ANTONIO A. S. VALDES, petitioner, vs.

REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and

CONSUELO M. GOMEZ-VALDES, respondents.

DECISION
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, [1] in its decision of 29 July 1994, granted the
petition; viz:

"WHEREFORE, judgment is hereby rendered as follows:

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

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

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

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

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

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

Consuelo Gomez sought a clarification of that portion of the decision directing compliance with Articles 50, 51 and
52 of the Family Code. She asserted that the Family Code contained no provisions on the procedure for the liquidation
of common property in "unions without marriage." Parenthetically, during the hearing 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.

"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." [3] (Italics 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 psychological incapacitated.

"II

"Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code govern the disposition of the family
dwelling in cases where a marriage is declared void ab initio, including a marriage declared void by reason of the
psychological incapacity of the spouses.

"III

"Assuming arguendo that Article 147 applies to marriages declared void ab initio on the ground of the psychological
incapacity of a spouse, the same may be read consistently with Article 129.

"IV

"It is necessary to determine the parent with whom majority of the children wish to stay."[5]

The trial court correctly applied the law. In a void marriage, regardless of the cause thereof, the property relations
of the parties during the period of cohabitation is governed by the provisions of Article 147 or Article 148, such as the
case may be, of the Family Code. Article 147 is a remake of Article 144 of the Civil Code as interpreted and so applied
in previous cases;[6] it provides:

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

"In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof 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."
 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"[7] of the Code.
Under this property regime, property acquired by both spouses through their work and industry shall be governed
by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been
obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be
considered as having contributed thereto jointly if said party's "efforts consisted in the care and maintenance of the
family household."[8] Unlike the conjugal partnership of gains, the fruits of the couple's separate property are not
included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144 of the Civil Code;
in addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act 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 [9] or declaration of nullity of the marriage.[10]
When the common-law spouses suffer from a legal impediment to marry or when they do not live exclusively with
each other (as husband and wife ),only the property acquired by both of them through their actual joint contribution of
money, property or industry shall be owned in common and in proportion to their respective contributions. Such
contributions and corresponding shares, however, are prima facie presumed to be equal. The share of any party who
is married to another shall accrue to the absolute community or conjugal partnership, as the case may be, if so existing
under a valid marriage. If the party who has acted in bad faith is not validly married to another, his or her share shall
be forfeited in the manner already heretofore expressed. [11]
In deciding to take further cognizance of the issue on the settlement of the parties' common property, the trial
court acted neither imprudently nor precipitately; a court which has jurisdiction to declare the marriage a nullity must be
deemed likewise clothed 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, [12] of
the Family Code, should aptly prevail. The rules set up to govern the liquidation of either the absolute community or
the conjugal partnership of gains, the property regimes recognized for valid and voidable marriages (in the latter case
until the contract is annulled ),are irrelevant to the liquidation of the co-ownership that exists between common-law
spouses. The first paragraph of Article 50 of the Family Code, applying paragraphs (2 ),(3 ),(4) and (5) of Article
43,[13] relates only, by its explicit terms, to voidable marriages and, exceptionally, to void marriages under Article
40[14] of the Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a prior void
marriage before the latter is judicially declared void. The latter is a special rule that somehow recognizes the philosophy
and an old doctrine that void marriages are inexistent from the very beginning and no judicial decree is necessary to
establish their nullity. In now requiring for purposes of remarriage, the declaration of nullity by final judgment of the
previously contracted void marriage, the present law aims to do away with any continuing uncertainty on the status of
the second marriage. It is not then illogical for the provisions of Article 43, in relation to Articles 41[15] and 42,[16] of the
Family Code, on the effects of the termination of a subsequent marriage contracted during the subsistence of a previous
marriage to be made applicable pro hac vice. In all other cases, it is not to be assumed that the law has also meant to
have coincident property relations, on the one hand, between spouses in valid and voidable marriages (before
annulment) and, on the other, between common-law spouses or spouses of void marriages, leaving to ordain, 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.
NOEL BUENAVENTURA, petitioner, vs. COURT OF APPEALS and ISABEL LUCIA SINGH
BUENAVENTURA, respondents.

DECISION
AZCUNA, J.:

These cases involve a petition for the declaration of nullity of marriage, which was filed by petitioner Noel
Buenaventura on July 12, 1992, on the ground of the alleged psychological incapacity of his wife, Isabel Singh
Buenaventura, herein respondent. After respondent filed her answer, petitioner, with leave of court, amended his
petition by stating that both he and his wife were psychologically incapacitated to comply with the essential obligations
of marriage. In response, respondent filed an amended answer denying the allegation that she was psychologically
incapacitated.[1]
On July 31, 1995, the Regional Trial Court promulgated a Decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between plaintiff Noel A. Buenaventura and defendant
Isabel Lucia Singh Buenaventura on July 4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in the amount of 2.5 million pesos and exemplary
damages of 1 million pesos with 6% interest from the date of this decision plus attorneys fees
of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal partnership property[,] particularly the plaintiffs
separation/retirement benefits received from the Far East Bank [and] Trust Company[,] by ceding,
giving and paying to her fifty percent (50%) of the net amount of P3,675,335.79 or P1,837,667.89
together with 12% interest per annum from the date of this decision and one-half (1/2) of his outstanding
shares of stock with Manila Memorial Park and Provident Group of Companies;
5) Ordering him to give a regular support in favor of his son Javy Singh Buenaventura in the amount
of P15,000.00 monthly, subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh Buenaventura to his mother, the herein defendant;
and
7) Hereby authorizing the defendant to revert back to the use of her maiden family name Singh.

Let copies of this decision be furnished the appropriate civil registry and registries of properties.

