the old Civil Code (now 8Articles 1392 and 1426, now Articles 142 and 185, Civil Code.
Article 160, New Civil Code). There are, however, important considerations which
6
9Article 932, now Article 980, Civil Code.
Article 999, Civil Code.
preclude Us from doing so. There is the established fact that the produce of the 10

234
 235
234 SUPREME COURT REPORTS ANNOTATED
VOL. 69, JANUARY 30. 1976 235
Vda. de Delizo vs. Delizo
Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II
Computation of Sharing
within one year from the issuance of the decree of registration. Applied to
3/64 + 1/26 = 142/1664] homesteads the decree of registration corresponds to the promulgation of the
3/64 + 1/26 = 142/1664] —Share of each child of 1st marriage order of the Director of Lands for the issuance of the patent and not the actual
issue of the patent. (Lopez VS. Padilla, L-27559, May 18, 1972).
3/64 + 1/26 = 142/1664] b) Underlying principle for enactment of Public Land Law.—The plain intent
1/26 = 64/1664] of the law is to give the homesteader or patentee every chance to preserve for
himself and his family the land that the State had gratuitously given to him as a
1/26 = 64/1664]
reward for his labor in cleaning and cultivating it. It is in this sense that the
1/26 = 64/1664] provision of law, Section 119 of Commonwealth Act 141, becomes unqualified and
unconditional. And in keeping with such reasons behind the passage of the law,
1/26 = 64/1664]
—Share of each child of 2nd marriage its basic objective is to promote public policy, that is, to provide home and decent
1/26 = 64/1664] living for destitutes, aimed at promoting a class of independent small landholders
which is the bulwark of peace and order. (Simeon vs. Peña, L-29049, December
1/26 = 64/1664]
29, 1970).
1/26 = 64/1664] c) Conjugal partnership.—Article 160 of the Civil Code must be construed in
1/26 = 64/1664] relation to Articles 153 to 159 of the same Code, enumerating the properties
“acquired x x x during the marriage” that constitute the conjugal partnership.
23/64 + 1/26 = 662/1664 —Share of Dorotea Ocampo. Consequently therewith, the party who invokes this presumption must first prove
32/64 + 13/26 = 1664/1664 —Whole Estate that the property in controversy was acquired during the marriage. In other
words, proof of acquisition during coverture is a condition sine qua non for the
operation of the presumption in favor of conjugal partnership. (Ponce de Leon vs.
Rehabilitation Finance Corporation, L-24571, December 18, 1970).
In the partition of the properties, the probate court should take into account the
fact that the respondents-appellees are in possession of the Muñoz lands, while ——oOo——
the petitioners-appellants have been in possession of the Caanawan properties as
well as the house and lot at 562 P. Campa Street. Sampaloc, Manila, as directed
© Copyright 2018 Central Book Supply, Inc. All rights reserved.
in the trial court’s order of April 23, 1958 (Record on Appeal, pp. 76-77). Should it
be convenient for the parties, their respective shares should be taken from the
properties presently under their custody.
Having reached the foregoing conclusions, it is unnecessary to resolve the
other legal questions raised in the appeal.
WHEREFORE, the appealed decision of the Court of Appeals is hereby
modified as herein indicated. The records of these cases should be, as they are
hereby, remanded to the trial court for further proceedings in accordance with
this judgment, No costs.
Fernando, Barredo and Concepcion, Jr., JJ., concur.
Castro, C.J., in the result.
Aquino, J., did not take part.
Decision modified.
Notes.—a) Homesteaa patent deemed issued upon promulgation of order for its
issuance,—In ordinary registration proceedings involving private lands, courts
may reopen proceedings already closed by final decision or decree, only when
application for review is filed by the party aggrieved,

VOL. 232, MAY 27, 1994
Uy vs. Court of Appeals
G.R. No. 102726. May 27, 1994.
Same; Indispensable Parties; Section 7, Rule 3 of the Revised Rules of Court; Without
579
the presence of indispensable parties to a suit or proceeding, a judgment of the court cannot
attain real finality.—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
*

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.
Remedial Law; Special Proceedings; Family Code; The action for partition of property
on alleged co-ownership is governed by Articles 147 and 148 of the Family Code considering
that the co-owner died on September 27, 1990, after the effectivity of E.O. 209 (Family Code)
on August 3, 1988.—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.
Civil Procedure; Motion for Intervention; Motion for intervention filed at the stage
where trial has been concluded and judgment has been promulgated is manifestly late,
beyond the period prescribed under Section 2, Rule 12 of the Rules of Court.—The case
Director of Lands vs. Court of Appeals, 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, this Court held: ‘It is quite clear and patent that the motions 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.
_______________
THIRD DIVISION.
*
action x x x.” 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.” 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.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
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,
581
VOL. 232, MAY 27, 1994 581
Uy vs. Court of Appeals
dated 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 commonlaw wife of the

580
5 SUPREME COURT REPORTS ANNOTATED
80
Uy vs. Court of Appeals
Same; Same; Section 2, Rule 12 of the Rules of Court’s proper aim is to facilitate the
application of justice to the rival claims of contending parties. It was not created to hinder
and delay but to facilitate and promote the administration of justice.—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.
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:
582
582 SUPREME COURT REPORTS ANNOTATED
Uy vs. Court of Appeals
“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 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 faith.”
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—
“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
_______________
1 Rollo, p. 35.
2 Rollo, pp. 13-14.
583
VOL. 232, MAY 27, 1994 583
Uy vs. Court of Appeals
governed by the rules on co-ownership.
“In the absence of proof to the contrary, properties acquired while they lived together
shall be presumed to have been obtained by their joint efforts, work or industry, and shall
be owned by them in equal shares. For purposes of this Article, a party who did not
participate in the acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former’s efforts consisted in the care and
maintenance of the family and of the household.
“Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of the
other, until after the termination of their cohabitation.
“When only one of the parties to a void marriage is in good faith, the share of the party
in bad faith in the co-ownership shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common children or their descendants, each
vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.”
“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 validity 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
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—
584
584 SUPREME COURT REPORTS ANNOTATED
Uy vs. Court of Appeals
1. (1)The intervention came too late, citing Section 2, Rule 12, of the
Revised Rules of Court; and
2. (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 have acknowledged that petitioners “claim some interest in the Estate of Menilo
the court or of an officer thereof.” B. Uy, Sr.” The trial court itself, in setting aside its previous judgment upon
5

The case Director of Lands vs. Court of Appeals , may not be on all fours to the
3
compromise, has expressed “that the intervenors have legal interest in the matter
case at bench but the rationale behind the decision can well be applicable. Citing in litigation,” a statement which we find hard to brush aside. In the interest of
Manila Railroad Co. vs. Attorney-General, this Court held:
4
adjudicating the whole controversy, petitioners’ inclusion in the action for
“It is quite clear and patent that the motions for intervention filed by the movants at this partition, given the circumstances, not only is preferable but rightly essential in
stage of the proceedings where trial has already been concluded, a judgment thereon had
the proper disposition of the case. It is a settled rule that without the presence of
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 indispensable parties to a suit or proceeding, a judgment of the court cannot
for certiorari to review said judgment is already submitted for decision by the Supreme attain real finality. 6

Court, are obviously and manifestly late, beyond the period prescribed under the aforecoded Private respondents argue that their failure to implead peti-
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. 5Rollo, p. 38.
Its proper aim is to facilitate the application of justice to the rival claims of contending 6Lozano vs. Ballesteros, 195 SCRA 681.
parties. It was created not to hinder and delay but to facilitate and promote the 586
administration of justice. It does not constitute the thing itself which courts are always 586 SUPREME COURT REPORTS ANNOTATED
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. Uy vs. Court of Appeals
“The denial of the motions for intervention arising from the strict application of the tioners in the complaint for partition has been cured by the filing of
Rule due to alleged lack of notice to, or the alleged 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
3 93 SCRA 238.
(among private respondents themselves) that did not include, and thereby cannot
4 20 Phil. 523. be held to bind, petitioners. 7

585 WHEREFORE, the decision of respondent Court of Appeals is SET ASIDE

VOL. 232, MAY 27, 1994 585 and a new one is entered REINSTATING the order, dated 10 June 1991, of the
trial court.
Uy vs. Court of Appeals
SO ORDERED.
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 Feliciano, Bidin, Romero and Melo, JJ., concur.
thereby open the door to fraud, falsehood and misrepresentation, should intervenors’ claims Reviewed decision set aside.
be proven to be true. For it cannot be gainsaid that if the petition for reconstitution is finally Note.—Intervention is not an independent proceeding, but merely an
granted, the chaos and confusion arising from a situation where the certificates of title of ancillary and supplemental one, which in the nature of things, must be in
the movants covering large areas of land overlap or encroach on properties the title to which subordination to main proceeding, unless otherwise provided for by statute or by
is being sought to be reconstituted by private respondent, who herself indicates in her the Rules of Court (Saw vs. Court of Appeals, 195 SCRA 740).
Opposition that, 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- ——o0o——
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 7Filamer Christian Institute vs. Court of Appeals, 190 SCRA 485.
thereon will not simply fold their hands but certainly will seek judicial protection of their 587
property rights or may even take the law into their own hands, resulting to multiplicity of © Copyright 2018 Central Book Supply, Inc. All rights reserved.
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
x x x.” Even private respondents, in their complaint in Civil Case No. 91-573,
 G.R. No. 176556. July 4, 2012.*
BRIGIDO B. QUIAO, petitioner, vs. RITA C. QUIAO, KITCHIE C. QUIAO,
LOTIS C. QUIAO, PETCHIE C. QUIAO, represented by their mother RITA
QUIAO, respondents.
Civil Procedure; Appeals; Fresh Period Rule; To standardize the appeal periods
provided in the Rules and to afford litigants fair
_______________
** Per Special Order No. 1226 dated May 30, 2012.
*** Per Special Order No. 1247 dated June 29, 2012.
**** Per Special Order No. 1227 dated May 30, 2012.
* SECOND DIVISION.
643
VOL. 675, JULY 4, 2012 643
Quiao vs. Quiao
opportunity to appeal their cases, we held that “it would be practical to allow a fresh
period of 15 days within which to file the notice of appeal in the Regional Trial Court (RTC),
counted from receipt of the order dismissing a motion for a new trial or motion for
reconsideration.”—In Neypes v. Court of Appeals, 469 SCRA 633 (2005), we clarified that to
standardize the appeal periods provided in the Rules and to afford litigants fair opportunity
to appeal their cases, we held that “it would be practical to allow a fresh period of 15 days
within which to file the notice of appeal in the RTC, counted from receipt of the order
dismissing a motion for a new trial or motion for reconsideration.” In Neypes, we explained
that the “fresh period rule” shall also apply to Rule 40 governing appeals from the
Municipal Trial Courts to the RTCs; Rule 42 on petitions for review from the RTCs to the
Court of Appeals (CA); Rule 43 on appeals from quasi-judicial agencies to the CA and Rule
45 governing appeals by certiorari to the Supreme Court. We also said, “The new rule aims
to regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for reconsideration (whether full or partial) or any
final order or resolution.” In other words, a party litigant may file his notice of appeal
within a fresh 15-day period from his receipt of the trial court’s decision or final order
denying his motion for new trial or motion for reconsideration. Failure to avail of the fresh
15-day period from the denial of the motion for reconsideration makes the decision or final
order in question final and executory.
Same; Finality of Judgments; A judgment becomes final and executory when the
reglementary period to appeal lapses and no appeal is perfected within such period.—A
judgment becomes final and executory when the reglementary period to appeal lapses and
no appeal is perfected within such period. Consequently, no court, not even this Court, can
arrogate unto itself appellate jurisdiction to review a case or modify a judgment that became
final.
Same; Void Judgments; A judgment is null and void when the court which rendered it
had no power to grant the relief or no jurisdiction over the subject matter or over the parties
or both.—“A judgment is null and void when the court which rendered it had no power to
grant the relief or no jurisdiction over the subject matter or over the parties or both.” In
other words, a court, which does not have the power to decide a case or that has no
jurisdiction over the subject
644
6 SUPREME COURT REPORTS ANNOTATED
44
Quiao vs. Quiao
matter or the parties, will issue a void judgment or a coram non judice.
Civil Law; Family Courts; Regional Trial Courts; Republic Act No. 8369; Republic Act
No. 8369 confers upon an Regional Trial Court (RTC), designated as the Family Court of a
city, the exclusive original jurisdiction to hear and decide, among others, complaints or
petitions relating to marital status and property relations of the husband and wife or those
living together.—Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the
Family Court of a city, the exclusive original jurisdiction to hear and decide, among others,
complaints or petitions relating to marital status and property relations of the husband and
wife or those living together. The Rule on Legal Separation provides that “the petition [for
legal separation] shall be filed in the Family Court of the province or city where the
petitioner or the respondent has been residing for at least six months prior to the date of
filing or in the case of a non-resident respondent, where he may be found in the Philippines,
at the election of the petitioner.”
Same; Property Relations; Conjugal Partnership; Since at the time of the exchange of
marital vows, the operative law was the Civil Code of the Philippines (R.A. No. 386) and
since they did not agree on a marriage settlement, the property relations between the
petitioner and the respondent is the system of relative community or conjugal partnership of
gains.—Since at the time of the exchange of marital vows, the operative law was the Civil
Code of the Philippines (R.A. No. 386) and since they did not agree on a marriage
settlement, the property relations between the petitioner and the respondent is the system
of relative community or conjugal partnership of gains. Article 119 of the Civil Code
provides: Art. 119. The future spouses may in the marriage settlements agree upon absolute
or relative community of property, or upon complete separation of property, or upon any
other regime. In the absence of marriage settlements, or when the same are void, the system
of relative community or conjugal partnership of gains as established in this Code, shall
govern the property relations between husband and wife.
Family Code; Property Relations; Since at the time of the dissolution of the petitioner
and the respondent’s marriage the operative law is already the Family Code, the same
applies in the instant case
645
VOL. 675, JULY 4, 2012 645
Quiao vs. Quiao
and the applicable law in so far as the liquidation of the conjugal partnership assets
and liabilities is concerned is Article 129 of the Family Code in relation to Article 63(2) of the
Family Code.—Since at the time of the dissolution of the petitioner and the respondent’s
marriage the operative law is already the Family Code, the same applies in the instant case
and the applicable law in so far as the liquidation of the conjugal partnership assets and
liabilities is concerned is Article 129 of the Family Code in relation to Article 63(2) of the
Family Code. The latter provision is applicable because according to Article 256 of the
Family Code “[t]his Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other law.”
Vested Rights; While one may not be deprived of his “vested right,” he may lose the
same if there is due process and such deprivation is founded in law and jurisprudence.—In
our en bancResolution dated October 18, 2005 for ABAKADA Guro Party List Officer
Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R. Ermita, we also
explained: The concept of “vested right” is a consequence of the constitutional guaranty
of due process that expresses a present fixed interest which in right reason and natural
justice is protected against arbitrary state action; it includes not only legal or equitable title
to the enforcement of a demand but also exemptions from new obligations created after the
right has become vested. Rights are considered vested when the right to enjoyment is a
present interest, absolute, unconditional, and perfect or fixed and irrefutable. (Emphasis
and underscoring supplied) From the foregoing, it is clear that while one may not be
deprived of his “vested right,” he may lose the same if there is due process and such
deprivation is founded in law and jurisprudence.
Family Code; Property Relations; Absolute Community; When a couple enters into a
regime of absolute community, the husband and the wife becomes joint owners of all the
properties of the marriage. Whatever property each spouse brings into the marriage, and
those acquired during the marriage (except those excluded under Article 92 of the Family
Code) form the common mass of the couple’s properties.—When a couple enters into
a regime of absolute community, the husband and the wife becomes joint owners of all
the properties of the marriage. Whatever property each spouse brings into the marriage,
and those acquired during the marriage (except those
646
6 SUPREME COURT REPORTS ANNOTATED
46
Quiao vs. Quiao
excluded under Article 92 of the Family Code) form the common mass of the couple’s
properties. And when the couple’s marriage or community is dissolved, that common mass is
divided between the spouses, or their respective heirs, equally or in the proportion the
parties have established, irrespective of the value each one may have originally owned.
Same; Same; Same; Under Article 102 of the Family Code, upon dissolution of
marriage, an inventory is prepared, listing separately all the properties of the absolute
community and the exclusive properties of each; then the debts and obligations of the absolute
community are paid out of the absolute community’s assets and if the community’s properties
are insufficient, the separate properties of each of the couple will be solidarily liable for the
unpaid balance.—Under Article 102 of the Family Code, upon dissolution of marriage, an
inventory is prepared, listing separately all the properties of the absolute community and
the exclusive properties of each; then the debts and obligations of the absolute community
are paid out of the absolute community’s assets and if the community’s properties are
insufficient, the separate properties of each of the couple will be solidarily liable for the
unpaid balance. Whatever is left of the separate properties will be delivered to each of them.
The net remainder of the absolute community is its net assets, which shall be divided
between the husband and the wife; and for purposes of computing the net profits subject to
forfeiture, said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at
the time of its dissolution.
Civil Law; Property Relations; Conjugal Partnership; When a couple enters into a
regime of conjugal partnership of gains under Article 142 of the Civil Code, “the husband
and the wife place in common fund the fruits of their separate property and income from
their work or industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse during the
marriage.”—When a couple enters into a regime of conjugal partnership of gains under
Article 142 of the Civil Code, “the husband and the wife place in common fund the fruits of
their separate property and income from their work or industry, and divide equally, upon
the dissolution of the marriage or of the partnership, the net gains or benefits ob-
647
VOL. 675, JULY 4, 2012 647
Quiao vs. Quiao
tained indiscriminately by either spouse during the marriage.” From the foregoing
provision, each of the couple has his and her own property and debts. The law does not
intend to effect a mixture or merger of those debts or properties between the spouses.
Rather, it establishes a complete separation of capitals.
Family Code; Conjugal Partnership; Property Relations; Since the trial court found the
petitioner the guilty party, his share from the net profits of the conjugal partnership is
forfeited in favor of the common children, pursuant to Article 63(2) of the Family Code.—
Ordinarily, what remains in the above-listed properties should be divided equally between
the spouses and/or their respective heirs. However, since the trial court found the petitioner
the guilty party, his share from the net profits of the conjugal partnership is forfeited in
favor of the common children, pursuant to Article 63(2) of the Family Code. Again, lest we
be confused, like in the absolute community regime, nothing will be returned to the guilty
party in the conjugal partnership regime, because there is no separate property which
may be accounted for in the guilty party’s favor.
PETITION for review on certiorari of an order of the Regional Trial Court of
Butuan City, Br. 1.
The facts are stated in the opinion of the Court.
Reserva, Filoteo Law Office for petitioner.
Noreen Salise-Gonzaga for respondents.
REYES, J.:
The family is the basic and the most important institution of society. It is in
the family where children are born and molded either to become useful citizens of
the country or troublemakers in the community. Thus, we are saddened when
parents have to separate and fight over properties, without regard to the message
they send to their children. Notwithstanding this, we must not shirk from our
obligation to rule on this case involving legal separation escalating to questions
on dissolution and partition of properties.648
648 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
The Case
This case comes before us via Petition for Review onCertiorari1 under Rule 45
of the Rules of Court. The petitioner seeks that we vacate and set aside the
Order2dated January 8, 2007 of the Regional Trial Court (RTC), Branch 1, Butuan
City. In lieu of the said order, we are asked to issue a Resolution defining the net
profits subject of the forfeiture as a result of the decree of legal separation in
accordance with the provision of Article 102(4) of the Family Code, or
alternatively, in accordance with the provisions of Article 176 of the Civil Code.
Antecedent Facts
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint
for legal separation against herein petitioner Brigido B. Quiao
(Brigido).3 Subsequently, the RTC rendered a Decision4 dated October 10, 2005,
the dispositive portion of which provides:
“WHEREFORE, viewed from the foregoing considerations, judgment is hereby rendered
declaring the legal separation of plaintiff Rita C. Quiao and defendant-respondent Brigido
B. Quiao pursuant to Article 55.
As such, the herein parties shall be entitled to live separately from each other, but the
marriage bond shall not be severed.
 Except for Letecia C. Quiao who is of legal age, the three minor children, namely, But if sufficient personal property cannot be found whereof to satisfy this execution and
Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the custody of the your lawful fees, then we command you that of the lands and buildings of the said
plaintiff who is the innocent spouse. [petitioner], you make the said sums in the manner required by law. You are enjoined to
_______________ strictly observed Section 9, Rule 39, Rule [sic] of the 1997 Rules of Civil Procedure.
1 Rollo, pp. 7-35.
2 Penned by Judge Eduardo S. Casals; id., at pp. 115-122. You are hereby ordered to make a return of the said proceedings immediately after the
3 Id., at p. 36. judgment has been satisfied in part or in full in consonance with Section 14, Rule 39 of the
4 Id., at pp. 36-57. 1997 Rules of Civil Procedure, as amended.” 10

649
On July 6, 2006, the writ was partially executed with the petitioner paying
VOL. 675, JULY 4, 2012 649 the respondents the amount of P46,870.00, representing the following payments:
Quiao vs. Quiao (a) P22,870.00—as petitioner’s share of the payment of the conjugal share;
Further, except for the personal and real properties already foreclosed by the RCBC, all (b) P19,000.00—as attorney’s fees; and
the remaining properties, namely: (c) P5,000.00—as litigation expenses.11
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte; _______________
2. coffee mill in Durian, Las Nieves, Agusan del Norte; 8 Id., at p. 59.
9 Id., at pp. 58-59.
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
10 Id., at p. 59.
4. coffee mill in Esperanza, Agusan del Sur; 11 Id., at p. 60.
5. a parcel of land with an area of 1,200 square meters located in Tungao, Butuan 651
City;
6. a parcel of agricultural land with an area of 5 hectares located in Manila de VOL. 675, JULY 4, 2012 651
Bugabos, Butuan City; Quiao vs. Quiao
7. a parcel of land with an area of 84 square meters located in Tungao, Butuan City;
On July 7, 2006, or after more than nine months from the promulgation of the
8. Bashier Bon Factory located in Tungao, Butuan City;
shall be divided equally between herein [respondents] and [petitioner] subject to the Decision, the petitioner filed before the RTC a Motion for Clarification, 12 asking
respective legitimes of the children and the payment of the unpaid conjugal liabilities of the RTC to define the term “Net Profits Earned.”
[P]45,740.00. To resolve the petitioner’s Motion for Clarification, the RTC issued an
[Petitioner’s] share, however, of the net profits earned by the conjugal partnership is Order13 dated August 31, 2006, which held that the phrase “NET PROFIT
forfeited in favor of the common children. EARNED” denotes “the remainder of the properties of the parties after deducting
He is further ordered to reimburse [respondents] the sum of [P]19,000.00 as attorney’s the separate properties of each [of the] spouse and the debts.”14 The Order further
fees and litigation expenses of [P]5,000.00[.] held that after determining the remainder of the properties, it shall be forfeited in
SO ORDERED.”
favor of the common children because the offending spouse does not have any
5

Neither party filed a motion for reconsideration and appeal within the period
right to any share of the net profits earned, pursuant to Articles 63, No. (2) and
provided for under Section 17(a) and (b) of the Rule on Legal Separation. 6
43, No. (2) of the Family Code.15 The dispositive portion of the Order states:
On December 12, 2005, the respondents filed a motion for execution 7 which “WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all the
the trial court granted in its Order dated December 16, 2005, the dispositive remaining properties after deducting the payments of the debts for only separate properties
portion of which reads: of the defendant-respondent shall be delivered to him which he has none.
_______________ The Sheriff is herein directed to proceed with the execution of the Decision.
5 Id., at pp. 56-57.
IT IS SO ORDERED.” 16
6 A.M. No. 02-11-11-SC.
7 Rollo, p. 185. Not satisfied with the trial court’s Order, the petitioner filed a Motion for
650 Reconsideration17 on September 8, 2006. Consequently, the RTC issued another
650 SUPREME COURT REPORTS ANNOTATED Order18 dated November 8, 2006, holding that although the Decision dated
October 10, 2005 has become final and executory, it may still consider
Quiao vs. Quiao _______________
“Wherefore, finding the motion to be well taken, the same is hereby granted. Let a writ 12 Id., at pp. 61-69.
of execution be issued for the immediate enforcement of the Judgment. 13 Id., at pp. 70-76.
14 Id., at p. 75.
SO ORDERED.” 8
15 Id., at pp. 74-75.
Subsequently, on February 10, 2006, the RTC issued a Writ of 16 Id., at pp. 75-76.
Execution9 which reads as follows: 17 Id., at pp. 77-86.
“NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B. 18 Id., at pp. 87-91.
QUIAO you cause to be made the sums stated in the afore-quoted DECISION [sic], together 652
with your lawful fees in the service of this Writ, all in the Philippine Currency. 652 SUPREME COURT REPORTS ANNOTATED
 Quiao vs. Quiao While the petitioner has raised a number of issues on the applicability of
the Motion for Clarification because the petitioner simply wanted to clarify the certain laws, we are well-aware that the respondents have called our attention to
meaning of “net profit earned.”19 Furthermore, the same Order held: the fact that the Decision dated October 10, 2005 has attained finality when the
“ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside. NET Motion for Clarification was filed.24 Thus, we are constrained to resolve first the
PROFIT EARNED, which is subject of forfeiture in favor of [the] parties’ common children, issue of the finality of the Decision dated October 10, 2005 and subsequently
is ordered to be computed in accordance [with] par. 4 of Article 102 of the Family Code.”
20 discuss the matters that we can clarify.
On November 21, 2006, the respondents filed a Motion for The Decision dated October 10, 2005
Reconsideration,21 praying for the correction and reversal of the Order dated has become final and executory at
November 8, 2006. Thereafter, on January 8, 2007,22 the trial court had changed the time the Motion for Clarification
its ruling again and granted the respondents’ Motion for Reconsideration whereby was filed on July 7, 2006.
the Order dated November 8, 2006 was set aside to reinstate the Order dated _______________
23 Id., at p. 18.
August 31, 2006. 24 Id., at pp. 143-146.
Not satisfied with the trial court’s Order, the petitioner filed on February 27, 654
2007 this instant Petition for Review under Rule 45 of the Rules of Court, raising 654 SUPREME COURT REPORTS ANNOTATED
the following:
Quiao vs. Quiao
Issues Section 3, Rule 41 of the Rules of Court provides:
“Section 3. Period of ordinary appeal.—The appeal shall be taken within fifteen (15)
days from notice of the judgment or final order appealed from. Where a record on appeal is
required, the appellant shall file a notice of appeal and a record on appeal within thirty (30)
I days from notice of the judgment or final order.
IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE COMMON The period of appeal shall be interrupted by a timely motion for new trial or
PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE DECREE OF LEGAL reconsideration. No motion for extension of time to file a motion for new trial or
SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE? reconsideration shall be allowed.”
II
In Neypes v. Court of Appeals,25 we clarified that to standardize the appeal
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE CONJUGAL
PARTNERSHIP FOR PURPOSES OF EFFECT-
periods provided in the Rules and to afford litigants fair opportunity to appeal
_______________ their cases, we held that “it would be practical to allow a fresh period of 15 days
19 Id., at p. 90. within which to file the notice of appeal in the RTC, counted from receipt of the
20 Id., at p. 91.
21 Id., at pp. 92-97. order dismissing a motion for a new trial or motion for reconsideration.”26
22 Id., at pp. 115-122. In Neypes, we explained that the “fresh period rule” shall also apply to Rule
653
40 governing appeals from the Municipal Trial Courts to the RTCs; Rule 42 on
VOL. 675, JULY 4, 2012 653 petitions for review from the RTCs to the Court of Appeals (CA); Rule 43 on
Quiao vs. Quiao appeals from quasi-judicial agencies to the CA and Rule 45 governing appeals
ING THE FORFEITURE AUTHORIZED UNDER ARTICLE 63 OF THE FAMILY CODE? by certiorari to the Supreme Court. We also said, “The new rule aims to regiment
III or make the appeal period uniform, to be counted from receipt of the order
WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE HUSBAND AND denying the motion for new trial, motion for reconsideration (whether full or
WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY CODE OF THE PHILIPPINES partial) or any final order or resolution.”27 In other words, a party litigant may
BE GIVEN RETROACTIVE EFFECT FOR PURPOSES OF DETERMINING THE NET file his notice of appeal within a fresh 15-day period from his receipt of the trial
PROFITS SUBJECT OF FORFEITURE AS A RESULT OF THE DECREE OF LEGAL
court’s decision or final order denying his motion for new trial or motion for
SEPARATION WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER
THE CIVIL CODE? reconsideration. Failure to avail of the fresh 15-day period from the
_______________
IV
25 506 Phil. 613, 629; 469 SCRA 633, 644 (2005).
WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE SHARE OF 26 Id., at p. 626; p. 644.
THE GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP AS A RESULT OF 27 Id., at p. 627; p. 645.
THE ISSUANCE OF THE DECREE OF LEGAL SEPARATION? 23
655