SO ORDERED.[2]

Petitioner appealed the above decision to the Court of Appeals. While the case was pending in the appellate
court, respondent filed a motion to increase the P15,000 monthly support pendente lite of their son Javy Singh
Buenaventura. Petitioner filed an opposition thereto, praying that it be denied or that such incident be set for oral
argument.[3]
On September 2, 1996, the Court of Appeals issued a Resolution increasing the support pendente
lite to P20,000.[4] Petitioner filed a motion for reconsideration questioning the said Resolution. [5]
On October 8, 1996, the appellate court promulgated a Decision dismissing petitioners appeal for lack of merit
and affirming in toto the trial courts decision.[6] Petitioner filed a motion for reconsideration which was denied. From the
abovementioned Decision, petitioner filed the instant Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court of Appeals denied petitioners motion for
reconsideration of the September 2, 1996 Resolution, which increased the monthly support for the son. [7] Petitioner
filed a Petition for Certiorari to question these two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari[8] and the Petition for Certiorari[9] were ordered consolidated
by this Court.[10]
 In the Petition for Review on Certiorari petitioner claims that the Court of Appeals decided the case not in accord
with law and jurisprudence, thus:

1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST FROM THE DATE OF ITS DECISION, WITHOUT
ANY LEGAL AND MORAL BASIS;

2. WHEN IT AWARDED P100,000.00 ATTORNEYS FEES AND P50,000.00 EXPENSES OF LITIGATION, PLUS
COSTS, TO DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL BASIS;

3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY DEFENDANT-APPELLEE ONE-HALF

OR P1,837,667.89 OUT OF HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST BANK AND TRUST
CO., WITH 12% INTEREST THEREON FROM THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE PROPERTY OF NOEL, AND ALSO TO DELIVER
TO DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE MANILA MEMORIAL PARK
AND THE PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID SHARES OF STOCK WERE ACQUIRED BY
NOEL BEFORE HIS MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE, AGAIN HIS EXCLUSIVE
PROPERTIES; AND

4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER THE PARTIES MINOR CHILD TO
DEFENDANT-APPELLEE WITHOUT ASKING THE CHILD (WHO WAS ALREADY 13 YEARS OLD AT THAT TIME)
HIS CHOICE AS TO WHOM, BETWEEN HIS TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY OVER HIS
PERSON.[11]

In the Petition for Certiorari, petitioner advances the following contentions:

THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT REFUSED TO SET RESPONDENTS
MOTION FOR INCREASED SUPPORT FOR THE PARTIES SON FOR HEARING.[12]

THERE WAS NO NEED FOR THE COURT OF APPEALS TO INCREASE JAVYS MONTHLY SUPPORT OF
P15,000.00 BEING GIVEN BY PETITIONER EVEN AT PRESENT PRICES.[13]

IN RESOLVING RESPONDENTS MOTION FOR THE INCREASE OF JAVYS SUPPORT, THE COURT OF
APPEALS SHOULD HAVE EXAMINED THE LIST OF EXPENSES SUBMITTED BY RESPONDENT IN THE LIGHT
OF PETITIONERS OBJECTIONS THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS ENTITLED TO A
P5,000 INCREASE IN SUPPORT AS SAID AMOUNT IS TOO MINIMAL.[14]

LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN PETITIONER AN OPPORTUNITY TO PROVE HIS
PRESENT INCOME TO SHOW THAT HE CANNOT AFFORD TO INCREASE JAVYS SUPPORT.[15]

With regard to the first issue in the main case, the Court of Appeals articulated:

On Assignment of Error C, the trial court, after findings of fact ascertained from the testimonies not only of the parties
particularly the defendant-appellee but likewise, those of the two psychologists, awarded damages on the basis of
Articles 21, 2217 and 2229 of the Civil Code of the Philippines.

Thus, the lower court found that plaintiff-appellant deceived the defendant-appellee into marrying him by professing
true love instead of revealing to her that he was under heavy parental pressure to marry and that because of pride he
married defendant-appellee; that he was not ready to enter into marriage as in fact his career was and always would
be his first priority; that he was unable to relate not only to defendant-appellee as a husband but also to his son, Javy,
as a father; that he had no inclination to make the marriage work such that in times of trouble, he chose the easiest
way out, that of leaving defendantappellee and their son; that he had no desire to keep defendant-appellee and their
son as proved by his reluctance and later, refusal to reconcile after their separation; that the aforementioned caused
defendant-appellee to suffer mental anguish, anxiety, besmirched reputation, sleepless nights not only in those years
the parties were together but also after and throughout their separation.

Plaintiff-appellant assails the trial courts decision on the ground that unlike those arising from a breach in ordinary
contracts, damages arising as a consequence of marriage may not be awarded. While it is correct that there is, as
yet, no decided case by the Supreme Court where damages by reason of the performance or non-performance of
marital obligations were awarded, it does not follow that no such award for damages may be made.

Defendant-appellee, in her amended answer, specifically prayed for moral and exemplary damages in the total
amount of 7 million pesos. The lower court, in the exercise of its discretion, found full justification of awarding at least
half of what was originally prayed for. We find no reason to disturb the ruling of the trial court.[16]

The award by the trial court of moral damages is based on Articles 2217 and 21 of the Civil Code, which read as
follows:

ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate result of the defendants wrongful act or omission.

ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.

The trial court referred to Article 21 because Article 2219 [17] of the Civil Code enumerates the cases in which
moral damages may be recovered and it mentions Article 21 as one of the instances. It must be noted that Article 21
states that the individual must willfully cause loss or injury to another. There is a need that the act is willful and hence
done in complete freedom. In granting moral damages, therefore, the trial court and the Court of Appeals could not but
have assumed that the acts on which the moral damages were based were done willfully and freely, otherwise the grant
of moral damages would have no leg to stand on.
On the other hand, the trial court declared the marriage of the parties null and void based on Article 36 of the
Family Code, due to psychological incapacity of the petitioner, Noel Buenaventura. Article 36 of the Family Code states:

A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply
with the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest
only after its solemnization.