VOL. 675, JULY 4, 2012 655

Our Ruling
Quiao vs. Quiao
denial of the motion for reconsideration makes the decision or final order in
question final and executory.
In the case at bar, the trial court rendered its Decision on October 10, 2005.
The petitioner neither filed a motion for reconsideration nor a notice of appeal. On
December 16, 2005, or after 67 days had lapsed, the trial court issued an order
granting the respondent’s motion for execution; and on February 10, 2006, or
after 123 days had lapsed, the trial court issued a writ of execution. Finally, when
the writ had already been partially executed, the petitioner, on July 7, 2006 or
after 270 days had lapsed, filed his Motion for Clarification on the definition of
the “net profits earned.” From the foregoing, the petitioner had clearly slept on
his right to question the RTC’s Decision dated October 10, 2005. For 270 days, the
petitioner never raised a single issue until the decision had already been partially
executed. Thus at the time the petitioner filed his motion for clarification, the
trial court’s decision has become final and executory. A judgment becomes final
and executory when the reglementary period to appeal lapses and no appeal is
perfected within such period. Consequently, no court, not even this Court, can
arrogate unto itself appellate jurisdiction to review a case or modify a judgment
that became final.28
The petitioner argues that the decision he is questioning is a void judgment.
Being such, the petitioner’s thesis is that it can still be disturbed even after 270
days had lapsed from the issuance of the decision to the filing of the motion for
clarification. He said that “a void judgment is no judgment at all. It never attains
finality and cannot be a source of any right nor any obligation.” 29 But what
precisely is a void judgment in our jurisdiction? When does a judgment becomes
void?
_______________
28 PCI Leasing and Finance, Inc., v. Milan, G.R. No. 151215, April 5, 2010, 617 SCRA 258.
29 Rollo, p. 166.
656
656 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
“A judgment is null and void when the court which rendered it had no power to
grant the relief or no jurisdiction over the subject matter or over the parties or
both.”30 In other words, a court, which does not have the power to decide a case or
that has no jurisdiction over the subject matter or the parties, will issue a void
judgment or a coram non judice.31
The questioned judgment does not fall within the purview of a void judgment.
For sure, the trial court has jurisdiction over a case involving legal separation.
Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the Family
Court of a city, the exclusive original jurisdiction to hear and decide, among
others, complaints or petitions relating to marital status and property relations of
the husband and wife or those living together. 32 The Rule on Legal
Separation33 provides that “the petition [for legal separation] shall be filed in the
Family Court of the province or city where the petitioner or the respondent has
been residing for at least six months prior to the date of filing or in the case of a
non-resident respondent, where he may be found in the Philippines, at the
election of the petitioner.”34 In the instant case, herein respondent Rita is found to
reside in Tungao, Butuan City for more than six months prior to the date of filing
of the petition; thus, the RTC, clearly has jurisdiction over the respondent’s
petition below. Furthermore, the RTC also acquired jurisdiction over the persons
of both parties, considering that summons and a copy of the complaint with its
annexes were served upon the herein petitioner on December 14, 2000 and that
the herein petitioner filed his Answer to the Complaint
_______________
30 See Moreno, Federico B., Philippine Law Dictionary, 3rd ed., 1988, p. 998.
31 People v. Judge Navarro, 159 Phil. 863, 874; 63 SCRA 264, 274 (1975).
32 R.A. No. 8369, Section 5(d).
33 A.M. No. 02-11-11-SC.
34 Id., at Section 2(c).
657
VOL. 675, JULY 4, 2012 657
Quiao vs. Quiao
on January 9, 2001.35 Thus, without doubt, the RTC, which has rendered the
questioned judgment, has jurisdiction over the complaint and the persons of the
parties.
From the aforecited facts, the questioned October 10, 2005 judgment of the
trial court is clearly not void ab initio, since it was rendered within the ambit of
the court’s jurisdiction. Being such, the same cannot anymore be disturbed, even
if the modification is meant to correct what may be considered an erroneous
conclusion of fact or law.36 In fact, we have ruled that for “[as] long as the public
respondent acted with jurisdiction, any error committed by him or it in the
exercise thereof will amount to nothing more than an error of judgment which
may be reviewed or corrected only by appeal.”37 Granting without admitting that
the RTC’s judgment dated October 10, 2005 was erroneous, the petitioner’s
remedy should be an appeal filed within the reglementary period. Unfortunately,
the petitioner failed to do this. He has already lost the chance to question the trial
court’s decision, which has become immutable and unalterable. What we can only
do is to clarify the very question raised below and nothing more.
For our convenience, the following matters cannot anymore be disturbed since
the October 10, 2005 judgment has already become immutable and unalterable, to
wit:
(a) The finding that the petitioner is the offending spouse since he cohabited
with a woman who is not his wife;38
(b) The trial court’s grant of the petition for legal separation of respondent
Rita;39
_______________
35 Rollo, p. 38.
36 Sps. Edillo v. Sps. Dulpina, G.R. No. 188360, January 21, 2010, 610 SCRA 590, 601-602.
37 Lim v. Judge Vianzon, 529 Phil. 472, 483-484; 497 SCRA 482, 485 (2006); See also Herrera v.
Barretto and Joaquin, 25 Phil. 245, 256 (1913), citing Miller v. Rowan, 251 Ill., 344.
38 Rollo, pp. 50-51.
39 Id., at p. 51.
658
658 SUPREME COURT REPORTS ANNOTATED
 Quiao vs. Quiao (q) The order to the petitioner to reimburse the respondents the sum of
(c) The dissolution and liquidation of the conjugal partnership;
40
P19,000.00 as attorney’s fees and litigation expenses ofP5,000.00. 54
(d) The forfeiture of the petitioner’s right to any share of the net profits After discussing lengthily the immutability of the Decision dated October 10,
earned by the conjugal partnership;41 2005, we will discuss the following issues for the enlightenment of the parties and
(e) The award to the innocent spouse of the minor children’s custody;42 the public at large.
(f) The disqualification of the offending spouse from inheriting from the Article 129 of the Family Code
innocent spouse by intestate succession;43 applies to the present case since
(g) The revocation of provisions in favor of the offending spouse made in the the parties’ property relation is
will of the innocent spouse;44 governed by the system of rela-
(h) The holding that the property relation of the parties is conjugal tive community or conjugal
partnership of gains and pursuant to Article 116 of the Family Code, all partnership of gains.
_______________
properties acquired during the marriage, whether acquired by one or both 49 Id., at pp. 53-54.
spouses, is presumed to be conjugal unless the contrary is proved;45 50 Id., at p. 55.
(i) The finding that the spouses acquired their real and personal properties 51 Id.
52 Id., at p. 56.
while they were living together;46 53 Id., at p. 57.
(j) The list of properties which Rizal Commercial Banking Corporation 54 Id.
(RCBC) foreclosed;47 660
(k) The list of the remaining properties of the couple which must be 660 SUPREME COURT REPORTS ANNOTATED
dissolved and liquidated and the fact that respondent Rita was the one who took
Quiao vs. Quiao
charge of the administration of these properties;48
(l) The holding that the conjugal partnership shall be liable to matters The petitioner claims that the court a quo is wrong when it applied Article
included under Article 121 of the Family Code 129 of the Family Code, instead of Article 102. He confusingly argues that Article
_______________ 102 applies because there is no other provision under the Family Code which
40 Id. defines net profits earned subject of forfeiture as a result of legal separation.
41 Id., at pp. 51-52. Offhand, the trial court’s Decision dated October 10, 2005 held that Article
42 Id., at pp. 52 and 56.
43 Id., at p. 52. 129(7) of the Family Code applies in this case. We agree with the trial court’s
44 Id. holding.
45 Id. First, let us determine what governs the couple’s property relation. From the
46 Id.
47 Id., at pp. 52-53.
record, we can deduce that the petitioner and the respondent tied the marital
48 Id., at p. 53. knot on January 6, 1977. Since at the time of the exchange of marital vows, the
659 operative law was the Civil Code of the Philippines (R.A. No. 386) and since they
VOL. 675, JULY 4, 2012 659 did not agree on a marriage settlement, the property relations between the
petitioner and the respondent is the system of relative community or conjugal
Quiao vs. Quiao partnership of gains.55 Article 119 of the Civil Code provides:
and the conjugal liabilities totaling P503,862.10 shall be charged to the income “Art. 119. The future spouses may in the marriage settlements agree upon absolute or
generated by these properties;49 relative community of property, or upon complete separation of property, or upon any other
(m) The fact that the trial court had no way of knowing whether the regime. In the absence of marriage settlements, or when the same are void, the system of
petitioner had separate properties which can satisfy his share for the support of relative community or conjugal partnership of gains as established in this Code, shall
the family;50 govern the property relations between husband and wife.”
(n) The holding that the applicable law in this case is Article 129(7);51 Thus, from the foregoing facts and law, it is clear that what governs the
(o) The ruling that the remaining properties not subject to any encumbrance property relations of the petitioner and of the respondent is conjugal partnership
shall therefore be divided equally between the petitioner and the respondent of gains. And under this property relation, “the husband and the wife place in a
without prejudice to the children’s legitime;52 common fund the fruits of their separate property and the income from their work
(p) The holding that the petitioner’s share of the net profits earned by the or industry.”56 The husband and wife also own
_______________
conjugal partnership is forfeited in favor of the common children; 53 and 55 CIVIL CODE OF THE PHILIPPINES, Art. 119.
56 Id., at Art. 142.
661
VOL. 675, JULY 4, 2012 661
Quiao vs. Quiao
in common all the property of the conjugal partnership of gains.57
Second, since at the time of the dissolution of the petitioner and the
respondent’s marriage the operative law is already the Family Code, the same
applies in the instant case and the applicable law in so far as the liquidation of
the conjugal partnership assets and liabilities is concerned is Article 129 of the
Family Code in relation to Article 63(2) of the Family Code. The latter provision is
applicable because according to Article 256 of the Family Code “[t]his Code shall
have retroactive effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other law.”58
Now, the petitioner asks: Was his vested right over half of the common
properties of the conjugal partnership violated when the trial court forfeited them
in favor of his children pursuant to Articles 63(2) and 129 of the Family Code?
We respond in the negative.
Indeed, the petitioner claims that his vested rights have been impaired,
arguing: “As earlier adverted to, the petitioner acquired vested rights over half of
the conjugal properties, the same being owned in common by the spouses. If the
provisions of the Family Code are to be given retroactive application to the point
of authorizing the forfeiture of the petitioner’s share in the net remainder of the
conjugal partnership properties, the same impairs his rights acquired prior to the
effectivity of the Family Code.”59 In other words, the petitioner is saying that
since the property relations between the spouses is governed by the regime of
Conjugal Partnership of Gains under the Civil Code, the petitioner acquired
vested rights over half of the properties of the Conjugal Partnership of Gains,
pursuant to Article 143 of the Civil Code, which
_______________
57 Id., at Art. 143.
58 FAMILY CODE OF THE PHILIPPINES, Art. 256.
59 Rollo, p. 29.
662
662 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
provides: “All property of the conjugal partnership of gains is owned in common
by the husband and wife.”60 Thus, since he is one of the owners of the properties
covered by the conjugal partnership of gains, he has a vested right over half of the
said properties, even after the promulgation of the Family Code; and he insisted
that no provision under the Family Code may deprive him of this vested right by
virtue of Article 256 of the Family Code which prohibits retroactive application of
the Family Code when it will prejudice a person’s vested right.
However, the petitioner’s claim of vested right is not one which is written on
stone. In Go, Jr. v. Court of Appeals,61 we define and explained “vested right” in
the following manner:
“A vested right is one whose existence, effectivity and extent do not depend upon events
foreign to the will of the holder, or to the exercise of which no obstacle exists, and which is
immediate and perfect in itself and not dependent upon a contingency. The term “vested
right” expresses the concept of present fixed interest which, in right reason and natural
justice, should be protected against arbitrary State action, or an innately just and
imperative right which enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny.
To be vested, a right must have become a title—legal or equitable—to the present or
future enjoyment of property.” (Citations omitted)
62
In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party
List Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo
R. Ermita,63 we also explained:
_______________
60 CIVIL CODE OF THE PHILIPPINES, Art. 143.
61 G.R. No. 172027, July 29, 2010, 626 SCRA 180, 201.
62 Id., at p. 199.
63 The Court consolidated the following cases: ABAKADA Guro Party List Officer Samson S.
Alcantara, et al. v. The Hon. Executive Secretary Eduardo R. Ermita, G.R. No. 168056; Aquilino Q.
Pimen-
663
VOL. 675, JULY 4, 2012 663
Quiao vs. Quiao
“The concept of “vested right” is a consequence of the constitutional guaranty of due
process that expresses a present fixed interest which in right reason and natural justice is
protected against arbitrary state action; it includes not only legal or equitable title to the
enforcement of a demand but also exemptions from new obligations created after the right
has become vested. Rights are considered vested when the right to enjoyment is a present
interest, absolute, unconditional, and perfect or fixed and irrefutable.” (Emphasis and
64
underscoring supplied)
From the foregoing, it is clear that while one may not be deprived of his
“vested right,” he may lose the same if there is due process and such deprivation
is founded in law and jurisprudence.
In the present case, the petitioner was accorded his right to due
process. First, he was well-aware that the respondent prayed in her complaint
that all of the conjugal properties be awarded to her. 65 In fact, in his Answer, the
petitioner prayed that the trial court divide the community assets between the
petitioner and the respondent as circumstances and evidence warrant after the
accounting and inventory of all the community properties of the
parties.66 Second, when the Decision dated October 10, 2005 was promulgated,
the petitioner never questioned the trial court’s ruling forfeiting what the trial
court termed as “net profits,” pursuant to Article 129(7) of the Family
Code.67 Thus, the petitioner cannot claim being deprived of his right to due
process.
_______________
tel, Jr., et al. v. Executive Secretary Eduardo R. Ermita, et al., G.R. No. 168207; Association of
Pilipinas Shell Dealers, Inc., et al. v. Cesar V. Purisima, et al., G.R. No. 168461; Francis Joseph G.
Escudero v. Cesar V. Purisima, et al., G.R. No. 168463; and Bataan Governor Enrique T. Garcia, Jr. v.
Hon. Eduardo R. Ermita, et al., G.R. No. 168730.
64 Id.
65 Rollo, p. 37.
66 Id., at p. 39.
67 Id., at pp. 55-57.
664
664 SUPREME COURT REPORTS ANNOTATED From the above discussions, Article 129 of the Family Code clearly applies to
the present case since the parties’ property relation is governed by the system of
Quiao vs. Quiao relative community or conjugal partnership of gains and since the trial court’s
Furthermore, we take note that the alleged deprivation of the petitioner’s Decision has attained finality and immutability.
“vested right” is one founded, not only in the provisions of the Family Code, but in The net profits of the conjugal
Article 176 of the Civil Code. This provision is like Articles 63 and 129 of the partnership of gains are all the
Family Code on the forfeiture of the guilty spouse’s share in the conjugal fruits of the separate properties
partnership profits. The said provision says: of the spouses and the products
“Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her share of of their labor and industry.
the conjugal partnership profits, which shall be awarded to the children of both, and the
The petitioner inquires from us the meaning of “net profits” earned by the
children of the guilty spouse had by a prior marriage. However, if the conjugal partnership
property came mostly or entirely from the work or industry, or from the wages and salaries,
conjugal partnership for purposes of effecting
_______________
or from the fruits of the separate property of the guilty spouse, this forfeiture shall not 69 Id., at pp. 890-891; p. 663.
apply. 70 Rollo, p. 55.
In case there are no children, the innocent spouse shall be entitled to all the net profits.” 71 Malayan Employees Association-FFW v. Malayan Insurance Co., Inc., G.R. No. 181357, February
From the foregoing, the petitioner’s claim of a vested right has no basis 2, 2010, 611 SCRA 392, 399; Catmon Sales Int’l. Corp. v. Atty. Yngson, Jr., G.R. No. 179761, January 15,
considering that even under Article 176 of the Civil Code, his share of the 2010, 610 SCRA 236, 245.
666
conjugal partnership profits may be forfeited if he is the guilty party in a legal
separation case. Thus, after trial and after the petitioner was given the chance to 666 SUPREME COURT REPORTS ANNOTATED
present his evidence, the petitioner’s vested right claim may in fact be set aside Quiao vs. Quiao
under the Civil Code since the trial court found him the guilty party. the forfeiture authorized under Article 63 of the Family Code. He insists that
More, in Abalos v. Dr. Macatangay, Jr.,68 we reiterated our long-standing since there is no other provision under the Family Code, which defines “net
ruling that: profits” earned subject of forfeiture as a result of legal separation, then Article
“[P]rior to the liquidation of the conjugal partnership, the interest of each spouse in the 102 of the Family Code applies.
conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an
What does Article 102 of the Family Code say? Is the computation of “net
equitable estate, and does not ripen into title until it appears that there are assets in the
community as a result of the liquidation and settlement. The interest of each spouse is profits” earned in the conjugal partnership of gains the same with the
limited to the net remainder or “remanente liquido” (haber ganancial) resulting from the computation of “net profits” earned in the absolute community?
liquidation of the affairs of the partnership after its dissolution. Thus, the right of the Now, we clarify.
husband or First and foremost, we must distinguish between the applicable law as to the
_______________
68 482 Phil. 877-894; 439 SCRA 649, 663-664 (2004).
property relations between the parties and the applicable law as to the definition
665 of “net profits.” As earlier discussed, Article 129 of the Family Code applies as to
VOL. 675, JULY 4, 2012 665 the property relations of the parties. In other words, the computation and the
succession of events will follow the provisions under Article 129 of the said Code.
Quiao vs. Quiao Moreover, as to the definition of “net profits,” we cannot but refer to Article 102(4)
wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of of the Family Code, since it expressly provides that for purposes of computing the
the conjugal partnership, or after dissolution of the marriage, when it is finally determined
net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2),
that, after settlement of conjugal obligations, there are net assets left which can be divided
between the spouses or their respective heirs.” (Citations omitted)
69
Article 102(4) applies. In this provision, net profits “shall be the increase in value
Finally, as earlier discussed, the trial court has already decided in its Decision between the market value of the community property at the time of the
dated October 10, 2005 that the applicable law in this case is Article 129(7) of the celebration of the marriage and the market value at the time of its
Family Code.70 The petitioner did not file a motion for reconsideration nor a dissolution.”72 Thus, without any iota of doubt, Article 102(4) applies to both the
notice of appeal. Thus, the petitioner is now precluded from questioning the trial dissolution of the absolute community regime under Article 102 of the Family
court’s decision since it has become final and executory. The doctrine of Code, and to the dissolution of the conjugal partnership regime under Article 129
immutability and unalterability of a final judgment prevents us from disturbing of the Family Code. Where lies the difference? As earlier shown, the difference
the Decision dated October 10, 2005 because final and executory decisions can no lies in the processes used under the dissolution of the absolute community regime
longer be reviewed nor reversed by this Court.71 under Article 102 of the Family Code, and in the processes used under the
dissolution of the conjugal partnership regime under Article 129 of the Family
Code.
 _______________
72 FAMILY CODE OF THE PHILIPPINES, Art. 102(4).
667
VOL. 675, JULY 4, 2012 667
Quiao vs. Quiao
Let us now discuss the difference in the processes between the absolute
community regime and the conjugal partnership regime.
On Absolute Community Regime:
When a couple enters into a regime of absolute community, the husband
and the wife becomes joint owners of all the properties of the marriage. Whatever
property each spouse brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the Family Code) form the
common mass of the couple’s properties. And when the couple’s marriage or
community is dissolved, that common mass is divided between the spouses, or
their respective heirs, equally or in the proportion the parties have established,
irrespective of the value each one may have originally owned.73
Under Article 102 of the Family Code, upon dissolution of marriage, an
inventory is prepared, listing separately all the properties of the absolute
community and the exclusive properties of each; then the debts and obligations of
the absolute community are paid out of the absolute community’s assets and if the
community’s properties are insufficient, the separate properties of each of the
couple will be solidarily liable for the unpaid balance. Whatever is left of the
separate properties will be delivered to each of them. The net remainder of the
absolute community is its net assets, which shall be divided between the husband
and the wife; and for purposes of computing the net profits subject to forfeiture,
said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market
value at the time of its dissolution.74
_______________
73 Id., at Art. 91; See also Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL
CODE OF THE PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, 379 (1990).
74 FAMILY CODE OF THE PHILIPPINES, Art. 102.
668
668 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
Applying Article 102 of the Family Code, the “net profits” requires that we
first find the market value of the properties at the time of the community’s
dissolution. From the totality of the market value of all the properties, we
subtract the debts and obligations of the absolute community and this result to
the net assets or net remainder of the properties of the absolute community, from
which we deduct the market value of the properties at the time of marriage,
which then results to the net profits.75
Granting without admitting that Article 102 applies to the instant case, let us
see what will happen if we apply Article 102:
(a) According to the trial court’s finding of facts, both husband and wife have
no separate properties, thus, the remaining properties in the list above are all
part of the absolute community. And its market value at the time of the
dissolution of the absolute community constitutes the “market value at
dissolution.”
(b) Thus, when the petitioner and the respondent finally were legally
separated, all the properties which remained will be liable for the debts and
obligations of the community. Such debts and obligations will be subtracted from
the “market value at dissolution.”
(c) What remains after the debts and obligations have been paid from the
total assets of the absolute community constitutes the net remainder or net asset.
And from such net asset/remainder of the petitioner and respondent’s remaining
properties, the market value at the time of marriage will be subtracted and the
resulting totality constitutes the “net profits.”
_______________
75 Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE
PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, pp. 401-402 (1990).
669
VOL. 675, JULY 4, 2012 669
Quiao vs. Quiao
(d) Since both husband and wife have no separate properties, and
nothing would be returned to each of them, what will be divided equally between
them is simply the “net profits.” However, in the Decision dated October 10, 2005,
the trial court forfeited the half-share of the petitioner in favor of his children.
Thus, if we use Article 102 in the instant case (which should not be the case),
nothing is left to the petitioner since both parties entered into their marriage
without bringing with them any property.
On Conjugal Partnership Regime:
Before we go into our disquisition on the Conjugal Partnership Regime, we
make it clear that Article 102(4) of the Family Code applies in the instant
case for purposes only of defining “net profit.” As earlier explained, the
definition of “net profits” in Article 102(4) of the Family Code applies to both the
absolute community regime and conjugal partnership regime as provided for
under Article 63, No. (2) of the Family Code, relative to the provisions on Legal
Separation.
Now, when a couple enters into a regime of conjugal partnership of
gains under Article 142 of the Civil Code, “the husband and the wife place in
common fund the fruits of their separate property and income from their work or
industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage.”76 From the foregoing provision, each of the couple has his
and her own property and debts. The law does not intend to effect a mixture or
merger of those debts or properties between the spouses. Rather, it establishes a
complete separation of capitals.77
_______________
76 CIVIL CODE OF THE PHILIPPINES, Art. 142.
77 Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE
PHILIPPINES: VOLUME ONE, p. 365 (1974).
670

670 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
Considering that the couple’s marriage has been dissolved under the Family
Code, Article 129 of the same Code applies in the liquidation of the couple’s
properties in the event that the conjugal partnership of gains is dissolved, to wit:
“Art. 129. Upon the dissolution of the conjugal partnership regime, the following
procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the conjugal
partnership and the exclusive properties of each spouse.
(2) Amounts advanced by the conjugal partnership in payment of personal debts and
obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the
acquisition of property or for the value of his or her exclusive property, the ownership of
which has been vested by law in the conjugal partnership.
(4) The debts and obligations of the conjugal partnership shall be paid out of the
conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable
for the unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.
(5) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.
(6) Unless the owner had been indemnified from whatever source, the loss or
deterioration of movables used for the benefit of the family, belonging to either spouse, even
due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any.
(7) The net remainder of the conjugal partnership properties shall constitute the
profits, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements or unless there has been
a voluntary waiver or forfeiture of such share as provided in this Code.
(8) The presumptive legitimes of the common children shall be delivered upon the
partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot on which it is
situated shall, unless otherwise agreed
671
VOL. 675, JULY 4, 2012 671
Quiao vs. Quiao
upon by the parties, be adjudicated to the spouse with whom the majority of the common
children choose to remain. Children below the age of seven years are deemed to have chosen
the mother, unless the court has decided otherwise. In case there is no such majority, the
court shall decide, taking into consideration the best interests of said children.”
In the normal course of events, the following are the steps in the liquidation of
the properties of the spouses:
(a) An inventory of all the actual properties shall be made, separately listing
the couple’s conjugal properties and their separate properties. 78 In the instant
case, the trial court found that the couple has no separate properties
when they married.79 Rather, the trial court identified the following conjugal
properties, to wit:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located in Tungao, Butuan
City;
6. a parcel of agricultural land with an area of 5 hectares located in Manila de
Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in Tungao, Butuan City;
8. Bashier Bon Factory located in Tungao, Butuan City.
80
(b) Ordinarily, the benefit received by a spouse from the conjugal
partnership during the marriage is returned in equal
_______________
78 Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF THE
PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, p. 472 (1990).
79 Rollo, p. 55.
80 Id., at pp. 56-57.
672
672 SUPREME COURT REPORTS ANNOTATED
Quiao vs. Quiao
amount to the assets of the conjugal partnership;81 and if the community is
enriched at the expense of the separate properties of either spouse, a restitution
of the value of such properties to their respective owners shall be made.82
(c) Subsequently, the couple’s conjugal partnership shall pay the debts of the
conjugal partnership; while the debts and obligation of each of the spouses shall
be paid from their respective separate properties. But if the conjugal partnership
is not sufficient to pay all its debts and obligations, the spouses with their
separate properties shall be solidarily liable.83
(d) Now, what remains of the separate or exclusive properties of the husband
and of the wife shall be returned to each of them. 84 In the instant case, since it
was already established by the trial court that the spouses have no
separate properties,85 there is nothing to return to any of them. The listed
properties above are considered part of the conjugal partnership. Thus, ordinarily,
what remains in the above-listed properties should be divided equally between
the spouses and/or their respective heirs.86 However, since the trial court found
the petitioner the guilty party, his share from the net profits of the conjugal
partnership is forfeited in favor of the common children, pursuant to Article 63(2)
of the Family Code. Again, lest we be confused, like in the absolute community
regime, nothing will be returned to the guilty party in the conjugal partnership
regime, because there is no separate property which may be accounted for
in the guilty party’s favor.
_______________
81 FAMILY CODE OF THE PHILIPPINES, Art. 129(2).
82 Id., at Art. 129(3).
83 Id., at Art. 129(4).
84 Id., at Art. 129(5).
85 Rollo, p. 55.
86 FAMILY CODE OF THE PHILIPPINES, Art. 129(7).
673
VOL. 675, JULY 4, 2012 673
Quiao vs. Quiao
 In the discussions above, we have seen that in both instances, the petitioner is
not entitled to any property at all. Thus, we cannot but uphold the Decision dated
October 10, 2005 of the trial court. However, we must clarify, as we already did
above, the Order dated January 8, 2007.
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial
Court, Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for
Clarification dated July 7, 2006 in the Regional Trial Court, the Order dated
January 8, 2007 of the Regional Trial Court is hereby CLARIFIED in accordance
with the above discussions.
SO ORDERED.
Carpio (Chairperson), Brion, Perez and Sereno, JJ.,
concur.
Judgment affirmed.
Notes.—With the advent of the fresh period rule, parties who availed
themselves of the remedy of motion for reconsideration are now allowed to file a
notice of appeal within fifteen days from the denial of that motion. (Sumiran vs.
Damaso, 596 SCRA 450 [2009])
The fresh period rule can be made applicable to actions pending upon its
effectivity without danger of violating anyone else’s rights. (Id.)
In Neypes v. Court of Appeals, 469 SCRA 633 (2005), the Court allowed a fresh
period of fifteen (15) days within which to file a notice of appeal in the Regional
Trial Court to be counted from receipt of the order dismissing a motion for new
trial or motion for reconsideration; The “fresh period rule” shall also apply to Rule
45 governing appeals by certiorari to the Supreme Court. (Tejano, Jr. vs.
Sandiganbayan, 584 SCRA 191 [2009])
——o0o——
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

VOL. 183, MARCH 26, 1990 713
Toda, Jr. vs. Court of Appeals
G.R. Nos. 78583-84. March 26, 1990. *
BENIGNO TODA, JR., petitioner, vs. COURT OF APPEALS and ROSE MARIE
TUASON-TODA, respondents.
G.R. Nos. 78696-97. March 26, 1990. * PETITION to review the decision of the Court of Appeals.
ROSE MARIE TUASON-TODA, petitioner, vs. BENIGNO TODA, JR.,
respondent.
Civil Law; Property; Conjugal Partnership; The separation of property is not effected
by the mere execution of the contract or agreement of the parties but by the decree of the court
approving the same; The conjugal partnership is dissolved only upon the issuance of a decree
of separation of property.—We are in agreement with the holding of the Court of Appeals
that the compromise agreement became effective only on June 9, 1981, the date when it was
approved by the trial court, and not on March 30, 1981 when it was signed by the parties.
Under Article 190 of the Civil Code, “(i)n the absence of an express declaration in the
marriage settlements, the separation of property between spouses during the marriage shall
not take place save in virtue of a judicial order.” Hence, the separation of property is not
effected by the mere execution of the contract or agreement of the parties, but by the decree
of the court approving the same. It, therefore, becomes effective only upon judicial approval,
without which it is void. Furthermore, Article 192 of said Code explicitly provides that
________________
*SECOND DIVISION.
714
7 SUPREME COURT REPORTS ANNOTATED
14
Toda, Jr. vs. Court of Appeals
the conjugal partnership is dissolved only upon the issuance of a decree of separation
of property.
Same; Same; Same; Same; Conjugal partnership of Benigno and Rose Marie should be
considered dissolved only on June 9, 1981 when the Trial Court approved their joint petition
for voluntary dissolution of their conjugal partnership.—Consequently, the conjugal
partnership of Benigno and Rose Marie should be considered dissolved only on June 9, 1981
when the trial court approved their joint petition for voluntary dissolution of their conjugal
partnership. Conformably thereto, the cash dividends declared on July 1, 1981 and July 25,
1981 in the amount of P2,191.62 and P40,196.12, respectively, should pertain to Rose Marie;
and that declared on April 25, 1981 in the amount of P37,126.30 ought to be paid to
Benigno, pursuant to Paragraph 4 (c) of the compromise agreement which awards to
Benigno the conjugal assets not otherwise specifically assigned to Rose Marie.
Same; Same; Same; Legal presumption that all property of the marriage belongs to the
conjugal partnership absent any proof that it is the exclusive property of either spouse.—With
respect to the amount of P360,095.12 which Benigno deducted from the P2 million supposed
to be paid to Rose Marie, it is not clear from the records where said amount came from. The
Court of Appeals, in holding that it is conjugal and therefore belongs to Benigno, presumed
it to be in the nature of cash dividends declared prior to the approval of the compromise
agreement by reason of the fact that the amount was deducted by Benigno from the P2
million which he paid on April 14, 1981. While no sufficient proof was adduced to
conclusively explain such deduction, there exists the legal presumption that all property of
the marriage belongs to the conjugal partnership absent any proof that it is the exclusive
property of either spouse. Since Rose Marie failed to prove that the amount forms part of
her paraphernal property, it is presumed to be conjugal property. Consequently, Benigno is
entitled to the said amount of P360,095.12, hence he rightfully deducted the same from the
amount due to Rose Marie.
The facts are stated in the opinion of the Court.
Bautista, Picazo, Buyco, Tan & Fider for Benigno Toda, Jr.
Belo, Abiera & Associates for petitioner Rose Marie Tuason-Toda.
715
VOL. 183, MARCH 26, 1990 715
Toda, Jr. vs. Court of Appeals
REGALADO, J.:
These consolidated cases seek a review of the decision of the Court of Appeals
promulgated on January 29, 1987 in CA-G.R. CV Nos. 06675 and 07936, the
1
dispositive portion of which reads:
“WHEREFORE, judgment is hereby rendered:
1. 1.Ordering the payment of the cash dividends declared on July 1, 1981 amounting
to P2,191.62 and those declared on July 25, 1981 amounting to P40,196.12 to
Rose Marie Toda as her separate property. The cash dividends declared on April
25, 1981 amounting to P37,196.30 (sic) are hereby adjudicated to Benigno Toda,
Jr. as his share in the conjugal partnership assets; the portion of the order dated
November 2, 1981 with respect to the payment of the amount of P360,095.12 to
Rose Marie T. Toda is set aside;
2. 2.Ordering the payment of the amount of P4,623,982.24 to Rose Marie Toda
representing the balance of P15,749,135.32 obligated to be paid as estate taxes
by Benigno Toda, Jr.;
3. 3.Setting aside the order of the lower court dated June 2, 1982 directing Benigno
Toda, Jr. to pay interest and non-payment penalty of 18% and 5%, respectively;
and
4. 4.Setting aside the order of the lower court directing the annotation of lien on the
property of Benigno Toda, Jr.
SO ORDERED.”
Benigno Toda, Jr. (Benigno for brevity) and Rose Marie Tuason-Toda (Rose Marie
for brevity) were married on June 9, 1951 and were blessed with two children.
Individual differences and the alleged infidelity of Benigno, however, marred the
conjugal union thereby prompting Rose Marie to file on December 18, 1979 in the
former Court of First Instance of Rizal, as Civil Case No. 35566, a petition for
2
termination of conjugal partnership for alleged mismanagement and dissipation
of conjugal funds against Benigno.
 After hearings were held, the parties in order to avoid further
________________
Justice Jose A.R. Melo, ponente, with Justices Ricardo P. Tensuan and Jaime M. Lantin,
1
concurring; Rollo, G.R. Nos. 78583-84, 29-45.
Presided over by then Judge Rizalina Bonifacio Vera.
2
716
716 SUPREME COURT REPORTS ANNOTATED
Toda, Jr. vs. Court of Appeals
“disagreeable proceedings,” filed on April 1, 1981 a joint petition for judicial
approval of dissolution of conjugal partnership under Article 191 of the Civil
Code, docketed as Special Proceeding No. 9478, which was consolidated with the
3 conjugal partnership and to partition the assets thereof, under the following terms and
aforesaid civil case. This petition which was signed by the parties on March 30,
1981, embodied a compromise agreement allocating to the spouses their
respective shares in the conjugal partnership assets and dismissing with
prejudice the said Civil Case No. 35566, CA-G.R. No. 11123-SP of the Court of
Appeals and G.R. No. 56121 of this Court. The said petition and the compromise
agreement therein were approved by the trial court in its order of June 9, 1981.
Thereafter, several orders were issued by the lower court pertaining to the
interpretation and implementation of the compromise agreement, as follows:
1. 1.Order, dated November 20, 1981, ordering Benigno, inter alia, to pay
Rose Marie the cash dividends on the shares declared on April 25, 1981
amounting to P37,126.30; that declared on July 25, 1981 amounting to
P40,196.12; that declared on July 1, 1981, given on September 25, 1981
amounting to P2,191.62; and the payment of P360,095.12 to Rose Marie
which is the balance of P2 million paid on April 4, 1981; 5
2. 2.Order, dated June 2, 1982, ordering Benigno to pay Rose Marie interest
at 18% per annum on the amounts required to be paid in the order of
November 20, 1981, as well as 5% non-payment penalty should the said
order of November 20, 1981 be sustained on appeal; 6
3. 3.Order, dated December 9, 1982, denying Benigno’s motion to inhibit
Judge Rizalina Bonifacio Vera from hearing the case; 7
4. 4.Order, dated March 1, 1983, ordering the annotation of a lien on
certain properties of Benigno as security for any and all amounts that
he may finally be ordered to pay to Rose Marie under the compromise
agreement; and 8
5. 5.Order, dated March 14, 1983, ordering Benigno to pay Rose Marie the
amount of P4,623,929.24, with interest and penalties thereon
________________
3 Rollo, G.R. Nos. 78696-97, 69-74.
4 Ibid., 75-84.
5 Ibid., 85-98.
6 Ibid., 102-105.
7Ibid., 62.
8Ibid., 122-125.
717
VOL. 183, MARCH 26, 1990 717
Toda, Jr. vs. Court of Appeals
at the rates stipulated in the compromise agreement from date of demand by Rose
Marie. 9
The compromise agreement which, as earlier stated, was incorporated in the
petition for dissolution of the conjugal partnership and was approved by the court
below, contains the following stipulations:
xxx
“4. For the best interest of each of them, petitioners have agreed to dissolve their
conditions—this document, a pleading, being intended by them to embody and evidence
their agreement;
1. “(a)Petitioners as the parties hereto agree upon the dissolution of their conjugal
partnership during the marriage and further agree to obtain judicial approval of
4
their said agreement as provided by Article 191 of the Civil Code.
2. “(b)The following shall be adjudicated to petitioner Rose Marie Tuason-Toda:
1. (1)Forty Million Pesos (P40,000,000.00) to be paid as follows:
1. (a)Petitioner Benigno Toda, Jr. shall assume the payment of the estate taxes,
interest and penalties thereon, pertaining to the estate of petitioner Rose Marie
Tuason-Toda’s late brother Manuel Tuason, Jr. in the sum of P15,749,135.32 as
of March 31, 1981—all interest and penalty charges after March 31, 1981 to be
the responsibility of petitioner Benigno Toda, Jr.
2. (b)P2,000,000.00 to be paid within 30 days after signing of this agreement.
3. (c)The balance shall be paid within six (6) months after date of signing of this
agreement. If not paid when due, the balance shall bear interest at 18% per
annum until paid and there shall be a 5% non-payment penalty. The proceeds
from any sale of or loss with respect to, Rubicon’s shares in Philippine Air Lines,
Inc., shares of Cibeles Insurance Corporation or Hermana Mayor shall be
applied when received against the aforesaid balance, except to the extent such
proceeds are used to satisfy any
________________
9 Ibid., 110-115.
718
718 SUPREME COURT REPORTS ANNOTATED
Toda, Jr. vs. Court of Appeals
1. other obligation under this agreement.
2. (2)All shares of stock in San Miguel Corporation registered solely in the name of
petitioner Rose Marie Tuason-Toda whether stock dividends or stocks acquired
 on pre-emptive rights including those acquired in the names of both petitioners
Benigno Toda, Jr. and Rose Marie Tuason-Toda (whether jointly or alternately
‘and/or’), free from all liens and encumbrances.
3. (3)All shares of stock in San Miguel Corporation acquired whether as stock
dividends of or on pre-emptive rights pertaining to the shares of stock in said
corporation of petitioner Rose Marie Tuason-Toda’s brother the late Manuel
Tuason, Jr. (of course, the original shares of the latter pertain to petitioner Rose
Marie Tuason-Toda also), free from all liens and encumbrances except for the
estate tax lien. Petitioner Rose Marie Tuason-Toda hereby grants petitioner
Benigno Toda, Jr. an irrevocable proxy, for three years through the 1983
stockholders’ meeting whether annual or special to elect directors for all shares
of stock she owns directly or indirectly including those from the late Manuel
Tuason, Jr. in San Miguel Corporation.
4. (4)The Banaba Forbes Park conjugal dwelling and its contents free from all liens
and encumbrances except that petitioner Benigno Toda, Jr. shall remove
therefrom his personal effects including furniture and appliances in his study
room and T.V. room and, from the family room, all antiques, rugs, paintings of
Old Fort Manila, books and mementos. Petitioner Benigno Toda, Jr. commits
that no servant now living in the Tolentino street apartments shall be evicted.
5. (5)The San Francisco apartment at Apartment 905, No. 1750 Taylor Street, San
Francisco, California, U.S.A., and its contents, free from all liens and
encumbrances, except that petitioner Benigno Toda, Jr. shall remove therefrom
his personal effects.
6. (6)The artifacts already removed by petitioner Rose Marie Tuason-Toda from the
Madrid Apartment at No. 4 San Pedro de Valdivia. She shall return to it its
silver ware, china ware, paintings and etchings. She may retain the three fans
encased in glass and may remove her clothes, perfumes and toiletries, the Sansa
painting of a shell dedicated to her, the painting of the Madonna and tapestry
hanging in her bedroom, 5 Persian rugs, 1 writing desk and chair and the 2
lamps thereon and 1 lamp on the night table, and the statuette given her by
Hagedorn.
7. (7)Jewelry.
8. (8)Motor vehicles registered in her name.
719
VOL. 183, MARCH 26, 1990 719
Toda, Jr. vs. Court of Appeals
1. (9)Within forty-five (45) days from signing of this agreement, One Million Pesos
(P1,000,000.00) as attorneys’ fees—petitioner Rose Marie Tuason-Toda agreeing
to hold petitioner Benigno Toda, Jr. harmless from any claim for attorneys’ fees
and expenses that may be filed against the conjugal partnership or herself for
services rendered to her in the prosecution of her claims against said conjugal
partnership or against petitioner Benigno Toda, Jr. or to secure her paraphernal
estate.
2. (10)Two shares with two lots in Valley Golf & Country Club.
3. (11)One share in Club Puerta de Hierro in Madrid, Spain if there is one registered
in petitioner Rose Marie Tuason-Toda’s name.
4. (12)Share in Montemar Beach Club in Bagac, Bataan—petitioner Rose Marie
Tuason-Toda agreeing to asume the balance of the acquisition cost thereof.
1. “(c)All other properties of the conjugal partnership of whatever kind wherever
located shall be adjudicated to petitioner Benigno Toda, Jr. even though acquired
in the name of petitioner Rose Marie Tuason-Toda or both of them—she
undertaking to execute the corresponding deeds of conveyances.
2. “(d)Petitioner Benigno Toda, Jr. shall assume the payment of all conjugal
obligations, petitioner Rose Marie Tuason-Toda representing and warranting
that she has no pending obligation or incurred no obligation chargeable to the
conjugal partnership except those listed in Annex ‘A’ hereof.“If the Rosaria
Apartment is subject to a mortgage loan and such loan is a conjugal debt,
petitioner Benigno Toda, Jr. shall assume such loan and shall obtain the
discharge of the mortgage.
3. “(e)After the signing of this document:
1. (1)Each of them shall own, dispose of, possess, administer and enjoy his or her
separate estate, present and future, without the consent of the other;
2. (2)All earnings from any profession business or industry shall likewise belong to
each of them respectively;
3. (3)All expenses and obligations incurred by each of them shall be their respective
and separate responsibilities.
1. “(f)With the signing of this document, Civil Case No. 35566 of this same
Court, CA-G.R. No. 11123-SP and SC-G.R. No. L-56121 shall be deemed
dismissed with prejudice as between the parties
720
720 SUPREME COURT REPORTS ANNOTATED
Toda, Jr. vs. Court of Appeals
hereto.”
10
The parties then prayed that judgment be rendered:
1. “(a)Approving the agreement for voluntary dissolution and partition of
the conjugal partnership;
2. (b)declaring the conjugal partnership of petitioners dissolved and
adjudicating to each of them his or her share in the properties and
assets of said conjugal partnership in accordance with the agreement
embodied in paragraph 4 hereof; and
3. (c)enjoining the parties to comply with the terms and conditions of the
aforesaid agreement.” 11
Ironically, the said agreement failed to fully subserve the intended amicable
settlement of all the disputes of the spouses. Instead, as lamented by the counsel
of one of them, the compromise agreement which was designed to terminate a
litigation spawned two new petitions, with each party initiating one against the
other. Thus, illustrative of the saying that a solution which creates another
problem is no solution, the contradictory interpretations placed by the parties on
some provisions of the agreement resulted in appeals to respondent court and,
eventually, the present recourse to us.
Benigno appealed from the aforestated orders of the trial court of November
20, 1981, June 2, 1982, December 9, 1982, March 1, 1983 and March 14, 1983
containing the directives hereinbefore respectively set out. The same were
disposed of by the Court of Appeals as explained at the start of this decision.
Rose Marie now submits that the Court of Appeals erred:
1. 1.In holding that the compromise agreement of the parties herein became
effective only after its judicial approval on June 9, 1981 and not upon
its execution on March 30, 1981;
2. 2.In setting aside the order of the lower court dated June 2, 1981
directing Benigno to pay interest of eighteen percent and non-payment
penalty of five percent; and
3. 3.In setting aside the order of the lower court directing the
_______________
Ibid., 69-73.
10
Ibid., 73.
11
721
VOL. 183, MARCH 26, 1990 721
Toda, Jr. vs. Court of Appeals
On the other hand, Benigno contends in his present petition before us that:
1. 1.The Court of Appeals erred on a question of law when it affirmed the lower
court’s award of P4,623,929.24 without trial and evidence-taking and overruled
petitioner’s claim of violation of his due process right;
2. 2.The Court of Appeals erred on a question of law and due process when it upheld
the lower court’s denial of petitioner’s motion for her inhibition/disqualification;
3. 3.Since the document (the parties’ compromise agreement) explicitly provided for
assumption of liability rather than agency to pay and since there was no
evidence-taking, the Court of Appeals’ finding of an agency to pay is reviewable
as a question of law; and
4. 4.The Court of Appeals erred on a question of law involving the parol evidence
rule. 13
The award of cash dividends basically depends on the date of effectivity of the
compromise agreement as this will determine whether the same is conjugal
property or separate property of the spouses.
We are in agreement with the holding of the Court of Appeals that the
compromise agreement became effective only on June 9, 1981, the date when it
was approved by the trial court, and not on March 30, 1981 when it was signed by
the parties. Under Article 190 of the Civil Code, “(i)n the absence of an express
14
declaration in the marriage settlements, the separation of property between
spouses during the marriage shall not take place save in virtue of a judicial
order.” Hence, the separation of property is not effected by the mere execution of
the contract or agreement of the parties, but by the decree of the court approving
the same. It, therefore, becomes effective only upon judicial approval, without
which it is void. Furthermore, Article 192 of
15
_________________
Ibid., 22.
12
Ibid., G.R. Nos. 78583-84, 13-26.
13
Now Art. 134 of the Family Code.
14
Lacson vs. Lacson, et al., 24 SCRA 837 (1968); see also Tolentino, Civil Code, Vol. I, 1987 Ed., 487.
15
722
722 SUPREME COURT REPORTS ANNOTATED
Toda, Jr. vs. Court of Appeals
dissolved only upon the issuance of a decree of separation of property.
Consequently, the conjugal partnership of Benigno and Rose Marie should be
considered dissolved only on June 9, 1981 when the trial court approved their
joint petition for voluntary dissolution of their conjugal partnership. Conformably
thereto, the cash dividends declared on July 1, 1981 and July 25, 1981 in the
amount of P2,191.62 and P40,196.12, respectively, should pertain to Rose Marie;
and that declared on April 25, 1981 in the amount of P37,126.30 ought to be paid
to Benigno, pursuant to Paragraph 4 (c) of the compromise agreement which
awards to Benigno the conjugal assets not otherwise specifically assigned to Rose
Marie.
With respect to the amount of P360,095.12 which Benigno deducted from the
P2 million supposed to be paid to Rose Marie, it is not clear from the records
where said amount came from. The Court of Appeals, in holding that it is conjugal
and therefore belongs to Benigno, presumed it to be in the nature of cash
dividends declared prior to the approval of the compromise agreement by reason
of the fact that the amount was deducted by Benigno from the P2 million which
he paid on April 14, 1981. While no sufficient proof was adduced to conclusively
explain such deduction, there exists the legal presumption that all property of the
marriage belongs to the conjugal partnership absent any proof that it is the
exclusive property of either spouse. Since Rose Marie failed to prove that the
16
amount forms part of her paraphernal property, it is presumed to be conjugal
property. Consequently, Benigno is entitled to the said amount of P360,095.12,
hence he rightfully deducted the same from the amount due to Rose Marie.
The issue regarding the annotation of the lien on Benigno’s properties has
been mooted by our resolution dated April 3, 1989 wherein, at his instance, we
ordered the cancellation thereof upon his posting of the corresponding bond. In
our resolution of February 26, 1990, we noted Benigno’s compliance, approved the
bond he filed, and ordered the cancellation of the liens annotated on the
certificates of title of the properties
_______________
16 Article 160, Civil Code.
 723
VOL. 183, MARCH 26, 1990 723
Toda, Jr. vs. Court of Appeals
Likewise, the order denying the motion to inhibit Judge Rizalina Bonifacio Vera
has become academic considering that she no longer presides over the court where
the case was filed. Besides, as correctly explained by respondent court, the ground
for inhibition raised by Benigno is not valid it being merely on the basis of the
judge having acquired knowledge of the facts surrounding the agreement of the
parties, hence she would be a material witness to the issue of the true agreement
which is contested by the parties. However, those facts came to the knowledge of
the judge in the course of her efforts to effect a compromise between parties and
are also known to the parties. This is not a ground for disqualification; on the
contrary, said acts of the judge were in accord with the rule encouraging
compromises in litigations, especially between members of the same family.
Anent the tax savings of P4,623,982.24 obtained by Benigno, we hold that this
forms part of the P40 million allocated to Rose Marie under paragraph 4 (b) (1) of
the compromise agreement. We give credit to the ratiocination thereon of the trial
court as quoted with approval by respondent court:
“The records show that petitioner Benigno Toda, Jr. paid only P1,125,152.48 in estate taxes,
although the amount stated in the Compromise Agreement was P15,749,135.32. The
balance of P4,623,929.24 is now being claimed by both parties as aforestated. In the opinion
of this court, the pertinent terms of the Agreement as quoted, are clear and do not require
any interpretation. In brief, under the Agreement, petitioner Rose Marie T. Toda is
adjudicated the fixed sum of P40 million, to be paid as follows: (a) Payment by petitioner
Benigno Toda, Jr. of the estate taxes, interests and penalties thereon, pertaining to the
estate of the late Manuel Tuason, Jr. in the amount of P15,749,135.32 as of March 31, 1982;
(b) P2 million within 30 days after signing of the Agreement; (c) the balance within six
months after date of signing of the Agreement. This Court notes that the amount of taxes,
interests and penalties is fixed at P15,749,135.32 and this figure was provided by Benigno
Toda, Jr. There is no provision as contended by petitioner Benigno Toda, Jr. that the
amount was only an assumed liability and that he could attempt to reduce it by suit or
compromise. It is clear that if the amount of P4,623,929.24 is to be credited to Benigno Toda,
Jr. then the P40 million which petitioner Rose Marie T. Toda is to receive would be short by
that amount. This VOL. 183, MARCH 26, 1990
724
724 SUPREME COURT REPORTS ANNOTATED
Toda, Jr. vs. Court of Appeals
Benigno Toda, Jr. was constituted as agent to pay to the government the liability of the
estate of the late Manuel Tuason, Jr. in the fixed amount of P15,749,135.32 and if he was
able to secure a reduction thereof, then he should deliver to his principal such reduction. . .
xxx” 17
We do not believe that Benigno was denied due process when the trial court
resolved the motion of Rose Marie for the payment of P4,623,982.24 without the
benefit of a hearing. The records disclose that the hearing thereon was postponed
twice at the instance of Benigno, which prompted the court to thereafter consider
the motion submitted for resolution on the basis of the allegations therein and the
answer filed by counsel for both parties. Benigno cannot now be heard to claim
that he was deprived of his day in court. Furthermore, respondent court correctly
held that the issue involved was more of a question of interpretation of a contract
rather than a determination of facts. Benigno failed to make a plausible showing
that the supposed evidence he had intended to present, if any, would not be
merely collateral matters.
Considering that the amount of P4,623,982.24 actually forms an integral part
of the P40 million (minus the lawful and authorized deductions that may be made
therefrom) which Benigno categorically undertook to pay to Rose Marie, the same
must earn interest at the rate of 18% per annum and 5% non-payment penalty,
the same being included in and within the contemplation of Paragraph 4 (b) (1) (c)
of the compromise agreement. Said provision of the agreement provides for the
payment of the interest and penalty upon non-payment of the balance of the P40
million after the specific authorized deductions therefrom. Since the amount of
P4,623,982.24 was not to be lawfully deducted by Benigno, as hereinbefore
explained, it constitutes part of the contemplated contingent balance which might
turn out to be due to Rose Marie and, therefore, subject to the imposition of said
increments on Benigno’s liability.
WHEREFORE, the judgment appealed from is hereby AFFIRMED, with the
modification that Benigno Toda, Jr. is hereby
________________
Rollo, G.R. Nos. 78696-97, 61-62.
17
725
VOL. 183, MARCH 27, 1990 725
United Realty Corporation vs. Court of Appeals
18% per annum and 5% non-payment penalty on the tax savings of P4,623,982.24
from date of formal demand until the same is fully paid.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla andSarmiento, JJ., concur.
Judgment affirmed with modification.
Note.—When the property is registered in the name of a Spouse only and
there is no showing as to when the property was acquired by said spouse, the
property belongs exclusively to said spouse. (PNB vs. Court of Appeals, 153 SCRA
435.)
——o0o——
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