Psychological incapacity has been defined, thus:

. . . no less than a mental (not physical) incapacity that causes a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their mutual obligations to live together, observe love, respect
and fidelity and render help and support. There is hardly any doubt that the intendment of the law has been to confine
the meaning of "psychological incapacity" to the most serious cases of personality disorders clearly demonstrative of
an utter insensitivity or inability to give meaning and significance to the marriage. . . . [18]

The Court of Appeals and the trial court considered the acts of the petitioner after the marriage as proof of his
psychological incapacity, and therefore a product of his incapacity or inability to comply with the essential obligations
of marriage. Nevertheless, said courts considered these acts as willful and hence as grounds for granting moral
damages. It is contradictory to characterize acts as a product of psychological incapacity, and hence beyond the control
of the party because of an innate inability, while at the same time considering the same set of acts as willful. By declaring
the petitioner as psychologically incapacitated, the possibility of awarding moral damages on the same set of facts was
negated. The award of moral damages should be predicated, not on the mere act of entering into the marriage, but on
specific evidence that it was done deliberately and with malice by a party who had knowledge of his or her disability
and yet willfully concealed the same. No such evidence appears to have been adduced in this case.
For the same reason, since psychological incapacity means that one is truly incognitive of the basic marital
covenants that one must assume and discharge as a consequence of marriage, it removes the basis for the contention
that the petitioner purposely deceived the private respondent. If the private respondent was deceived, it was not due to
a willful act on the part of the petitioner. Therefore, the award of moral damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that the grant of exemplary damages cannot stand
since the Civil Code provides that exemplary damages are imposed in addition to moral, temperate, liquidated or
compensatory damages.[19]
With respect to the grant of attorneys fees and expenses of litigation the trial court explained, thus:
Regarding Attorneys fees, Art. 2208 of the Civil Code authorizes an award of attorneys fees and expenses of
litigation, other than judicial costs, when as in this case the plaintiffs act or omission has compelled the defendant to
litigate and to incur expenses of litigation to protect her interest (par. 2), and where the Court deems it just and
equitable that attorneys fees and expenses of litigation should be recovered. (par. 11) [20]

The Court of Appeals reasoned as follows:

On Assignment of Error D, as the award of moral and exemplary damages is fully justified, the award of attorneys
fees and costs of litigation by the trial court is likewise fully justified. [21]

The acts or omissions of petitioner which led the lower court to deduce his psychological incapacity, and his act
in filing the complaint for the annulment of his marriage cannot be considered as unduly compelling the private
respondent to litigate, since both are grounded on petitioners psychological incapacity, which as explained above is a
mental incapacity causing an utter inability to comply with the obligations of marriage. Hence, neither can be a ground
for attorneys fees and litigation expenses. Furthermore, since the award of moral and exemplary damages is no longer
justified, the award of attorneys fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank and Trust Co. and the shares of stock in the Manila
Memorial Park and the Provident Group of Companies, the trial court said:

The third issue that must be resolved by the Court is what to do with the assets of the conjugal partnership in the
event of declaration of annulment of the marriage. The Honorable Supreme Court has held that the declaration of
nullity of marriage carries ipso facto a judgment for the liquidation of property (Domingo v. Court of Appeals, et al.,
G.R. No. 104818, Sept. 17, 1993, 226 SCRA, pp. 572 573, 586). Thus, speaking through Justice Flerida Ruth P.
Romero, it was ruled in this case:

When a marriage is declared void ab initio, the law states that the final judgment therein shall provide for the
liquidation, partition and distribution of the properties of the spouses, the custody and support of the common children
and the delivery of their presumptive legitimes, unless such matters had been adjudicated in the previous
proceedings.

The parties here were legally married on July 4, 1979, and therefore, all property acquired during the marriage,
whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved (Art. 116, New Family Code; Art. 160, Civil Code). Art. 117 of
the Family Code enumerates what are conjugal partnership properties. Among others they are the following:

1) Those 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) Those obtained from the labor, industry, work or profession of either or both of the spouses;

3) The fruits, natural, industrial, or civil, due or received during the marriage from the common property, as well as the
net fruits from the exclusive property of each spouse. . . .

Applying the foregoing legal provisions, and without prejudice to requiring an inventory of what are the parties
conjugal properties and what are the exclusive properties of each spouse, it was disclosed during the proceedings in
this case that the plaintiff who worked first as Branch Manager and later as Vice-President of Far East Bank & Trust
Co. received separation/retirement package from the said bank in the amount of P3,701,500.00 which after certain
deductions amounting to P26,164.21 gave him a net amount of P3,675,335.79 and actually paid to him on January 9,
1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown debts or obligations other than those deducted from the said
retirement/separation pay, under Art. 129 of the Family Code 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 settlement or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code. In this particular case, however, there had been no marriage
settlement between the parties, nor had there been any voluntary waiver or valid forfeiture of the defendant wifes
share in the conjugal partnership properties. The previous cession and transfer by the plaintiff of his one-half (1/2)
share in their residential house and lot covered by T.C.T. No. S-35680 of the Registry of Deeds of Paraaque, Metro
Manila, in favor of the defendant as stipulated in their Compromise Agreement dated July 12, 1993, and approved by
the Court in its Partial Decision dated August 6, 1993, was actually intended to be in full settlement of any and all
demands for past support. In reality, the defendant wife had allowed some concession in favor of the plaintiff
husband, for were the law strictly to be followed, in the process of liquidation of the conjugal assets, 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 their only child has chosen to remain (Art. 129, par. 9). Here, what was done was one-half (1/2)
portion of the house was ceded to defendant so that she will not claim anymore for past unpaid support, while the
other half was transferred to their only child as his presumptive legitime.

Consequently, nothing yet has been given to the defendant wife by way of her share in the conjugal properties, and it
is but just, lawful and fair, that she be given one-half (1/2) share of the separation/retirement benefits received by the
plaintiff the same being part of their conjugal partnership properties having been obtained or derived from the labor,
industry, work or profession of said defendant husband in accordance with Art. 117, par. 2 of the Family Code. For
the same reason, she is entitled to one-half (1/2) of the outstanding shares of stock of the plaintiff husband with the
Manila Memorial Park and the Provident Group of Companies.[22]

The Court of Appeals articulated on this matter as follows:

On Assignment of Error E, plaintiff-appellant assails the order of the trial court for him to give one-half of his
separation/retirement benefits from Far East Bank & Trust Company and half of his outstanding shares in Manila
Memorial Park and Provident Group of Companies to the defendant-appellee as the latters share in the conjugal
partnership.

On August 6, 1993, the trial court rendered a Partial Decision approving the Compromise Agreement entered into by
the parties. In the same Compromise Agreement, the parties had agreed that henceforth, their conjugal partnership is
dissolved. Thereafter, no steps were taken for the liquidation of the conjugal partnership.

Finding that defendant-appellee is entitled to at least half of the separation/retirement benefits which plaintiff-
appellant received from Far East Bank & Trust Company upon his retirement as Vice-President of said company for
the reason that the benefits accrued from plaintiffappellants service for the bank for a number of years, most of which
while he was married to defendant-appellee, the trial court adjudicated the same. The same is true with the
outstanding shares of plaintiff-appellant in Manila Memorial Park and Provident Group of Companies. As these were
acquired by the plaintiff-appellant at the time he was married to defendant-appellee, the latter is entitled to one-half
thereof as her share in the conjugal partnership. We find no reason to disturb the ruling of the trial court. [23]

Since the present case does not involve the annulment of a bigamous marriage, the provisions of Article 50 in
relation to Articles 41, 42 and 43 of the Family Code, providing for the dissolution of the absolute community or conjugal
partnership of gains, as the case may be, do not apply. Rather, the general rule applies, which is that in case a marriage
is declared void ab initio, the property regime applicable and to be liquidated, partitioned and distributed is that of equal
co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,[24] this Court expounded on the consequences of a
void marriage on the property relations of the spouses and specified the applicable provisions of law:

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:

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

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family
and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during
cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation.

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

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.

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 separate property are not
included in the co-ownership.

Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that

(a) Neither party can dispose or encumber by act[s] inter vivos [of] 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 declaration of nullity of the marriage.

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, should aptly prevail. The rules set up to govern the liquidation of either the absolute community or the
conjugal partnership of gains, the property regimes recognized for valid and voidable marriages (in the latter case
until the contract is annulled), are irrelevant to the liquidation of the co-ownership that exists between common-law
spouses. The first paragraph of 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, 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 Family
Code, on the effects of the termination of a subsequent marriage contracted during the subsistence of a previous
marriage to be made applicable pro hac vice. In all other cases, it is not to be assumed that the law has also meant to
have coincident property relations, on the one hand, between spouses in valid and voidable marriages (before
annulment) and, on the other, between common-law spouses or spouses of void marriages, leaving to ordain, 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.[25]
 Since the properties ordered to be distributed by the court a quo were found, both by the trial court and the Court
of Appeals, to have been acquired during the union of the parties, the same would be covered by the co-ownership. No
fruits of a separate property of one of the parties appear to have been included or involved in said distribution. The
liquidation, partition and distribution of the properties owned in common by the parties herein as ordered by the court a
quo should, therefore, be sustained, but on the basis of co-ownership and not of the regime of conjugal partnership of
gains.
As to the issue on custody of the parties over their only child, Javy Singh Buenaventura, it is now moot since he
is about to turn twenty-five years of age on May 27, 2005[26]and has, therefore, attained the age of majority.
With regard to the issues on support raised in the Petition for Certiorari, these would also now be moot, owing to
the fact that the son, Javy Singh Buenaventura, as previously stated, has attained the age of majority.
WHEREFORE, the Decision of the Court of Appeals dated October 8, 1996 and its Resolution dated December
10, 1996 which are contested in the Petition for Review (G.R. No. 127449), are hereby MODIFIED, in that the award
of moral and exemplary damages, attorneys fees, expenses of litigation and costs are deleted. The order giving
respondent one-half of the retirement benefits of petitioner from Far East Bank and Trust Co. and one-half of petitioners
shares of stock in Manila Memorial Park and in the Provident Group of Companies is sustained but on the basis of
the liquidation, partition and distribution of the co-ownership and not of the regime of conjugal partnership of
gains. The rest of said Decision and Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of Appeals Resolutions of
September 2, 1996 and November 13, 1996 which increased the support pendente lite in favor of the parties son, Javy
Singh Buenaventura, is now MOOT and ACADEMIC and is, accordingly, DISMISSED.
No costs.
SO ORDERED.

Abing vs Waeyan

In this appeal by way of a petition for review under Rule 45 of the Rules of Court, petitioner John Abing (John, hereafter)

seeks to set aside the Decision[1] dated October 24, 2000 of the Court of Appeals (CA) in CA-G.R. SP No.

48675, reversing that of the Regional Trial Court (RTC) of Benguet, Branch 64, which affirmed an earlier decision of

the Municipal Trial Court (MTC) of Mankayan, Benguet in an ejectment suit thereat commenced by the petitioner

against the respondent.