600 SUPREME COURT REPORTS ANNOTATED
Valencia vs. Locquiao
G.R. No. 122134. October 3, 2003. *
ROMANA LOCQUIAO VALENCIA and CONSTANCIA L. VALENCIA,
petitioners, vs. BENITO A. LOCQUIAO, now deceased and substituted by JIMMY
LOCQUIAO, TOMASA MARA and the REGISTRAR OF DEEDS OF
PANGASINAN, respondents.
CONSTANCIA L. VALENCIA, petitioner, vs. BENITO A. LOCQUIAO, now
deceased and substituted by JIMMY LOCQUIAO, respondent.
Attorneys; Notary Public; Failure of the notary public to furnish a copy of the deed to
the appropriate office is a ground for disciplining him but certainly not for invalidating the
document or for setting aside the transaction therein involved.—The certification is not
sufficient to prove the alleged inexistence or spuriousness of the challenged document. The
appellate court is correct in pointing out that the mere absence of the notarial record does
not prove that the notary public does not have a valid notarial commission and neither does
the absence of a file copy of the document with the archives effect evidence of the
falsification of the docu-
_______________
*SECOND DIVISION.
601
VOL. 412, OCTOBER 3, 2003 601
Valencia vs. Locquiao
ment. This Court ruled that the failure of the notary public to furnish a copy of the
deed to the appropriate office is a ground for disciplining him, but certainly not for
invalidating the document or for setting aside the transaction therein involved.
Same; Same; A public document executed and attested through the intervention of the
notary public is evidence of the facts therein expressed in clear unequivocal manner.—
Thirdly, the questioned deeds, being public documents as they were duly notarized, are
admissible in evidence without further proof of their due execution and are conclusive as to
the truthfulness of their contents, in the absence of clear and convincing evidence to the
contrary. A public document executed and attested through the intervention of the notary
public is evidence of the facts therein expressed in clear, unequivocal manner.
Civil Law; Donations; The celebration of the marriage between the beneficiary couple
in tandem with compliance with the prescribed form was enough to effectuate the donation
propter nuptias under the Old Civil Code.—Under the Old Civil Code, donations propter
nuptias must be made in a public instrument in which the property donated must be
specifically described. However, Article 1330 of the same Code provides that “acceptance is
not necessary to the validity of such gifts.” In other words, the celebration of the marriage
between the beneficiary couple, in tandem with compliance with the prescribed form, was
enough to effectuate the donation propter nuptias under the Old Civil Code.
Same; Same; As provided in Article 129, express acceptance is not necessary for the
validity of donations propter nuptias; Implied acceptance is sufficient.—Under the New Civil
Code, the rules are different. Article 127 thereof provides that the form of donations propter
nuptias are regulated by the Statute of Frauds. Article 1403, paragraph 2, which contains
the Statute of Frauds requires that the contracts mentioned thereunder need be in writing
only to be enforceable. However, as provided in Article 129, express acceptance “is not
necessary for the validity of these donations.”Thus, implied acceptance is sufficient.
Same; Prescription; Petitioners’ action which was filed on December 23, 1985 or more
than forty (40) years from the execution of the deed of donation on May 22, 1944 was clearly
time-barred.—Viewing petitioners’ action for reconveyance from whatever feasible legal
angle, it is definitely barred by prescription. Petitioners’ right to file an action for the
reconveyance of the land accrued in 1944, when the Inventario Ti Sagut was executed. It
must be remembered that before the effectivity of the New Civil Code in 1950, the Old Code
of Civil Procedure (Act No. 190) governed prescription. Under the Old Code of Civil
Procedure, an action for recovery
602
6 SUPREME COURT REPORTS ANNOTATED
02
Valencia vs. Locquiao
of the title to, or possession of, real property, or an interest therein, can only be
brought within ten years after the cause of such action accrues. Thus, petitioners’ action,
which was filed on December 23, 1985, or more than forty (40) years from the execution of
the deed of donation on May 22, 1944, was clearly time-barred.
Same; Same; The prescriptive period for the reconveyance of property allegedly
registered through fraud is ten (10) years reckoned from the date of the issuance of the
certificate of title.—As early as May 15, 1970, when the deed of donation was registered and
the transfer certificate of title was issued, petitioners were considered to have constructive
knowledge of the alleged fraud, following the jurisprudential rule that registration of a deed
in the public real estate registry is constructive notice to the whole world of its contents, as
well as all interests, legal and equitable, included therein. As it is now settled that the
prescriptive period for the reconveyance of property allegedly registered through fraud is
ten (10) years, reckoned from the date of the issuance of the certificate of title, the action
filed on December 23, 1985 has clearly prescribed.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Romeo C. Dela Cruz for respondents.
TINGA, J.:
The Old Civil Code and the Old Code of Civil Procedure, repealed laws that they
1 2
both are notwithstanding, have not abruptly become mere quiescent items of legal
history since their relevance do not wear off for a long time. Verily, the old
statutes proved to be decisive in the adjudication of the case at bar.
Before us is a petition for review seeking to annul and set aside the
joint Decision dated November 24, 1994, as well as the Resolution dated
3 4
September 8, 1995, of the former Tenth Division of the 5
_______________
1 Otherwise referred to as the Civil Code of Spain of 1889.
2 Act No. 190.
Rollo, pp. 45-58.
3
 Id, at p. 59.
4
due course, the original title was cancelled and in lieu thereof Transfer Certificate
Associate Justice Conrado M. Vasquez, Jr., ponente, with former Associate Justice Jaime M.
of Title No. 84897 was issued in the name of the respondents Benito and Tomasa.
5
15

Lantin, (ret.), and then Associate Justice

603 On March 18, 1973, the heirs of the Locquiao spouses, including respondent
Benito and petitioner Romana, executed a Deed of Partition with Recognition of
VOL. 412, OCTOBER 3, 2003 603
Rights, wherein they distributed among only three (3) of them, the twelve (12)
16

Valencia vs. Locquiao
Court of Appeals in two consolidated cases involving an action for annulment of
title and an action for ejectment.
6 7
Both cases involve a parcel of land consisting of 4,876 square meters situated
in Urdaneta, Pangasinan. This land was originally owned by the spouses
Herminigildo and Raymunda Locquiao, as evidenced by Original Certificate of
Title No. 18383 issued on October 3, 1917 by the Register of Deeds of Pangasinan.
8
On May 22, 1944, Herminigildo and Raymunda Locquiao executed a deed of
donation propter nuptias which was written in the Ilocano dialect, denominated
parcels of land left by their common progenitors, excluding the land in question
and other lots disposed of by the Locquiao spouses earlier. Contained in the deed
is a statement that respondent Benito and Marciano Locquiao, along with the
heirs of Lucio Locquiao, “have already received our shares in the estates of our
parents, by virtue of previous donations and conveyances,” and that for that
reason the heirs of Lucio Locquaio were not made parties to the deed. All the
living children of the Locquaio spouses at the time, including petitioner Romana,
confirmed the previous dispositions and waived their rights to whomsoever the
properties covered by the deed of partition were adjudicated. 17

as Inventario Ti Sagut in favor of their son, respondent Benito Locquiao

9
(hereafter, respondent Benito) and his prospective bride, respondent Tomasa
Mara (hereafter, respondent Tomasa). By the terms of the deed, the donees were
gifted with four (4) parcels of land, including the land in question, as well as a
male cow and one-third (1/3) portion of the conjugal house of the donor parents, in
Later on, disagreements among five (5) heirs or groups of heirs, including
petitioner Romana, concerning the distribution of two (2) of the lots covered by
the deed of partition which are Lots No. 2467 and 5567 of the Urdaneta Cadastral
Survey surfaced. As their differences were settled, the heirs concerned executed
a Deed of Compromise Agreement on June 12, 1976, which provided for the re-
18

consideration of the impending marriage of the donees. distribution of the two (2) lots. Although not directly involved in the discord,
The donees took their marriage vows on June 4, 1944 and the fact of their Benito signed the compromise agreement together with his feuding siblings,
marriage was inscribed at the back of O.C.T. No. 18383. 10
nephews and nieces. Significantly, all the signatories to the compromise
Herminigildo and Raymunda died on December 15, 1962 and January 9, 1968, agreement, including petitioner
respectively, leaving as heirs their six (6) children, namely: respondent Benito,
Marciano, Lucio, Emeteria, Anastacia, and petitioner Romana, all surnamed _______________
Locquiao. With the permission of respondents Benito and Tomasa, petitioner
11

Romana Valencia (hereinafter, Romana) took possession and cultivated the TSN, October 2, 1986, pp. 19, 22.
13

Exhibit “7-A,” Annotation at the back of OCT 18383, supra.

subject land. When respondent Romana’s husband got sick sometime in 1977, her
14
12

Exhibit “B,” Record, p. 208.

15

daughter petitioner Constancia Valencia (hereaf- Exhibit “2,” Record, p. 170-173.

16

Ibid., pp. 3-4.

17

_______________ Exhibit “3,” Record, pp. 174-175.

18

605
Maria Alicia Austria-Martinez (now Supreme Court Associate Justice), concurring. VOL. 412, OCTOBER 3, 2003 605
CA-G.R. No. CV-21311.
6

CA-G.R. No. SP-16789.

7 Valencia vs. Locquiao
Annex “A”, Record, p. 7.
8
Romana, confirmed all the other stipulations and provisions of the deed of
Exhibit “C,” Record, p. 9, translated in English as Inventory of Donation, Record, p. 10.
partition.
9
19

Exhibit “7-B,” Annotation at the back of OCT 18383, supra; Vide RTC Decision in Civil Case No. U-
10

4348, Record, p. 253. Sometime in 1983, the apparent calm pervading among the heirs was
TSN, October 2, 1986, pp. 11, 13.
11
disturbed when petitioner Constancia filed an action for annulment of title
TSN, April 7, 1987, p. 21.
12
against the respondents before the Regional Trial Court of Pangasinan. The 20

604
record shows that the case was dismissed by the trial court but it does not
604 SUPREME COURT REPORTS ANNOTATED indicate the reason for the dismissal. 21

Valencia vs. Locquiao On December 13, 1983, respondent Benito filed with the Municipal Trial
ter, petitioner Constancia) took over, and since then, has been in possession of the Court of Urdaneta, Pangasinan a Complaint seeking the ejectment of petitioner
22

land. 13
Constancia from the subject property.
Meanwhile, respondents Benito and Tomasa registered the Inventario Ti
Sagut with the Office of the Register of Deeds of Pangasinan on May 15, 1970. In 14
 On November 25, 1985, the Municipal Trial Court rendered
a Decision, ordering the defendant in the case, petitioner Constancia, to vacate
23
the land in question.
Petitioners Romana and Constancia countered with a Complaint for the 24
annulment of Transfer Certificate of Title No. 84897 against respondents Benito
and Tomasa which they filed with the Regional Trial Court of Pangasinan on
25
December 23, 1985. Petitioners alleged that the issuance of the transfer
certificate of title was fraudulent; that the Inventario Ti Sagut is spurious; that
the notary public who notarized the document had no authority to do so, and; that
the donation did not observe the form required by law as there was no written
acceptance on the document itself or in a separate public instrument.
Meanwhile, the decision in the ejectment case was appealed to the same RTC
where the case for annulment of title was also pending. Finding that the question
of ownership was the central issue in both cases, the court issued
an Order suspending the
26
_______________
19 Ibid.
20 Agrarian Case No. 1406, Vide Decision dated January 30, 1989, supra; TSN, April 7, 1987, pp. 13-
14.
Ibid.
21
Vide Complaint in Civil Case No. U-4338, Record, p. 3.
22
Ibid.
23
Record, pp. 1-3.
24
On October 1, 1987, Benito Locquiao died. The court ordered for the substitution of Jimmy
25
Locquiao, the adopted son Benito Locquiao, as party-defendant. Vide Order dated March 23, 1988,
Record, p. 215.
Order dated September 29, 1986, cited in the RTC decision dated January 31, 1989, Records, pp.
26
102-103.
606
606 SUPREME COURT REPORTS ANNOTATED
Valencia vs. Locquiao
proceedings in the ejectment case until it shall have decided the ownership issue
in the title annulment case.
After trial, the RTC rendered a Decision dated January 30, 1989 dismissing
27
the complaint for annulment of title on the grounds of prescription and laches. It
likewise ruled that the Inventario Ti Sagut is a valid public document which
transmitted ownership over the subject land to the respondents. With the
dismissal of the complaint and the confirmation of the respondents’ title over the
subject property, the RTC affirmed in toto the decision of the MTC in the
ejectment case. 28
Dissatisfied, petitioners elevated the two (2) decisions to the respondent Court
of Appeals. Since they involve the same parties and the same property, the
appealed cases were consolidated by the appellate court.
On November 24, 1994, the Court of Appeals rendered the
assailed Decision affirming the appealed RTC decisions. The appellate court
upheld the RTC’s conclusion that the petitioners’ cause of action had already
prescribed, considering that the complaint for annulment of title was filed more
than fifteen (15) years after the issuance of the title, or beyond the ten (10)-year
prescriptive period for actions for reconveyance. It likewise rejected the
petitioners’ assertion that the donation propter nuptias is null and void for want
of acceptance by the donee, positing that the implied acceptance flowing from the
very fact of marriage between the respondents, coupled with the registration of
the fact of marriage at the back of OCT No. 18383, constitutes substantial
compliance with the requirements of the law.
The petitioners filed a Motion for Reconsideration but it was denied by the
29
appellate court in its Resolution dated September 8, 1995. Hence, this petition.
30
We find the petition entirely devoid of merit.
Concerning the annulment case, the issues to be threshed out are: (1) whether
the donation propter nuptiasis authentic; (2) whether acceptance of the donation
by the donees is required; (3) if
_______________
Supra, item 4.
27
Decision dated January 31, 1989, supra.
28
Rollo, pp. 104-118.
29
Id., at p. 59.
30
607
VOL. 412, OCTOBER 3, 2003 607
Valencia vs. Locquiao
so, in what form should the acceptance appear, and; (4) whether the action is
barred by prescription and laches.
The lnventario Ti Sagut which contains the donation propter nuptias was
executed and notarized on May 22, 1944. It was presented to the Register of
Deeds of Pangasinan for registration on May 15, 1970. The photocopy of the
document presented in evidence as Exhibit “8” was reproduced from the original
kept in the Registry of Deeds of Pangasinan. 31
The petitioners have launched a two-pronged attack against the validity of the
donation propter nuptias, to witfirst, the Inventario Ti Sagut is not authentic; and
second, even assuming that it is authentic, it is void for the donee’s failure to
accept the donation in a public instrument.
To buttress their claim that the document was falsified, the petitioners rely
mainly on the Certification dated July 9, 1984 of the Records Management and
32
Archives Office that there was no notarial record for the year 1944 of Cipriano V.
Abenojar who notarized the document on May 22, 1944 and that therefore a copy
of the document was not available.
The certification is not sufficient to prove the alleged inexistence or
spuriousness of the challenged document. The appellate court is correct in
pointing out that the mere absence of the notarial record does not prove that the
notary public does not have a valid notarial commission and neither does the
absence of a file copy of the document with the archives effect evidence of the
falsification of the document. This Court ruled that the failure of the notary public
33
to furnish a copy of the deed to the appropriate office is a ground for disciplining Decision, p. 3, supra.
35

Exhibit “2”, supra, pp. 3-4.

him, but certainly not for invalidating the document or for setting aside the
36

609
transaction therein involved. 34

Moreover, the heirs of the Locquaio spouses, including petitioner Romana, VOL. 412, OCTOBER 3, 2003 609
made reference in the deed of partition and the compromise agreement to the Valencia vs. Locquiao
previous donations made by the spouses in The petitioners fault the RTC for admitting in evidence the deed of partition and
the compromise agreement on the pretext that the documents “were not properly
_______________ submitted in evidence”, pointing out that “when presented to respondent Tomasa
Mara for identification, she simply stated that she knew about the documents but
Vide Certification dated August 11, 1983 at the bottom of Exhibit “8,” Record, p. 9.
she did not actually identify them.”
31
37

Exhibit “W,” Record, p. 210.

32

Decision, p. 8, Rollo, p. 52.

33
The argument is not tenable. Firstly, objection to the documentary evidence
Spouses Santiago v. Court of Appeals, 317 Phil. 400; 247 SCRA 336(1995).
34 must be made at the time it is formally offered. Since the petitioners did not even
38

608 bother to object to the documents at the time they were offered in evidence, it is 39

608 SUPREME COURT REPORTS ANNOTATED now too late in the day for them to question their admissibility. Secondly, the
documents were identified during the Pre-Trial, marked as Exhibits “2” and “3”
Valencia vs. Locquiao
and testified on by respondent Tomasa. Thirdly, the questioned deeds, being
40

favor of some of the heirs. As pointed out by the RTC respondent Benito was not
public documents as they were duly notarized, are admissible in evidence without
35

allotted any share in the deed of partition precisely because he received his share
further proof of their due execution and are conclusive as to the truthfulness of
by virtue of previous donations. His name was mentioned in the deed of partition
their contents, in the absence of clear and convincing evidence to the contrary. A 41

only with respect to the middle portion of Lot No. 2638 which is the eleventh
public document executed and attested through the intervention of the notary
(11th) parcel in the deed but that is the same one-third (1/3) portion of Lot No.
public is evidence of the facts therein expressed in clear, unequivocal manner. 42

2638 covered by O.C.T. No. 18259 included in the donation propter

Concerning the issue of form, petitioners insist that based on a provision of 43

nuptias. Similarly, Marciano Locquiao and the heirs of Lucio Locquiao were not
the Civil Code of Spain (Old Civil Code), the acceptance by the donees should be
allocated any more share in the deed of partition since they received theirs by
made in a public instrument. This argument was rejected by the RTC and the
virtue of prior donations or conveyances.
appellate court on the theory that the implied acceptance of the donation had
The pertinent provisions of the deed of partition read:
flowed from the celebration of the marriage between the respondents, followed by
...
That the heirs of Lucio Locquiao are not included in this Partition by reason of the fact the registration of the fact of marriage at the back of OCT No. 18383.
that in the same manner as we, BENITO and MARCIANO LOCQUIAO are concerned, we The petitioners, the appellate court and the trial court all erred in applying
have already received our shares in the estate of our parents by virtue of previous donations the requirements on ordinary donations to the present
and conveyances, and that we hereby confirm said dispositions, waiving our rights to
whomsoever will these properties will now be adjudicated; _______________
...
That we, the Parties herein, do hereby waive and renounce as against each other any Petition, p. 31, citing TSN, April 7, 1987, pp. 12-13.
37

claim or claims that we may have against one or some of us, and that we recognize the rights Section 36, Rule 132, Revised Rules of Court.
38

of ownership of our coheirs with respect to those parcels already distributed and Order dated May 22, 1987, Record, p. 192.
39

adjudicated and that in the event that one of us is cultivating or in possession of any one of TSN, April 7, 1987, Folder of TSN, p. 107.
40

the parcels of land already adjudicated in favor of another heir or has been Gerales v. Court of Appeals, G.R. No. 85909, 9, February 1993, 218 SCRA 638, 648, citing Baranda
41

v. Baranda, 150 SCRA 59 (1987).

conveyed, donated or disposed of previously, in favor of another heir, we do hereby renounce Ibid., citing Collantes v. Capuno, 123 SCRA 652 (1983).
42

and waive our right of possession in favor of the heir in whose favor the donation or Article 633 of the Old Civil Code provides that the acceptance in an ordinary donation must appear
43

conveyance was made previously. (Emphasis supplied)

36
in a public instrument. This requirement is the same under Article 749 of the New Civil Code.
The exclusion of the subject property in the deed of partition dispels any doubt as 610
to the authenticity of the earlier Inventario Ti Sagut. 610 SUPREME COURT REPORTS ANNOTATED
This brings us to the admissibility of the Deed of Partition with Recognition of
Valencia vs. Locquiao
Rights, marked as Exhibit “2”, and the Deed of Compromise Agreement, marked
as Exhibit “3”. case instead of the rules on donation propter nuptias.Underlying the blunder is
their failure to take into account the fundamental dichotomy between the two
_______________ kinds of donations.
 Unlike ordinary donations, donations propter nuptias or donations by reason
of marriage are those “made before its celebration, in consideration of the same
and in favor of one or both of the future spouses.” The distinction is crucial
44
because the two classes of donations are not governed by exactly the same rules,
especially as regards the formal essential requisites.
Under the Old Civil Code, donations propter nuptiasmust be made in a public
instrument in which the property donated must be specifically
described. However, Article 1330 of the same Code provides that acceptance is not
45
necessary to the validity of such gifts”. In other words, the celebration of the
marriage between the beneficiary couple, in tandem with compliance with the
prescribed form, was enough to effectuate the donation propter nuptias under the
Old Civil Code.
Under the New Civil Code, the rules are different. Article 127 thereof provides
that the form of donations propter nuptias are regulated by the Statute of Frauds.
Article 1403, paragraph 2, which contains the Statute of Frauds requires that the
contracts mentioned thereunder need be in writing only to be enforceable.
However, as provided in Article 129, express acceptance “is not necessary for the
validity of these donations.” Thus, implied acceptance is sufficient.
_______________
44 Article 126, New Civil Code. The definition was retained in Article 82 of the Family Code. Article
1327 of the Old Civil Code similarly defines donations by reason of marriage as “those bestowed before its
celebration in consideration of the same, upon one or both of the spouses.”
Article 1328 of the Old Civil Code provides that donations propter nuptias are governed by the
45
rules on ordinary donations (Title II, Book III of the Code) “insofar as they are not modified by the
following articles.” Article 633 of the same Code, which is under Title II, Book III, provides that ordinary
donations must be made in a public instrument in which the property donated must be specifically
described. It is also settled that a donation of real estate propter nuptias is void unless made by public
instrument. Solis v. Barroso, 53 Phil. 912 (1928); Camagay v. Lagera, 7 Phil. 397 (1907); Velasquez v.
Biala, 18 Phil. 231 (1911).
611
VOL. 412, OCTOBER 3, 2003 611
Valencia vs. Locquiao
The pivotal question, therefore, is which formal requirements should be applied
with respect to the donation propter nuptias at hand. Those under the Old Civil
Code or the New Civil Code?
It is settled that only laws existing at the time of the execution of a contract
are applicable thereto and not later statutes, unless the latter are specifically
intended to have retroactive effect. Consequently, it is the Old Civil Code which
46
applies in this case since the donation propter nuptias was executed in 1944 and
the New Civil Code took effect only on August 30, 1950. The fact that in 1944 the
47
Philippines was still under Japanese occupation is of no consequence. It is a well-
known rule of the Law of Nations that municipal laws, as contra-distinguished
from laws of political nature, are not abrogated by a change of sovereignty. This 48
Court specifically held that during the Japanese occupation period, the Old Civil
Code was in force. As a consequence, applying Article 1330 of the Old Civil Code
49
in the determination of the validity of the questioned donation, it does not matter
whether or not the donees had accepted the donation. The validity of the donation
is unaffected in either case.
Even the petitioners agree that the Old Civil Code should be applied.
However, they invoked the wrong provisions thereof. 50
Even if the provisions of the New Civil Code were to be applied, the case of the
petitioners would collapse just the same. As earlier shown, even implied
acceptance of a donation propter nuptias suffices under the New Civil Code. 51
With the genuineness of the donation propter nuptiasand compliance with the
applicable mandatory form requirements fully
_______________
Philippine Virginia Tobacco Administration vs. Gonzalez, G.R. No. 34628, 30 July 1979, 92 SCRA
46
172, cited in Ortigas Co., Ltd. vs. Court of Appeals, G.R. No. 126102, 346 SCRA 748 (2000).
Ilejay v. Ilejay, et al., (S.C.) 49 O.G. 4903; Casabar v. Sino Cruz, et al., 96 Phil. 970 (1954), cited in I
47
A. Tolentino, Civil Code of the Philippines Commentaries and Jurisprudence 18 (1990 ed.)
Co Kim Cham vs. Valdez Tan Keh and Dizon, 75 Phil. 371 (1945).
48
Ebero v. Canizares, 79 Phil. 152 (1947).
49
The petitioners argued that the deed of donation did not comply with the requirements of Article
50
633 of the Old Civil Code. Petition, p. 28, Record, p. 29.
Article 129, New Civil Code, supra
51
612
612 SUPREME COURT REPORTS ANNOTATED
Valencia vs. Locquiao
established, petitioners’ hypothesis that their action is imprescriptible cannot
take off.
Viewing petitioners’ action for reconveyance from whatever feasible legal
angle, it is definitely barred by prescription. Petitioners’ right to file an action for
the reconveyance of the land accrued in 1944, when the Inventario Ti Sagut was
executed. It must be remembered that before the effectivity of the New Civil Code
in 1950, the Old Code of Civil Procedure (Act No. 190) governed
prescription. Under the Old Code of Civil Procedure, an action for recovery of the
52
title to, or possession of, real property, or an interest therein, can only be brought
within ten years after the cause of such action accrues. Thus, petitioners’ action,
53
which was filed on December 23, 1985, or more than forty (40) years from the
execution of the deed of donation on May 22, 1944, was clearly timebarred.
Even following petitioners’ theory that the prescriptive period should
commence from the discovery of the alleged fraud, the conclusion would still be
the same. As early as May 15, 1970, when the deed of donation was registered
and the transfer certificate of title was issued, petitioners were considered to have
constructive knowledge of the alleged fraud, following the jurisprudential rule
that registration of a deed in the public real estate registry is constructive notice
to the whole world of its contents, as well as all interests, legal and equitable,
included therein. As it is now settled that the prescriptive period for the
54
reconveyance of property allegedly registered through fraud is ten (10) years,
reckoned from the date of the issuance of the certificate of title, the action filed on 55
December 23, 1985 has clearly prescribed.
 In any event, independent of prescription, petitioners’ action is dismissible on Costs against petitioners.
the ground of laches. The elements of laches are present in this case, viz.:
_______________
_______________
Metropolitan Waterworks and Sewerage System (MWSS) v. Court of Appeals, 7 October 1998, G.R.
56

52 Amerol, et al. v. Molok Bagumbaran, G.R. No. L-33261, 30 September 1987, 154 SCRA 396. No. 126000, 297 SCRA 287, 306 (1998).
53 Section 40, Act 190. Chan Sui Bi vs. Court of Appeals, 29 September 2000, G.R. No. 129507, 341 SCRA 364, 372 (2000).
57

54 Garcia v. Court of Appeals, 22 January 1980, G.R. Nos. L-48971 & 49011, 95 SCRA 380 (1980), 614
citing Prieto v. Saleeby, 31 Phil. 590 (1915). 614 SUPREME COURT REPORTS ANNOTATED
55 Caro v. Court of Appeals, 180 SCRA 402 (1990).
613 Cruz vs. Court of Appeals
VOL. 412, OCTOBER 3, 2003 613 SO ORDERED.
Bellosillo (Chairman), Quisumbing and Callejo, Sr., JJ., concur.
Valencia vs. Locquiao
Austria-Martinez, J., No part. Concurred in CA decision.
Judgment affirmed.
1. (1)conduct on the part of the defendant, or one under whom he claims, Note.—Article 1602 of the Civil Code enumerates the instances when a
giving rise to the situation that led to the complaint and for which the contract will be presumed to be an equitable mortgage. (Ching Sen Ben vs. Court
complainant seeks a remedy; of Appeals, 314 SCRA 762 [1999])
2. (2)delay in asserting the complainant’s rights, having had knowledge or
notice of defendant’s conduct and having been afforded an opportunity ——o0o——
to institute a suit;
3. (3)lack of knowledge or notice on the part of the defendant that the © Copyright 2018 Central Book Supply, Inc. All rights reserved.
complainant would assert the right on which he bases his suit, and
4. (4)injury or prejudice to the defendant in the event relief is accorded to
the complainant, or the suit is not held barred. 56

Of the facts which support the finding of laches, stress should be made of the
following: (a) the petitioners Romana unquestionably gained actual knowledge of
the donation propter nuptias when the deed of partition was executed in 1973 and
the information must have surfaced again when the compromise agreement was
forged in 1976, and; (b) as petitioner Romana was a party-signatory to the two
documents, she definitely had the opportunity to question the donation propter
nuptias on both occasions, and she should have done so if she were of the mindset,
given the fact that she was still in possession of the land in dispute at the time.
But she did not make any move. She tarried for eleven (11) more years from the
execution of the deed of partition until she, together with petitioner Constancia,
filed the annulment case in 1985.
Anent the ejectment case, we find the issues raised by the petitioners to be
factual and, therefore, beyond this Court’s power of review. Not being a trier of
facts, the Court is not tasked to go over the proofs presented by the parties and
analyze, assess, and weigh them to ascertain if the trial court and the appellate
court were correct in according them superior credit in this or that piece of
evidence of one party or the other. In any event, implicit in the affirmance of the
57

Court of Appeals is the existence of substantial evidence supporting the decisions

of the courts below.
WHEREFORE, finding no reversible error in the assailed decision, the same
is hereby AFFIRMED.

VOL. 260, JULY 31, 1996 221
Valdes vs. Regional Trial Court, Br. 102, Quezon City
G.R. No. 122749. July 31, 1996. *
ANTONIO A.S. VALDES, petitioner, vs. REGIONAL TRIAL COURT, BRANCH
102, QUEZON CITY, and CONSUELO M. GOMEZ-VALDES, respondents.
Civil Law; Family Code; 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 of the Family Code.—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.
Same; Same; Property acquired by both spouses through their work and industry shall
be governed by the rules on equal co-ownership.—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
_______________
*FIRST DIVISION.
222
2 SUPREME COURT REPORTS ANNOTATED
22
Valdes vs. Regional Trial Court, Br. 102, Quezon City
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 still be considered as having
contributed thereto jointly if said party’s “efforts consisted in the care and maintenance of
the family household.” Unlike the conjugal partnership of gains, the fruits of the couple’s
separate property are not included in the co-ownership.
Same; Same; When the common-law spouses suffer from a legal impediment to marry
or when they do not live exclusively with each other, 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.—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 jointcontribution 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 faciepresumed 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.
Same; Same; The first paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43 relates only by its explicit terms, to voidable
marriages and exceptionally, to void marriages under Article 40 of the Code.—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 Article 50 of the Family Code,
applying paragraphs (2), (3), (4) and (5)of Article 43, relates only, by its explicit terms,
to voidablemarriages and, exceptionally, to void marriages under Article 40 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
223
VOL. 260, JULY 31, 1996 223
Valdes vs. Regional Trial Court, Br. 102, Quezon City
from the very beginning and no judicial decree is necessary to establish their nullity.
PETITION for review of a decision of the Regional Trial Court of Quezon City, Br.
102.
The facts are stated in the opinion of the Court.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.
Roco, Buñag, Kapunan & Migallos for private respondent.
VITUG, J.:
The petition for review bewails, purely on a 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 of
the parties to the contract.
The pertinent facts giving rise to this incident are, by and large, not in
dispute.
Antonio Valdes and Consuelo Gomez were married on 05 January 1971.
Begotten during the marriage were five children. In a petition, dated 22 June
1992, Valdes sought the declaration of nullity of the marriage pursuant to Article
36 of the Family Code (docketed Civil Case No. Q-92-12539, Regional Trial Court
of Quezon City, Branch 102). After hearing the parties following the joinder of
issues, the trial court, in its decision of 29 July 1994, granted the petition; viz:
1
“WHEREFORE, judgment is hereby rendered as follows:
“(1) The marriage of petitioner Antonio Valdez and respondent Consuelo Gomez-Valdes
is hereby declared null and void under
________________
1 Hon. Perlita Tria Tirona, presiding.
224
224 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
Article 36 of the Family Code on the ground of their mutual psychological incapacity to
comply with their essential marital obligations;
“(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela Rosario
shall choose which parent they would want to stay with.
 “Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother, herein
respondent Consuelo Gomez-Valdes.
“The petitioner and respondent shall have visitation rights over the children who are in
the custody of the other.
“(3) The petitioner and 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.” (Italics ours.)
2
Consuelo Gomez sought a clarification of that portion of the decision directing
compliance with Articles 50, 51 and 52 of the Family Code. She asserted that the
Family Code contained no provisions on the procedure for the liquidation of
common property in “unions without marriage.” Parenthetically, during the
hearing on the motion, the children filed a joint affidavit expressing their desire
to remain with their father, Antonio Valdes, 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 other properties for that matter in equal shares.
_________________
2Rollo, p. 22.
225
VOL. 260, JULY 31, 1996 225
Valdes vs. Regional Trial Court, Br. 102, Quezon City
“In the liquidation and partition of the properties owned in common by the plaintiff and
defendant, the provisions on co-ownership found in the Civil Code shall apply.” (Emphasis
3
supplied.)
In addressing specifically the issue regarding the disposition of the family
dwelling, the trial court said:
“Considering that this Court has already declared the marriage between petitioner and
respondent as null and void ab initio, pursuant to Art. 147, the property regime of petitioner
and respondent shall be governed by the rules on co-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
“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.
_________________
3 Rollo, p. 42.
4 Rollo, pp. 38-39.
226
226 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
“III
“Assuming arguendo that Article 147 applies to marriages declared void ab initio on the
ground of the psychological incapacity of a spouse, the same may be read consistently with
Article 129.
“IV
“It is necessary to determine the parent with whom majority of the children wish to
stay.” 5
The trial court correctly applied the law. In a void marriage, regardless of the
cause thereof, the property relations of the parties during the period of
cohabitation is governed by the provisions of Article 147 or Article 148, such as
the case may be, of the Family Code. Article 147 is a remake of Article 144 of the
Civil Code as interpreted and so applied in previous cases; it provides:
6
“ART. 147. When a man and a woman who are capacitated to marry each other, live
exclusively with each other as husband and wife without the benefit of marriage or under a
void marriage, their wages and salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or industry shall be governed by the
rules on co-ownership.
“In the absence of proof to the contrary, properties acquired while they lived together
shall be presumed to have been obtained by their joint efforts, work or industry, and shall
be owned by them in equal shares. For purposes of this Article, a party who did not
participate in the acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former’s efforts consisted in the care and
maintenance of the family and of the household.
“Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of the
other, until after the
__________________
 Rollo, pp. 24-25.
5
6 See Margaret Maxey vs. Court of Appeals, 129 SCRA 187; Aznar, et al. vs. Garcia, et al., 102 Phil. 1055.
227
VOL. 260, JULY 31, 1996
Valdes vs. Regional Trial Court, Br. 102, Quezon City
termination of their cohabitation.
“When only one of the parties to a void marriage is in good faith, the share of the party
in bad faith in the co-ownership shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common children or their descendants, each
vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.”
This peculiar kind of co-ownership applies when a man and a woman, suffering no
legal impediment to marry each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of marriage. The term
“capacitated” in the provision (in the first paragraph of the law) refers to the legal
capacity of a party to contract marriage, i.e., any “male or female of the age of
eighteen years or upwards not under any of the impediments mentioned in
Articles 37 and 38” of the Code.
7
___________________
Art. 5. Any male or female of the age of eighteen years or upwards not under any of the
7
impediments mentioned in Articles 37 and 38, may contract marriage.
Art. 37. Marriages between the following are incestuous and void from the beginning, whether the
relationship between the parties be legitimate or illegitimate:
1. (1)Between ascendants and descendants of any degree; and
2. (2)Between brothers and sisters, whether of the full-or half-blood.
Art. 38. The following marriages shall be void from the beginning for reasons of public policy:
1. (1)Between collateral blood relatives; whether legitimate or illegitimate, up to the fourth civil
degree;
2. (2)Between step-parents and stepchildren;
3. (3)Between parents-in-law and children-in-law;
4. (4)Between the adopting parent and the adopted child;
5. (5)Between the surviving spouse of the adopting parent and the adopted child;
228
228 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
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 still be considered as having contributed thereto
jointly if said party’s “efforts consisted in the care and maintenance of the family
household.” Unlike the conjugal partnership of gains, the fruits of the couple’s
8
separate property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has
227
clarified Article 144 of the Civil Code; in addition, the law now expressly provides
that—
(a) Neither party can dispose or encumber by act inter vivos his or her share
in co-ownership property, without the consent of the other, during the period of
cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her
share in the co-ownership in favor of their common children; in default thereof or
waiver by any or all of the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to the innocent party.
The forfeiture shall take place upon the termination of the cohabitation or 9
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
__________________
1. (6)Between the surviving spouse of the adopted child and the adopter;
2. (7)Between an adopted child and a legitimate child of the adopter;
3. (8)Between adopted children of the same adopter; and
4. (9)Between parties where one, with the intention to marry the other, killed that other person’s
spouse or his or her own spouse.
8Article 147, Family Code.
9Article 147, Family Code.
Articles 43, 50 and 51, Family Code.
10
229
VOL. 260, JULY 31, 1996 229
Valdes vs. Regional Trial Court, Br. 102, Quezon City
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 had jurisdiction to declare the marriage a nullity
must be deemed likewise clothed with authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in ruling that
petitioner and private respondent own the “family home” and all their common
property in equal shares, as well as in concluding that, in the liquidation and
partition of the property owned in common by them, the provisions on co-
ownership under the Civil Code, not Articles 50, 51 and 52, in relation to Articles
102 and 129, of the Family Code,
12
_______________
Article 148, Family Code.
11
Art. 50. The effects provided for in paragraph (2), (3), (4) and (5) of Article 43 and in Article 44
12
shall also apply in proper cases to marriages which are declared void ab initio or annulled by final
judgment under Articles 40 and 45.
The final judgment in such cases shall provide for the liquidation, partition and distribution of the
properties of the spouses, the custody and support of the common children, and the delivery of their
presumptive legitimes, unless such matters had been adjudicated in previous judicial proceedings.
All creditors of the spouses as well as of the absolute community or the conjugal partnership shall be
notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated in
accordance with the provisions of
230
230 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
should aptly prevail. The rules set up to govern the liquidation of either the
absolute community or the conjugal partnership
__________________
Articles 102 and 129.
Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed
as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound
securities, unless the parties, by mutual agreement judicially approved, had already provided for such
matters.
The children or their guardian, or the trustee of their property, may ask for the enforcement of the
judgment.
The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon the death of either or both of the parents; but the value
of the properties already received under the decree of annulment or absolute nullity shall be considered
as advances on their legitime.
Art. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses, and the delivery of the children’s presumptive legitimes
shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not
affect their persons.
Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:
1. (1)An inventory shall be prepared, listing separately all the properties of the absolute
community and the exclusive properties of each spouse.
2. (2)The debts and obligations of the absolute community shall be paid out of its assets. In case
of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance
with their separate properties in accordance with the provisions of the second paragraph of
Article 94.
3. (3)Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to
each of them.
4. (4)The net remainder of the properties of the absolute community shall constitute its net
assets, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements, or unless there has
been a voluntary waiver of such share as provided in this Code. For purposes of computing
the net profits subject to forfeiture in accordance with Article 43, No. (2) and 63, No. (2), the
said profits shall be the increase in
231
VOL. 260, JULY 31, 1996 231
Valdes vs. Regional Trial Court, Br. 102, Quezon City
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
_________________
value between the market value of the community property at the time of the celebration of the
marriage and the market value at the time of its dissolution.
1. (5)The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51.
2. (6)Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal
dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the
majority of the common children choose to remain. Children below the age of seven years are
deemed to have chosen the mother, unless the court has decided otherwise. In case there is
no such majority, the court shall decide, taking into consideration the best interests of said
children.
Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall
apply;
1. (1)An inventory shall be prepared, listing separately all the properties of the conjugal
partnership and the exclusive properties of each spouse.
2. (2)Amounts advanced by the conjugal partnership in payment of personal debts and
obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.
3. (3)Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition
of property or for the value of his or her exclusive property, the ownership of which has been
vested by law in the conjugal partnership.
4. (4)The debts and obligations of the conjugal partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.
5. (5)Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to
each of them.
6. (6)Unless the owner has been indemnified from whatever source, the loss or deterioration of
movables used for the benefit of the family, belonging to either spouse, even due to
fortuitous event, shall be paid to said spouse from the conjugal
232
232 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
that exists between common-law spouses. The first paragraph of Article 50 of the
Family Code, applying paragraphs (2), (3), (4) and (5) of Article 43, relates only, 13
by its explicit terms, to
________________
1. funds, if any.
2. (7)The net remainder of the conjugal partnership properties shall constitute the profits, which
shall be divided equally between husband and wife, unless a different proportion or division
was agreed upon in the marriage settlements or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code.
3. (8)The presumptive legitimes of the common children shall be delivered upon partition in
accordance with Article 51.
4. (9)In the partition of the properties, the conjugal dwelling and the lot on which it is situated
shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom
the majority of the common children choose to remain. Children below the age of seven years
are deemed to have chosen the mother, unless the court has decided otherwise. In case there
is no such majority, the court shall decide, taking into consideration the best interests of
said children.
13Art. 43. The termination of the subsequent marriage referred to in the preceding Article shall
produce the following effects:
1. (1)The children of the subsequent marriage conceived prior to its termination shall be
considered legitimate, and their custody and support in case of dispute shall be decided by
the court in a proper proceeding;
2. (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. (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. (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 ir-
233
VOL. 260, JULY 31, 1996 233
Valdes vs. Regional Trial Court, Br. 102, Quezon City
voidable marriages and, exceptionally, to void marriages under Article 40 of the 14
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 and 42, of the 15 16
Family
_________________
1. revocable; and
2. (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.
Art. 40. The absolute nullity of a previous marriage may be invoked for purposes of remarriage on
14
the basis solely of a final judgment declaring such previous marriage void.
Art. 41. A marriage contracted by any person during the subsistence of a previous marriage shall
15
be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been
absent for four consecutive years and the spouse present had a well-founded belief that the absent spouse
was already dead. In case of disappearance where there is danger of death under the circumstances set
forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the preceding paragraph, the spouse
present must institute a summary proceeding as provided in this Code for the declaration of presumptive
death of the absentee, without prejudice to the effect of reappearance of the absent spouse.
Art. 42. The subsequent marriage referred to in the preceding Article shall be automatically
16
terminated by the recording of the affidavit of reappearance of the absent spouse, unless there is a
judgment annulling the previous marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of reappearance shall be recorded in the civil
registry of the residence of the
234
234 SUPREME COURT REPORTS ANNOTATED
Valdes vs. Regional Trial Court, Br. 102, Quezon City
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, in the latter case, the
ordinary rules on co-ownership subject to the provision of Article 147 and Article
148 of the Family Code. It must be stressed, nevertheless, even as it may merely
state the obvious, that 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.
SO ORDERED.
Padilla (Chairman), Kapunan and Hermosisima, Jr., JJ., concur.
Bellosillo, J., On leave.
Orders affirmed.
——o0o——
________________
parties to the subsequent marriage at the instance of any interested person, with due notice to the
spouses of the subsequent marriage and without prejudice to the fact of reappearance being judicially
determined in case such fact is disputed.
235
© Copyright 2018 Central Book Supply, Inc. All rights reserved.
 [No. 22383. October 6, 1924]
THE PHILIPPINE NATIONAL BANK, plaintiff and appellee, vs. MARGARITA
QUINTOS E YPARRAGUIRRE and ANGEL A. ANSALDO, defendants and
appellants.
HUSBAND AND WlFE; CONJUGAL PARTNERSHIP; OBLIGATIONS
CONTRACTED DURING MARRIAGE; LIABILITY OF SPOUSES.—The conjugal
partnership is liable for obligations contracted during marriage, and in default of
conjugal property, the spouses are jointly liable therefor with their private properties,
unless by express stipulation, they shall have bound themselves solidarily.
APPEAL from a judgment of the Court of First Instance of Manila. Concepcion, J.
The facts are stated in the opinion of the court.
Angel A. Ansaldo for appellants.
Roman J. Lacson for appellee.
VlLLAMOR, J.:
The appellants pray for the dismissal of the complaint with costs against the
plaintiff, alleging that the judgment appealed from is erroneous: (1) Because it
holds that the document Exhibit A does not contain anything that makes the
plaintiff agent of the defendants; (2) because it finds without any ground that the
defendants were husband and wife when they executed said document; (3)
because upon this finding, it considers unnecessary to discuss whether or not the
obligation evidenced by said document is solidary between the defendants; (4)
because to maintain such opinion amounts to compelling the defendants to
comply with said obligation in a manner distinct from that stipulated in the
contract; and (5) because it sanctions an arbitrary, unjust and illegal procedure.
The Honorable Pedro Concepcion, judge, who tried this case, rendered
decision in the following terms:
"The plaintiff seeks to recover of the defendants the sum of P31,785.96, the
amount of an alleged overdraft against them and in favor of the plaintiff bank,
with interest thereon at 8 per cent per annum from October 1, 1922.
371
VOL. 46, OCTOBER 6, 1924 371
National Bank vs. Quintos and Ansaldo
"It appears from the evidence that in a document dated June 20, 1918, the
Philippine National Bank granted the defendants a credit to the amount of
P31,284, and to secure the payment thereof, as well as the interest and costs, the
defendants mortgaged and pledged to the bank certain certificates of one hundred
fifty-eight shares of stock of the Bank of the Philippine Islands of the nominal
value of P200 each. Later on, a certificate of fifty shares and another of forty were
substituted by others of 10 and 30 shares, respectively. Besides these shares, the
defendants delivered to the bank, as additional securities, fifty shares of stock of
the 'Compañía Naviera' of the nominal value of P100 each; eighty shares of stock
of the 'Compañía Mercantil' of P100 each; fifty shares of stock of the Davao
Agriculture and Commercial Company of P100 each, and 10 second liberty bonds.
These bonds were sold by the plaintiff bank on or before August 19, 1922, having
realized the sum of P2,360 from the sale thereof. (Exhibit 3.)
"On August 21, 1920, the herein defendant, Mr. Angel Ansaldo, in his answer
to a letter of the bank addressed to him or to his wife, his codefendant Margarita
Q. de Ansaldo, stated, as may be seen in Exhibit B, that the balance in his current
account in favor of said bank in the sum of P33,558.45 on July 31, 1920, had been
examined by him and found correct. This balance with the interest due from the
said date up to September 30, 1922, amounted to P41,212.05 and after deducting
the credit and deposits from August 1, 1920, to September 30, 1922, which
amount to P9,426.09, there remains a balance of P31,785.96, payment of which is
claimed in the complaint.
"And the complaint was filed because between April 2, 1921, and July 22,
1922, the 'date of the letter Exhibit 6, the defendant Mr. Ansaldo was several
times required to pay his debt, the securities given having been found to be
insufficient to secure the payment of his obligations, but the defendants failed to
give the new additional securities demanded.
372
372 PHILIPPINE REPORTS ANNOTATED
National Bank vs. Quintos and Ansaldo
"The defendants discuss in the first place the nature of the obligation sued on,
maintaining that the same is not of a solidary nature because, say they, there is
nothing in it that expressly determines said character, and therefore it binds only
those who have contracted the same to the extent of their share in said obligation;
and in connection with this point it was attempted to prove that the defendant
Margarita Q. de Ansaldo, making use of the credit granted, has received from the
bank only the sum of ?10,000, (Exhibit 5). As an answer to the question raised the
attorney for the bank calls attention to Exhibit A where it appears that the
defendant Angel A. Ansaldo 'and or' Margarita Q. de Ansaldo, both or either of
them indiscriminately, could sign checks against the bank in their current
account.
"The court is of the opinion that it is not necessary to discuss whether the
obligation in question is solidary or joint, because in either case this debt is in the
last analysis chargeable to the conjugal partnership of the defendant spouses.
According to article 1408 of the Civil Code, all the debts and obligations
contracted during the marriage by the husband, as well as those incurred by the
wife in those cases in which she may legally bind the partnership, are chargeable
to the conjugal partnership. In the instant case, the defendant Margarita Q. de
Ansaldo joined her husband in the execution of the document, evidencing the
obligation in question, on June 20, 1918, Exhibit A. (See Joaquin vs.Avellana, 11
Phil., 249; Fulgencio vs. Gatchalian, 21 Phil., 252; Falcon vs. Manzano, 15 Phil.,
441.)
"Another question raised, although indirectly, by the defendants is that, this
being, as. it is, a case of a loan for an indefinite period of time they were not asked
to pay in accordance with law, articles 313 and 316 of the Code of Commerce. This
contention is untenable. Under the provision of section 33 of Act No. 2938,
amending the charter of the Philippine National Bank, if, from any cause
whatsoever, any of the securities specified for the loans provided
373
VOL. 46, OCTOBER 6, 1924 373
National Bank vs. Quintos and Ansaldo
for therein, or accepted by said bank as security for loans, should decline or
depreciate in market value wholly or in part, said bank may demand additional
securities or may forthwith declare such obligation due and payable; and it is a
fact admitted by the defendants themselves that the securities given by them
have suffered a considerable depreciation and it is a fact proven that they were
required to give additional securities but failed to do so.
"If the securities were found to have depreciated in value, say the defendants,
'the plaintiff bank's remedy was the one provided in the document executed by the
defendants in its favor and in accordance with its own charter. According to the
contract, it may hold or sell the securities above mentioned although as an agent
(articles 1710, 1713, 1714, 1718, 1719, and 1796 of the Civil Code); and in
accordance with its charter (section 42, Act No. 2612), said sale may be ordered:
15 days after a demand in writing is made upon the debtor to increase the
amount thereof, if in the meantime said debtor should have failed to comply with
this requirement * * * The plaintiff, say they, cannot be considered authorized to
be negligent, as soon as it shall have learned that the securities had begun to
depreciate, as compared with the value they had when they were delivered; for
then it neither would comply with the agency stipulated in the document in its f
avor, which would render it liable, nor could in justice claim from the debtor what
by its own negligence it may have failed to receive/ As an answer to this, it may be
said that:
" '* * * it must be borne in mind that it is a recognized doctrine in the matter
of suretyship that with respect to the surety, the creditor is under no obligation to
display any diligence in the enforcement of his rights as a creditor. His mere
inaction, indulgence, passiveness, or delay in proceeding against the principal
debtor, or the fact that he did not enforce the guaranty or apply to the payment of
such funds as were available, constitute no defense at all for the surety, unless
the contract expressly requires diligence
374
374 PHILIPPINE REPORTS ANNOTATED
National Bank vs. Quintos and Ansaldo
and promptness on the part of the creditor, which is not the case in the present
action.' (Clark vs. Sellner, 42 Phil., 384.)
"Furthermore, there is nothing in the document evidencing the contract which
makes the plaintiff, as the defendants believe, their agent with the obligation to
sell the securities given as pledge; on the contrary, the plaintiff, according to the
document, has a right, not an obligation, to elect to enforce the securities in the
manner it now does by bringing this action.
"As to the amount of the obligation, the defendants argue that the
acknowledgment of the debit balance on July 31, 1920, in the amount of
P33,548.55, (Exhibit B), is not any evidence that may legally bind the defendant
Margarita Q. de Ansaldo, who has not accepted it as correct. The truth, however,
is that the defendant Mr. Ansaldo who gave his conformity with the aforesaid
balance is the husband of the other defendant and the legal manager of the
property of the conjugal partnership which is liable for the payment of this debt.
"The interest computed was likewise discussed in this case, the defendants
claiming that the same was not fixed with their consent, nor does there exist, say
they, any proof that it was ever fixed by the Board of Directors of the bank. It
appears, however, from the evidence of the plaintiff that the National Bank had
authorized various officers thereof to fix certain rate of interest on certain
occasions; as for instance, the rate of interest for the months of August to
September, 1920, was raised from 9 to 12 per cent. It remained stationary at the
rate of 12 per cent until April, 1922, when it lowered from 12 to 8 per cent. At all
events, we believe that the defendants have no right to raise this question
because they have paid interest at the rate of 9 per cent per annum, as appears f
rom the document marked Exhibit I.
"For all of the foregoing, judgment is rendered sentencing the defendants to
pay the plaintiff bank the sum of thirty-
375
VOL. 46, OCTOBER 6, 1924 375
National Bank vs. Quintos and Ansaldo
one thousand seven hundred eighty-five pesos and ninetysix centavos
(P31,785.96), with interest thereon at the rate of 8 per cent per annum from
October 1, 1922, until full payment, with the costs; in case of failure to pay, let the
certificates of shares described in Exhibit A be sold, and if the proceeds of the sale
of said shares are not sufficient to cover the whole amount of the debt, let an
execution issue against any property of the conjugal partnership of the
defendants and, in default thereof, against the private property of each of them,
sufficient to cover the whole amount of the balance that may be remaining
unpaid.
"So ordered.
"Manila, P. I., February 5, 1924.
(Sgd.) "PEDRO CONCEPCION
"Judge"
As the transcript of the testimony of the witnesses was not forwarded to this
court, we cannot, according to the constant jurisprudence of this court, review the
evidence and so we have to abide by the findings of fact set forth in the judgment
of the trial court.
We agree with the appellants that, according to the contract of pledge Exhibit
A, attached to the complaint, the defendants authorized the plaintiff to act as
their agent with full power and authority to dispose of the effects pledged in the
manner stipulated in said contract; but it appears that the plaintiff had also an
option, not an obligation precisely, to enforce the securities given.
The question whether or not the appellants executed the aforesaid document
Exhibit A as husband and wife was decided by the trial court in the sense that the
defendant appellant Mr. Ansaldo is the husband of the other defendant Doña
Margarita Q. e Iparraguirre. For the reason above given we cannot alter this
finding of the trial court and consequently if the defendants are husband and
wife, it is immaterial whether the debt was contracted by one or the other, for in
either case as the debt was contracted
376
376 PHILIPPINE REPORTS ANNOTATED
National Bank vs. Quintos and Ansaldo
during the marriage of the defendants it must be paid for the account of the
conjugal partnership in accordance with article 1408 of the Civil Code.
After a thorough study of the judgment appealed from, we do not find therein
any substantial error that justifies the reversal thereof and therefore the same
must be, as is hereby, affirmed with costs against the appellants. So ordered.
Johnson, Street, Malcolm, Avanceña, Ostrand, and Romualdez, JJ., concur.
Judgment affirmed.
DECISION UPON MOTION FOR RECONSIDERATION
December 10, 1924.
VILLAMOR, J.:
In view of the juridical importance of the question raised in this motion, wherein
it is maintained that the obligation of the defendants is chargeable to the conjugal
partnership, and not to the private property of the spouses, and much less to the
private property of Margarita Quintos de Ansaldo, we deem it well to enlarge
upon our decision published October 6, 1924.
It will be remembered that the defendants signed a document of pledge in
favor of the plaintiff Philippine National Bank to secure the payment of a loan in
current account to the amount of P31,284. In said document it does not clearly
appear that the signers were husband and wife, although there is proof in the
record tending to show their civil status as husband and wif e. Nor does it appear
in the said document that the signers have bound themselves solidarily to pay the
debt owing to plaintiff.
The judgment appealed from, affirmed by this court in a decision published
October 6, 1924, sentences the defendants to pay the plaintiff bank the sum of
thirty-one thousand seven hundred eighty-five pesos and ninety-six centavos
(P31,785.96) with interest thereon at 8 per cent per annum from October 1, 1922,
until full payment, with
377
VOL. 46, OCTOBER 6, 1924 377
National Bank vs. Quintos and Ansaldo
the costs; providing that, in default of payment, the certificates of shares
described in Exhibit A must be sold, and in case the proceeds of the sale were not
sufficient to cover the whole amount of the debt, an execution shall issue against
the property of the conjugal partnership of the defendants and, 'if no such
property was found, then against any private property of each of them sufficient
to cover the whole amount of the balance remaining unpaid.
There can be no doubt that the property pledged being insufficient, the
property of the conjugal partnership is liable for this obligation in accordance
with article 1408 of the Civil Code, because the same was contracted by the
spouses during the marriage; but in def ault of property of the conjugal
partnership (article 1401), what- is the liability of the spouses as to the private
property (article 1396) of each of them?
In this jurisdiction we do not believe that a similar question was heretofore
ever raised and decided, and so far as the research of the writer hereof discloses,
it finds no precedent in the Spanish jurisprudence.
By express provision of the Civil Code, the conjugal partnership begins to
exist at the celebration of the marriage, and the separation of the properties
between the spouses shall take place (article 1432) only when it is expressly
stipulated in the marriage settlement, or is judicially decreed, or in the case
provided in article 50 of the Code. This conjugal partnership, however, is confined
to the properties mentioned in article 1401 of the Civil Code, to wit: (a) Those
acquired by onerous title during the marriage at the expense of the common
property whether the acquisition is made f or the community or f or only one of
them; (b) those obtained by the industry, salary or labor of the spouses or any of
them; (c) the fruits, rents or interest received or accruing during the marriage,
from the common or the private property of each of the spouses. The partnership
does not produce the merger of the properties of each spouse. Each of them,
notwithstanding the existence
378
378 PHILIPPINE REPORTS ANNOTATED
National Bank vs. Quintos and Ansaldo
of the partnership, continues to be the owner of what he or she had before
contracting marriage, as well as of what he or she may have acquired later by
lucrative title, by right of' redemption, or by exchange with his or her property, or
by purchase with his or her money.
The ganancial partnership, to use the expression of Mr. Manresa, is the same
conjugal partnership constituted, in its economical aspect, under the system
established by the law as suppletory. It is, therefore, formed by the husband and
the wife, each with his or her own property and with his or her own debts. The
legislator does not intend to effect a mixture or merger of those debts or
properties between the spouses. The partnership maintains the separation of the
properties brought by each spouse f rom those that he or she may substitute for
them, or privately acquire afterwards by lucrative title.
Under the provisions of the Code it appears evident that the conjugal
partnership does not produce the merger of properties, nor does it cause the
personality of the wife to disappear; on the contrary, the law establishes absolute
separation of capitals—a complete independence of the capital account from the
account of benefits pertaining to the conjugal partnership, all of which constitutes
an unsurmountable obstacle to the presumption of solidarity between spouses.
 The question submitted to our consideration presupposes the insolvency of the ____________
conjugal partnership, and as there is no presumption of solidarity of properties
between the spouses, the question may be asked, What liability do the partners © Copyright 2018 Central Book Supply, Inc. All rights reserved.
have with respect to the debts of the partnership? The legal provisions about
conjugal partnership, contained in chapter 5, title 3, book 4, of the Civil Code, do
not give an adequate answer to this question; so that we have to resort to other
sources for a solution thereof. Mr. Manresa already indicates in his commentaries
on article 1395 that in view of the provisions of the Code regard-
379

VOL. 46, OCTOBER 6, 1924 379

National Bank vs. Quintos and Ansaldo
ing conjugal partnership, "the cases will be rare wherein there would be any need
to resort to the suppletory rule of the contract of partnership; but the law, which
does not in any manner pretend having provided for all the questions that may
present themselves in the practice, points out new sources of law to which resort
must be made in order to solve doubtful cases, situations or circumstances not
provided in articles 1392 to 1431." The case now before us is one of them, which
requires, in order to be solved, a resort to the rule on the contract of partnership,
prescribed in article 1698, which provides that the partners are not solidarily
liable with respect to the debt of the partnership, and none can bind the others by
a personal act, if they have not given him any power theref or.
The af orecited provision negativing solidarity in the liability of the partners
is a consequence of the conclusive rule of article 1137, of general application to all
kinds of obligation, to the effect that in obligations created by the will of the
parties, solidarity will exist only when it is expressly determined in the title
thereof, giving them such a character. Therefore if solidarity exists only by
stipulation, or by law, it is evident that the partner cannot be solidarily liable for
the debts of the partnership, because, as Manresa says, there is no legal provision
imposing such burden upon him, and because the same is not only not authorized
by the contract of partnership, but is contrary to the nature thereof, for gain being
the consideration of the obligation, the latter cannot be extended beyond the
interest that the partner may have therein which is proportional to his share.
Taking into account that the contract of pledge signed by the defendants does
not show that they have contracted a solidary obligation, it is our opinion, and so
decide, that the properties given as pledge being insufficient, the properties of the
conjugal partnership of the defendants are liable for the debt to the plaintiff, and
in default thereof, they are jointly liable for the payment thereof.
380
380 PHILIPPINE REPORTS ANNOTATED
People vs. Joson
It being understood that the judgment appealed from is modified in the sense
above stated, the motion of the appellants is denied. So ordered.
Johnson, Street, Malcolm, Avanceña, Ostrand, and Romualdez, JJ., concur.
Motion denied.

VOL. 509, NOVEMBER 30, 2006 383
Metropolitan Bank and Trust Company vs. Tan
G.R. No. 163712. November 30, 2006. *
METROPOLITAN BANK AND TRUST COMPANY and ROGELIO T. UY,
petitioners, vs. JOSE B. TAN and ELIZA GO TAN, respondents.
Banks and Banking; Loans; In the absence of proof, nay allegation, that the signatures
of a party on Promissory Notes, Credit Line Agreements, and Amendments of Real Estate
Mortgage were forged, the Court is constrained to uphold their genuineness.—Petitioners, on
the other hand, presented six Promissory Notes dated February 26, 1996, May 8, 1996,
August 27, 1996, October 8, 1996, October 25, 1996, and November 18, 1996; five Credit
Line Agreements dated September 9, 1991, September 24, 1992, September 2, 1993,
November 3, 1994, and April 25, 1996; an Amendment of Real Estate Mortgage from
P15,000,000 to P25,000,000; and October 29, 1996 Amendment of Real Estate Mortgage
from P25,000,000 to P40,000,000. All document-exhibits of petitioners which are original
copies bear the signature of respondent Jose B. Tan, however, as solidary co-debtor of his
sons Rey John Tan and Ariel Tan. And these documents were annotated at the back of the
title in question. In the absence of proof, nay allegation, that the signatures of respondent
Jose B. Tan on the abovementioned documents were forged, this Court is constrained to
uphold their genuineness.
Same; Same; Husband and Wife; Conjugal Partnership; The statement in the title that
the property is “registered in accordance with the provisions of Section 103 of the Property
Registration Decree in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan” does
not prove or indicate that the property is conjugal.—In any event, lack of respondent Eliza
Go Tan’s consent to the mortgage covering the title in question would not render the
encumbrance void under the second paragraph of Article 124 of the Family Code. For proof
is wanting that the property covered by the title is conjugal—that it was acquired during
respondents’ marriage which is what would give rise to the presumption that it is conjugal
property. The statement in the title that the property is “registered in accordance with the
provisions of Section 103 of the Property Registration De-
_______________
*THIRD DIVISION.
384
3 SUPREME COURT REPORTS ANNOTATED
84
Metropolitan Bank and Trust Company vs. Tan
cree in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan” does
not prove or indicate that the property is conjugal. So Ruiz v. Court of Appeals instructs:
The property subject of the mortgage is registered in the name of “Corazon G. Ruiz, of legal
age, married to Rogelio Ruiz, Filipinos.” Thus, title is registered in the name of Corazon
alone because the phrase “married to Rogelio Ruiz” is merely descriptive of the civil
status of Corazon and should not be construed to mean that her husband is also a
registered owner. Furthermore, registration of the property in the name of “Corazon G.
Ruiz, of legal age, married to Rogelio Ruiz” is not proof that such property was acquired
during the marriage, and thus, is presumed to be conjugal. The property could have been
acquired by Corazon while she was still single, and registered only after her marriage to
Rogelio Ruiz. Acquisition of title and registration thereof are two different acts. The
presumption under Article 116 of the Family Code that properties acquired during the
marriage are presumed to be conjugal cannot apply in the instant case. Before such
presumption can apply, it must first be established that the property was in fact acquired
during the marriage. In other words, proof of acquisition during the marriage is a
condition sine qua non for the operation of the presumption in favor of conjugal ownership.
No such proof was offered nor presented in the case at bar.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Francis U. Ku for respondents.
CARPIO-MORALES, J.:
On the application for extrajudicial foreclosure of mortgage filed by herein
petitioners Metropolitan Bank and Trust Company (Metrobank) and its Vice
President Rogelio T. Uy (Uy), the Office of the Provincial Sheriff of Misamis
Oriental issued a “Sheriffs Notice of Sale” setting on April 17, 1998 the sale at
1
public auction of four mortgaged parcels of land
_______________
1Exhibit “E,” Index of Exhibits for the Plaintiffs, p. 16.
385
VOL. 509, NOVEMBER 30, 2006 385
Metropolitan Bank and Trust Company vs. Tan
including that covered by Transfer Certificate of Title No. T53267 (the title in
question) registered in the name of herein respondent Jose B. Tan who was
referred to in the title as “JOSE B. TAN, of legal age, Filipino, married to Eliza
Go Tan....” 2
A day before the scheduled public auction of the mortgaged properties or on
April 16, 1998, respondent spouses Jose B. Tan and Eliza Go Tan filed a
complaint against petitioners, along with Albano L. Cuarto, Sheriff IV of the
3
Office of the Provincial Sheriff of Misamis Oriental, for removal of cloud on the
title in question and injunction before the Regional Trial Court of Misamis
Oriental. The complaint was docketed as Civil Case No. 98-225.
Respondents cited the following grounds-bases of their complaint:
1. 1.Respondent Eliza Go Tan never gave her consent or conformity to
encumber the title in question;
2. 2.The real estate mortgages, annotated as Entries No. 142475, 146789,
174644, 213699, 247803, and 246959 at the back of TCT No. 52367
covering the questioned land are null and void because respondent Jose
B. Tan had already fully paid the obligations secured by the mortgages
annotated as Entries No. 14275, 146789, and 174644; while the
mortgages registered as Entry No. 213699 (amendment of mortgage,
amending a previous loan of P15,000,000 to £25,000,000) and Entry No.
246959 (amendment of mortgage amending a previous loan of
P25,000,000 to P40,000,000), as well as any mortgage prior to that
 registered as Entry No. 213699 was not executed and signed
by[respondent Jose B. Tan]. (Italics supplied)
As scheduled, the public auction of the foreclosed properties took place on April
Crediting the testimony of respondent Jose B. Tan denying having 1) executed
and signed the two amendments of the mortgage, 2) received the amount of
P40,000,000, and 3) appeared before Notary Public Joel Peñaranda who
notarized the mortgage for P40,000.00, and likewise crediting the testimony of
11

17, 1998 following which the Office of the Provincial Sheriff of Misamis Oriental respondent Eliza Go Tan denying that the signature appearing on the real estate
issued a Sheriff’s mortgage dated November 5, 1992 was hers, and finding that 12

“... the existing loans covered by real estate mortgages annotated at the back of subject TCT
No. T-53267 of the Registry of Deeds for Cagayan de Oro, had been fully paid as of July 1,
_______________
1997, defendant Metrobank had no basis to be paid again through the extrajudicial
foreclosure proceedings” (italics supplied)[,]
13

Exhibits “C,” “C-1,” and “C-2,” id., at p. 12.

Branch 38 of the Misamis Oriental RTC, by Decision of March 5, 2001, rendered
2

3Index of Records, pp. 2-9.

386 judgment in favor of respondents, disposing as follows:
“WHEREFORE, premises considered, this Court hereby renders judgment in favor of the
386 SUPREME COURT REPORTS ANNOTATED
plaintiffs spouses Jose B. Tan and Eliza G. Tan and against the defendants, as follows:
Metropolitan Bank and Trust Company vs. Tan
Certificate of Sale in the name of petitioner Metrobank, the highest bidder.
4
1. a)Declaring that, because of the fact that the plaintiff Eliza G. Tan did not give
In their Answer to the Complaint, petitioners alleged that:
5 her consent to all the real estate mortgages annotated at the back of her title,
“Plaintiffs [herein respondents], together with their two sons, Ariel and Rey TCT No. T-53267, of the Registry of Deeds for Cagayan de Oro, all said
John, obtained a credit line from the defendant bank from which they made availments mortgages are null and void ab initio;
from time to time. In time and always upon their plea, the line was gradually increased until 2. b)Declaring that, because plaintiff Jose R Tan did not execute the real estate
it reached P40 million. There was no separate or distinct loan to speak of; all mortgages annotated at the back of his ti
availments or releases were taken from one and the same line.
In the same token, the mortgage constituted on the four lots, TCT No. T-53267 included, _______________
was for the entire credit line and not for any particular availment or for a determinate
portion of the credit. As such, the mortgage will be discharged and the four lots released only 10 Index of Records, pp. 27-28.
upon the termination of the line, which means full payment of the entire loan -which 11 Id., at p. 243; TSN, January 28, 1999, pp. 8-9; Rollo, pp. 98, 387-388.
12 Index of Records, p. 242; TSN, January 26, 1999, p. 27.
plaintiffs never did.” (Emphasis and italics supplied)
6

13 Id., at p. 245.

Petitioners further alleged that the deeds of real estate mortgage, promissory 7
388
notes, and credit line agreements bore the signature of respondent Jose B. Tan
8 9

388 SUPREME COURT REPORTS ANNOTATED

either for himself or as attorney-in-fact of his son Ariel Tan and, in one of them,
his wife-co-respondent Eliza Go Tan’s signature appeared. Metropolitan Bank and Trust Company vs. Tan

_______________ 1. tle, TCT No. T-53267, of the Registry of Deeds for Cagayan de Oro, all said
mortgages are null and void ab initio;
Exhibit “F,” Index of Exhibits for the Plaintiffs, p. 17.
4
2. c)Declaring the extrajudicial foreclosure proceedingstaken by the defendant
Index of Records, pp. 25-29.
5
sheriff, including the sheriffs certificate of sale as null and void;
Index of Records, p. 27.
3. d)Making permanent the writ of preliminary injunction against the defendant
6

Id., at pp. 30-34; vide marked originals, Exhibits “16,” “17,” “18,” “19,” and “20,” Index of Exhibits
7

for the Defendants, pp. 16-20. sheriff, and the Office of the Provincial Sheriff of Misamis Oriental enjoining
Index of Records, pp. 35-40; vide marked originals, Exhibits “5,” “6,” “7,” “8,” “9,” and “10,” Index of
8 and restraining them, their agents, and representatives from issuing a final
Exhibits for the Defendants, pp. 5-10. certificate of sale in favor of defendant Metrobank covering the parcel of land
Index of Records, pp. 41-45; vide marked originals, Exhibits “11,” “12,” “13,” “14,” and “15,” Index of
9
covered by TCT No. T-53267;
Exhibits for the Defendants, pp. 11-15. 4. e)Ordering the removal of the cloud on the title, TCT No. T-53267, of the Registry
387 of Deeds for Cagayan de Oro, and the cancellation of all the entries of the real
VOL. 509, NOVEMBER 30, 2006 387 estate mortgages and amendment of mortgages annotated at the back of TCT
No. T-53267, of the Registry of Deeds for Cagayan de Oro City;
Metropolitan Bank and Trust Company vs. Tan 5. f)Absolving the plaintiffs spouses from financial liability from the null and
By way of Counterclaim, petitioners prayed for the award of attorney’s fees, void real estate mortgages;
compensatory and/or moral damages, exemplary damages, and other reliefs. 10 6. g)Declaring the principal obligations obtained by Rey John Tan through
the annulled real estate mortgages as FULLY PAID by him;
 7. h)Ordering defendant Metrobank to pay attorney’s fee and expenses of litigation in 390
the amount of P100,000 and the costs. 390 SUPREME COURT REPORTS ANNOTATED
Metropolitan Bank and Trust Company vs. Tan
SO ORDERED.” (Emphasis and italics supplied)
1996; five Credit Line Agreements dated September 9, 1991, September 24, 1992,
14

Petitioners appealed the trial court’s decision before the Court of Appeals.
22

By Decision of November 21, 2003, the Court of Appeals affirmed the trial
15
September 2, 1993, November 3, 1994, and April 25, 1996; an Amendment of 23

court’s decision and accordingly dismissed petitioners’ appeal. And it denied Real Estate Mortgage from P15,000,000 to P25,000,000; and October 29,
petitioners’ Motion for Reconsideration. 16
1996 Amendment of Real Estate Mortgage from P25,000,000 to P40,000,000.
24

All document-exhibits of petitioners which are original copies bear the

_______________ signature of respondent Jose B. Tan, however, as solidary co-debtor of his sons
Rey John Tan and Ariel Tan. And these documents were annotated at the back of
25

14Id., at pp. 245-247. the title in question. 26

15Penned by Court of Appeals Associate Justice Andres B. Reyes, Jr. with the concurrence of
Associate Justices Buenaventura J. Guerrero and Regalado E. Maambong, CA Rollo, pp. 211-228.
Id., at pp. 231-243.
16
In the absence of proof, nay allegation, that the signatures of respondent Jose
B. Tan on the abovementioned documents were forged, this Court is constrained
to uphold their genuineness.

389
27

As for the claim that respondent Eliza Go Tan did not give her consent to the
VOL. 509, NOVEMBER 30, 2006 389
mortgage of the title in question, the same is belied by her signature on Exhibit 28

Metropolitan Bank and Trust Company vs. Tan “18”-Real Estate Mortgage which is annotated as Entry No. 174644 at the back of
Hence, the present Petition for Review on Certiorari filed on July 7, 2004. 17 the title. Her bare denial that the signature was forged, without more, does not
The petition is impressed with merit. lie.
Petitioners assail, in the main, the appellate court’s affirmance of the trial
court’s decision absolving respondents from liability for the principal obligation _______________
obtained by their son Rey John Tan which was secured by real estate mortgages,
including that covered by the title in question, and declaring such principal Exhibits “5”-“10,” Index of Exhibits for the Defendants, pp. 510.
22

Exhibits “11”-“15,” Index of Exhibits for the Defendants, pp. 11-15.

obligation of Rey John Tan, who is not a party to the case, to have been fully paid
23

Exhibit “19,” Index of Exhibits for the Defendants, p. 19.

24

by him as of July 1, 1997, before the questioned extra-judicial foreclosure and Vide Exhibits “5-a,” “6-a,” “7-a,” “8-a,” “9-a,” “10-a,” “11-a,” “12-a,” “13-a,” “14-a,” “15-a,” “19-a,” and
25

public auction sale conducted on April 17, 1998. 18 “20-a,” Index of Exhibits for the Defendants, pp. 5-15, 19-20.
Exhibits “16”-“20”, Index of Exhibits for the Defendants, pp. 16-20; Exhibits “C-5”-“C-7,” Index of
Respondent Jose B. Tan insisted that he was not a party to the documents
26
19

Exhibits for the Plaintiffs, pp. 12-13.

bearing on the grant of the credit line, he pointing to the absence of his signature Vide Bautista v. Court of Appeals, G.R. No. 158015, August 11, 2004, 436 SCRA 141, 146-147
27

above his typewritten name on the Credit Line Agreements, promissory notes, (presumption in favor of genuineness of signatures).
disclosure statements, and an Amendment of Real Estate Mortgage. Respondents Vide Exhibit “18-b,” Index of Exhibits for the Defendants, p. 18.
28

391
presented in evidence Promissory Notes—Exhibits “B-2” and “B-4” dated July 1,
1997 and June 24, 1997, respectively; three Credit Line Agreements—Exhibits VOL. 509, NOVEMBER 30, 2006 391
“B-6,” “B-7,” and “B-8,” dated May 2, 1997; and the Agreement amending the real
20
Metropolitan Bank and Trust Company vs. Tan
estate mortgage—Exhibit “B-9,” all dated May 2, 1997.
21

In any event, lack of respondent Eliza Go Tan’s consent to the mortgage covering
Petitioners, on the other hand, presented six Promissory Notes dated the title in question would not render the encumbrance void under the second
February 26, 1996, May 8, 1996, August 27, 1996, October 8, 1996, October 25, paragraph of Article 124 of the Family Code. For proof is wanting that the
29

1996, and November 18, property covered by the title is conjugal—that it was acquired during
respondents’ marriage which is what would give rise to the presumption that it is
_______________
conjugal property. The statement in the title that the property is “registered in
30

accordance with the provisions of Section 103 of the Property Registration Decree
Rollo, pp. 16-49.
in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan” does not
17

Id., at pp. 34-36, 40-41.

31
18

19 A Notice of Death together with a Certificate of Death of respondent Jose B. Tan showing that he prove or indicate that the property is conjugal. So Ruiz v. Court of
died on December 26, 2004 was submitted before this Court during the pendency of the present petition Appeals instructs: 32

or on February 10, 2005. “The property subject of the mortgage is registered in the name of “Corazon G. Ruiz, of legal
Index of Exhibits for the Plaintiffs, pp. 4, 6, 8-10.
age, married to Rogelio Ruiz, Filipinos.” Thus, title is registered in the name of Corazon
20

21 Id., at p. 11.
alone because the phrase “married to Rogelio Ruiz” is merely descriptive of the civil
Promissory Note Debit Memo
status of Corazon and should not be construed to mean that her husband is also a
registered owner. Furthermore, registration of the property in the name of “Corazon G. P1,000,000) payment of AGRICDO-074-96E)
Ruiz, of legal age, married to Rogelio Ruiz” is not proof that such property was acquired
Exhibit “9” or AGRI-075-96 (for P2,000,000) Exhibit “G-8” (Debit Memo for P2,000,000 in full
_______________ payment of AGRICDO-075-96E)
393
29 The relevant portion reads:
“x x x x
VOL. 509, NOVEMBER 30, 2006 393
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 disposition or encumbrance without the authority of the court or the Metropolitan Bank and Trust Company vs. Tan
written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void.
x x x x” “H” and “H-1” issued by an accountant, one Glenn Cabading.
36

30 Vide Art. 116 of the Family Code: “All property acquired during the marriage, whether the acquisition appears to

have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the
Rebutting Exhibits “G” to “G-11” inclusive, petitioners presented credit
contrary is proved.” memos which, to them, cancelled respondents’ debit memos. From a comparison
37

31 Exhibits “C-2” and “C-3,” Index of Exhibits for the Plaintiffs, p. 12 (emphasis supplied).

32 G.R. No. 146942, April 22, 2003, 401 SCRA 410.

of the credit and debit memos with the bank ledgers and especially considering
38

392 the unquestioned explanation of petitioner Uy on the reason behind the issuance
392 SUPREME COURT REPORTS ANNOTATED of these memos, viz.:
ATTY. DEL CASTILLO:
Metropolitan Bank and Trust Company vs. Tan
during the marriage, and thus, is presumed to be conjugal. The property could have been Q You said, when a loan is renewed you credit a certain amount. Can you expound that a little bit?
acquired by Corazon while she was still single, and registered only after her marriage to A Actually, the Banco Central punish[es] if the loan cannot be renewed for several years without
Rogelio Ruiz. Acquisition of title and registration thereof are two different acts.The
presumption under Article 116 of the Family Code that properties acquired during the payment. Just to circumvent that policy, we do the credit first and the debit just for the renewal.
marriage are presumed to be conjugal cannot apply in the instant case. Before such Q Why is that?
presumption can apply, it must first be established that the property was in fact acquired
during the marriage. In other words, proof of acquisition during the marriage is a A To show that amount is fully paid and we avail.
condition sine qua non for the operation of the presumption in favor of conjugal ownership. Q How is that done?
No such proof was offered nor presented in the case at bar.” (Emphasis and italics supplied) 33

On respondents’ claim of payment, they presented debit memo-Exhibits “G” to “G- A We credit first the renewed amount and we debit the old promissory note.
11” (of which only Exhibits “G-6” to “G-11” are relevant to the issues) and
34 35
Q When you credit, there were other papers accomplished?
certifications-Exhibits
A Yes.
_______________ Q What are these papers called?
A Credit Memos on loan release.
Id., at pp. 418-419.
33

Index of Exhibits for the Plaintiffs, pp. 18-21.