In the main, the controversy is between a man and a woman who, during the good old days, lived together as husband

and wife without the benefit of marriage. During their cohabitation, they acquired properties. Later, they parted ways,

and with it this litigation between them involving one of their common properties.

The facts:
Sometime in 1986, John and respondent Juliet Waeyan (Juliet, for short) met and fell in love with each other. In time,

the duo cohabited as husband and wife without the benefit of marriage. Together, the couple bought a 2-storey

residential house from one Benjamin Macua which was erected on a lot owned by a certain Alejandro Dio on Aurora

Street, Mankayan, Benguet. Consequent to the purchase, the tax declaration of the 2-storey house was transferred in

the name of Juliet.

On December 2, 1991, Juliet left for overseas employment in Korea. She would send money to John who deposited

the same in their joint bank account.

In 1992, the original 2-storey residential house underwent renovation. To it was annexed a new structure which housed

a sari-sari store. This new structure and the sari-sari store thereat are the properties involved in this case.

In 1994, Juliet returned from Korea and continued to live with John. She managed the sari-sari store while John worked

as a mine employee of the LepantoConsolidated Mining, Inc.

In 1995, the relationship between the two turned from bad to worse. Hence, they decided to partition their properties.

For the purpose, they executed on October 7, 1995a Memorandum of Agreement. Unfortunately, the document was

left unsigned by the parties although signed by the witnesses thereto. Under their unsigned agreement, John shall

leave the couples dwelling with Juliet paying him the amount of P428,870.00 representing Johns share in all their

properties. On the same date October 7, 1995 Juliet paid John the sum of P232,397.66 by way of partial payment of

his share, with the balance of P196,472.34 to be paid by Juliet in twelve monthly installment beginning November 1995.

Juliet, however, failed to make good the balance. On account thereof, John demanded of her to vacate the annex

structure housing the sari-sari store. Juliet refused, prompting John to file an ejectment suit against her before the MTC

of Mankayan, Benguet.

In his complaint, John alleged that he alone spent for the construction of the annex structure with his own funds and

thru money he borrowed from his relatives. In fact, he added that the tax declaration for the structure was under his

name. On this premise, John claimed exclusive ownership of the subject structure, which thereby gave him the right to
eject Juliet therefrom upon the latters failure to pay the agreed balance due him under the

aforementioned Memorandum of Agreement.

In her answer, Juliet countered that their original house was renovated thru their common funds and that the subject

structure annexed thereto was merely an attachment or an extension of their original residential house, hence the same

pertained to the two of them in common.

In a decision[2] dated March 15, 1997, the MTC, on its finding that the money used in the construction of the structure

in question solely came from John, ruled that the same exclusively pertained to the latter, and accordingly ordered

Juliets eviction therefrom, including the sari-sari store thereat, and required her to surrender possession thereof to

John, thus:

WHEREFORE, judgment is rendered in favor of the plaintiff (John) and against the
defendant (Juliet).

Defendant is hereby ordered to vacate the premises of the store in litigation covered by Tax
Declaration No. 96-001-00445 in the name of the Plaintiff and turn over possession thereof
to the latter.

Defendant is hereby further ordered to pay the Plaintiff the sum of P2,500.00 a month from
the time she withheld possession of the store in litigation in June 1996 until she vacates the
same and turn over possession thereof to the Plaintiff.

Defendant is finally ordered, to pay the sum of P5,000.00 to the Plaintiff by way of Attorneys
fees; and to pay the costs.

SO ORDERED.

On Juliets appeal to the RTC, the latter, in its decision of July 29, 1995, affirmed that of the MTC. Undaunted, Juliet

then went to the CA in CA-G.R. SP No. 48675.

As stated at the threshold hereof, the CA, in its Decision of October 24, 2000,[3] reversed that of the RTC, to wit:

WHEREFORE, the petition is GRANTED. The assailed decision of the Regional

Trial Court is hereby reversed and set aside. Petitioner, Juliet Waeyan is entitled to possess
the property and maintain therein her business.

SO ORDERED.

Partly says the CA in its reversal disposition:

 It is undisputed that the parties lived together as husband and wife without the benefit of
marriage from 1986 to 1995 and that they acquired certain properties which must be divided
between them upon the termination of their common law relationship.

xx xxx xxx

. . . their property relations cannot be governed by the provision of the Civil Code on conjugal
partnership... but by the rule on co-ownership.

xxx xxx xxx

. . . the parties share in respect of the properties they have accumulated during their
cohabitation shall be equal unless there is proof to the contrary.

To the CA, Johns evidence failed to establish that he alone spent for the construction of the annex structure. Hence,

the same pertained to both, and being a co-owner herself, Juliet cannot be evicted therefrom, adding that if ever, Johns

cause of action should have been for a sum of money because he claims that Juliet still owes him the payment for the

extension. According to the CA, ejectment cannot lie against Juliet because Juliets possession of the premises in

dispute was not by virtue of a contract, express or implied, nor did she obtain such possession thru force, intimidation,

threat, strategy or stealth.

Hence, Johns present recourse, submitting that the CA erred in

1. not giving effect to the parties Memorandum of Agreement which should have been
binding between them albeit unsigned by both;

2. in holding that the subject premises (annex structure housing the sari-sari store) is
owned by the two of them in common;

3. in ruling that the parties should settle their common properties in a separate action
for partition even as the community character of the subject premises has not been
proven.

We AFFIRM with modification.

Essentially, the issues raised center on the core question of whether or not the property subject of the suit pertains to

the exclusive ownership of petitioner, John. Departing from the factual findings of the two courts before it, the CA found

that the premises in dispute is owned in common by Juliet and John, the latter having failed to establish by the required

quantum of proof that the money spent for the construction thereof solely came from him. Being a co-owner of the same

structure, Juliet may not be ejected therefrom.