34 Q Where do you credit this?
Id., at pp. 20-21. An examination of the debit memos shows that the total loans covered by all the
35

debit memos amount to P72,100,000 while the loan in this case totalled P40,000,000. Furthermore, only
A It is credited on their accounts.
Exhibits “G-6” to “G-11” correspond to the promissory notes presented by petitioners: Q On the existing accounts?
Promissory Note Debit Memo A Yes, deposit account.
Exhibit “5” or PN No. BDS-041-96 (for Exhibit “G-6” (Debit Memo forP2,900,000 in full
_______________
P2,900,000) payment of AGRICDO-X41-96F)
Exhibit “6” or AGR-CDO 037-96 (for Exhibit “G-11” (Debit Memo for P12,000,000 in
Exhibit “10” or AGRI-CDO-081-96 (for Exhibit “G-9” (Debit Memo for P20,100,000 in full
P12,000,000) full payment of AGRICDO-037-96E)
P20,100,000) payment of AGRICDO-081-96E)
Exhibit “7” or AGR-CDO 065-96 (for Exhibit “G-10” (Debit Memo for P2,000,000 in
P2,000,000) full payment of AGRICDO-065-96E) 36 Index of Exhibits for the Plaintiffs, pp. 22-23.
37 Exhibits “25,” “27,” “29,” “30,” “32,” and “33,” Index of Exhibits for the Defendants, pp. 26, 28, 37,
Exhibit “8” or AGR-CDO 074-96 (for Exhibit “G-7” (Debit Memo for P1,000,000 in full 38, 41, and 47.
 38 Exhibits “26,” “28’ and submarkings, “31,” Index of Exhibits for the Defendants, pp. 27, 33-36, 39-
40.
394

394 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. Tan
Q And what is debit memos?
A Debit memos are ones that liquidate the loan so that the whole promissory note will be
distinguished [sic]. (Emphasis and italics supplied),
39

this Court is persuaded by petitioners’ claim that the debit memos represented
“payment” only in the bank’s book entries but did not actually involve
payment/settlement of the original obligation.
In fine, the extrajudicial foreclosure and subsequent sale of the mortgaged
property covered by the title in question was valid.
WHEREFORE, the petition is GRANTED. The assailed decision of the
appellate court is SET ASIDE. Civil Case No. 98225, “Jose B. Tan and Eliza Go
Tan v. Metropolitan Bank and Trust Company, et al.” filed before and raffled to
Branch 38 of the Regional Trial Court of Misamis Oriental, is DISMISSED.
SO ORDERED.
Quisumbing (Chairperson), Carpio, Tinga and Velasco Jr., JJ., concur.
Petition granted, assailed decision set aside. Civil Case No. 98-225 dismissed.
Notes.—The disposition of a conjugal property by the husband as
administrator in appropriate cases must be with the written consent of the wife,
otherwise, the disposition is void. (Jader-Manalo vs. Camaisa, 374 SCRA
498 [2002])
Any transaction entered by the wife without the court or the husband’s
authority is unenforceable. (Fabrigas vs. San Francisco Del Monte, Inc., 476
SCRA 247 [2005])

——o0o——

_______________

TSN, September 21, 1999, pp. 62-64.

39

395
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

VOL. 153, AUGUST 31, 1987 435
Philippine National Bank vs. Court of Appeals
No. L-57757. August 31, 1987. *
PHILIPPINE NATIONAL BANK, petitioner, vs. THE HONORABLE COURT OF
APPEALS, PRAGMACIO VITUG AND MAXIMO VITUG, respondents.
Civil Law; Land Registration; Mortgage; The PNB had the right to rely on what
appears in the certificate of title where on its face the properties are owned by the mortgagor,
and there is no reason to doubt the status of the registered owner and her ownership
thereof.—When the subject properties were mortgaged to the PNB they were registered in
the name of Donata Montemayor, widow. Relying on the torrens certificate of title covering
said properties the mortgage loan applications of Donata were granted by the PNB and the
mortgages were duly constituted and registered in the office of the Register of Deeds. In
processing the loan applications of Donata Montemayor, the PNB had the right to rely on
what appears in the certificates of title and no more. On its face the properties are owned by
Donata Montemayor, a widow. The PNB had no reason to doubt nor question the status of
said registered owner and her ownership thereof. Indeed, there are no liens and
encumbrances covering the same.
Same; Same; Same; Same; Rule that a person dealing with a registered land has a
right to rely upon the face of the Torrens certificates of title and to dispense with the need of
inquiring further; Exception.—The well-known rule in this jurisdiction is that a person
dealing with a registered land has a right to rely upon the f ace of the torrens certificate of
title and to dispense with the need of inquiring further, except when the party concerned
has actual knowledge of facts and circumstances that would impel a reasonably cautious
man to make such inquiry.
Same; Same; Same; Same; Same; A Torrens title concludes all controversies over
ownership of the land covered by a final decree of registration.—A torrens title concludes all
controversy over ownership of the land covered by a final decree of registration. Once the
title is registered the owner may rest assured without the necessity of stepping into the
portals of the court or sitting in the mirador de su casa to avoid the possibility of losing his
land.
_____________
*FIRST DIVISION.
436
4 SUPREME COURT REPORTS ANNOTATED
36
Philippine National Bank vs. Court of Appeals
Same; Same; Same; Property; Presumption of conjugality, not a case of; When the
property is registered in the name of a spouse only and there is no showing as to when the
property was acquired by said spouse, the property belongs exclusively to said spouse;
Presumption under Art 160 of the Civil Code cannot prevail when the title is in the name of
only one spouse and the rights of innocent third parties are involved.—The presumption
applies to property acquired during the lifetime of the husband and wife. In this case, it
appears on the face of the title that the properties were acquired by Donata Montemayor
when she was already a widow. When the property is registered in the name of a spouse
only and there is no showing as to when the property was acquired by said spouse, this is an
indication that the property belongs exclusively to said spouse. And this presumption under
Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse
and the rights of innocent third parties are involved.
Same; Same; Same; Same; PNB is a mortgagee in good faith as it was not aware that
at the time the mortgages were constituted there was a flaw of the mortgagor's title.—The
PNB had a reason to rely on what appears on the certificates of title of the properties
mortgaged. For all legal purposes, the PNB is a mortgagee in good faith for at the time the
mortgages covering said properties were constituted the PNB was not aware to any flaw of
the title of the mortgagor.
Same; Same; Same; Same; Parties; Although actions for recovery of real property and
for partition are real actions, they are actions in personam that bind only the particular
individuals who are parties thereto; PNB, not being a party to the cases earlier decided nor
aware of said decisions, it is not bound by said decisions; PNB was a purchaser for value in
good faith, when the properties were sold at public auction.—At any rate, although actions
for recovery of real property and for partition are real actions, however, they are actions
in personam that bind only the particular individuals who are parties thereto. The PNB not
being a party in said cases is not bound by the said decisions, Nor does it appear that the
PNB was aware of the said decisions when it extended the above described mortgage loans.
Indeed, if the PNB knew of the conjugal nature of said properties it would not have
approved the mortgage applications covering said properties of Donata Montemayor without
requiring the consent of all the other heirs or co-owners thereof. Moreover, when said
properties were sold at public auction, the PNB was a purchaser for value in good faith so
its right thereto is beyond question.
437
VOL. 153, AUGUST 31, 1987 437
Philippine National Bank vs. Court of Appeals
Same; Same; Same; Same; Estoppel; Laches; Respondents are in estoppel when they
never raised the conjugal nature of the property nor took issue as to the ownership of their
mother; For failure of respondents to assert their rights over the property, respondents are
guilty of laches.—Pragmacio and Maximo Vitug are now estopped from questioning the title
of Donata Montemayor to the said properties. They never raised the conjugal nature of the
property nor took issue as to the ownership of their mother, Donata Montemayor, over the
same. Indeed private respondents were among the defendants in said two cases wherein in
their answers to the complaint they asserted that the properties in question are
paraphernal properties belonging exclusively to Donata Montemayor and are not conjugal in
nature. Thus they leased the properties from their mother Donata Montemayor for many
years knowing her to be the owner. They were in possession of the property for a long time
and they knew that the same were mortgaged by their mother to the PNB and thereafter
were sold at public auction, but they did not do anything. It is only after 17 years that they
remembered to assert their rights. Certainly, they are guilty of laches.
PETITION for certiorari to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
GANCAYCO, J.:
Does the presumption of conjugality of properties acquired by the spouses during
coverture provided for in Article 160 of the Civil Code apply to property covered
by a Torrens certificate of title in the name of the widow? This is the issue posed
in this petition to review on certiorari of the decision of the Court of Appeals 439
in CA-G.R. No. 60903which is an action for reconveyance and damages. **
VOL. 153, AUGUST 31, 1987 439
On November 28, 1952, Donata Montemayor, through her son, Salvador M.
Philippine National Bank vs. Court of Appeals
Vitug, mortgaged to the Philippine National Bank (PNB) several parcels of land
ing titles were issued.
covered by Transfer Certificate of Title (TCT) No. 2289—Pampanga to guarantee
6

the loan granted by the PNB to Salvador Jaramiila and Pedro During the lifetime of Clodualdo Vitug he married two times. His first wife
was Gervacia Flores with whom he had 3 children, namely, Victor, Lucina and
______________
Julio all surnamed Vitug. Victor now dead is survived by his 5 children: Leonardo,
Juan, Candido, Francisco and Donaciano, all surnamed Vitug. Juan Vitug is also
Penned by Mr. Justice Porfirio V. Sison, and concurred in by Messrs. Justices Juan Sison and Elias
**
dead and is survived by his only daughter Florencia Vitug.
B. Asuncion. The second wife of Clodualdo Vitug was Donata Montemayor with whom he
438 had 8 children, namely, Pragmacio, Maximo, Jesus, Salvador, Prudencio and
438 SUPREME COURT REPORTS ANNOTATED Anunciacion, all surnamed Vitug, the late Enrique Vitug represented by his wife
Natalia Laquian, and the late Francisco Vitug who is survived by 11 children,
Philippine National Bank vs. Court of Appeals
namely, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno,
Bacani in the amount of P40,900.00 which was duly registered in the Office of the
Eligio, Jesus and Luz.
Register of Deeds of Pampanga.1 *
Clodualdo Vitug died intestate on May 20,1929 so his estate was settled and
On December 1, 1963, Donata Montemayor also mortgaged in favor of PNB
distributed in Special Proceeding No. 422 in the Court of First Instance of
certain properties covered by TCT Nos. 2887 and 2888—Pampanga to guarantee
Pampanga wherein Donata Montemayor was the Administratrix.
the payment of the loan account of her son Salvador Vitug in the amount of
7

Meanwhile, on May 12, 1958, Donata Montemayor executed a contract of

P35,200.00, which mortgage was duly registered in the Register of Deeds of
lease of Lot No. 24, which is covered by TCT No. 2887-R in favor of her children
Pampanga.
Pragmacio and Maximo both surnamed Vitug. This lease was extended on August
2

The above-mentioned Transfer Certificates of Titles covering said properties

31, 1963. By virtue of a general power of attorney executed by Donata
were all in the name of Donata Montemayor, of legal age, Filipino, widow and a
Montemayor on Sept. 19, 1966 in favor of Pragmacio Vitug, the latter executed a
resident of Lubao, Pampanga at the time they were mortgaged to PNB and were
contract of lease on Sept. 19, 1967 of the said lot in f avor of Maximo Vitug.
3

free from all liens and encumbrances.

8

On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an action for
4

Salvador Vitug failed to pay his account so the bank foreclosed the mortgaged
partition and reconveyance with damages in the Court of First Instance of
properties covered by TCT Nos. 2887 and 2888. They were sold at public auction
Pampanga against Marcelo Mendiola, special administrator of the intestate estate
on May 20,1968 in which the PNB was the highest bidder. The titles thereto were
of Donata Montemayor who died earlier, Jesus Vitug, Sr.,
thereafter consolidated in the name of PNB.
Likewise, Salvador Jaramilla and Pedro Bacani failed to settle their accounts ______________
with the PNB so the latter foreclosed the properties covered by TCT No. 2889
which were sold at public auction and likewise PNB was the buyer thereof. On 6Pars. 6 to 10 and 11, Partial Stipulation of Facts, pp. 124, 125 and 139, Record on Appeal.
August 30, 1968, a certificate of sale was issued by the Register of Deeds covering 7Pars. 22, 23 and 24, Partial Stipulation of facts, pp. 144-145, Record on Appeal.
said properties in favor of the PNB. When the title of the PNB was consolidated a 8Pars. 5, 6, 7, 8, 15, pp. 136-140, supra.
440
new title was issued in its name. 5

On September 2,1969, the PNB sold the properties covered by TCT Nos. 2887 440 SUPREME COURT REPORTS ANNOTATED
and 2888-Pampanga to Jesus M. Vitug, Anunciacion V. de Guzman, Prudencia V. Philippine National Bank vs. Court of Appeals
Fajardo, Salvador Vitug and Aurora V. Gutierrez in those names the correspond- Salvador, Natalia, Prudencia, Anunciacion, all surnamed Vitug, Antonio,
Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio, Jesus and
_____________
Luz, all surnamed Fajardo and the PNB.
The subject of the action is 30 parcels of land which they claim to be the
Annex 2, Answer of PNB, Record on Appeal; par. 11, Partial Stipulation of Facts, p. 139; Record on
1

Appeal. conjugal property of the spouses Donata Montemayor and Clodualdo Vitug of
Annex 1, Answer of PNB, Record on Appeal; par. 17, Partial Stipulation of Facts, pp. 141-142,
2 which they claim a share of 2/11 of 1/2 thereof. They assailed the mortgage to the
supra. PNB and the public auction of the properties as null and void. They invoked the
Par. 16, Partial Stipulation of Facts, p. 141, supra.
case of Vitug vs. Montemayor, L-5297 decided by this Court on Oct. 20, 1953
3

Par. 18, Partial Stipulation of Facts, p. 142, supra.

4

Pars. 12, 13, 19, 20, 21, and 22, Partial Stipulation of Facts, pp. 139-144, supra.
5
which is an action for partition and liquidation of the said 30 parcels of land
wherein the properties were found to be conjugal in nature.
In a decision of Sept. 15, 1975, the lower court dismissed the complaint with
costs against the plaintiffs and ordered them to pay attorney's fees of P5,000.00 to
the defendant's counsel. Plaintiffs then interposed an appeal to the Court of
Appeals, wherein in due course a decision was rendered on May 20, 1981, the
dispositive part of which reads as follows:
"WHEREFORE, in the light of the foregoing, the decision appealed from is hereby reversed
and set aside, and another one entered in accordance with the tenor of the prayer of
appellant's complaint with the modification that the sale at public auction of the 22 parcels
be considered valid with respect to the 1/2 thereof. No costs."
Hence the herein petition for certiorari filed by the PNB raising the following
assignments of error:
"I
THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO THE CASE AT
BAR THE RULING OF THIS HONORABLE SUPREME COURT IN FLORENCIA VITUG
VS. DONATA MONTEMAYOR, ET AL., 91 PHIL. 286 (1953) BECAUSE:
1. A.BETWEEN A PROVISION OF A SPECIAL LAW AND THE JUDICIAL
INTERPRETATION AND/OR APPLICATION OF A PROVISION OF A
GENERAL LAW THE FORMER PREVAILS.
441
VOL. 153, AUGUST 31, 1987 441
Philippine National Bank vs, Court of Appeals
1. B.THE DOCTRINE OF STARE DECISIS IS NOT A MECHANICAL FORMULA
OF ADHERENCE.
2. C.PNB WAS NOT A PARTY, AND HAD NO KNOWLEDGE OF THE
ABOVECITED CASE. D. SIMILARLY, PRAGMACIO VITUG AND MAXIMO
VITUG WERE NOT PARTIES IN SAID CASE.
II
THE RESPONDENT COURT OF APPEALS ERRED IN NOT RECOGNIZING THE
CONCLUSIVENESS OF THE CERTIFICATE, OF TITLE, AS PROVIDED IN ACT 496, AS
AMENDED (THE LAND REGISTRATION).
III
THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING THE
CONCLUSIVENESS OF OWNERSHIP OF DONATA MONTEMAYOR OVER THE
PROPERTIES WHICH WERE REGISTERED EXCLUSIVELY IN HER NAME WHEN
PRIVATE RESPONDENTS (PRAGMACIO VITUG AND MAXIMO VITUG), AS LESSEES,
ENTERED INTO A CONTRACT OF LEASE WITH DONATA MONTEMAYOR AS THE
OWNERLESSOR.
IV
THE RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT PNB
WAS A MORTGAGEE IN BAD FAITH."
The petition is impressed with merit.
When the subject properties were mortgaged to the PNB they were registered
in the name of Donata Montemayor, widow. Relying on the torrens certificate of
title covering said properties the mortgage loan applications of Donata were
granted by the PNB and the mortgages were duly constituted and registered in
the off ice of the Register of Deeds.
In processing the loan applications of Donata Montemayor, the PNB had the
right to rely on what appears in the certificates of title and no more. On its face
the properties are
442
442 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
owned by Donata Montemayor, a widow. The PNB had no reason to doubt nor
question the status of said registered owner and her ownership thereof. Indeed,
there are no liens and encumbrances covering the same.
The well-known rule in this jurisdiction is that a person dealing with a
registered land has a right to rely upon the face of the torrens certificate of title
and to dispense with the need of inquiring further, except when the party
concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry. 9
A torrens title concludes all controversy over ownership of the land covered by
a final degree of registration. Once the title is registered the owner may rest
10
assured without the necessity of stepping into the portals of the court or sitting in
the mirador de su casa to avoid the possibility of losing his land. 11
Article 160 of the Civil Code provides as follows:
"Art. 160. All property of the marriage is presumed to belong to the conjugal partnership,
unless it be proved that it pertains exclusively to the husband or to the wife."
The presumption applies to property acquired during the lifetime of the husband
and wife. In this case, it appears on the face of the title that the properties were
acquired by Donata Montemayor when she was already a widow. When the
property is registered in the name of a spouse only and there is no showing as to
when the property was acquired by said spouse, this is an indication that the
property belongs exclusively to said spouse. And this presumption under Article
12
160 of the Civil Code cannot prevail when the title is in the name of only one
spouse and the rights of innocent third parties are involved. 13
_______________
Capital Subdivision vs. Province of Negros Occidental L16257, January 31, 1963, 7 SCRA 60; Fule
9
vs. Legare, L-17951 Feb 28, 1963, 7 SCRA 351.
 Legarda and Prieto vs. Salleeby, 31 Phil. 590.
10
Director of Lands vs. Court of Appeals, 122 SCRA 37, 70.
11
Maramba vs. Lozano, 20 SCRA 474.
12
Nable Jose vs. Nable Jose, 41 Phil. 713; Seva vs. Nolan, 340
13
443
VOL. 153, AUGUST 31, 1987
Philippine National Bank vs. Court of Appeals
The PNB had a reason to rely on what appears on the certificates of title of the
properties mortgaged. For all legal purposes, the PNB is a mortgagee in good
faith for at the time the mortgages covering said properties were constituted the
PNB was not aware to any flaw of the title of the mortgagor. 14
True it is that in the earlier cases decided by this Court, namely Vitug vs.
Montemayor decided on May 15, 1952, which is an action for recovery of
possession of a share in said parcels of land, and in the subsequent action for
15
partition between the same parties decided on Oct. 20, 1953, this court found the16
30 parcels of land in question to be conjugal in nature and awarded the
corresponding share to the property of Florencia Vitug, an heir of the late
Clodualdo Vitug from the first marriage. In said cases this Court affirmed the
decision of the lower court. In the dispositive part of the decision of the trial court
it made the observation that "but from the conduct of Clodualdo Vitug and
Donata Montemayor during the existence of their marital life, the inference is
clear that Clodualdo had the unequivocal intention of transmitting the full
ownership of the 30 parcels of land to his wife Donata Montemayor, thus
considering the 1/2 of the funds of the conjugal property so advanced for the
purchase of said parcels of land as reimbursible to the estate of Clodualdo Vitug
on his death." That must be the reason why the property was registered in the
17
name of Donata Montemayor as widow after the death of Clodualdo Vitug.
At any rate, although actions for recovery of real property and for partition
are real actions, however, they are actions in personam that bind only the
particular individuals who are parties thereto. The PNB not being a party in said
19
cases is not bound by the said decisions. Nor does it appear that the
_____________
Cui and Joven vs. Henson, 51 Phil. 606, 612; Roxas vs. Dinglasan, L-27234, May 30, 1969, 28
14
SCRA 430.
91 Phil. 286.
15
93 Phil. 99.
16
91 Phil. 289.
17
Exhibit 17 PNB & 18 PNB, Pp. 210-212, Record on Appeal.
18
Ang Lam vs. Rosillosa, L-3595, May 22, 1950; Hernandez vs. Rural Bank of Lucena, L-2979, Jan.
19
10, 1978, 81SCRA 84-85.
444
444 SUPREME COURT REPORTS ANNOTATED
Philippine National Bank vs. Court of Appeals
PNB was aware of the said decisions when it extended the above described
mortgage loans. Indeed, if the PNB knew of the conjugal nature of said properties
it would not have approved the mortgage applications covering said properties of
Donata Montemayor without requiring the consent of all the other heirs or co-
owners thereof. Moreover, when said properties were sold at public auction, the
PNB was a purchaser for value in good faith so its right thereto is beyond
question. 20
443 Pragmacio and Maximo Vitug are now estopped from questioning the title of
Donata Montemayor to the said properties. They never raised the conjugal nature
of the property nor took issue as to the ownership of their mother, Donata
Montemayor, over the same. Indeed private respondents were among the
defendants in said two cases wherein in their answers to the complaint they
asserted that the properties in question are paraphernal properties belonging
exclusively to Donata Montemayor and are not conjugal in nature. Thus they 21
leased the properties from their mother Donata Montemayor for many years
knowing her to be the owner. They were in possession of the property for a long
time and they knew that the same were mortgaged by their mother to the PNB
and thereafter were sold at public auction, but they did not do anything. It is only22
after 17 years that they remembered to assert their rights. Certainly, they are
guilty of laches.23
Moreover, as correctly held by the lower court. Pragmacio and Maximo Vitug
as occupants and lessees of the property in question cannot now dispute the
ownership of their mother over the same who was their lessor. 24
WHEREFORE, the subject decision of the respondent
______________
Fule vs. Legare, supra; Arches vs. Billanes, L-20452, April 30, 1965, 13 SCRA 715.
20
Vitug vs. Montemayor, 91 Phil. 286, 288; see also Exhibits 3 Mendiola, 3-A Mendiola, 3-B
21
Mendiola, pp. 238-240, Record on Appeal.
18
Exhibits 1, 1-A, and 1-B Mendiola, 2 and 2-A Mendiola, pp. 236-238, Record on Appeal.
22
Tijam vs. Sibonghanoy, L-21450, April 15, 1968, 32 SCRA 29.
23
Section 3 (b), Rule 131, Rules of Court.
24
445
VOL. 153, AUGUST 31. 1987 445
Philippine National Bank vs. Court of Appeals
Court of Appeals is hereby REVERSED and set aside and another decision is
hereby rendered DISMISSING the complaint and ordering private respondents to
pay attorney's fees and expenses of litigation to petitioner PNB in the amount of
P20,000.00 and the costs of the suit.
SO ORDERED.
Teehankee (C.J.), Narvasa and Cruz, JJ., concur.
Paras, J., in the result.
Decision reversed and set aside.
——o0o——
446
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

VOL. 168, DECEMBER 8, 1988
Cuenca vs. Cuenca
No. L-72321. December 8, 1988.
documents are titled in the name of either respondent Meladora Cuenca or respondent
335
Restituto Cuenca. The presumption cannot prevail “when the title is in the name of only one
spouse and the rights of innocent third parties are involved. (Philippine National Bank v.
Court of Appeals, supra citing Nable Jose v. Nable Jose, 41 Phil. 713) Under the
*

DIOSDIDIT, BALDOMERO, FILOMENO, ELPIDIO, AIDA, all surnamed
CUENCA, petitioners, vs. RESTITUTO CUENCA, MELADORA CUENCA and
COURT OF APPEALS, respondents.
New Trial; Since the motion for new trial was filed before the appellate court’s
judgment could become final and executory, the motion was filed within the reglementary
period.—The rules are clear and leave no room for interpretation. Rule 37 speaks of a trial
court while Rule 53 speaks of the Court of Appeals. Undoubtedly, the appellate court erred
in denying the petitioner’s motion for new trial on the ground that it was filed out of time
pursuant to Rule 37. The applicable law is Rule 53 and since the motion for new trial was
filed before the appellate court’s judgment could become final and executory, the motion was
filed within the reglementary period. With these findings, the usual procedure would be to
remand the case to the appellate court. Nevertheless, since all the relevant facts needed to
resolve the issue as to whether or not the petitioners’ motion for new trial is meritorious are
before us, we find no need to refer the case back to the appellate court. (See Tejones v.
Gironella, et al., G.R. No. L-35506 March 21, 1988; Alger Electric, Inc. v. Court of Appeals
(135 SCRA 37 [1985]), and Beautifont, Inc., et al. v. Court of Appeals, et al. (G.R. No. 50141,
January 29, 1988).
Same; Same; Conjugal Partnership; Presumption that all property of the marriage is
presumed to belong to the conjugal partnership, unless it is proved that it pertains exclusively
to the husband or the wife.—Article 160 of the New Civil Code provides that “All property of
the marriage is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife,” In the cases of Philippine National Bank
v. Court of Appeals, (153 SCRA 435 [August 31, 1987]); Magallon v. Montej (146 SCRA 282
[December 16, 1986]) and Maramba v. Lozano (20 SCRA 474 [June 29, 1967]) this Court
ruled that the presumption refers only to the property acquired during marriage and does
not operate when there is no showing as to when property alleged to be conjugal was
acquired.
_______________
*THIRD DIVISION.
336
3 SUPREME COURT REPORTS ANNOTATED
36
Cuenca vs. Cuenca
Same; Same; Newly discovered evidence; The presumption cannot prevail when the
title is in the name of only one spouse and the rights of innocent third parties are involved.—
In the case at bar, the documents sought to be presented as newly discovered evidence do
not show that the claims to the subject parcels consisting of homestead lands were perfected
during the marriage of Agripino Cuenca and petitioner Engracia Basadre. The perfection of
the homestead claims is considered the time of acquisition of the properties. (See Magallon
v. Montejo supra) The fact that these parcels were surveyed for Agripino Cuenca and
approved during the marriage of Agripino Cuenca and petitioner Engracia Basadre is not
determinative of the issue as to whether or not the parcels were the conjugal properties of
Agripino and Engracia. Moreover, the documents show that 5 of the 8 parcels covered by the
circumstances of this case, the non-applicability of the presumption should also be upheld.
In the light of these findings a new trial would only be an unnecessary exercise and
ineffective. The documents sought to be presented during a new trial would not in any way
change the result. The motion for new trial was correctly denied although not for the reason
given by the respondent court.
PETITION for certiorari to review the resolutions of the Court of Appeals.
The facts are stated in the opinion of the Court.
De Castro & Cagampang Law Offices for petitioners.
Cipriano C. Alvizo, Sr. for respondents.
GUTIERREZ, JR., J.:
This petition for review on certiorari seeks the reversal of the resolutions of the
then Intermediate Appellate Court, now Court of Appeals, denying the
petitioners’ motion for new trial on the ground of newly discovered evidence.
Private respondents Restituto Cuenca and Meladora Cuenca filed a complaint
for recovery of real property and damages against the petitioners before the then
Court of First Instance of Davao del Norte. The case was docketed as Civil Case
No.
337
VOL. 168, DECEMBER 8, 1988 337
Cuenca vs. Cuenca
1240.
After trial, the lower court rendered a decision in favor of the petitioners. The
lower court dismissed the complaint.
The private respondents appealed the decision to the then Intermediate
Appellate Court.
On November 26, 1984, the appellate court reversed and set aside the decision
of the lower court. It rendered a decision in favor of the private respondents the
dispositive portion of which reads:
“WHEREFORE, the decision appealed from is hereby set aside and another one entered
declaring plaintiff Restituto Cuenca the absolute and exclusive owner of that parcel of land
known as Lot 3063 Pls-22 of the Cadastral Survey of the Municipality of Butuan, Province
of Agusan located at Bo. Pinamangculan, containing an area of six (6) hectares, more or less,
declared in the name of Restituto Cuenca; ordering the defendants to restore to said
plaintiff Restituto Cuenca the possession of said parcel of land; declaring the parcel of land
described as Lot 3060 Pls-22 of the Cadastral Survey of the Municipality of Butuan,
Province of Agusan, located at Barrio Pinamangculan, Butuan, Agusan, containing an area
of 17 hectares, 732 centares, more or less, declared in the name of Restituto Cuenca as
conjugal partnership property of deceased spouses Agripino Cuenca and Maria Bangahon in
effect declaring one half portion of said parcel of conjugal partnership property the share of
the deceased Maria Bangahon to be divided exclusively share and share alike between the
plaintiffs Restituto Cuenca and Meladora Cuenca as the heirs of Maria Bangahon; declaring
the other half portion of said parcel as the share of the late Agripino Cuenca also with
plaintiffs as the only surviving heirs of the said Agripino Cuenca entitled to divide
exclusively between themselves share and share alike the said one half portion of Agripino
Cuenca, and the other one half of the share of Agripino Cuenca to be divided among the
plaintiffs Restituto Cuenca and Meladora Cuenca and defendant Engracia Basadre in equal
shares under Article 892 of the New Civil Code. The other claim of the plaintiffs for
damages and accounting of the value of the produce corresponding to their shares is not
granted for lack of evidence. The counterclaim of defendants is likewise dismissed for lack of
merit.” (Rollo, pp. 37-38)
On December 3, 1984, the petitioners received a copy of the appellate court’s
decision.
338
338 SUPREME COURT REPORTS ANNOTATED
Cuenca vs. Cuenca
On December 14, 1984, the petitioners filed a motion for reconsideration of the
decision.
On February 22, 1985, the petitioners filed a Supplemental Motion for
Reconsideration and/or Motion for New Trial on the ground of newly discovered
evidence.
In a Resolution dated August 6, 1985, the appellate court denied the motion
for reconsideration for lack of merit and the supplemental motion for
reconsideration and/or new trial for having been filed out of time. The court ruled
that under section 1, Rule 37 of the Revised Rules of Court, a motion for new trial
on the ground of newly discovered evidence must be filed only within thirty (30)
days after notice of the decision is received.
The petitioners filed a motion for reconsideration of the August 6, 1985
resolution insofar as the same held that the motion for new trial was filed out of
time. The motion was denied for lack of merit and legal basis.
Hence, this petition.
In a resolution dated September 14, 1987, we gave due course to the petition.
The sole issue raised in the instant petition pertains to the period when a
party may file a motion for new trial before the appellate court.
The Rules of Court under Rule 37 and Rule 53 provide two (2) instances when
a party may file a motion for new trial on the ground of newly discovered
evidence.
Rule 37, Section 1 states:
“SECTION 1. Grounds of and period for filing motion for new trial—Within the period for
perfecting appeal, the aggrieved party may move the trial court to set aside the judgment
and grant a new trial for one or more of the following causes materially affecting the
substantial rights of said party.”
xxx xxx xxx
“b) Newly discovered evidence, which he could not, with reasonable diligence have
discovered, and produced at the trial and which if presented would probably alter the result;
(italics supplied)”
xxx xxx xxx
while section 1, Rule 53 states:
339
VOL. 168, DECEMBER 8, 1988 339
Cuenca vs. Cuenca
“SECTION 1. Petition—Before a final order or judgment rendered by the Court of Appeals
becomes executory, a motion for new trial may be filed on the ground of newly discovered
evidence which could not have been discovered prior to the trial in the court below by the
exercise of due diligence and which is of such a character as would probably change the
result. The motion shall be accompanied by affidavits showing the facts constituting the
grounds therefor and the newly discovered evidence. (Italics supplied)
The rules are clear and leave no room for interpretation. Rule 37 speaks of a trial
court while Rule 53 speaks of the Court of Appeals. Undoubtedly, the appellate
court erred in denying the petitioners’ motion for new trial on the ground that it
was filed out of time pursuant to Rule 37. The applicable law is Rule 53 and since
the motion for new trial was filed before the appellate court’s judgment could
become final and executory, the motion was filed within the reglementary period.
With these findings, the usual procedure would be to remand the case to the
appellate court. Nevertheless, since all the relevant facts needed to resolve the
issue as to whether or not the petitioners’ motion for new trial is meritorious are
before us, we find no need to refer the case back to the appellate court.
(See Tejones v. Gironella, et al., G.R. No. L-35506 March 21, 1988; Alger Electric,
Inc. v. Court of Appeals (135 SCRA 37 [1985]), and Beautifont, Inc., et al. v. Court
of Appeals, et al. (G.R. No. 50141, January 29, 1988).
Civil Case No. 1240 had for its subject matter parcels of land which were
claimed by two sets of families. Private respondents Restituto Cuenca and
Meladora Cuenca claimed ownership over the subject parcels of land on the
ground that they are the legitimate children of Agripino Cuenca and Maria
Bangahon, both deceased, owners of the subject parcels of land. They alleged that
some of the parcels are paraphernal property of Maria while all the others are
conjugal properties of Maria and Agripino. They also alleged that Agripino
Cuenca and Engracia Basadre were not legally married because at the time they
lived together Agripino was married to a certain Jesusa Pagar.
On the other hand, the petitioners (defendants below) Diosdidit, Baldomero,
Filomeno Elpidio, Aida, Anita and Engra-
340
340 SUPREME COURT REPORTS ANNOTATED
Cuenca vs. Cuenca
cia Vda. de Cuenca denied the legitimacy of the marriage between Agripino
Cuenca and Maria Bangahon as well as the legitimacy of the plaintiffs as children
of the couple. They claimed that Agripino Cuenca and their mother Engracia
Basadre were legally married and that they are the legitimate children of the
couple. They contend that the subject parcels of lands are conjugal properties of
Agripino and Engracia.
The appellate court stated its findings as follows:
“The records show that defendant Bartolome Sanchez upon manifestation of his counsel is
no longer a necessary party as Engracia Basadre-Cuenca has repurchased that portion of
the land in question sold to Bartolome Sanchez making plaintiffs’ claim against defendant
Bartolome Sanchez moot and academic.
“Our review of the evidence shows that Agripino Cuenca in his lifetime expressed in the
extrajudicial settlement of the estate of Maria Bangahon executed on June 13, 1950 before
Notary Public Francisco Ro. Cupin (Exh. “C”) that:
“ ‘Parcel of agricultural land situated in Pinamangculan, Butuan, Agusan, planted to coconut, under the
present possession of the heirs of Maria Bangahon, bounded on the North, Lot No. 3062, Lucio Plaza, Lot
No. 4319, A. Cuenca, portion of Lot No. 3063, in the possession of A. Cuenca, on the south Road, on the
West by Lot No. 3057, S. Dumanon, 3058, B. Adormio, 3059, A. Cuenca and east portion of Lot No. 3063,
containing an area of six (6) hectares, more or less (This is a portion of Lot No. 3063, Pls-22 of Cad. of
Municipality of Butuan), which parcel of land belongs exclusively to Maria Bangahon during her lifetime
and which property is separate from the conjugal property of the marriage of said Maria Bangahon and
Agripino Cuenca.
That parcel of land situated in Rendon, Butuan, Agusan, planted to rice with irrigation under the
present possession of the heirs, bounded on the North by Mariano Agagdang, on the East by Clerencia
Tagonsod, on the South by Suatan River and on the West by Mariano Agagdang, containing an area of
1.2500 hectares, more or less, under Tax Dec. 3055, assessed at P250.00 by the property records of
Agusan.
That parcel of land situated in Rendon, Butuan, Agusan, planted to coconut, under the present
possession of the heirs, bounded on the North by Maximo Bangahon, on the East, by Sergio Pagar, on the
South, by Macaria Agagdang, on the West, by Folgencio Buyan, containing an area of 1.1722 hectares,
341
VOL. 168, DECEMBER 8, 1988 341
Cuenca vs. Cuenca
more or less, assessed at P670.00 by Tax Dec. No. 4026 of Agusan.’ ”
belong to Maria Bangahon as her inheritance from her parents. This declaration against
interest is further reiterated by Agripino Cuenca in that judicial settlement and sale
executed by him on October 19, 1950. These two documents, as rightly contended by the
plaintiffs, are ample proofs that the properties in question described in par. 2 of the
complaint, belong exclusively to Maria Bangahon as her paraphernal property, a fact
declared by no less than the husband himself in a declaration against his interest. It was
error for the trial court to unceremoniously brush aside the importance of the declaration of
Agripino Cuenca in the extrajudicial settlement of the estate of Maria Bangahon. These
public documents carry sufficient evidentiary weight to prove the origin of the properties in
question and the nature of their ownership as properties brought into the marriage by
Maria Bangahon to Agripino Cuenca as against the bare testimony of the defendants and
their witnesses. More importantly, Juan Buyan and former Judge Francisco Ro. Cupin,
parties who participated in the execution of the two documents—the first as an intrumental
witness to the documents and the other the intervening Notary Public—testified to the due
execution of the said documents. These witnesses likewise proved the genuineness of
Exhibits C and D.
The ownership of Maria Bangahon of the three parcels of land was testified to further
by Adel Ras who declared unrebutted that Maria Bangahon was the daughter of Isidro
Bangahon, the first cousin of his father; that the three parcels of land in question were
inherited by Maria Bangahon from her parents; that Maria Bangahon later married
Agripino Cuenca bringing into their marriage the properties which she inherited from her
father, Isidro Bangahon. These pieces of evidence established the fact that the plaintiffs are
the forced heirs of Maria Bangahon and Agripino Cuenca, who by law should succeed to the
possession and ownership of the properties in question. On the other hand, defendants’
evidence consist only of the oral testimonies of Marta Legaspi, Engracia Basadre-Cuenca,
Baldomero Cuenca and Diosdidit Cuenca which proved nothing concrete as they merely are
inferences and deductions conveniently tailored to support their claim that Agripino Cuenca
married Engracia BasadreCuenca; that the properties in question were acquired during
their marriage without, however, presenting any document to prop up their pretense; that
they are the legitimate children of Agripino Cuenca and Engracia Basadre-Cuenca who
succeeded to the properties in litigation. We find no evidentiary value in the extrajudicial
settlement of the estate of Agripino Cuenca executed by the defen-
342
342 SUPREME COURT REPORTS ANNOTATED
Cuenca vs. Cuenca
dants of Engracia Basadre-Cuenca and her children. It is self-serving and proves nothing.
In passing, We note that the defendants presented tax declaration (Exhibits 3-17-A),
pieces of evidence which have been ruled in a long line of decisions by our Supreme Court to
be not real evidence at all sufficient to prove ownership or possession.
After considering the evidence of both parties, in sum, We find convincing evidence to
show that Agripino Cuenca and Maria Bangahon were legally married with Restituto
Cuenca and Meladora Cuenca as their issues; that Maria Bangahon brought properties into
her marriage; that the couple acquired properties during the marriage; that by virtue of the
extrajudicial settlement executed by Agripino Cuenca and his children, Restituto is the
absolute owner of the parcels of land described in paragraph 2(a) (b) and (c) of the
complaint; that one half of the land described in par. 6 of the complaint belongs to Agripino
Cuenca and the other half to Maria Bangahon the same having been acquired by Agripino
Cuenca and Maria Bangahon during their marriage—conjugal partnership property.
Therefore, upon the dissolution of the conjugal relationship by the death of spouses Agripino
Cuenca and Maria Bangahon, one half goes to Agripino Cuenca which portion after the
death of Agripino Cuenca goes to his alleged third wife, Engracia Basadre-Cuenca together
with the plaintiffs as forced heirs of Agripino Cuenca (Arts. 185 & 189, New Civil Code).
From the evidence of the plaintiffs, We find the present appeal impressed with merit.”
(Rollo, pp. 33-37)
In their motion for new trial the petitioners alleged:
1. “1.There are newly discovered evidence consisting of ancient, authentic
records which establish beyond reasonable doubt, the status of
defendants-appellees as legitimate children of the deceased Agri-pino
Cuenca whose estate is the subject matter of this case.
2. 2.There is documentary proof beyond doubt that Agripino Cuenca
was never married to Jesusa Pagar.
3. 3.The totality of defendants-appellees’ evidence prove that Engracia A.
Basadre was married legally to Agripino Cuenca in 1920 and that
defendant-appellees are legitimate children of Agripino Cuenca and
legitimate half-brother/half-sisters of plaintiffs-appellants who are
entitled to equal shares of their father’s estate.
4. 4.There is sufficient documentary evidence to prove that the lands in
question were conjugal properties of Agripino Cuenca and Engracia A.
Basadre acquired during their marriage.” (Rollo, p. 60)
343
VOL. 168, DECEMBER 8, 1988 343
Cuenca vs. Cuenca
The petitioners wanted to prove that Engracia Basadre was legally married to
their father Agripino Cuenca and that all the other petitioners were the
legitimate children of the couple. In this connection, the petitioners attached to
their motion an alleged newly discovered evidence consisting of a certified true
copy of the Register of Birth of petitioner Diosdidit Cuenca, first child of Agripino
Cuenca and petitioner Engracia Basadre issued by the National Archives or
Bureau of Records Management which discloses that Diosdidit is a legitimate
child of the couple and a notarized public document dated August 13, 1948 which
discloses that Jesusa Pagar was married to Santiago Barkowel disproving the
respondents’ evidence that Jesusa Pagar was married to Agripino Cuenca.
The issue as to whether or not petitioner Engracia Basadre was legally
married to Agripino Cuenca was settled by the appellate court in this wise:
“After considering the evidence of both parties, in sum, We find convincing evidence to show
that Agripino Cuenca and Maria Bangahon were legally married with Restituto Cuenca and
Meladora Cuenca as their issues; that Maria Bangahon brought properties into her
marriage; that the couple acquired properties during the marriage; that by virtue of the
extrajudicial settlement executed by Agripino Cuenca and his children, Restituto is the
absolute owner of the parcels of land described in paragraph 2(a) (b) and (c) of the
complaint; that one half of the land described in par. 6 of the complaint belongs to Agripino
Cuenca and the other half to Maria Bangahon the same having been acquired by Agripino
Cuenca and Maria Bangahon during their marriage—conjugal partnership
property. Therefore, upon the dissolution of the conjugal relationship by the death of spouses
Agripino Cuenca and Maria Bangahon, one half goes to Agripino Cuenca which portion after
the death of Agripino Cuenca goes to his alleged third wife, Engracia Basadre-Cuenca
together with the plaintiffs as forced heirs of Agripino Cuenca (Arts. 185 & 189, New Civil
Code).” (Rollo, pp. 36-37) (Italics supplied)
The dispositive portion of the decision states that petitioner Engracia Basadre
was entitled to inherit from Agripino Cuenca together with the latter’s legitimate
children by Maria Bangahon, the private respondents herein in accordance
with Article 892 of the New Civil Code.
344
Accordingly, the appellate court declared Engracia Basadre as surviving spouse.
There was, therefore no need to prove the legality of marriage between petitioners
Engracia Basadre and Agripino Cuenca much less to prove the legitimacy of the
other petitioners who are undoubtedly the children of Agripino and Engracia.
The petitioners also alleged the finding of newly discovered evidence to prove
that the subject parcels of land were conjugal properties of Agripino Cuenca and
petitioner Engracia Basadre. These consist of eight (8) sketch maps obtained on
December 27, 1984 from the Regional Office of the Bureau of Lands in Cagayan
de Oro City “after extensive research.” The petitioners alleged that these parcels
were surveyed for Agripino Cuenca and approved when Agripino Cuenca was
already married to Engracia as indicated in the documents, hence, there is the
presumption that these are conjugal properties and therefore petitioners have
hereditary rights over these properties.
Article 160 of the New Civil Code provides that “All property of the marriage
is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife,” In the cases of Philippine
National Bank v. Court of Appeals, (153 SCRA 435 [August 31, 1987]); Magallon
v. Montejo (146 SCRA 282 [December 16, 1986]) and Maramba v. Lozano (20
SCRA 474 [June 29, 1967]) this Court ruled that the presumption refers only to
the property acquired during marriage and does not operate when there is no
showing as to when property alleged to be conjugal was acquired.
In the case at bar, the documents sought to be presented as newly discovered
evidence do not show that the claims to the subject parcels consisting of
homestead lands were perfected during the marriage of Agripino Cuenca and
petitioner Engracia Basadre. The perfection of the homestead claims is considered
the time of acquisition of the properties. (See Magallon v. Montejo supra) The fact
that these parcels were surveyed for Agripino Cuenca and approved during the
marriage of Agripino Cuenca and petitioner Engracia Basadre is not
determinative of the issue as to whether or not the parcels were the conjugal
properties of Agripino and Engracia. Moreover, the
345
VOL. 168, DECEMBER 8, 1988 345
Cuenca vs. Cuenca
documents show that 5 of the 8 parcels covered by the documents are titled in the
name of either respondent Meladora Cuenca or respondent Restituto Cuenca. The
presumption cannot prevail “when the title is in the name of only one spouse and
the rights of innocent third parties are involved. (Philippine National Bank v.
Court of Appeals, supra citing Nable Jose v. Nable Jose, 41 Phil. 713) Under the
circumstances of this case, the non-applicablility of the presumption should also
be upheld.
In the light of these findings a new trial would only be an unnecessary
exercise and ineffective. The documents sought to be presented during a new trial
would not in any way change the result. The motion for new trial was correctly
denied although not for the reason given by the respondent court.
WHEREFORE, the instant petition is DISMISSED. The questioned
resolutions of the appellate court are AFFIRMED. For non-compliance with this
Court’s Resolution dated March 2, 1988, ordering him to show cause for his
failure to file a memorandum within the period given to him, Atty. Cipriano C.
Alvizo, Sr. is fined Five Hundred (P500.00) Pesos. If he fails to pay the fine within
ten (10) days from notice of this decision, he shall be imprisoned for five (5) days.
SO ORDERED.
Fernan (C.J.), Feliciano, Bidin and Cortés, JJ., concur.
Petition dismissed. Resolutions affirmed.
Notes.—There is no need to include the name of the wife where husband is
sued in order to bind the conjugal partnership. (G-Tractors, Inc. vs. Court of
Appeals, 135 SCRA 192.)
The conjugal partnership must equally bear the indebtedness of the husband
in pursuit of his career or profession and his losses from a legitimate business.
(Ibid.)

No. L-28589. January 8, 1973.
RAFAEL ZULUETA, ET AL., plaintiffs-appellees, vs. PAN AMERICAN
WORLDAIRWAYS,INC., defendant-appellant.
Courts; Jurisdiction; Question of jurisdictional amount;Where original claim less than
jurisdictional amount, counter-claim within original jurisdiction of court filed cures defect.—
– Although the original claim involves less than the jurisdictional amount, jurisdiction can
be sustained if the counterclaim (of the compulsory type)—– based upon the damages
allegedly suffered by the defendant in consequence of the filing of the complaint—– exceeds
the jurisdictional amount.
Same; Same; When party estopped from impugning jurisdiction of the court.—–The
defendant not only failed to question the jurisdiction of the trial court—– either in that
court or in the Supreme Court, before the rendition of the latter’s decision, and even
subsequently thereto, by filing the aforementioned motion for reconsideration and seeking
the reliefs therein prayed for—– but, also, urged both courts to exercise jurisdiction over the
merits of the case, defendant is now estopped from impugning said jurisdiction.
Same; Same; Nature of claim for damages as one not capable of pecuniary estimation
and, therefore, within the original jurisdiction of courts of first instance; Reasons therefor.—–
A claim for moral damages is one not susceptible of pecuniary estimation. Article 2217 of
the Civil Code of the Philippines explicitly provides that “(t)hough incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the
defendant’s wrongful act or omission.” Hence, “(n)o proof of pecuniary loss is necessary”—–
pursuant to article 2216 of the same Code—– “in order that moral x x x damages may be
adjudicated.” And (t)the assessment of such damages x x x is left to the discretion of the
court”—– said article adds—– “according to the circumstances of each case.”
Civil law; Damages; Breach by common carrier of contract of carriage justifies award
of damages to passenger(s); Case at bar.—–The plaintiffs had a contract of carriage with the
defendant, as a common carrier, pursuant to which the latter was bound, for a substantial
monetary consideration paid by the former, not merely to transport them to Manila, but,
also, to do so with “extraordinary diligence” or “utmost diligence.” The
2 are plaintiffs or defendants in a common cause, such as defense of the rights of the conjugal
2 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
responsibility of the common carrier, under said contract, as regards the passenger’s
safety is of such a nature, affecting as it does public interest, that it “cannot be dispensed
with” or even “lessened by stipulation, by the posting of notices, by statements on tickets, or
otherwise.” In the case at bar, the defendant did not only fail to comply with its obligation to
transport the plaintiff to Manila, but, also, acted in a manner calculated to humiliate him,
to chastise him, to make him suffer, to cause to him the greatest possible inconvenience by
leaving him in a desolate island, in the expectation that he would be stranded there for a
“minimum of one week” and, in addition thereto, charged therefor $13.30 a day.
Same; Same; Award of exemplary damages; When justified; Case at bar.—It is obvious
that in off-loading the plaintiff at Wake Island, under the circumstances heretofore adverted
to. the defendant’s agents had acted with malice aforethought and evident bad faith. If
“gross negligence” warrants the award of exemplary damages, with more reason is its
imposition justified when the act performed is deliberate, malicious and tainted with bad
faith.
Same; Same; Award of attorney’s fees; When proper; Case at bar.—–Article 2208 of the
Civil Code expressly authorizes the award of attorney’s fees “when exemplary damages are
award-ed,”—– as they are in the case at bar—– as well as “in any other case where the court
deems it just and equitable that attorney’s fees x x x be recovered.”
Same; Same; Same; Factors considered in awarding attorney’s fees.—–The quantity
and quality of the services rendered by the plaintiffs’ counsel appearing on record, apart
from the nature of the case and the amount involved therein, as well as his prestige as one
of the most distinguished members of the legal profession in the Philippines, of which
judicial cognizance may be taken, amply justify the award, which is a little over 10% of the
damages (P700,000) collectible by the plaintiffs herein.
Same; Conjugal partnership; Damages claimed in case at bar form part of conjugal
partnership property.—–Considering that the damages in question have arisen from, inter
alia, a breach of plaintiffs’ contract of carriage with the defendant, for which plaintiffs paid
their fare with funds presumably belonging to the conjugal partnership, the said damages
fall under paragraph (1) of article 153 of the Civil Code, the right thereto having been
“acquired by onerous title during the marriage x x x.”
Same; Same; Same; Reasons therefor.—–The damages involved in the case at bar do
not come under any of the provi-
3
VOL. 49, JANUARY 8, 1973 3
Zulueta vs. Pan American World Airways, Inc.
sions of article 148 or of other provisions forming part of Chapter 3, Title VI, of Book I
of the Civil Code, which chapter is entitled “Paraphernal Property.” What is more, if “(t)hat
which is acquired by right of redemption or by exchange with other property belonging to
only one of the spouses,” and “(t)hat which is purchased with exclusive money of the wife or
of the husband,” belong exclusively to such wife or husband it follows necessarily that that
which is acquired with money of the conjugal partnership belongs thereto or forms part
thereof.
Same; Same; Where husband and wife plaintiffs or defendants in a common cause,
settlement with one of the spouses not favored.—–It is true that the law favors and
encourages the settlement of litigations by compromise agreement between the contending
parties, but, it certainly does not favor a settlement with one of the spouses, both of whom
partnership, when the effect, even if indirect, of the compromise is to jeopardize “the
solidarity of the family”—– which the law seeks to protect—– by creating an additional
cause for the misunderstanding that had arisen between such spouses during the litigation,
and thus rendering more difficult, a reconciliation between them.
MOTION FOR RECONSIDERATION of a decision of the Supreme Court.
The facts are stated in the resolution of the Court.
Alfredo L. Benipayo for plaintiffs-appellees Rafael Zulueta and Carolina
Zulueta.
Justo L. Albert for plaintiff-appellee Telly Albert Zulueta.
V. E. del Rosario & Associates and Salcedo, Del Rosario, Bito, Misa &
Lozada for defendant-appellant.
RESOLUTION
CONCEPCION, C.J.:
Both parties in this case have moved for the reconsideration of the decision of this
Court promulgated on February 29, 1972. Plaintiffs maintain that the decision
appealed from should be affirmed in toto. The defendant, in turn, prays that the
decision of this Court be “set aside x x x with or without a new trial, x x x and
that the complaint be dismissed, with costs; or, in the alternative, that the
4 “We need not consider the jurisdictional controversy as to the amount the appellant sues to
4 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
amount of the award embodied therein be considerably reduced.”
Subsequently to the filing of its motion for reconsideration, the defendant filed
a “petition to annul proceedings and/or to order the dismissal of plaintiffs-
appellees’ complaint,” upon the ground that “appellees’ complaint actually seeks
the recovery of only P5,502.85 as actual damages, because, for the purpose of
determining the jurisdiction of the lower court, the unspecified sums representing
items of alleged damages, may not be considered, under the settled doctrines of
this Honorable Court,” and “the jurisdiction of courts of first instance when the
complaint in the present case was filed on Sept. 30, 1965” was limited to cases “in
which the demand, exclusive of interest, or the value of the property in
controversy amounts to more than ten thousand pesos” and “the mere fact that
the complaint also prays for unspecified moral damages and attorney’s fees, does
not bring the action within the jurisdiction of the lower court.”
We find no merit in this contention. To begin with, it is not true that “the
unspecified sums representing items or other alleged damages, may not be
considered”—– for the purpose of determining the jurisdiction of the court—–
“under the settled doctrines of this Honorable Court.” In fact, not a single case has
been cited in support of this allegation.
Secondly, it has been held that a claim for moral damages is one not
susceptible of pecuniary estimation. In fact, Article 2217 of the Civil Code of the
1
Philippines explicitly provides that “(t)hough incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of
the defendant’s wrongful act or omission.” Hence, “(n)o proof pecuniary loss
necessary”—– pursuant to Article 2216 of the same Code—– “in order that moral
x x x damages may be adjudicated.” And “(t)he assessment of such damages x x x
is left to the discretion of the court”—– said article adds—– “according to the
circumstances of each case.” Appellees’ complaint is, therefore,
_______________
1 Layda v. Court of Appeals, L-4487, Jan. 29, 1952; Yutuk v. Manila Electric Co., L-13016, May 31,
1961.
5 reconsideration, it should be noted that the same is mainly predicated upon the
VOL. 49, JANUARY 8, 1973
Zulueta vs. Pan American World Airways, Inc.
within the original jurisdiction of courts of first instance, which includes “all civil
actions in which the subject of the litigation is not capable of pecuniary
estimation.”
2
Thirdly, in its answer to plaintiffs’ original and amended complaints,
defendant had set up a counterclaim in the aggregate sum of P12,000, which is,
also, within the original jurisdiction of said courts, thereby curing the alleged
defect if any, in plaintiffs’ complaint. 3
recover because the counter-claim interposed establishes the jurisdiction of the District
Court. Merchants’ Heat & Light Co. v. James B. Clow & Sons, 204 U.S. 286, 27 S. Ct. 285,
51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner, 176 F. 343 (C.C.A. 2), certiorari
denied 216 U.S. 620, 30 S Ct. 575, 54 L. Ed. 641. x x x.” 4
“x x x courts have said that ‘when the jurisdictional amount is in question, the
tendering of a counterclaim in an amount which in itself, or added to the amount claimed in
the petition, makes up a sum equal to the amount necessary to the jurisdiction of this court,
jurisdiction is established, whatever may be the state of the plaintiff’s complaint.’ American
Sheet & Tin Plate Co. v. Winzeler(D.C.) 227 F. 321, 324.” Thus, in Ago v. Buslon, We held:
5 6
“x x x. Then, too, petitioner’s counterclaim for P37,000.00 was, also, within the exclusive
original jurisdiction of the latter courts, and there are ample precedents to the effect that
‘although the original claim involves less than the jurisdictional amount, x x x jurisdiction
can be sustained if the counter-claim (of the compulsory type)’—– such as the one set up by
petitioner herein, based upon the damages allegedly suffered by him in consequence of the
filing of said complaint—– ‘exceeds the jurisdictional amount.’ (Moore Federal Practice, 2nd
ed. [1948], Vol. 3, p. 41; Ginsburg vs. Pacific Mutual Life Ins. Co. of California, 69 Fed. [2d]
97; Home Life Ins. Co. vs. Sipp., 11 Fed, [2d] 474; American Sheet & Tin Plate Co. vs.
Winzeler [D.C.] 227 Fed. 321, 324; Brix vs. People’s Mutual Life Ins. Co., 41 P. 2d. 537, 2
Cal. 2d. 446; Emery vs. Pacific Employees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663).”
_______________
2Sec. 44(a), Rep, Act No. 296.
3See 38 Harvard Law Review, 744-751; 45 Yale Law Journal 416.
Ginsburg v. Pacific Mutual Life Ins. Co., 69 F. (2d) 97, 98.
4
Home Life Ins. Co. v. Sipp., 11 F. (2d) 474, 476.
5
6L-19631, Jan. 31, 1964. Italics ours.
6
6 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
Needless to say, having not only failed to question the jurisdiction of the trial
court—– either in that court or in this Court, before the rendition of the latter’s
decision, and even subsequently thereto, by filing the aforementioned motion for
reconsideration and seeking the reliefs therein prayed for—– but, also, urged both
courts to exercise jurisdiction over the merits of the case, defendant is now
estopped from impugning said jurisdicton. 7
Before taking up the specific questions raised in defendant’s motion for
5 premise that plaintiffs’ version is inherently incredible, and that this Court
should accept the theory of the defense to the effect that petitioner was off-loaded
because of a bomb-scare allegedly arising from his delay in boarding the aircraft
and subsequent refusal to open his bags for inspection. We need not repeat here
the reasons given in Our decision for rejecting defendant’s contention and not
disturbing the findings of fact of His Honor, the Trial Judge, who had the decided
advantage—– denied to Us—– of observing the behaviour of the witnesses in the
course of the trial and found those of the plaintiffs worthy of credence, not the
evidence for the defense.
It may not be amiss, however, to stress the fact that, in his written
report, made in transit from Wake to Manila—– or immediately after the
occurrence and before the legal implications or consequences thereof could have
been the object of mature deliberation, so that it could, in away, be considered as
part of the res gestae—– Capt. Zentner stated that Zulueta had been off-loaded
“due to drinking” and
_______________
7 People v. Casiano, L-15309, Feb. 16, 1961; People v. Roberts, L-15632, Feb. 28, 1961; People v.
Fajardo, L-18257, June 30, 1966; Tijam v. Manila Surety & Fidelity Co., L-21450, April 15, 1968; Carillo
v. Allied Workers’ Association of the Philippines, L-23689, July 31, 1968; Rizal Light & Ice Co. v.
Municipality of Morong, L-20993 and L-21221, Sept. 28, 1968; Tolentino v. Escalona, et al., L-26556, Jan.
24, 1969; Surigao Consolidated Mining Co., Inc. v. Philippine Land-Air-Sea Labor Union (PLAS-LU), L-
22970, June 9, 1969; Rodriguez v. Court of Appeals, et al., L-29264, Aug. 29, 1969; Calderon, Jr. v. Public
Service Commission and Milo, L-29228, April 30, 1971.
7
VOL. 49, JANUARY 8, 1973 7 his clothing, because, without the facilities of a toilet, he had to wash himself and,
Zulueta vs. Pan American World Airways, Inc.
“belligerent attitude,” thereby belying the story of the defense about said alleged
bomb-scare, and confirming the view that said agent of the defendant had acted
out of resentment because his ego had been hurt by Mr. Zulueta’s adamant
refusal to be bullied by him. Indeed, had there been an iota of truth in said story
of the defense, Capt. Zentner would have caused every one of the passengers to be
frisked or searched and the luggage of all of them examined—– as it is done
now—– before resuming the flight from Wake Island. His failure to do so merely
makes the arti-ficious nature of defendant’s version more manifest. Indeed, the
fact that Mrs. Zulueta and Miss Zulueta were on board the plane shows beyond
doubt that Mr. Zulueta could not possibly have intended to blow it up.
The defense tries to explain its failure to introduce any evidence to contradict
the testimony of Mr. Zulueta as to why he had gone to the beach and what he did
there, alleging that, in the very nature of things, nobody else could have
witnessed it. Moreover, the defense insists, inter alia, that the testimony of Mr.
Zulueta is inherently incredible because he had no idea as to how many toilets the
plane had; it could not have taken him an hour to relieve himself in the beach;
there were eight (8) commodes at the terminal toilet for men; if he felt the need of
relieving himself, he would have seen to it that the soldiers did not beat him to
the terminal toilets; he did not tell anybody about the reason for going to the
beach, until after the plane had taken off from Wake.
We find this pretense devoid of merit. Although Mr. Zulueta had to look for a
secluded place in the beach to relieve himself, beyond the view of others,
defendant’s airport manager, whom Mr. Zulueta informed about it, soon after the
departure of the plane, could have forthwith checked the veracity of Mr. Zulueta’s
statement by asking him to indicate the specific place where he had been in the
beach and then proceeding thereto for purposes of verification.
Then, again, the passenger of a plane seldom knows how many toilets it has.
As a general rule, his knowledge is limited to the toilets for the class—– first class
or tourist class—– in which he is. Then, too, it takes several minutes
8
8 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
for the passengers of big aircrafts, like those flying from the U.S. to the
Philippines, to deplane. Besides, the speed with which a given passenger may do
so depends, largely, upon the location of his seat in relation to the exit door. He
cannot go over the heads of those nearer than he thereto. Again, Mr. Zulueta may
have stayed in the toilet terminal for some time, expecting one of the commodes
therein to be vacated soon enough, before deciding to go elsewhere to look for a
place suitable to his purpose. But he had had to walk, first, from the plane to the
terminal building and, then, after vainly waiting therein for a while, cover a
distance of about 400 yards therefrom to the beach, and seek there a place not
visible by the people in the plane and in the terminal, inasmuch as the terrain at
Wake Island is flat. What is more, he must have had to take off part, at least, of
then, dry himself up before he could be properly attired and walk back the 400
yards that separated him from the terminal building and/or the plane.
Considering, in addition to the foregoing, the fact that he was not feeling well, at
that time, We are not prepared to hold that it could not have taken him around an
hour to perform the acts narrated by him.
But, why—– asks the defendant—– did he not reveal the same before the
plane took off? The record shows that, even before Mr. Zulueta had reached the
ramp leading to the plane, Capt. Zentner was already remonstrating at him in an
intemperate and arrogant tone and attitude (“What do you think you are?),
thereby impelling Mr. Zulueta to answer back in the same vein. As a consequence,
there immediately ensued an altercation in the course of which each apparently
tried to show that he could not be cowed by the other. Then came the order of
Capt. Zentner to off-load all of the Zuluetas, including Mrs. Zulueta and the
minor Miss Zulueta, as well as their luggage, their overcoats and other effects
handcarried by them; but, Mr. Zulueta requested that the ladies be allowed to
continue the trip. Meanwhile, it had taken time to locate his four (4) pieces of
luggage. As a matter of fact, only three (3) of them were found, and the fourth
eventually remained in the plane. In short, the issue between Capt.
9
VOL. 49, JANUARY 8, 1973 9
Zulueta vs. Pan American World Airways, Inc.
Zentner and Mr. Zulueta had been limited to determining whether the latter
would allow himself to be browbeaten by the former. In the heat of the
altercation, nobody had inquired about the cause of Mr. Zulueta’s delay in
returning to the plane, apart from the fact that it was rather embarrassing for
him to explain, in the presence and within the hearing of the passengers and the
crew, then assembled around them, why he had gone to the beach and why it had
taken him some time to answer there a call of nature, instead of doing so in the
terminal building.
Defendant’s motion for reconsideration assails: (1) the amount of damages
awarded as excessive; (2) the propriety of accepting as credible plaintiffs’ theory;
(3) plaintiffs’ right to recover either moral or exemplary damages; (4) plaintiff’s
right to recover attorney’s fees; and (5) the non-enforcement of the compromise
agreement between the defendant and plaintiffs’ wife, Mrs. Zulueta. Upon the
other hand, plaintiffs’ motion for reconsideration contests the decision of this
Court reducing the amount of damages awarded by the trial court to
approximately one-half thereof, upon the ground, not only that, contrary to the
findings of this Court, in said decision, plaintiff had not contributed to the
aggravation of his altercation or incident with Capt. Zentner by reacting to his
provocation with extreme belligerency, thereby allowing himself to be dragged
down to the level on which said agent of the defendant had placed himself, but,
also, because the purchasing power of our local currency is now much lower than
when the trial court rendered its appealed decision, over five (5) years ago, on
July 5, 1967, which is an undeniable and undisputed fact. Precisely, for this
reason, defendant’s characterization as exorbitant of the aggregate award of over
P700,000 by way of damages, apart from attorney’s fees in the sum of P75,000, is
untenable. Indeed, said award is now barely equivalent to around 100,000 U. S.
dollars.
In further support of its contention, defendant cites the damages awarded in
previous cases to passengers of air-
10
10 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
lines, as well as in several criminal cases, and some cases for libel and slander.
None of these cases is, however, in point. Said cases against airlines referred to
passengers who were merely constrained to take a tourist class
accommodation, despite the fact that they had first class tickets, and that
although, in one of such cases, there was proof that the airline involved had acted
as it did to give preference to a “white” passenger, this motive was not disclosed
until the trial in court. In the case at bar, plaintiff Rafael Zulueta was “off-loaded”
at Wake Island, for having dared to retort to defendant’s agent in a tone and
manner matching, if not befitting his intemperate language and arrogant
attitude. As a consequence, Capt. Zentner’s attempt to humiliate Rafael Zulueta
had boomeranged against him (Zentner), in the presence of the other passengers
and the crew. It was, also, in their presence that defendant’s agent had referred to
the plaintiffs as “monkeys,” a racial insult not made openly and publicly in the
abovementioned previous cases against airlines.
In other words, Mr. Zulueta was off loaded, not to protect the safety of the
aircraft and its passengers, but to retaliate and punish him for the
embarrassment and loss of face thus suffered by defendant’s agent. This
vindictive rnotive is made more manifest by the note delivered to Mr. Zulueta by
defendant’s airport manager at Wake Island, Mr. Sitton, stating that the former’s
stay therein would be “for a minimum of one week,” during which he would be
charged $13.30 per day. This reference to a “minimum of one week” revealed the
intention to keep him there stranded that long, for no other plane, headed for
Manila, was expected within said period of time, although Mr. Zulueta managed
to board, days later, a plane that brought him to Hawaii, whence he flew back to
the Philippines, via Japan.
Neither may criminal cases, nor the cases for libel and slander cited in the
defendant’s motion for reconsideration,
_______________
8Northwest Airlines, Inc. v. Cuenca, et al., L-22425, Aug. 31, 1965; Lopez, et al. v. Pan American
World Airways, L-22415, March 30, 1966; Air France v. Carrascoso, et al., L-21438, Sept. 28, 1996
11
VOL. 49, JANUARY 8, 1973 11
Zulueta vs. Pan American World Airways, Inc.
be equated with the present case. Indeed, in ordinary criminal cases, the award
for damages is, in actual practice, of purely academic value, for the convicts
generally belong to the poorest class of society. There is, moreover, a fundamental
difference between said cases and the one at bar. The Zuluetas had a contract of
carriage with the defendant, as a common carrier, pursuant to which the latter
was bound, for a substantial monetary considerationpaid by the former, not
merely to transport them to Manila, but, also, to do so with “extraordinary
diligence” or “utmost diligence.” The responsibility of the common carrier, under
9
said contract, as regards the passenger’s safety, is of such a nature, affecting as it
does public interest, that it “cannot be dispensed with” or even “lessened by
stipulation, by the posting of notices, by statements on tickets, or otherwise.” In
10
the present case, the defendant did not only fail to comply with its obligation to
transport Mr. Zulueta to Manila, but, also, acted in a manner calculated to
humiliate him, to chastise him, to make him suffer, to cause to him the greatest
possible inconvenience, by leaving him in a desolate island, in the expectation
that he would be stranded there for a “minimum of one week” and, in addition
thereto, charged therefor $13.30 a day.
It is urged by the defendant that exemplary damages are not recoverable in
quasi-delicts, pursuant to Article 2231 of our Civil Code, except when the
defendant has acted with “gross negligence,” and that there is no specific finding
that it had so acted. It is obvious, however, that in off-loading plaintiff at Wake
Island, under the circumstances heretofore adverted to, defendant’s agents had
acted with malice aforethought and evident bad faith. If “gross negligence”
warrants the award of exemplary damages, with more reason is its imposition
justified when the act performed is deliberate, malicious and tainted with bad
faith. Thus, in Lopez v. PAN AM, We held:
11
“The rationale behind exemplary or corrective damages is, as the name implies, to provide
an example or correction for
_______________
 9Articles 1733 and 1755, Civil Code of the Philippines.
Article 1757, Civil Code of the Philippines.
10
Supra.
11
12
12 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
public good. Defendant having breached its contracts in bad faith, the court, as stated
earlier, may award exemplary damages in addition to moral damages (Articles 2229, 2232,
New Civil Code.)”
Similarly, in NWA v. Cuenca, this Court declared that an award for exemplary
12
damages was justified by the fact that the airline’s “agent had acted in a wanton,
reckless and oppressive manner” in compelling Cuenca, upon arrival at Okinawa,
to transfer, over his objection, from the first class, where he was accommodated
from Manila to Okinawa, to the tourist class, in his trip to Japan, “under threat of
otherwise leaving him in Okinawa,” despite the fact that he had paid in full the
first class fare and was issued in Manila a first class ticket.
Defendant cites Rotea v. Halili, in support of the proposition that a principal
13
is not liable for exemplary damages owing to acts of his agent unless the former
has participated in said acts or ratified the same. Said case involved, however, the
subsidiary civil liability of an employer arising from criminal acts of his employee,
and “exemplary damages x x x may be imposed when the crime was committed
with one or more aggravating circumtances.” Accordingly, the Rotea case is not in
14
point, for the case at bar involves a breach of contract, as well as a quasi-delict.
Neither may the case of Palisoc v. Brillantes, invoked by the defendant, be
15
equated with the case at bar. The Palisoc case dealt with the liability of school
officials for damages arising from the death of a student (Palisoc) due to fist blows
given by another student (Daffon), in the course of a quarrel between them, while
in a laboratory room of the Manila Technical Institute. In an action for damages,
the head thereof and the teacher in charge of said laboratory were held jointly
and severally liable with the student who caused said death, for failure of the
school to provide “adequate supervision over the activities of the students in the
school premises,” to protect them “from
_______________
Supra.
12
109 Phil. 495.
13
Article 2230, New Civil Code.
14
L-29025; October 4, 1971.
15
13
VOL. 49, JANUARY 8, 1973 13
Zulueta vs. Pan American World Airways, Inc.
harm, whether at the hands of fellow students or other parties.” Such liability
was predicated upon Article 2180 of our Civil Code, the pertinent part of which
reads:
“ART. 2180. The obligation imposed by article 2176 is demandable not only for one’s own
acts or omissions, but also for those of persons for whom one is responsible.
“x x x xxxx xxx
“Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they remain in their
custody.
“x x x xxxx x x x.”
Obviously, the amount of damages awarded in the Palisoc case is not and cannot
serve as the measure of the damages recoverable in the present case, the latter
having been caused directly and intentionally by an employee or agent of the
defendant, whereas the student who killed the young Palisoc was in no wise an
agent of the school. Moreover, upon her arrival in the Philippines, Mrs. Zulueta
reported her husband’s predicament to defendant’s local manager and asked him
to forthwith have him (Mr. Zulueta) brought to Manila, which defendant’s
aforementioned manager refused to do, thereby impliedly ratifying the off-loading
of Mr. Zulueta at Wake Island.
It is next urged that, under the contract of carriage with the defendant, Mr.
Zulueta was bound to be present at the time scheduled for the departure of
defendant’s plane and that he had, consequently, violated said contract when he
did not show up at such time. This argument might have had some weight had
defendant’s plane taken off before Mr. Zulueta had shown up. But the fact is that
he was ready, willing and able to board the plane about two hours beforeit
actually took off, and that he was deliberately and maliciously off-loaded on
account of his altercation with Capt. Zentner. It should, also, be noted that,
although Mr. Zulueta was delayed some 20 to 30 minutes, the arrival or
departure of planes is often delayed for much longer periods of time. Followed to
its logical conclusion, the argument adduced by the defense suggests that airlines
should be held liable for damages due to the inconvenience and
14
14 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
anxiety, aside from actual damages, suffered by many passengers either in their
haste to arrive at the airport on scheduled time just to find that their plane will
not take off until later, or by reason of the late arrival of the aircraft at its
destination.
PANAM impugns the award of attorney’s fees upon the ground that no
penalty should be imposed upon the right to litigate; that, by law, it may be
awarded only in exceptional cases; that the claim for attorney’s fees has not been
proven; and that said defendant was justified in resisting plaintiff’s claim
“because it was patently exorbitant.”
Nothing, however, can be farther from the truth. Indeed, apart from plaintiff’s
claim for actual damages, the amount of which is not contested, plaintiffs
did not ask any specific sum by way of exemplary and moral damages, as well as
attorney’s fees, and left the amount thereof to the “sound discretion” of the lower
court This, precisely, is the reason why PANAM, now, alleges—– without
justification—– that the lower court had no jurisdiction over the subject matter of
the present case.
 Moreover, Article 2208 of our Civil Code expresslyauthorizes the award of
attorney’s fees “when exemplary damages are awarded,”—– as they are in this
case—– as well as “in any other case where the court deems it just and equitable
that attorney’s fees x x x be recovered,” and We so deem it just and equitable in
the present case, considering the “exceptional” circumstances obtaining therein,
particularly the bad faith with which defendant’s agent had acted, the place
where and the conditions under which Rafael Zulueta was left at Wake Island,
the absolute refusal of defendant’s manager in Manila to take any step
whatsoever to alleviate Mr. Zulueta’s predicament at Wake and have him brought
to Manila—– which, under their contract of carriage, was defendant’s obligation
to discharge with “extraordinary” or “utmost” diligence—– and, the “racial” factor
that had, likewise, tainted the decision of defendant’s agent, Capt. Zentner, to off-
load him at Wake Island.
As regards the evidence necessary to justify the sum of P75,000 awarded as
attorney’s fees in this case, suffice
15
VOL. 49, JANUARY 8, 1973 15
Zulueta vs. Pan American World Airways, Inc.
it to say that the quantity and quality of the services rendered by plaintiffs’
counsel appearing on record, apart from the nature of the case and the amount
involved therein, as well as his prestige as one of the most distinguished members
of the legal profession in the Philippines, of which judicial cognizance may be
taken, amply justify said award, which is a little over 10% of the damages (P700,-
000) collectible by plaintiffs herein. Indeed, the attorney’s fees in this case is
proportionally much lessthan that adjudged in Lopez v. PANAM in which the
16
judgment rendered for attorney’s fees (P50,000) was almost 20% of the damages
(P275,000) recovered by the plaintiffs therein.
The defense assails the last part of the decision sought to be reconsidered, in
which—– relying upon Article 172 of our Civil Code, which provides that “(t)he
wife cannot bind the conjugal partnership without the husband’s consent, except
in cases provided by law,” and it is not claimed that this is one of such cases—–
We denied a motion, filed by Mrs. Zulueta, for the dismissal of this case, insofar
as she is concerned—– she having settled all her differences with the defendant,
which appears to have paid her the sum of P50,000 therefor—– “without prejudice
to this sum being deducted from the award made in said decision.” Defendant now
alleges that this is tantamount to holding that said compromise agreement is both
effective and ineffective.
This, of course, is not true. The payment is effective, insofar as it is deductible
from the award, and, because it is due (or part of the amount due) from the
defendant, with or without its compromise agreement with Mrs. Zulueta. What is
ineffective is the compromise agreement, insofar as the conjugal partnership is
concerned. Mrs. Zulueta’s motion was for the dismissal of the case insofar as she
was concerned, and the defense cited in support thereof Article 113 of said Code,
pursuant to which “(t)he husband must be joined in all suits by or against the
wife except: x x x (2) If they have in fact been separated for at least one year.”
This provision, We held, however, re-
_______________
Supra.
16
16
16 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
fers to suits in which the wife is the principal or real party in interest, not to the
case at bar, “in which the husband is the main party in interest, both as the
person principally aggrieved and as administrator of the conjugal partnership x x
x he having acted in this capacity in entering into the contract of carriage with
PANAM and paid the amount due to the latter, under the contract, with funds of
the conjugal partnership,” to which the amounts recoverable for breach of said
contract, accordingly, belong. The damages suffered by Mrs. Zulueta were mainly
an incident of the humiliation to which her husband had been subjected. The
Court ordered that said sum of P50,000 paid by PANAM to Mrs. Zulueta be
deducted from the aggregate award in favor of the plaintiffs herein for the simple
reason that upon liquidation of the conjugal partnership, as provided by law, said
amount would have to be reckoned with, either as part of her share in the
partnership, or as part of the support which might have been or may be due to her
as wife of Rafael Zulueta. It would surely be inane to sentence the defendant to
pay the P700,-000 due to the plaintiffs and to direct Mrs. Zulueta to return said
P50,006 to the defendant.
In this connection, it is noteworthy that, for obvious reasons of public policy,
she is not allowed by law to waive her share in the conjugal partnership, before
the dissolution thereof. She cannot even acquire any property by gratuitous title,
17
without the husband’s consent, except from her ascendants, descendants, parents-
in-law, and collateral relatives within the fourth degree. 18
It is true that the law favors and encourages the settlement of litigations by
compromise agreement between the contending parties, but, it certainly does not
favor a settlement with one of the spouses, both of whom are plaintiffs or
defendants in a common cause, such as the defense of the rights of the conjugal
partnership, when the effect, even if indirect, of the compromise is to jeopardize
“the solidarity of the family”—– which the law seeks 19
_______________
Civil Code of the Philippines, Article 179.
17
Ibid., Article 114.
18
Id., Article 220.
19
17
VOL. 49, JANUARY 8, 1973 17
Zulueta vs. Pan American World Airways, Inc.
to protect—– by creating an additional cause for the misunderstanding that had
arisen between such spouses during the litigation, and thus rendering more
difficult a reconciliation between them.
It is urged that there is no proof as to the purpose of the trip of the plaintiffs,
that neither is there any evidence that the money used to pay the plane tickets
came from the conjugal funds and that the award to Mrs. Zu-lueta was for her
personal suffering or injuries. There was, however, no individual or specific award
in favor of Mrs. Zulueta or any of the plaintiffs. The award was made in their
favor collectively. Again, in the absence of said proof, the presumption is that the
purpose of the trip was for the common benefit of the plaintiffs and that the
money had come from the conjugal funds, for, unless there is proof to the
contrary, it is presumed “(t)hat things have happened according to the ordinary
course of nature and the ordinary habits of life.” In fact Manresa maintains that
20 21
they are deemed conjugal, when the source of the money used therefor is not
established, even if the purchase had been made by the wife. And this is the rule
22
obtaining in the Philippines. Even property registered, under the Torrens system,
in the name of one of the spouses, or in that of the wife only, if acquired during
the marriage, is presumed to belong to the conjugal partnership, unless there is
competent proof to the contrary. 23
PANAM maintains that the damages involved in the case at bar are not
among those forming part of the conjugal partnership pursuant to Article 153 of
the Civil Code, reading:
“ART. 153. The following are conjugal partnership property :
_______________
Paragraph (z) of Sec. 5, Rule 131 of the Rules of Court.
20
Codigo Civil Español, by Manresa (1950-ed.), Vol. 9, pp. 54 8-549.
21
In support of this view, Manresa cites the resolutions of the Supreme Court of Spain of March 30
22
ad May 6, 1904 as well as those of September 2, 1896, March 6, 1897, April 23, 1898, November 30, 1903
and September 20, 1907.
Flores v. Flores, 48 Phil. 288; Guinguing v. Abuton, 48 Phil. 144; Bucoy v. Paulino, G.R. No. L-
23
25775, April 26, 1968.
18
18 SUPREME COURT REPORTS ANNOTATED
Zulueta vs. Pan American World Airways, Inc.
1. “(1)That which is acquired by onerous title during the marriage at the expense of
the common fund, whether the acquisition be for the partnership, or for only one
of the spouses;
2. “(2)That which is obtained by the industry, or work, or as salary of the spouses, or
of either of them;
3. “(3)The fruits, rents or interests received or due during the marriage, coming from
the common property or from the exclusive property of each spouse.”
Considering that the damages in question have arisen from, inter alia, a breach of
plaintiffs’ contract of carriage with the defendant, for which plaintiffs paid their
fare with funds presumably belonging to the conjugal partnership, We hold that
said damages fall under paragraph (1) of said Article 153, the right thereto
having been “acquired by onerous title during the marriage x x x.” This conclusion
is bolstered up by Article 148 of our Civil Code, according to which:
“ART. 148. The following shall be the exclusive property of each spouse:
1. “(1)That which is brought to the marriage as his or her own;
2. “(2)That which each acquires, during the marriage, by lucrative title;
3. “(3)That which is acquired by right of redemption or by exchange with other
property belonging to only one of the spouses;
4. “(4)That which is purchased with exclusive money of the wife or of the husband.”
The damages involved in the case at bar do not come under any of these
provisions or of the other provisions forming part of Chapter 3, Title VI, of Book I
of the Civil Code, which chapter is entitled “Paraphernal Property.” What is more,
if “(t)hat which is acquired by right of redemption or by exchange with other
property belonging to only one of the spouses,” and “(t)hat which is purchased
with exclusive money of the wife or of the husband,” belong exclusively to such
24
wife or husband, it follows necessarily that that which is acquired with money of
the conjugal partnership belongs thereto or forms part
_______________
Pursuant to Article 148.
24
19
VOL. 49, JANUARY 8, 1973 19
Zulueta vs. Pan American World Airways, Inc.
thereof. The rulings in Maramba v. Lozano and Perez v. Lantin, cited in
25 26
defendant’s motion for reconsideration, are, in effect, adverse thereto. In both
cases, it was merely held that the presumption under Article 160 of our Civil
Code—– to the effect that all property of the marriage belong to the conjugal
partnership—– does not apply unless it is shown that it was
acquired during marriage. In the present case, the contract of carriage was
concededly entered into, and the damages claimed by the plaintiffs were
incurred, during marriage. Hence, the rights accruing from said contract,
including those resulting from breach thereof by the defendant, are presumed to
belong to the conjugal partnership of Mr. and Mrs. Zulueta. The fact that such
breach of contract was coupled, also, with a quasi-delict constitutes an
aggravating circumstances and can not possibly have the effect of depriving the
conjugal partnership of such property rights.
Defendant insists that the use of conjugal funds to redeem property does not
make the property redeemed conjugal if the right of redemption pertained to the
wife. In the absence, however, of proof that such right of redemption pertains to
the wife—– and there is no proof that the contract of carriage with PANAM or the
money paid therefor belongs to Mrs. Zulueta—– the property involved, or the
rights arising therefrom, must be presumed, therefore, to form part of the 28Italics ours.
Although Colin y Capitant actually said that the question has not been “expressly” settled under
conjugal partnership.
29

the Spanish law, they did not say that it has been “impliedly” settled and in what way.
It is true that in Lilius v. Manila Railroad Co., it was held that the
27
30Art. 119, Civil Code of the Philippines.
“patrimonial and moral damages” awarded to a young and beautiful woman by 21
reason of a scar—– in consequence of an injury resulting from an automobile VOL. 49, JANUARY 8, 1973 21
accident—–which disfigured her face and fractured her left leg, as well as caused
Zulueta vs. Pan American World Airways, Inc.
a permanent deformity, are her paraphernal property. Defendant cites, also, in
support of its contention the following passage from Colin y Capitant: presumed to belong to the conjugal partnership, unless it be proved that it
“No esta resuelta expresamente en la legislación española pertains exclusively to the husband or to the wife.” 31