While the question raised is essentially one of fact, of which the Court normally eschews from, yet, given the conflicting

factual findings of the three courts below, the Court shall go by the exception [4] to the general rule and proceed to make

its own assessment of the evidence.

First and foremost, it is undisputed that the parties hereto lived together as husband and wife from 1986 to 1995 without

the benefit of marriage. Neither is it disputed that sometime in December 1991, Juliet left for Korea and worked thereat,

sending money to John which the latter deposited in their joint account. In fact, Juliet was still in Korea when the annex

structure was constructed in 1992.

Other than Johns bare allegation that he alone, thru his own funds and money he borrowed from his relatives, spent

for the construction of the annex structure, evidence is wanting to support such naked claim. For sure, John even failed

to reveal how much he spent therefor. Neither did he divulge the names of the alleged relatives from whom he made

his borrowings, let alone the amount of money he borrowed from them. All that petitioner could offer by way of

reinforcing his claim of spending his own funds and borrowed money in putting up the subject structure was the affidavit

executed by a certain Manuel Macaraeg to the effect that petitioner borrowed P30,000.00 from him. Even

then, Macaraeg stated in his affidavit that it was sometime in 1990 when John borrowed said amount from him. With

the petitioners own admission that the subject structure was constructed only in 1992, or two years after he

borrowed P30,000.00 from Macaraeg, it is even doubtful whether the amount he allegedly borrowed from the latter

went into the construction of the structure in dispute. More, it is noted that while petitioner was able to present in

evidence the Macaraeg affidavit, he failed to introduce similar affidavits, if any, of his close relatives from whom he

claimed to have made similar borrowings. For sure, not a single relative came forward to confirm petitioners tale. In

short, there is a paucity of evidence, testimonial or documentary, to support petitioners self-serving allegation that the

annex structure which housed the sari-sari store was put up thru his own funds and/or money borrowed by him. Sure,

petitioner has in his favor the tax declaration covering the subject structure. We have, however, ruled time and again

that tax declarations do not prove ownership but at best an indicia of claims of ownership.[5]Payment of taxes is not

proof of ownership, any more than indicating possession in the concept of an owner. [6] Neither tax receipts nor

declaration of ownership for taxation purposes are evidence of ownership or of the right to possess realty when not

supported by other effective proofs.[7]

In this connection, Article 147 of the Family Code is instructive. It reads:

 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 other
party of any property shall be deemed to have contributed jointly in the acquisition thereof if
the formers efforts consisted in the care and maintenance of the family and of the household.

The law is clear. In the absence, as here, of proofs to the contrary, any property acquired by common-law spouses

during their period of cohabitation is presumed to have been obtained thru their joint efforts and is owned by them in

equal shares. Their property relationship is governed by the rules on co-ownership. And under this regime, they owned

their properties in common in equal shares. Being herself a co-owner of the structure in question, Juliet, as correctly

ruled by the CA, may not be ejected therefrom.

True it is that under Article 487[8] of the Civil Code, a co-owner may bring an action for ejectment against a co-owner

who takes exclusive possession and asserts exclusive ownership of a common property. It bears stressing, however,

that in this case, evidence is totally wanting to establish Johns or Juliets exclusive ownership of the property in

question. Neither did Juliet obtain possession thereof by virtue of a contract, express or implied, or thru intimidation,

threat, strategy or stealth. As borne by the record, Juliet was in possession of the subject structure and the sari-

sari store thereat by virtue of her being a co-owner thereof. As such, she is as much entitled to enjoy its possession

and ownership as John.

We, however, disagree with the ruling of the CA that the subject Memorandum of Agreement, being unsigned by Juliet

and John, has no binding effect between them.

It is a matter of record that pursuant to said Agreement, Juliet did pay John the amount of P232,397.66, as initial

payment for Johns share in their common properties, with the balance of P196,472.34 payable in twelve monthly

installments beginning November 1995. It is also a matter of record that the Agreement was signed by the witnesses

thereto. Hence, the irrelevant circumstances that the Agreement was left unsigned by Juliet and John cannot adversely

affect its binding force or effect between them, as evidently, Juliets initial payment of P232,397.66 to John was in

fulfillment of what the parties had agreed upon thereunder. However, and as correctly held by the CA, Juliets failure to
pay John the balance of the latters share in their common properties could at best give rise to an action for a sum of

money against Juliet, or for rescission of the said agreement and not for ejectment.

WHEREFORE, the petition is DENIED and the assailed CA Decision is AFFIRMED, except that portion thereof denying

effect to the parties Memorandum of Agreement for being unsigned by both.

Costs against petitioner.

SO ORDERED.

Metrobank vs Pascual

Respondent Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the union,

Florencia bought from spouses Clarito and Belen Sering a 250-square meter lot with a three-door apartment standing

thereon located in Makati City. Subsequently, Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the

purchased lot was canceled and, in lieu thereof, TCT No. 156283 [1] of the Registry of Deeds of Makati City was issued

in the name of Florencia, married to Nelson Pascual a.k.a. Nicholson Pascual.

In 1994, Florencia filed a suit for the declaration of nullity of marriage under Article 36 of the Family

Code, docketed as Civil Case No. Q-95-23533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon

City rendered, on July 31, 1995, a Decision,[2] declaring the marriage of Nicholson and Florencia null and void on the
ground of psychological incapacity on the part of Nicholson. In the same decision, the RTC, inter alia, ordered the

dissolution and liquidation of the ex-spouses conjugal partnership of gains. Subsequent events saw the couple going

their separate ways without liquidating their conjugal partnership.