No similar rules are found in the French Civil Code. What is more, under the
_______________ provisions thereof, the conjugal partnership exists only when so stipulated in the
“capitulaciones matrimoniales” or by way of exception. In the language of
L-21533, June 29, 1967.
25 Manresa—–
L-22320, May 22, 1968.
26
“Prescindimos de los preceptos de los Codigos de Francia, Italia, Holanda, Portugal,
62 Phil. 56, 64-65.
27
Alemania y Suiza, porsue sólo excepcionalmente, o cuando asi se pacta en las capitulaciones,
20
admiten el sistema de gananciales.” 32

20 SUPREME COURT REPORTS ANNOTATED Again, Colin y Capitant, as well as the Lilius case, refer to damages recovered
Zulueta vs. Pan American World Airways, Inc. for physical injuries suffered by the wife. In the case at bar, the party mainly
la cuestión de si las indemnizaciones debidas por accidentes del trabajo tienen la injured, although not physically, is the husband.
consideración de gananciales o son bienes particulares de los conyuges. Accordingly, the other Philippine cases and those from Louisiana—– whose
33

“Inclinan a la solución de que estas indemnizaciones deben ser consideradas como
gananciales, el hecho de que la sociedad pierde la capacidad de trabajo con el accidente, que
a ella le pertenece, puesto que de la sociedad son los frutos de ese trabajo; en cambio, la
consideración de que de igual manera que los bienes que sustituyen a los que cada cónyuge
lleva al matrimonio como propios tienen el caracter de propios, hace pensar que las
indemnizaciones que vengan a suplir la capacidad de trabajo aportada por cada cónyuge a
la sociedad, deben ser juridicamente reputadas como bienes propios del cónyuge que haya
sufrido el accidente. Asi se llega a la misma solución aportada por la jurisprudencia
francesa.” 28
This opinion is, however, undecisive, to say the least. It should be noted that
Colin y Capitant were commenting on the French Civil Code; that their comment
referred to indemnities due in consequence of “accidentes del trabajo” resulting
in physical injuries sustained by one of the spouses (which Mrs. Zulueta
has not suffered); and that said commentators admit that the question whether or
not said damages are paraphernal property or belong to the conjugal partnership
civil law is based upon the French Civil Code—–cited by the defendant, which
similarly refer to moral damages due to physical injuries suffered by the wife, are,
likewise, inapplicable to the case at bar.
We find, therefore, no plausible reason to disturb the views expressed in Our
decision promulgated on February 29, 1972.
WHEREFORE, the motions for reconsideration above-referred to should be, as
they are hereby denied.
Makalintal, Zaldivar, Fernando, Makasiar, Antonioand Esguerra,
JJ., concur.
Barredo, J., voted to modify the judgment by reducing the amount of the
awarded damages and individualizing the same, and now reserves the filing of a
separate concurring and dissenting opinion in support of his vote.
_______________

is not settled under the Spanish law. Besides,29 the French law and
Art. 160, Civil Code of the Philippines, and Art. 1407 of the Civil Code of Spain.
jurisprudence—– to which the comments of Planiol and Ripert, likewise, refer—–
31

9 Manresa, p. 552. Italics ours.

32

are inapposite to the question under consideration, because they differ Strebel v. Figueras, 96 Phil. 321; Araneta v. Arreglado, 104 Phil. 529; Soberano v. Manila
33

basically from the Spanish law in the treatment of the property relations between Railroad Co., L-19407, Nov. 23, 1966.
husband and wife. Indeed, our Civil Code, like the Spanish Civil Code, favors the 22

system of conjugal partnership of gains. Accordingly, the former provides that 2 SUPREME COURT REPORTS ANNOTATED
“(i)n the absence of marriage settlements, or when the same are void, the system 2
of relative community or conjugal partnership of gains x x x shall govern the
property relations between” the spouses. Hence, “(a) 11 property of the marriage
30
In re Integration of the Bar of the Philippines
is Castro and Teehankee, JJ., took no part.
Motions denied.
_______________ Notes.—–a) When counterclaim considered to determine jurisdiction of the
court.—– The claim of the plaintiff and the counterclaim of the defendant can only
be considered in the alternative form for determining the jurisdiction of the court.
(Rio y Compañia vs. Vda. de Vasquez, L-12097, July 19, 1960).
b) Measure and amount of damages.—– The amount of damages to be
awarded must be determined by adequately considering the official, political,
social, and financial standing of the offended parties on one hand, and the
business and financial position of the offender on the other. (Lopez vs. Pan-
American World Airways, Inc., L-22415, March 30, 1966).
c) Recovery of attorney’s fees.—– Under the new Civil Code, attorney’s fee is an
element of recoverable damages whether it be in writing or not stipulated at all.
(Santiago vs. Dimayuga, L-17883, December 30, 1961).
See also annotations on Moral Damages for Breach of Contract, 16 SCRA 445-
448; Recovery of Damages Based on Quasi-Delict, 22 SCRA 567-577; and
Attorney’s Fees as Damages, 18 SCRA 360-371.
LEGAL RESEARCH SERVICE
See SCRA Quick Index-Digest, volume 1, page 177 on Attorneys; page 364 on
Conjugal Partnership; page 501 on Courts; page 656 on Damages.
See also SCRA Quick Index-Digest, volume 2, page 1114 on Jurisdiction.

—–—–—–—–—–

© Copyright 2018 Central Book Supply, Inc. All rights reserved.


154 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
No. L-31618. August 17, 1983. *
EFREN V. MENDOZA and INOCENCIA R. DE MENDOZA,
petitioners, vs. PONCIANO S. REYES and THE COURT OF APPEALS,
respondents.
No. L-31625. August 17, 1983.
*
JULIA R. DE REYES, petitioner, vs. PONCIANO S. REYES and COURT OF
APPEALS, respondents.
Civil Law; Property; Conjugal Partnership; Presumption of conjugality.—The
presumption is a strong one. As stated in Camia de Reyes v. Reyes de Ilano (63 Phil. 629,
639), “it is sufficient to prove that the property was acquired during the marriage in order
that the same may be deemed conjugal property.” And in Laluan v. Malpaya (65 SCRA 494,
504) we stated, “proof of acquisition of the property in dispute during the marriage suffices
to render the statutory presumption operative.”
Same; Same; Same; Theory that property bought from personal funds of wife negated
by fact that the funds were also invested by husband and wife in other business; Case at
bar.—As a matter of fact, Mrs. Reyes’ testimony about a loan from Mrs. Rosa Borja, the sale
of a lot in Cabiao, Nueva Ecija given by her mother, and the loan from PNB only emphasize
the conjugal nature of the disputed properties because she stated that these sums were also
used to put up their gravel and sand business, a poultry farm, and a banana plantation plus
a jeepney transportation line although according to her, every business venture handled by
her husband failed. The two were establishing businesses and buying properties together as
husband and wife, in happier times.
Same; Same; Same; Conjugal nature of property not destroyed even if property
registered in the name of only one of the spouses; Reason.—Property acquired during a
marriage is presumed to be conjugal and the fact that the land is later registered in the
name of only one of the spouses does not destroy its conjugal nature. (Bucoy v. Paulino, 23
SCRA 249). Section 46 of P.D. 1529, the Property Registration Decree, reiterates the proviso
in Section 70 of the
______________
*FIRST DIVISION.
155
VOL. 124, AUGUST 17, 1983 155
Mendoza vs. Reyes
former Land Registration Act that registration cannot be construed to relieve
registered land or the owners thereof from any rights incident to the relation of husband
and wife. (See also: Marigsa v. Macabuntoc, 17 Phil. 107, 109; Romero de Pratts v. Menzi &
Co., Inc., 53 Phil. 51, 54; Padilla v. Padilla, 74 Phil. 377. 382-384; Vitug v. Montemayor, 91
Phil. 286, 290, 291, citingGuinguing v. Abuton, 48 Phil. 144; Sideco v. Aznar, 92 Phil. 952,
961-962, citing Flores v. Flores, 48 Phil. 288; Guinoo v. Court of Appeals, 97 Phil. 235, 238;
Silos v. Ramos, 97 Phil. 263, 270, citing Commonwealth v. Sandiko, 72 Phil. 258, 260; and
Alvarez v. Espiritu, 14 SCRA 893). If the fact that property acquired during marriage was
registered in the name of the husband alone does not affect its conjugal nature, neither does
registration in the name of the wife. Any person who buys land registered in the married
name of the wife is put on notice about its conjugal nature.
Same; Same; Estoppel, nature of; When estoppel can be invoked.—The principle of
estoppel rests on the rule that whenever a party has, by his declaration, act or omission,
intentionally and deliberately led the other to believe a particular thing true and to act,
upon such belief, he cannot, in any litigation arising out of such declaration, act or omission,
be permitted to falsify it. (Sotto v. Teves, 86 SCRA 154). Estoppel can only be invoked
between the person making the misrepresentation and the person to whom it was
addressed. It is essential that the latter shall have relied upon the misrepresentation and
had been influenced and misled thereby.
Same; Same; Same; Estoppel, not applicable, where misrepresentation is absent.—
There is no showing that the respondent had intentionally and deliberately led the
petitioners Mendozas to believe what was contained in the pleading, “Exh. 11”, and to make
them act upon it. As observed by the respondent, they were not even a party in the case
where the said pleading was filed. Neither is there any assertion by the Mendozas that the
said pleading was shown to them or that they happened to see it or to have any knowledge
about it before they purchased the properties in question. The alleged misrepresentation
was never addressed to the petitioners, much less made with the intention that they would
act upon it. Moreover, there is no specific and clear reference to the disputed lots as
paraphernal in the cited answer. The petitioners cannot invoke estoppel in these petitions.
Same; Same; Same; Unjust enrichment, not a case of, where the person alleged to be
enriched has not been benefited.—The final
156
1 SUPREME COURT REPORTS ANNOTATED
56
Mendoza vs. Reyes
argument refers to the alleged unjust enrichment by Ponciano Reyes if the deed of
sale is nullified. The petitioners admit that the benefit including that represented by one-
half of the purchase price, accrued not to the respondent but to his wife. Since Mr. Reyes did
not receive any part of the proceeds of the sale and his wife has been aligning herself with
the Mendoza couple, there could be no unjust enrichment as alleged.
PETITIONS for certiorari to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
L-31618 & 31625:
Conrado B. Enriquez and Elpidio G. Navarro for petitioners.
Pacifico M. Castro for respondents.
GUTIERREZ, JR., J.:
Questioned in these consolidated petitions for review on certiorari is the decision
of the Court of Appeals, now Intermediate Appellate Court, reversing the decision
of the Court of First Instance of Rizal, Quezon City Branch. The dispositive
portion of the appellate decision reads:
“WHEREFORE, (a) the judgment appealed from is hereby reversed; (b) the deed of sale
executed by appellee Julia de Reyes on March 3, 1961 in favor of appellees Efren V.
Mendoza and Inocencia R. Mendoza, covering lots 5 and 6, Block No. 132 of Subdivision
Plan Psd. 14841, situated at Retiro Street, Quezon City, is hereby declared null and void
with respect to one-half share of appellant therein; (c) the Register of Deeds of Quezon City
is hereby directed to cancel TCT Nos. 56110 and 56111, now covering said lots, and to issue,
in lieu thereof, certificates of title in favor of appellant Ponciano S. Reyes for one-half (1/2)
pro-indiviso and the spouses Efren V. Mendoza and Inocencia Mendoza for one-half (1/2)
also pro-indiviso; (d) the appellees Mendozas are hereby ordered to pay unto the appellant
the accrued rentals of the properties in litigation due to the share corresponding to said
appellant, at the rate of P350.00 a month from March 3, 1961 until the finality of this
decision, with legal interest thereon; and (e) said appellees are likewise ordered to pay
157
VOL. 124, AUGUST 17, 1983 157
Mendoza vs. Reyes
unto the appellant the amount of THREE THOUSAND (P3,000.00) PESOS as attorney’s
fees, plus the costs in both instances.”
This case originated with the filing of a complaint by Feliciano S. Reyes with the
Court of First Instance of Rizal docketed as Civil Case No. Q-6905, for the
annulment of a deed of sale of two parcels of land with their improvements,
executed by his wife, Julia R. De Reyes as vendor and the spouses Efren V.
Mendoza and Inocencia R. De Mendoza, as vendees. Ponciano S. Reyes averred
that said properties were conjugal properties of himself and his wife and that she
had sold them to petitioners “all by herself” and without his knowledge or
consent.
Petitioners Efren V. Mendoza and Inocencia R. De Mendoza alleged in their
answer that the properties were paraphernal properties of Julia R. de Reyes and
that they had purchased the same in good faith and for adequate consideration.
In a separate answer, petitioner Julia R. De Reyes, supported the spouses
Mendozas’ contentions.
In its decision, the Court of First Instance of Rizal dismissed the complaint
and declared the properties in question exclusive and paraphernal properties of
petitioner Julia R. De Reyes. It ruled that she could validly dispose of the same
without the consent of her husband and that the Mendozas are innocent
purchasers.
As earlier stated, the Court of Appeals reversed the decision of the court a
quo.
The petitioners filed separate petitions for review on certiorari. Efren V.
Mendoza and Inocencia R. De Mendoza raised the following assignments of
errors:
I thereon, were bought from J. M. Tuason & Co., represented by Gregorio Araneta, Inc.—to be
THE COURT OF APPEALS ERRED, NOT MERELY IN GIVING CREDENCE, BUT IN
FACT IN CONSIDERING AT ALL PROOF OF THE ALLEGED CONJUGAL CHARACTER
OF THE PROPERTIES IN QUESTION, AND IN NOT INVOKING THE DOCTRINE OF
ESTOPPEL TO RULE OUT ANY AND ALL SUCH PROOF ALTOGETHER.
158
158 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
II
THE COURT OF APPEALS ERRED IN FINDING PETITIONERS GUILTY OF BAD
FAITH IN PURCHASING THE PROPERTIES LITIGATED FOR WITHOUT EVIDENCE
OF SUCH FACT BEING PRESENTED AND ON THE STRENGTH MERELY OF A
SIMPLE PRESUMPTION UNWARRANTEDLY DRAWN FROM ONE OF ITS OWN
OBSCURE AND HARDLY AUTHORITATIVE RULINGS, AND AGAINST ABUNDANT,
POSITIVE AND UNCONTRADICTED PROOF OF GOOD FAITH.
III
THE COURT OF APPEALS ERRED UPON EQUITABLE GROUNDS IN, IN EFFECT,
GIVING JUDICIAL FIAT TO THE UNJUST ENRICHMENT OR BENEFIT OF ONE
PERSON AT THE EXPENSE OF ANOTHER OR OTHERS.
On the other hand, Julia R. De Reyes made the following assignments of errors in
her petition for review.
“THE COURT OF APPEALS ERRED IN DECLARING THAT THE PROPERTIES IN
QUESTION ARE THE CONJUGAL PROPERTIES OF THE RESPONDENT PONCIANO S.
REYES AND THE PETITIONER IN SPITE OF THE CATEGORICAL JUDICIAL
DECLARATION AND ADMISSION BY SAID RESPONDENT THAT THE SAID
PROPERTIES ARE THE EXCLUSIVE AND PARAPHERNAL PROPERTIES OF HIS
WIFE, THE PETITIONER HEREIN.
“THE COURT OF APPEALS ERRED IN HAVING DECIDED THE CASE NOT IN
ACCORDANCE WITH LAW AND THE APPLICABLE DECISIONS ON THE MATTER IN
THE SENSE, PARTICULARLY, THAT THE ACT AND DECLARATION OF A PARTY
AGAINST HIS INTERESTS CAN NOT BE CONTRADICTED BY HIM, AND IN SO DOING
THE DECISION AMOUNTED TO SANCTIONING A PERJURED TESTIMONY.”
On the first issue regarding the alleged paraphernal character of the disputed
properties, we find that the records sustain the findings of the Court of Appeals.
159
VOL. 124, AUGUST 17, 1983 159
Mendoza vs. Reyes
The facts are:
xxx xxx xxx
“Ponciano Reyes and Julia de Reyes—to be herein referred to as Ponciano and Julia
alone for brevity—were married in 1915. The properties in question—consisting of Lots 5
and 6. Block No. 132, situated at Retire Street, Quezon City—plus the buildings erected
herein mentioned as ‘Araneta’—February, 1947 on installment basis. (Testimony of Julia,
t.s.n., p. 74, February 15, 1963). The first installment on Lot No. 5 was P69.96 and on Lot
No. 6 was P10-2.00 (Exh. ‘H’ and uncontradicted testimony of Ponciano, t.s.n., p. 4, July 20,
1964).
“The spouses were always in arrears in the payment of the installments to Araneta due
to lack of money (t.s.n., pp. 5-7, July 20, 1964) so they had to borrow money from the
Rehabilitation Finance Corporation—hereinafter referred to as RFC for short. Thus, on
November 26, 1948, they jointly obtained a loan of P12,000.00 from the RFC for the
following exclusive purposes only: ‘to complete the construction of one-storey residential
building on 9th Street, La Loma, Quezon City; and to pay the balance of the price of the lot
offered as security’ which is Lot 5, (Deed of Mortgage, Exh. ‘A-1’). Out of this loan, the
amount of P5,292.00 was paid to Araneta as price of Lot 5. The corresponding deed of
absolute sale thereof was executed by Araneta on November 27, 1948 (Exh.’ A’). On October
2, 1952, the spouses secured an additional loan of P8,000.00 from the RFC ‘to pay the
balance of the lot herein offered (Lot No. 6) as additional security, and to defray the
expenses incurred in the repairs of the building’ as the deed of mortgage so recites (Exh. ‘B-
1’). From the amount of this loan, the sum of P7,719.60, as price of Lot No. 6, was paid and
the deed of absolute sale was forthwith executed by Araneta (Exh. ‘B’). In the deed of sale,
the vendee named is ‘Julia de Reyes’. Her signatures appear over the caption ‘vendee’ and
those of Ponciano under the phrase: ‘with my marital consent.’
“As a result of these sales, Transfer Certificates of Title Nos. 8550 (Exh. ‘F’) and 19998
(Exh. ‘G’) were issued for Lots 5 and 6, respectively, by the Register of Deeds of Quezon City,
in the name of ‘JULIA REYES married to PONCIANO REYES.’ The mortgage contracts
(Exhs. ‘A-1’ and ‘B-1’) executed by the spouses in favor of the RFC were duly registered and
annotated on the said Transfer Certificates of Title (Exhs. ‘F’ and ‘G’).
160
160 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
“As promised to the RFC, the spouses built a house and later a camarin on the two lots. The
camarin was leased as a school building to the Quezon City Elementary School of La Loma
for the period of two years (1950-51) at P500.00 a month. When the school was transferred
to another place, the camarin was leased on December 10, 1952 to Mr. and Mrs. Mendoza,
appellees, for ten years at P600.00 a month for the first year and P700.00 for the remaining
nine years. The contract of lease was signed by Julia as lessor, with the marital consent of
Ponciano. The camarin was converted into a movie house and used as such by the lessees.
(Exh. ‘G’).
“In spite of the good rentals they had been receiving for the building, the spouses failed
to pay seasonably their obligations to the RFC so, as late as November 28, 1958, they had to
ask for an extension of 5 years from the Development Bank of the Philippines or DBP, as
successor of the RFC, for the payment of an outstanding balance of P7,876.13 (Exh. ‘D’).
“On March 3, 1961, while Ponciano was absent attending his farm in Arayat,
Pampanga, Julia sold absolutely the lots in question, together with their improvements to
appellees Mendozas for the sum of P80,000.00 without the knowledge and consent of
Ponciano (Exh. T-Mendoza). At the same time the spouses were living separately and were
not in speaking terms. By virtue of such sale, Transfer Certificates of Title Nos. 56110 and
56111 were subsequently issued in the name of the Mendozas.”
The applicable provision of law is Article 153 of the Civil Code which provides:
“ART. 153. The following are conjugal partnership property:
“(1) That which is acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of the spouses;”
xxx xxx xxx
The presumption found in Article 160 of the Civil Code must also be overcome by
one who contends that the disputed property is paraphernal. Article 160 provides:
“ART. 160. All property of the marriage is presumed to belong to the conjugal partnership,
unless it be proved that it pertains exclusively to the husband or to the wife.”
161
VOL. 124, AUGUST 17, 1983 161
Mendoza vs. Reyes
The presumption is a strong one. As stated in Camia de Reyes v. Reyes de
llano (63 Phil. 629, 639), “it is sufficient to prove that the property was acquired
during the marriage in order that the same may be deemed conjugal property.”
And in Laluan v. Malpaya (65 SCRA 494, 504) we stated, “proof of acquisition of
the property in dispute during the marriage suffices to render the statutory
presumption operative.”
There is no question that the disputed property was acquired by onerous title
during the marriage. But were the funds used to buy the lot and build the
improvements at the expense of the common fund?
The records show that the funds came from loans obtained by the spouses
from the Rehabilitation Finance Corporation. Under Article 161 of the Civil Code,
all debts and obligations contracted by the husband and the wife for the benefit of
the conjugal partnership are liabilities of the partnership.
As stated in Castillo, Jr. vs. Pasco (11 SCRA 102, 107):
“x x x. The position thus taken by appellants is meritorious, for the reason that the deeds
show the loans to have been made by Dr. Nicanor Jacinto and by Gabriel and Purificacion
Gonzales, to both spouses Marcelo Castillo and Macaria Pasco, as joint borrowers. The loans
thus became obligations of the conjugal partnership of both debtor spouses and the money
loaned is logically conjugal property.”
Citing Palanca v. Smith Bell & Co. (9 Phil. 131) interpreting Par. 3, Article 1401
of the old Civil Code, the Court in Castillo v. Pasco stated:
“If money borrowed by the husband alone on the security of his wife’s property is conjugal in
character, a fortiori should it be conjugal when borrowed by both spouses. The reason
obviously is that the loan becomes an obligation of the conjugal partnership which is the one
primarily bound for its repayment.”
To rebut the presumption and the evidence of the conjugal character of the
property, the petitioners have only the testimony of Julia de Reyes to offer.
Mrs. Reyes testified that she bought the two parcels of land on installment
basis and that the first payment of a little less
162
162 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
than P2,000.00 came from her personal funds: The receipt issued by Araneta,
however, shows that the first installment on one lot was only P69.96 and on the
other lot, P102.00. Mrs. Reyes also testified that she paid the entire purchase
price and the construction of the buildings from her personal funds and money
borrowed from the Philippine National Bank. The mortgage contracts, however,
show that the properties were paid out of the loan from RFC.
As a matter of fact, Mrs. Reyes’ testimony about a loan from Mrs. Rosa Borja,
the sale of a lot in Cabiao, Nueva Ecija given by her mother, and the loan from
PNB only emphasize the conjugal nature of the disputed properties because she
stated that these sums were also used to put up their gravel and sand business, a
poultry farm, and a banana plantation plus a jeepney transportation line
although according to her, every business venture handled by her husband failed.
The two were establishing businesses and buying properties together as husband
and wife, in happier times.
 The Court of Appeals ruled upon the testimony of Julia De Reyes as follows:
“Julia’s testimony that she had sold her Cabiao property to Rosa Borja is not supported by
the deed of sale (Exh. T) which shows that the property was sold to Encarnacion Goco and
Mariano Robles. Again, her claim that said Cabiao property was donated to her by her
mother is negated by the deeds of sale (Exhs. ‘J’ and ‘K’) which show that said property was
donated to her and her two brothers, Pablo and Jose del Rosario, who afterwards sold their
participation thereof to the spouses, Ponciano and Julia.
“Her claim of exclusive ownership is further belied by the Income Tax Returns (Exhs.
‘N’ to “N-3’) which she herself prepared and filed in behalf of the conjugal partnership
wherein she made the statement that the rentals paid by her co-appellees were income of
the conjugal partnership; and by the Income Tax Returns (Exhs. ‘O’ to ‘O-4’) also filed by her
for the conjugal partnership, were she made to appear the properties in question as capital
assets of the conjugal partnership. It should be noted that Julia did not care to deny the
truth of said statements. Neither did she endeavor to offer any explanation for such
damaging averments.”
163
VOL. 124, AUGUST 17, 1983 163
Mendoza vs. Reyes
Petitioners also raised the issue of estoppel in their assignments of errors. They
alleged:
“Even so, petitioners would have small legal cause to dispute the respondent Court’s giving
credence to the husband’s pretensions did there not also exist in the record plain and
indisputable evidence that he had on a former occasion both solemnly confirmed the
paraphernal character of the very properties now in question and disclaimed the existence
of any conjugal partnership funds or properties of himself and his wife.” (Petitioner’s Brief,
L-31616, p. 7).
It turns out that in 1948. Ponciano Reyes was sued in the then Municipal Court of
Manila for ejectment from a leased hotel that he was then operating. Judgment
was rendered against Reyes in favor of the lessors, the brothers named Gocheco.
Having failed in a bid to garnish the rentals of the disputed buildings because the
municipal court stated that it had no jurisdiction to decide the paraphernal or
conjugal nature of the properties, the Gocheco brothers filed Civil Case No. 24772
for revival of judgment with the Court of First Instance of Manila.
It was in this latter case where Mr. Reyes stated in his special defenses that
he and his wife never had any kind of fund which could be called conjugal
partnership funds, that they acted independently from one another whenever
either one engaged in any business, and—
“That the herein plaintiff has not limited his action in the present case against defendant
Ponciano S. Reyes as he did in the original case above-mentioned, that is, Civil Case No.
7524 of the Manila Municipal Court which the instant case derived from, but has included
the defendant’s wife Julia Reyes, with the only intended purpose and design of going over
and against the paraphernal properties of said Julia Reyes.” (par. 4, Special Defenses,
Answer, Exh. 11; Petitioner’s Brief, L-31618, pp. 9-10).
Article 1437 of the Civil Code on estoppel involving immovable property provides:
“Art. 1437. When in a contract between third persons concerning immovable property, one of
them is misled by a person
164
164 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
with respect to the ownership or real right over the real estate, the latter is precluded from
asserting his legal title or interest therein, provided all these requisites are present:
1. “(1)There must be fraudulent representation or wrongful concealment of facts
known to the party estopped;
2. “(2)The party precluded must intend that the other should act upon the facts as
misrepresented;
3. “(3)The party misled must have been unaware of the true facts; and
4. “(4)The party defrauded must have acted in accordance with the
misrepresentation.”
The principle of estoppel rests on the rule that whenever a party has, by his
declaration, act or omission, intentionally and deliberately led the other to believe
a particular thing true and to act, upon such belief, he cannot, in any litigation
arising out of such declaration, act or omission, be permitted to falsify it. (Sotto v.
Teves, 86 SCRA 154.)
Estoppel can only be invoked between the person making the
misrepresentation and the person to whom it was addressed. It is essential that
the latter shall have relied upon the misrepresentation and had been influenced
and misled thereby.
There is no showing that the respondent had intentionally and deliberately
led the petitioners Mendozas to believe what was contained in the pleading, “Exh.
11”, and to make them act upon it. As observed by the respondent, they were not
even a party in the case where the said pleading was filed. Neither is there any
assertion by the Mendozas that the said pleading was shown to them or that they
happened to see it or to have any knowledge about it before they purchased the
properties in question. The alleged misrepresentation was never addressed to the
petitioners, much less made with the intention that they would act upon it.
Moreover, there is no specific and clear reference to the disputed lots as
paraphernal in the cited answer. The petitioners cannot invoke estoppel in these
petitions.
165
VOL. 124, AUGUST 17, 1983 165
Mendoza vs. Reyes
May the Mendoza spouses be considered buyers in good faith?
The proof that the petitioners in L-31618 are purchasers in good faith comes
from the testimony of Mrs. Inocencia Mendoza herself. Mrs. Mendoza testified
that Mrs. Julia R. De Reyes assured her that the properties were paraphernal,
that her lawyer verified the titles being in the name of Mrs. Julia R. De Reyes,
and that she never dealt with Mr. Ponciano Reyes when she and her husband
were still renting the properties they later purchased. On cross-examination, Mrs.
Mendoza admitted that she learned of the RFC mortgage when the lots were
about to be purchased.
Property acquired during a marriage is presumed to be conjugal and the fact
that the land is later registered in the name, of only one of the spouses does not
destroy its conjugal nature. (Bucoy v. Paulino, 23 SCRA 249). Section 46 of P.D.
1529, the Property Registration Decree, reiterates the proviso in Section 70 of the
former Land Registration Act that registration cannot be construed to relieve
registered land or the owners thereof from any rights incident to the relation of
husband and wife. (See also: Marigsa v. Macabuntoc, 17 Phil. 107, 109; Romero de
Pratts v. Menzi & Co., Inc., 53 Phil. 51, 54; Padilla v. Padilla, 74 Phil. 377, 382-
384; Vitug v. Montemayor, 91 Phil. 286, 290, 291, citing Guinguing v. Abuton, 48
Phil. 144; Sideco v. Aznar, 92 Phil. 952, 961-962, citing Flores v. Flores, 48 Phil.
288; Guinoo v. Court of Appeals, 97 Phil. 235, 238; Silos v. Ramos, 97 Phil. 263,
270, citing Commonwealth v. Sandiko, 72 Phil. 258, 260; and Alvarez v.
Espiritu, 14 SCRA 893).
If the fact that property acquired during marriage was registered in the name
of the husband alone does not affect its conjugal nature, neither does registration
in the name of the wife. Any person who buys land registered in the married
name of the wife is put on notice about its conjugal nature.
The mortgage contracts (Exhs. “A-1” and “B-1”) executed by the spouses
Ponciano S. Reyes and Julia Reyes in favor of RFC were duly registered in the
Registry of Deeds of Quezon City and seasonably annotated on transfer
certificates of title Nos. 8550 (Exh. “F”) and 19998 (Exh. “G”), which were issued
166
166 SUPREME COURT REPORTS ANNOTATED
Mendoza vs. Reyes
in the name of Julia Reyes “married to Ponciano Reyes”. Their dates of inscription
were November 29, 1948 and October 11, 1952, respectively. On December 10,
1952, the lots and the building were leased by Julia, with the marital consent of
Ponciano to the petitioners Mendozas. The contract of lease was registered in the
Registry of Deeds and was annotated in the transfer certificates of title on May 5,
1952. At that time, the RFC mortgages were already noted at the back of the
transfer certificates of title. The petitioners, therefore, are unquestionably
charged with notice of the existence and contents of said mortgages, their joint
execution by the spouses Ponciano Reyes and Julia Reyes and the application of
the loans to the payment to Araneta of the purchase price of the lots in question.
Furthermore, the consent of the Ponciano Reyes to the mere lease of the
properties was demanded by the Mendozas allegedly for their own protection, yet
when it came to the deed of sale which entailed a greater transfer of rights such
consent was not required.
The final argument refers to the alleged unjust enrichment by Ponciano Reyes
if the deed of sale is nullified. The petitioners admit that the benefit including
that represented by one half of the purchase price, accrued not to the respondent
but to his wife. Since Mr. Reyes did not receive any part of the proceeds of the sale
and his wife has been aligning herself with the Mendoza couple, there could be no
unjust enrichment as alleged.
The assignments of errors have no merit.
WHEREFORE, the petitions for review on certiorari are hereby DENIED for
lack of merit. The judgment of the Court of Appeals is affirmed.
SO ORDERED.
Teehankee, Actg. C.J., Melencio-Herrera, Plana, Vasquez and Relova, JJ.,
concur.
Petitions denied. Judgment affirmed.
167
VOL. 124, AUGUST 17, 1983 167
People vs. Jardin
Notes.—Phrase “having inherited the same (property) from their deceased
parents and grandparents” construed to mean that land in question is the
conjugal property of said parents and grandparents. (Montesa vs. Court of
Appeals, 117 SCRA 770.)
A part-owner of property can bring an action to protect her interest therein
which right exists even before the liquidation or dissolution of the conjugal
partnership. (Enriquez vs. Court of Appeals, 104 SCRA 656.)
A decree of separation, which does not yet include an order of division of
property is not an incomplete judgment. A decree of separation, if not appealed,
becomes final and executory. (Macadangdang vs. Court of Appeals, 108 SCRA
314.)
A supplemental decision on the division of property is a mere incident of the
decree of legal separation the latter being the main judgment which, if not
appealed, will become final and executory. (Macadangdang vs. Court of
Appeals, 108 SCRA 314.)
Party invoking the presumption that property is conjugal must first prove
that the same was acquired during the marriage. (Torela vs. Torela, 93 SCRA
391.)
Statement in the title that the registered owner is married to the person
named therein is merely descriptive of civil status. (Torela vs. Torela, 93 SCR
391.)
——o0o——
© Copyright 2018 Central Book Supply, Inc. All rights reserved.
 VOL. 227, OCTOBER 20, 1993 303
Belcodero vs. Court of Appeals
G.R. No. 89667. October 20, 1993. *
JOSEPHINE B. BELCODERO, petitioner, vs. THE HONORABLE COURT OF
APPEALS, ET AL., respondents.
Civil Law; Property; Conjugal Partnership; Presumption that all property of the
marriage belong to the conjugal partnership has not been convincingly rebutted.—Whether
the property in question was acquired
_______________
*THIRD DIVISION.
304
3 SUPREME COURT REPORTS ANNOTATED
04
Belcodero vs. Court of Appeals
by Alayo in 1949 when an agreement for its purchase on installment basis was
entered into between him and Magdalena Estate, Inc., or in 1959 when a deed of sale was
finally executed by Magdalena Estate, Inc., the legal results would be the same. The
property remained as belonging to the conjugal partnership of Alayo and his legitimate wife
Juliana. Under both the new Civil Code (Article 160) and the old Civil Code (Article 1407),
“all property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife.” This presumption has not
been convincingly rebutted.
Same; Same; Same; Same; There is valid basis to the conclusion that the property
really belonged to the lawful conjugal partnership between Alayo and his true spouse
Juliana.—The appellate court below, given the above circumstances, certainly cannot be
said to have been without valid basis in concluding that the property really belonged to the
lawful conjugal partnership between Alayo and his true spouse Juliana.
Same; Same; Co-ownership; In both the New and the Old Civil Code, the co-ownership
rule had more than once been repudiated when either or both spouses suffered from an
impediment to marry.—As regards the property relations between common-law spouses,
Article 144 of the Civil Code merely codified the law established through judicial precedents
under the old code (Margaret Maxey vs. Court of Appeals, G.R. No. L-45870, 11 May 1984).
In both regimes, the co-ownership rule had more than once been repudiated when either or
both spouses suffered from an impediment to marry (Jeroniza vs. Jose, 89 SCRA 306). The
present provisions under Article 147 and Article 148 of the Family Code did not much
deviate from the old rules; in any case, its provisions cannot apply to this case without
interdicting prior vested rights (Article 256, Family Code).
Same; Same; Reconveyance; Prescription; Prescriptive period for an action seeking a
reconveyance of the property by the beneficiaries thereof is ten (20) years.—The applicable
prescriptive period for an action seeking a reconveyance of the property by the beneficiaries
thereof is ten (10) years (Article 1144, Civil Code). Ordinarily, that period starts from the
establishment of the implied trust being the day when the cause of action would be
considered to have accrued (Article 1150, Civil Code). Unfortunately for Josefa and
Josephine, however, the property involved in this case is a realty titled under the Torrens
System. The prescriptive period is thus to be counted from the time the transaction affecting
the property is registered with the corresponding
305
VOL. 227, OCTOBER 20, 1993 305
Belcodero vs. Court of Appeals
issuance of a new certificate of title. Between the time Transfer Certificate of Title
No. 198840 was issued on 06 June 1974, and the filing of the action for the reconveyance of
the property with the court a quo on 30 October 1980, barely a period of six (6) years and
four (4) months had elapsed. The case has accordingly been initiated seasonably.
PETITION for review on certiorari of the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Jaime I. Infante and Joanes G. Caacbay for petitioners.
Lamberto C. Nanquil & Associates Law Office for private respondents.
VITUG, J.:
This case involves the question of ownership over a piece of land acquired by a
husband while living with a paramour and after having deserted his lawful wife
and children. The property had been bought by the husband on installment basis
prior to the effectivity of the Civil Code of 1950 but the final deed, as well as the
questioned conveyance by him to his common law spouse, has ensued during the
latter Code’s regime. Now, of course, we have to likewise take note of the new
Family Code which took effect on 03 August 1988.
Let us begin by paraphrasing the factual findings of the appellate court below.
The husband, Alayo D. Bosing, married Juliana Oday on 27 July 1927, with
whom he had three children, namely, Flora, Teresita, and Gaido. In 1946, he left
the conjugal home, and he forthwith started to live instead with Josefa Rivera
with whom he later begot one child, named Josephine Bosing, now Josephine
Belcodero.
On 23 August 1949, Alayo purchased a parcel of land on installment basis
from the Magdalena Estate, Inc. In the deed, he indicated his civil status as
“married to Josefa R. Bosing,” the common-law wife. In a letter, dated 06 October
1959, which he addressed to Magdalena Estate, Inc., he authorized the latter to
transfer the lot in the name of his “wife Josefa R. Bosing.” The final deed of sale
was executed by Magdalena Estate, Inc., on 24
306
306 SUPREME COURT REPORTS ANNOTATED
Belcodero vs. Court of Appeals
October 1959. A few days later, or on 09 November 1959, Transfer Certificate of
Title No. 48790 was issued in the name of “Josefa R. Bosing, x x x married to
Alayo Bosing, x x x.”
On 6 June 1958, Alayo married Josefa even while his prior marriage with
Juliana was still subsisting. Alayo died on 11 March 1967. About three years
later, or on 17 September 1970, Josefa and Josephine executed a document of
extrajudicial partition and sale of the lot in question, which was there described
as “conjugal property” of Josefa and deceased Alayo. In this deed, Josefa’s
supposed one-half (1/2) interest as surviving spouse of Alayo, as well as her one-
fourth (1/4) interest as heir, was conveyed to Josephine for a P10,000.00
consideration, thereby completing for herself, along with her own one-fourth (1/4)
interest as the surviving child of Alayo, a full “ownership” of the property. The
notice of extrajudicial partition was published on 04, 05 and 06 November 1970 in
the Evening Post; the inheritance and estate taxes were paid; and a new Transfer
Certificate of Title No. 198840 was issued on 06 June 1974 in the name of
Josephine.
On 30 October 1980, Juliana (deceased Alayo’s real widow) and her three
legitimate children filed with the court a quo an action for reconveyance of the
property. On the basis of the above facts, the trial court ruled in favor of the
plaintiffs, and it ordered that—
“x x x Josephine Bosing execute a deed of reconveyance of the property in question to the
legal heirs of the deceased Alayo D. Bosing, and that both defendants pay, jointly and
severally, actual damages by way of attorney’s fees and expenses in litigation, TEN
THOUSAND (P10,000.00) PESOS, and the sum of TEN THOUSAND (P10,000.00) PESOS
as moral damages, plus TEN THOUSAND (P10,000.00) PESOS exemplary damages to
prevent future frauds.”
The defendants went to the Court of Appeals which affirmed the trial court’s
order for the reconveyance but reversed the decision on the award for damages,
thus—
WHEREFORE, the judgment appealed from is hereby AFFIRMED insofar as defendant
Josephine Bosing is ordered to execute a deed of reconveyance of the property granting the
same to the legal heirs of the deceased Alayo D. Bosing, and REVERSED insofar as it
awards actual,
307
VOL. 227, OCTOBER 20, 1993 307
Belcodero vs. Court of Appeals
moral and exemplary damages.
1
Hence, the instant petition for review submitting that—
2
1. 1.THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE
ACTION FOR RECONVEYANCE HAD LONG PRESCRIBED.
2. 2.THE RESPONDENT COURT ERRED IN FINDING THAT, THE
ACTION FOR RECONVEYANCE IS BASED UPON AN IMPLIED OR
CONSTRUCTIVE TRUST.
3. 3.THE RESPONDENT COURT ERRED IN NOT HOLDING THAT, THE
PROPERTY IN QUESTION BELONGS EXCLUSIVELY TO THE
PETITIONERS.
4. 4.THE RESPONDENT COURT ERRED IN NOT GRANTING
PETITIONERS’ MOTION FOR NEW TRIAL BASED ON NEWLY
DISCOVERED EVIDENCE, AND LIKEWISE ERRED IN HOLDING
THAT EVEN IF A NEW TRIAL IS GRANTED THE SAME WOULD
NOT SERVE A USEFUL PURPOSE.
We rule for affirmance.
The first three issues are interrelated, and the same will thus be jointly
discussed.
Whether the property in question was acquired by Alayo in 1949 when an
agreement for its purchase on installment basis was entered into between him
and Magdalena Estate, Inc., or in 1959 when a deed of sale was finally executed
by Magdalena Estate, Inc., the legal results would be the same. The property
remained as belonging to the conjugal partnership of Alayo and his legitimate
wife Juliana. Under both the new Civil Code (Article 160) and the old Civil Code
(Article 1407), “all property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband or to
the wife.” This presumption has not been convincingly rebutted.
It cannot be seriously contended that, simply because the property was titled
in the name of Josefa at Alayo’s request, she should thereby be deemed to be its
owner. The property unques-
_______________
Penned by Justice Minerva Gonzaga-Reyes, concurred in by Justices Santiago Kapunan and
1
Ricardo Francisco.
Ably presented by Atty. Jaime Infante.
2
308
308 SUPREME COURT REPORTS ANNOTATED
Belcodero vs. Court of Appeals
tionably was acquired by Alayo. Alayo’s letter, dated 06 October 1959, to
Magdalena Estate, Inc., merely authorized the latter to have the title to the
property transferred to her name. More importantly, she implicitly recognized
Alayo’s ownership when, three years after the death of Alayo, she and Josephine
executed the deed of extrajudicial partition and sale in which she asserted a one-
half (1/2) interest in the property in what may be described as her share in the
“conjugal partnership” with Alayo, plus another one-fourth (1/4) interest as the
“surviving widow”, the last one-fourth (1/4) going to Josephine as the issue of the
deceased. Observe that the above adjudication would have exactly conformed with
a partition in intestacy had they been the sole and legitimate heirs of the
decedent.
The appellate court below, given the above circumstances, certainly cannot be
said to have been without valid basis in concluding that the property really
belonged to the lawful conjugal partnership between Alayo and his true spouse
Juliana.
As regards the property relations between common-law spouses, Article 144 of
the Civil Code merely codified the law established through judicial precedents
under the old code (Margaret Maxey vs. Court of Appeals, G.R. No. L-45870, 11
May 1984). In both regimes, the co-ownership rule had more than once been
repudiated when either or both spouses suffered from an impediment to marry
(Jeroniza vs. Jose, 89 SCRA 306). The present provisions under Article 147 and
Article 148 of the Family Code did not much deviate from the old rules; in any
case, its provisions cannot apply to this case without interdicting prior vested
rights (Article 256, Family Code).
It was at the time that the adjudication of ownership was made following
Alayo’s demise (not when Alayo merely allowed the property to be titled; in
Josefa’s name which clearly was not intended to be adversarial to Alayo’s
interest), that a constructive trust was deemed to have been created by operation
of law under the provisions of Article 1456 of the Civil Code.
“Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from whom
the property comes.
309
VOL. 227, OCTOBER 20, 1993 309
Belcodero vs. Court of Appeals
The applicable prescriptive period for an action seeking a reconveyance of the
property by the beneficiaries thereof is ten (10) years (Article 1144, Civil Code).
Ordinarily, that period starts from the establishment of the implied trust being
the day when the cause of action would be considered to have accrued (Article
1150, Civil Code). Unfortunately for Josef a and Josephine, however, the property
involved in this case is a realty titled under the Torrens System. The prescriptive
period is thus to be counted from the time the transaction affecting the property is
registered with the corresponding issuance of a new certificate of title. Between
3
310
310 SUPREME COURT REPORTS ANNOTATED
Belcodero vs. Court of Appeals
discovered or considered as necessary evidence during the trial of the case below” by the
former counsel; it is therefore more properly considered as forgotten evidence, which the
appellant knew or should have known during the trial (Tesoro vs. Court of Appeals, 54
SCRA 296; Republic vs. Vda. de Castelvi, 58 SCRA 336). Moreover, assuming the sale is
proven, it does not follow that the proceeds were used to pay the lot in question; the
payments were made in installments, not in one lump sum.
Neither is the second ground deserving of merit. Assuming that the marriage to Ballit
in 1961 is duly proven, and that this provided a cause for legal separation and consequent
disqualification of the guilty spouse to succeed to the husband’s intestate estate under
Article 1002 of the Civil Code, the fact remains that no action for legal separation was
brought by the husband during his lifetime and within the period provided by law. It is too
late to raise the issue at this time.
Accordingly, assuming that the Motion for New Trial complies with the formal
requisites for such a motion (See Minister of Natural Resources vs. Heirs of Orval Hughes,
et. al., GR No. 62662, prom. November 12, 1987), a question We don’t find necessary to
decide, a new trial would not serve a useful purpose in altering the result of the questioned
decision.
WHEREFORE, the decision appealed from in the instant petition for review on
certiorari is AFFIRMED.
SO ORDERED.