On April 30, 1997, Florencia, together with spouses Norberto and Elvira Oliveros, obtained a PhP 58 million

loan from petitioner Metropolitan Bank and Trust Co. (Metrobank). To secure the obligation, Florencia and the spouses

Oliveros executed several real estate mortgages (REMs) on their properties, including one involving the lot covered by

TCT No. 156283. Among the documents Florencia submitted to procure the loan were a copy of TCT No. 156283, a

photocopy of the marriage-nullifying RTC decision, and a document denominated as Waiver that Nicholson purportedly

executed on April 9, 1995. The waiver, made in favor of Florencia, covered the conjugal properties of the ex-spouses
listed therein, but did not incidentally include the lot in question.
 Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation when it fell due, Metrobank,

on November 29, 1999, initiated foreclosure proceedings under Act No. 3135, as amended, before the Office of the

Notary Public of Makati City. Subsequently, Metrobank caused the publication of the notice of sale on three issues
of Remate.[3] At the auction sale on January 21, 2000, Metrobank emerged as the highest bidder.

Getting wind of the foreclosure proceedings, Nicholson filed on June 28, 2000, before the RTC in Makati City,

a Complaint to declare the nullity of the mortgageof the disputed property, docketed as Civil Case No. 00-789 and

eventually raffled to Branch 65 of the court. In it, Nicholson alleged that the property, which is still conjugal property,

was mortgaged without his consent.

Metrobank, in its Answer with Counterclaim and Cross-Claim,[4] alleged that the disputed lot, being registered

in Florencias name, was paraphernal. Metrobank also asserted having approved the mortgage in good faith.

Florencia did not file an answer within the reglementary period and, hence, was subsequently declared in

default.

The RTC Declared the REM Invalid

After trial on the merits, the RTC rendered, on September 24, 2001, judgment finding for Nicholson.
The fallo reads:

PREMISES CONSIDERED, the Court renders judgment declaring the real estate mortgage
on the property covered by [TCT] No. 156283 of the Registry of Deeds for the City of Makati as well
as all proceedings thereon null and void.

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

1. PhP100,000.00 by way of moral damages;

2. PhP75,000.00 by way of attorneys fees; and
3. The costs.

SO ORDERED.[5]

Even as it declared the invalidity of the mortgage, the trial court found the said lot to be conjugal, the same

having been acquired during the existence of the marriage of Nicholson and Florencia. In so ruling, the RTC invoked

Art. 116 of the Family Code, providing that all property acquired during the marriage, whether the acquisition appears

to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless

the contrary is proved. To the trial court, Metrobank had not overcome the presumptive conjugal nature of the lot. And

being conjugal, the RTC concluded that the disputed property may not be validly encumbered by Florencia without
Nicholsons consent.
 The RTC also found the deed of waiver Florencia submitted to Metrobank to be fatally defective. For let alone

the fact that Nicholson denied executing the same and that the signature of the notarizing officer was a forgery, the

waiver document was allegedly executed on April 9, 1995 or a little over three months before the issuance of the RTC

decision declaring the nullity of marriage between Nicholson and Florencia.

The trial court also declared Metrobank as a mortgagee in bad faith on account of negligence, stating the

observation that certain data appeared in the supporting contract documents, which, if properly scrutinized, would have

put the bank on guard against approving the mortgage. Among the data referred to was the date of execution of the

deed of waiver.

The RTC dismissed Metrobanks counterclaim and cross-claim against the ex-spouses.

Metrobanks motion for reconsideration was denied. Undeterred, Metrobank appealed to the Court of Appeals

(CA), the appeal docketed as CA-G.R. CV No. 74874.

The CA Affirmed with Modification the RTCs Decision

On January 28, 2004, the CA rendered a Decision affirmatory of that of the RTC, except for the award therein

of moral damages and attorneys fees which the CA ordered deleted. The dispositive portion of the CAs Decision reads:

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

MODIFICATION with respect to the award of moral damages and attorneys fees which is hereby
DELETED.

SO ORDERED.[6]

Like the RTC earlier held, the CA ruled that Metrobank failed to overthrow the presumption established in Art.

116 of the Family Code. And also decreed as going against Metrobank was Florencias failure to comply with the

prescriptions of the succeeding Art. 124 of the Code on the disposition of conjugal partnership property. Art. 124 states:

Art. 124. The administration and enjoyment of the conjugal partnership property shall belong
to both spouses jointly. In case of disagreement, the husbands decision shall prevail, subject to
recourse to the court by the wife for proper remedy x x x.

In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority of the
court or written consent of the other spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third person, and may be perfected as
a binding contract upon the acceptance by the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors.
 As to the deletion of the award of moral damages and attorneys fees, the CA, in gist, held that Metrobank did

not enter into the mortgage contract out of ill-will or for some fraudulent purpose, moral obliquity, or like dishonest

considerations as to justify damages.

Metrobank moved but was denied reconsideration by the CA.

Thus, Metrobank filed this Petition for Review on Certiorari under Rule 45, raising the following issues for consideration:

a. Whether or not the [CA] erred in declaring subject property as conjugal by applying
Article 116 of the Family Code.

b. Whether or not the [CA] erred in not holding that the declaration of nullity of marriage
between the respondent Nicholson Pascual and Florencia Nevalga ipso facto dissolved the
regime of community of property of the spouses.

c. Whether or not the [CA] erred in ruling that the petitioner is an innocent purchaser for
value.[7]

Our Ruling

A modification of the CAs Decision is in order.