the time Transfer Certificate of Title No. 198840 was issued on 06 June 1974, and
Feliciano (Chairman), Bidin, Romero and Melo, JJ.,concur.
the filing of the action for the reconveyance of the property with the court a
Appealed decision affirmed.
quo on 30 October 1980, barely a period of six (6) years and four (4) months had
Note.—In the absence of proof as to the time when the improvements existing
elapsed. The case has accordingly been initiated seasonably.
on the exclusive property of the spouse were made, the presumption is that they
The four-year prescriptive period, mentioned in passing by the petitioners,
belong exclusively to said spouse (Villanueva vs. Intermediate Appellate
would have had some value and relevance had the private respondents or their
Court, 192 SCRA 21).
predecessor in interest been parties to the extrajudicial partition and sale. In that
event, the latter’s action could only then be predicated on a vitiation of
——o0o——
consent where the applicable statutory limitation would be four years.
4 5

The last issue raises the supposed error in the rejection of a new trial on the
311
basis of newly discovered evidence. We concur with the resolution of the appellate © Copyright 2018 Central Book Supply, Inc. All rights reserved.
court below (on appellant’s [petitioners herein] motion for reconsideration
thereat), thus—
Appellants’ prayer for a new trial based upon what they claim is newly discovered evidence
deserves scant consideration.
Appellant proposes to prove (1) that Josefa Bosing sold certain property for P8,000.00 in
1948 and was therefore in a financial position to make the payments to Magdalena Estate
Inc. and (2) that appellee Juliana Bosing got married in 1961 to one Burayos Ballit, and
thus, “forfeited” her right to the conjugal partnership.
The first ground is not meritorious. It is not newly discovered evidence. As described in
appellants’ Motion the documents were “not

_______________

3 See Articles 708-709, 711, Civil Code; Amerol vs. Bagumbaran, 154 SCRA 396.
4 Article 1390, Civil Code.
5 Article 1391, Ibid.

VOL. 233, JUNE 27, 1994
Embrado vs. Court of Appeals
G.R. No. 51457. June 27, 1994.
sufficient means of livelihood and that they were totally dependent on their mother Lucia
335
for the support of their family. This fact strengthens the claim of Lucia that the price of the
property was fictitious and that Eda Jimenez could not have paid the price of the property
as she was financially incapable to do so. In fact, Eda Jimenez did not prove as to how she
*

LUCIA EMBRADO and ORESTE TORREGIANI, petitioners, vs. COURT OF
APPEALS, PACIFICO CIMAFRANCA, MARCOS SALIMBAGAT, EDA
JIMENEZ and SANTIAGO JIMENEZ, respondents.
Civil Law; Husband and Wife; Conjugal Properties; Paraphernal
Property; Presumption; That the funds used were conjugal.—In the case at bar, the Venta
Definitiva over Lot 564 in favor of Lucia Embrado was executed by the Carpitanoses on 2
July 1946 when her marriage to petitioner Oreste Torregiani was already subsisting.
Although ownership was acquired during the marriage and hence presumed conjugal, the
presumption of conjugality was successfully overcome by the terms of the Venta
Definitiva which contains a positive assertion of exclusive ownership, which was duly
supported by the testimony of Matias Carpitanos, one of the original sellers of the lot.
However, a decisive fact appears which prevents us from ultimately affirming the validity of
her sale of Lot 564 to private respondent Eda Jimenez. The trial court found as a fact the
construction in 1958 of a residential/commercial building on said lot a part of which was
leased to third persons and another part serving as the Torregianis’ conjugal dwelling.
Although no evidence was presented on the source of funds used in the construction to
determine whether the same was conjugal or paraphernal, other than the testimony of
Torregiani, petitioners nevertheless enjoy in their favor the presumption that the funds
used were conjugal.
_______________
*FIRST DIVISION.
336
3 SUPREME COURT REPORTS ANNOTATED
36
Embrado vs. Court of Appeals
Same; Same; Same; Same; Same; Paraphernal property becomes conjugal upon the
construction of the residential/commercial building at the expense of the partnership.—The
second paragraph of Art. 158 of the Civil Code provides that “[b]uildings constructed, at the
expense of the partnership, during the marriage on land belonging to one of the spouses,
also pertain to the partnership, but the value of the land shall be reimbursed to the spouse
who owns the same.” Under this article, the land becomes conjugal upon the construction of
the building without awaiting reimbursement before or at the liquidation of the partnership
upon the concurrence of two conditions, to wit: (a) the construction of the building at the
expense of the partnership; and, (b) the ownership of the land by one of the spouses. The
conditions have been fully met in the case at bench. Thus, even if Lot 564 was originally the
paraphernal property of Lucia as evident from the “Venta Definitiva”, the same became
conjugal upon the construction of the residential/commercial building in 1958.
Same; Evidence; Rule that an instrument duly notarized is admissible in evidence
without further proof of its execution and conclusive as to the truthfulness of its contents, not
absolute but may be rebutted by evidence to the contrary.—While it is true that a notarized
document is admissible in evidence without proof of its due execution and is conclusive as to
the truthfulness of its contents, this rule is not absolute and may be rebutted by evidence to
the contrary. In this case, it was clearly shown that Eda and Santiago Jimenez had no
obtained the money to pay for the property she supposedly bought from Lucia. When the
source of the purchase price is “intriguing” and is not convincingly shown to have been given
by the “buyer” to the “seller,” the claim of the latter that she signed the deed of sale without
her consent may be upheld.
Same; Same; Sale; Land Registration; Certificate of Title; Registration does not vest
title, it is merely evidence of such title over a particular property.—Even assuming in gratia
argumentithat Lucia signed the document knowing that it was a deed of sale of the
property, the sale thereof by Lucia to Eda Jimenez without her husband’s conformity should
be considered void ab initiobeing contrary to law. Since “(t)he wife cannot bind the conjugal
partnership without the husband’s consent, except in cases provided by law,” it follows that
337
VOL. 233, JUNE 27, 1994 337
Embrado vs. Court of Appeals
Lucia Embrado Torregiani could not, by herself, validly dispose of Lot 564 without
her husband’s consent. Consequently, Eda Jimenez likewise could not have acquired
ownership over the land. The issuance of a certificate of title in favor of Eda Jimenez did not
vest upon her ownership over the property. Neither did it validate the alleged purchase
thereof which is null and void. Registration does not vest title. It is merely evidence of such
title. Our land registration laws do not give the holder any better title than what he actually
has. Being null and void, the sale to Eda Jimenez and the transfer of the property she made
to Salimbagat and Cimafranca produced no legal effects whatsoever. Quod nullum est,
nullum producit effectum. There being no valid title to the land that Eda Jimenez acquired
from Lucia, it follows that no title to the same land could be conveyed by the former to
Salimbagat and Cimafranca.
Same; Same; Same; Burden of proving the status of a purchaser in good faith and for
value lies upon him who asserts that status.—It is worthy to note that Salimbagat and
Cimafranca, as buyers of Eda Jimenez, have not proved their status as purchasers in good
faith and for value of the land which, in the first place, Eda Jimenez had no right to sell.
The burden of proving the status of a purchaser in good faith and for value lies upon him
who asserts that status. In discharging the burden, it is not enough to invoke the ordinary
presumption of good faith, i.e., that everyone is presumed to act in good faith. The good faith
that is here essential is integral with the very status which must be proved.
Same; Same; Same; Findings that purchasers had knowledge of facts and
circumstances with the defects in the title of their vendors.—We agree with the trial court
when it found that Salimbagat and Cimafranca purchased the disputed lot from Eda and
Santiago Jimenez with knowledge of facts and circumstances which should have put them
upon such inquiry and investigation as might be necessary to acquaint them with the
defects in the title of their vendor. A purchaser cannot close his eyes to facts which should
put a reasonable man on his guard and then claim that he acted in good faith under the
belief that there was no defect in the title of the vendor. His mere refusal to believe that
such defect exists, or his willful closing of his eyes to the possibility of the existence of a
defect in the vendor’s title will not make him an innocent purchaser for value if afterwards
it develops that the title is in fact defective, and it appears that he had such notice of the
defect as would have led to its discovery had he acted with the measure of precaution which
may reasonably be required of a prudent man in like situation.
338
338 SUPREME COURT REPORTS ANNOTATED
 Embrado vs. Court of Appeals
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Alerio P. Acosta for petitioner.
Roseller L. Barinaga & Venancio M. Carpio for respondents Santiago and
Eda Jimenez.
Pacifico Cimafranca for and in his own behalf.
BELLOSILLO, J.:
LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed this petition for
review on certiorari from the decision of respondent Court of Appeals upholding
the validity of the Deed of Sale over Lot No. 564 executed by petitioner Lucia
Embrado in favor of private respondent Eda Jimenez.
Lot No. 564 is a 366-square meter lot situated in Dipolog City originally
owned by Juan, Pastor and Matias Carpitanos. On 2 July 1946, a Venta
Definitiva, a notarized document written entirely in Spanish, was executed by the
Carpitanos whereby they sold Lot No. 564 to “Srta. LUCIA C. EMBRADO x x x
soltera, con residencia y direccion postal Municipio de Dipolog, Provincia de
Zamboanga.” The document provided that even though the deed was prepared and
2 4TSN, 27 June 1973, p. 24.
signed on 2 July 1946, the effects of the document would retroact to the 15th day
of April 1941, the date the lot and its improvements were actually sold to Lucia C.
Embrado.
The sale was registered and Transfer Certificate of Title No. T-99 was issued3
on 13 February 1948 in the name of Lucia Embrado alone, who was by then
already married to petitioner Oreste Torregiani since 1943. However, by virtue of
a court order in Misc. Sp. Proc. No. 2330 of the then Court of First Instance of
Zamboanga del Norte, the word “single” appearing in TCT No. T-
_______________
Decision penned by then Presiding Justice Andres Reyes, concurred in by Associate Justices
1
Samuel F. Reyes and Carlos L. Sundiam, promulgated 26 April 1979, Rollo, pp. 37-45.
Exh. “1,” Folder of Exhibits, p. 33.
2
Id., p. 3.
3
339
VOL. 233, JUNE 27, 1994
Embrado vs. Court of Appeals
99 was canceled and replaced on 19 October 1970 by the phrase “married to
Oreste Torregiani.” The Torregianis then made their conjugal abode on the lot
and in 1958 constructed a residential/ commercial building thereon. 4
As appearing from a document entitled Absolute Deed of Sale dated 1 May
1971, Lucia Embrado Torregiani sold Lot No. 564, described as her “own
5
paraphernal property,” to her adopted daughter, herein private respondent Eda
Jimenez, for the sum of P1,000.00. Transfer Certificate of Title No. T-99 was
canceled to give way to TCT No. T-17103 in the name of Eda Jimenez,
6
married to Santiago Jimenez. On 6 March 1972, Eda Jimenez sold sixty-five
(65) square meters of Lot 564 to Marcos Salimbagat for P6,500.00, and on 1
7
August 1972, conveyed 301 square meters of the same lot to Pacifico
Cimafranca for P30,000. Both sales were duly annotated on TCT No. T-17103.
8
On 25 September 1972, the Torregianis instituted in the Court of First
Instance, now Regional Trial Court, of Zamboanga del Norte an action for
declaration of nullity of contract, annulment of sales, reconveyance and
damages against the spouses Santiago and Eda Jimenez, Marcos Salimbagat and
9
Pacifico Cimafranca alleging that the sale of Lot 564 by Lucia Embrado to Eda
Jimenez was void not only for lack of consideration but also because Oreste
Torregiani did not consent to the sale, which consent was necessary because Lot
564 was conjugal property. In addition, the petitioners claim that Lucia was
1
misled into signing the deed of sale marked as Exh. “D” on the belief that Lot 564
was merely intended as security for a loan that the Jimenez spouses were then
negotiating with the First Insular Bank of Cebu. Since the Jimenez spouses did
not acquire valid title to the land, the subsequent sales in favor of Salimbagat and
Cimafranca were without legal effect.
_______________
5Folder of Exhibits, p. 7.
Id., p. 23.
6
7See Exh. “G,” Folder of Exhibits, p. 10.
8See Exh. “H,” Folder of Exhibits, p. 11.
9Docketed as Civil Case No. 2314.
340
340 SUPREME COURT REPORTS ANNOTATED
Embrado vs. Court of Appeals
The Torregianis were sustained by the CFI of Zamboanga del Norte which held
10
that the sale of Lot 564 to Eda Jimenez and its subsequent transfers to Marcos
Salimbagat and Pacifico Cimafranca, who were declared buyers in bad faith, were
void and of no effect. More specifically, the judgment (a) declared Exhs. “D,” “G”
and “H” as well as TCT No. 17103 null and void and of no force and effect; (b)
ordered defendants jointly and severally to pay plaintiffs the sum of P2,000.00 as
actual damages and P1,500.00 for attorney’s fees; (c) ordered the Register of
Deeds of Dipolog City to cancel TCT No. 17103 in the name of Eda Jimenez and
339 issue another one in favor of plaintiff Lucia Embrado, married to Oreste
Torregiani, and to cancel all the annotations thereon emanating from the void
transfers in favor of Marcos Salimbagat and Pacifico Cimafranca; (d) ordered
defendants Eda and Santiago Jimenez to return to defendant Pacifico Cimafranca
the sum of P30,000.00 paid by him for the 301 square meters and the house in
question, and to defendant Marcos Salimbagat the P6,500.00 paid by him for the
65 square meters occupied by Comendador Clinic with legal interest of six percent
(6%) until fully paid; and, (e) ordered defendant Cimafranca to pay plaintiffs all
the rents he has been collecting from the lessees of the first floor of the house with
legal interest thereon from the time he started collecting them until fully paid,
with costs against defendants. 11
The foregoing judgment was reversed by the Court of Appeals which held that
since Lucia Embrado actually agreed with Juan, Pastor and Matias Carpitanos,
the original owners, to the purchase of Lot 564 on 15 April 1941 when she was 12
not yet married, then the lot was her paraphernal property since a sale is
considered perfected the moment the parties agree on the object and cause of the
contract. In addition, the respondent court declared Salimbagat and Cimafranca
buyers in good faith since the con-
_______________
Decision penned by Presiding Judge Dimalanes B. Buissan of the then Court of First Instance of
10
Zamboanga del Norte dated 14 June 1976, Rollo, pp. 22-36.
Id., pp. 35-36.
11
Testimony of Matias Carpitanos, TSN, 9 October 1975, pp. 38-40.
12
341
VOL. 233, JUNE 27, 1994
Embrado vs. Court of Appeals
trary was not proved. Consequently, the complaint in the trial court was ordered
dismissed by respondent Court of Appeals.
Three (3) issues are herein involved: (a) whether Lot 564 was paraphernal
property of Lucia Embrado or conjugal with her husband Oreste Torregiani; (b)
whether the sale in favor of Eda Jimenez was valid; and, (c) whether vendees
Marcos Salimbagat and Pacifico Cimafranca were buyers in good faith so that the
sale to them was valid, hence, would bar reconveyance.
We sustain petitioners. While we agree with respondent court that Lot 564
was originally the paraphernal property of Lucia, we cannot adopt its conclusion
that because Lucia and the original owners agreed in 1941 for its purchase and
sale, ownership was already acquired by Lucia at that moment. Under Art. 1496
of the Civil Code, “ownership of the thing sold is acquired by the vendee from the
moment it is delivered to him in any of the ways specified in articles 1497 to 1501,
or in any other manner signifying an agreement that the possession is transferred
from the vendor to the vendee,” and under Art. 1498, “(w)hen the sale is made
through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred.”
In the case at bar, the Venta Definitiva over Lot 564 in favor of Lucia
Embrado was executed by the Carpitanoses on 2 July 1946 when her marriage to
petitioner Oreste Torregiani was already subsisting. Although ownership was
acquired during the marriage and hence presumed conjugal, the presumption of
conjugality was successfully overcome by the terms of the Venta Definitiva which
13
contains a positive assertion of exclusive ownership, which was duly supported by
the testimony of Matias Carpitanos, one of the original sellers of the lot.
However, a decisive fact appears which prevents us from ultimately affirming
the validity of her sale of Lot 564 to private respondent Eda Jimenez. The trial
court found as a fact the
_______________
Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it
13
is proved that it pertains exclusively to the husband or to the wife.
TSN, 10 July 1975, pp. 38-39; 58-59.
14
342
342 SUPREME COURT REPORTS ANNOTATED
Embrado vs. Court of Appeals
construction in 1958 of a residential/commercial building on said lot a part of
15
which was leased to third persons and another part serving as the Torregianis’
conjugal dwelling.
Although no evidence was presented on the source of funds used in the
construction to determine whether the same was conjugal or paraphernal, other
341 than the testimony of Torregiani, petitioners nevertheless enjoy in their favor the
16
presumption that the funds used were conjugal. 17
The second paragraph of Art. 158 of the Civil Code provides that “[b]uildings
constructed, at the expense of the partnership, during the marriage on land
belonging to one of the spouses, also pertain to the partnership, but the value of
the land shall be reimbursed to the spouse who owns the same.” Under this
article, the land becomes conjugal upon the construction of the building without
awaiting reimbursement before or at the liquidation of the partnership upon the
concurrence of two conditions, to wit: (a) the construction of the building at the
expense of the partnership; and, (b) the ownership of the land by one of the
spouses. The conditions have been fully met in the case at bench. Thus, even if
18
Lot 564 was originally the paraphernal property of Lucia as evident from the
“Venta Definitiva”, the same became conjugal upon the construction of the
residential/commercial building in 1958.
Lucia claims that she was misled by her daughter and son-in-law into signing
a deed of absolute sale in their favor thinking that she would be helping them
obtain a loan from a bank if they could mortgage the property as security for their
loan; that although she signed the deed of sale, she did not consent to the sale nor
did she intend to convey or transfer her title to Eda Jimenez; and, that she never
received the alleged amount of P1,000.00 as consideration for the sale of the
property.
_______________
Rollo, p. 23.
15
TSN, 8 August 1974, p. 16.
16
Vitug v. Montemayor, et al., 91 Phil. 286, 290-291 (1952).
17
Vda. de Padilla v. Paterno, No. L-8748, 26 December 1961, 3 SCRA 678, 691; see also Vitug, J. C.,
18
14
Compendium of Civil Law and Jurisprudence, 1993 ed., p. 67; Tolentino A., Commentaries and
Jurisprudence on the Civil Code of the Philippines, Vol. I, 1983 ed., pp. 423-424.
343
 VOL. 233, JUNE 27, 1994
Embrado vs. Court of Appeals
While it is true that a notarized document is admissible in evidence without proof
of its due execution and is conclusive as to the truthfulness of its contents, this
rule is not absolute and may be rebutted by evidence to the contrary. In this case,
it was clearly shown that Eda and Santiago Jimenez had no sufficient means of
livelihood and that they were totally dependent on their mother Lucia for the
support of their family. This fact strengthens the claim of Lucia that the price of
the property was fictitious and that Eda Jimenez could not have paid the price of
the property as she was financially incapable to do so. In fact, Eda Jimenez did
not prove as to how she obtained the money to pay for the property she
supposedly bought from Lucia. When the source of the purchase price is
“intriguing” and is not convincingly shown to have been given by the “buyer” to
the “seller,” the claim of the latter that she signed the deed of sale without her
consent may be upheld. 20
Even assuming in gratia argumenti that Lucia signed the document knowing
that it was a deed of sale of the property, the sale thereof by Lucia to Eda Jimenez
without her husband’s conformity should be considered void ab initio being
contrary to law. Since “(t)he wife cannot bind the conjugal partnership without
21
the husband’s consent, except in cases provided by law,” it follows that Lucia 22
Embrado Torregiani could not, by herself, validly dispose of Lot 564 without her
husband’s consent. Consequently, Eda Jimenez likewise could not have acquired
ownership over the land. The issuance of a certificate of title in favor of Eda
Jimenez did not vest upon her ownership over the property. Neither did it
validate the alleged purchase thereof which is null and void. Registration does not
vest title. It is merely evidence of such title. Our land registration laws do not
_______________
Mendezona v. Phil. Sugar Estate Dev. Co., 41 Phil. 475 (1921).
19
Baranda v. Baranda, G.R. No. 73275, 20 May 1987, 150 SCRA 59.
20
Tolentino, Civil Code of the Philippines, Vol. I, 1983 ed., p. 453; see also La Urbana v. Villasor, 59
21
Phil. 644 (1934); Paras, Civil Code of the Philippines, Vol. I, 1984 ed. p. 545.
Art. 172, Civil Code of the Philippines; see also Tinitigan v. Tinitigan, Sr., No. L-45418, 30 October
22
1980, 100 SCRA 619, 636.
344
344 SUPREME COURT REPORTS ANNOTATED
Embrado vs. Court of Appeals
give the holder any better title than what he actually has. Being null and void,
23
the sale to Eda Jimenez and the transfer of the property she made to Salimbagat
and Cimafranca produced no legal effects whatsoever. Quod nullum est, nullum
producit effectum. There being no valid title to the land that Eda Jimenez
acquired from Lucia, it follows that no title to the same land could be conveyed by
the former to Salimbagat and Cimafranca.
24
It is worthy to note that Salimbagat and Cimafranca, as buyers of Eda
Jimenez, have not proved their status as purchasers in good faith and for value of
343 the land which, in the first place, Eda Jimenez had no right to sell. The burden of
proving the status of a purchaser in good faith and for value lies upon him who
asserts that status. In discharging the burden, it is not enough to invoke the
ordinary presumption of good faith, i.e., that everyone is presumed to act in good
faith. The good faith that is here essential is integral with the very status which
19
must be proved. 25
We agree with the trial court when it found that Salimbagat and Cimafranca
purchased the disputed lot from Eda and Santiago Jimenez with knowledge of
facts and circumstances which should have put them upon such inquiry and
investigation as might be necessary to acquaint them with the defects in the title
of their vendor. A purchaser cannot close his eyes to facts which should put a
reasonable man on his guard and then claim that he acted in good faith under the
belief that there was no defect in the title of the vendor. His mere refusal to
believe that such defect exists, or his willful closing of his eyes to the possibility of
the existence of a defect in the vendor’s title will not make him an innocent
purchaser for value if afterwards it develops that the title is in fact defective, and
it appears that he had such notice of the defect as would have led to its discovery
had he acted with the measure of precaution which may reasonably be required of
a prudent
_______________
De Guzman v. Court of Appeals, No. L-46935, 21 December 1987, 156 SCRA 701; Cruz v.
23
Cabana, G.R. No. 56232, 22 June 1984, 129 SCRA 656.
Solid State Multi-Products Corporations v. Court of Appeals, G.R. No. 83383, 6 May 1991, 196
24
SCRA 631.
Baltazar v. Court of Appeals, G.R. No. 78728, 8 December 1988, 168 SCRA 354.
25
345
VOL. 233, JUNE 27, 1994 345
Embrado vs. Court of Appeals
man in like situation. 26
Cimafranca is a close relative of Santiago Jimenez and at the same time
godfather to one of his children. As such, there can be no doubt that Cimafranca
was aware of the personal circumstances and financial standing of the Jimenez
spouses, including their financial ability to acquire any property. It would be
impossible for Cimafranca not to know that Santiago Jimenez was only twenty-
two years old, a working student earning six pesos per day with a wife and three
27
children to support. With these facts, there is every reason for him to inquire
28
further as to how Eda Jimenez came up with the sum of P1,000.00 to buy the
property. When there is a clear showing that Eda Jimenez, being the transferee of
a registered property, is not gainfully employed or did not have an independent
source of income or is financially incapable of paying the price of the property she
bought, this is sufficient to engender doubt as to whether Eda validly bought the
property from Lucia. 29
On the part of Salimbagat, he has been a resident of Dipolog for about thirty
(30) years. He has a daughter renting a portion of the building with her husband
for more than a year prior to the sale by Eda Jimenez to Salimbagat on 6 March
1972. This means that the lease of the building by Salimbagat’s daughter already
30
commenced while Lucia Torregiani was still the registered owner and this was
prior to the alleged sale by Lucia Torregiani of the property to Eda Jimenez on 1
May 1991. There can be no doubt that Salimbagat’s daughter was aware of the
_______________
Francisco v. Court of Appeals, G.R. No. 30162, 31 August 1987, 156 SCRA 330; Cardente v.
26
Intermediate Appellate Court, G.R. No. 73651, 27 November 1987, 155 SCRA 685, 690-691; J.M. Tuason
& Co., Inc., v. Court of Appeals, No. L-41233, 21 November 1979, 94 SCRA 413, 422-423; Barrios v. Court
of Appeals, No. L-32531, 31 August 1977, 78 SCRA 427, 435; Paylago v. Jarabe, No. L-20046, 27 March
1968, 22 SCRA 1247, 1252; Manacop, Jr. v. Cansino, No. L-13971, 27 February 1961, 1 SCRA 572,
576; Leung Yee v. Strong Machinery Company, 37 Phil. 645, 651 (1918).
TSN, 9 October 1975, p. 81.
27
TSN, 27 June 1973, p. 21.
28
See Note 21.
29
TSN, 7 August 1975, p. 8.
30
346
346 SUPREME COURT REPORTS ANNOTATED
Embrado vs. Court of Appeals
factual background of the property and the personal circumstances of the owners
thereof especially that they are all occupying the same building. During the time
that Salimbagat was already interested in buying the property, it would have
been usual and part of ordinary human nature for him to inquire about the
property from his daughter who was living very near the supposed owners.
Considering that the Torregiani and Jimenez families are not total strangers to
Salimbagat, it is safe to conclude that Salimbagat had some knowledge of the
financial status of the supposed vendors which should have put him on guard
before buying the property. Moreover, the records show that this would not have
escaped the notice of Salimbagat and Cimafranca that at the time of the sale to
them petitioners were in actual possession of the property with Salimbagat’s
daughter renting a portion thereof. For that matter, at the time of the sale to
Salimbagat and Cimafranca, petitioners had already been in continuous
possession of the property for fourteen (14) years, or since 1958. Santiago Jimenez
admitted that after his marriage he and his wife Eda lived and stayed with her
parents, herein petitioners, and dependent on them for support. 31
Before buying the property, Salimbagat and Cimafranca allegedly inquired
from the office of the Register of Deeds concerning the genuineness of the
certificate of title of Eda Jimenez, and from the Clerk of Court of the Court of
First Instance of Dipolog City as to whether the property was involved in any
litigation. However, they failed to inquire from petitioners as to why they were
32
the ones in actual possession of the property.
The rule is settled that a buyer of real property which is in the possession of
persons other than the seller must be wary and should investigate the rights of
those in possession. Otherwise, without such inquiry, the buyer can hardly be
regarded as a buyer in good faith. When a man proposes to buy or deal with
33
_______________
TSN, 9 October 1975, pp. 78-79.
31
TSN, 10 July 1975, p. 21; 7 August 1975, pp. 11-12.
32
Cardente v. Intermediate Appellate Court, G.R. No. 73651, 27 November 1987, 155 SCRA 685, 690-
33
691; J.M. Tuason & Co., Inc., v. Court of Appeals, No. L-41233, 21 November 1979, 94 SCRA 413, 422-
423; Barrios v. Court of Appeals, No. L-32531, 31 August 1977, 78
347
VOL. 233, JUNE 27, 1994 347
Embrado vs. Court of Appeals
realty, his first duty is to read the public manuscript, i.e., to look and see who is
there upon it, and what are his rights. A want of caution and diligence which an
honest man of ordinary prudence is accustomed to exercise in making purchases
is, in contemplation of law, a want of good faith. The buyer who has failed to know
or discover that the land sold to him is in the adverse possession of another, is a
buyer in bad faith. 34
The fact that Lucia Embrado resides in the premises, coupled with the
relatively young age and meager financial standing of the Jimenez spouses,
should have been sufficient for Cimafranca to hesitate accepting Eda’s transfer
certificate of title at its face value. Cimafranca, after deliberately closing his eyes
to such a vital information, is now claiming good faith. For obvious reasons, we
cannot accept his contention. We thus declare him, together with Marcos
Salimbagat, to be purchasers in bad faith hence not entitled to protection under
the Torrens system of registration.
Lot 564 is now registered in the name of Eda Jimenez “married to Santiago
Jimenez” under Transfer Certificate of Title No. T-17103 which was issued
pursuant to the “Absolute Deed of Sale” executed in her favor by petitioner Lucia
Embrado. We have already declared said deed of sale as null and void since its
object, Lot 564, is conjugal property which was sold by Lucia Embrado without
her husband’s conformity. The present vendees, Marcos Salimbagat and Pacifico
Cimafranca, who bought the property from Eda Jimenez have failed to persuade
us that they acquired the property in good faith.
WHEREFORE, the decision of respondent Court of Appeals dated 26 April
1979 is REVERSED and SET ASIDE and the Decision of the then Court of First
Instance (now Regional Trial Court) of Zamboanga del Norte dated 14 June 1976
is REINSTATED and ADOPTED herein as the decision in this case.
_______________
SCRA 427, 435; Paylago v. Jarabe, No. L-20046, 27 March 1968, 22 SCRA 1247, 1252; Manacop, Jr.
v. Cansino, No. L-13971, 27 February 1961, 1 SCRA 572, 576; Leung Yee v. Strong Machinery
Company, 37 Phil. 645, 651 (1918).
J. M. Tuason & Co., Inc. v. Court of Appeals, No. L-41233, 21 November 1979, 94 SCRA 413, 422-
34
423; see also Angelo v. Pacheco, 56 Phil. 70 (1931); Andaya v. Manansala, 107 Phil. 1151 (1960).
348
348 SUPREME COURT REPORTS ANNOTATED
Marquino vs. Intermediate Appellate Court
SO ORDERED.
Cruz (Chairman), Davide, Jr., Quiason and Kapunan, JJ., concur.
 Decision reversed and set aside.
Notes.—Registration does not vest title, it is merely evidence of such title
over a particular property (Solid State-Multi-Products Corp. vs. Court of
Appeals, 196 SCRA 630).
Where the document is notarized, the party challenging the recital of the
document must prove his claim with clear and convincing evidence (Diaz vs. Court
of Appeals, 145 SCRA 314).

——o0o——

© Copyright 2018 Central Book Supply, Inc. All rights reserved.