The Disputed Property is Conjugal

It is Metrobanks threshold posture that Art. 160 of the Civil Code providing that [a]ll property of the marriage

is presumed to belong to the conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to

the wife, applies. To Metrobank, Art. 116 of the Family Code could not be of governing application inasmuch as

Nicholson and Florencia contracted marriage before the effectivity of the Family Code on August 3, 1988.
Citing Manongsong v. Estimo,[8] Metrobank asserts that the presumption of conjugal ownership under Art. 160 of the

Civil Code applies when there is proof that the property was acquired during the marriage.Metrobank adds, however,

that for the presumption of conjugal ownership to operate, evidence must be adduced to prove that not only was the

property acquired during the marriage but that conjugal funds were used for the acquisition, a burden Nicholson

allegedly failed to discharge.

To bolster its thesis on the paraphernal nature of the disputed property, Metrobank cites Francisco v. Court of

Appeals[9] and Jocson v. Court of Appeals,[10]among other cases, where this Court held that a property registered in

the name of a certain person with a description of being married is no proof that the property was acquired during the

spouses marriage.
 On the other hand, Nicholson, banking on De Leon v. Rehabilitation Finance Corporation [11] and Wong v.

IAC,[12] contends that Metrobank failed to overcome the legal presumption that the disputed property is conjugal. He

asserts that Metrobanks arguments on the matter of presumption are misleading as only one postulate needs to be

shown for the presumption in favor of conjugal ownership to arise, that is, the fact of acquisition during marriage.
Nicholson dismisses, as inapplicable, Francisco and Jocson, noting that they are relevant only when there is no

indication as to the exact date of acquisition of the property alleged to be conjugal.

As a final point, Nicholson invites attention to the fact that Metrobank had virtually recognized the conjugal

nature of the property in at least three instances. The first was when the bank lumped him with Florencia in Civil Case

No. 00-789 as co-mortgagors and when they were referred to as spouses in the petition for extrajudicial foreclosure of

mortgage. Then came the published notice of foreclosure sale where Nicholson was again designated as co-mortgagor.

And third, in its demand-letter[13]to vacate the disputed lot, Metrobank addressed Nicholson and Florencia as spouses,

albeit the finality of the decree of nullity of marriage between them had long set in.

We find for Nicholson.

First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art. 116 of the Family Code, is

the applicable legal provision since the property was acquired prior to the enactment of the Family Code, it errs in its

theory that, before conjugal ownership could be legally presumed, there must be a showing that the property was
acquired during marriage using conjugal funds. Contrary to Metrobanks submission, the Court did not,

in Manongsong,[14] add the matter of the use of conjugal funds as an essential requirement for the presumption of

conjugal ownership to arise. Nicholson is correct in pointing out that only proof of acquisition during the marriage is

needed to raise the presumption that the property is conjugal. Indeed, if proof on the use of conjugal is still required as

a necessary condition before the presumption can arise, then the legal presumption set forth in the law would veritably
be a superfluity. As we stressed in Castro v. Miat:

Petitioners also overlook Article 160 of the New Civil Code. It provides that all property of
the marriage is presumed to be conjugal partnership, unless it be prove[n] that it pertains exclusively
to the husband or to the wife. This article does not require proof that the property was acquired
with funds of the partnership. The presumption applies even when the manner in which the
property was acquired does not appear.[15] (Emphasis supplied.)

Second, Francisco and Jocson do not reinforce Metrobanks theory. Metrobank would thrust on the Court,

invoking the two cases, the argument that the registration of the property in the name of Florencia Nevalga, married to

Nelson Pascual operates to describe only the marital status of the title holder, but not as proof that the property was

acquired during the existence of the marriage.

 Metrobank is wrong. As Nicholson aptly points out, if proof obtains on the acquisition of the property during

the existence of the marriage, then the presumption of conjugal ownership applies. The correct lesson
of Francisco and Jocson is that proof of acquisition during the marital coverture is a condition sine qua non for the

operation of the presumption in favor of conjugal ownership. When there is no showing as to when the property was

acquired by the spouse, the fact that a title is in the name of the spouse is an indication that the property belongs

exclusively to said spouse.[16]

The Court, to be sure, has taken stock of Nicholsons arguments regarding Metrobank having implicitly

acknowledged, thus being in virtual estoppel to question, the conjugal ownership of the disputed lot, the bank having

named the former in the foreclosure proceedings below as either the spouse of Florencia or her co-mortgagor. It is felt,

however, that there is no compelling reason to delve into the matter of estoppel, the same having been raised only for

the first time in this petition. Besides, however Nicholson was designated below does not really change, one way or

another, the classification of the lot in question.

Termination of Conjugal Property Regime does

not ipso facto End the Nature of Conjugal Ownership

Metrobank next maintains that, contrary to the CAs holding, Art. 129 of the Family Code is inapplicable. Art.

129 in part reads:

Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure
shall apply:

xxxx

(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.

Apropos the aforequoted provision, Metrobank asserts that the waiver executed by Nicholson, effected as it

were before the dissolution of the conjugal property regime, vested on Florencia full ownership of all the properties

acquired during the marriage.

Nicholson counters that the mere declaration of nullity of marriage, without more, does not automatically result

in a regime of complete separation when it is shown that there was no liquidation of the conjugal assets.

We again find for Nicholson.

 While the declared nullity of marriage of Nicholson and Florencia severed their marital bond and dissolved the

conjugal partnership, the character of the properties acquired before such declaration continues to subsist as conjugal

properties until and after the liquidation and partition of the partnership. This conclusion holds true whether we apply

Art. 129 of the Family Code on liquidation of the conjugal partnerships assets and liabilities which is generally

prospective in application, or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the Civil Code on the subject,

Conjugal Partnership of Gains. For, the relevant provisions of both Codes first require the liquidation of the conjugal

properties before a regime of separation of property reigns.

In Dael v. Intermediate Appellate Court, we ruled that pending its liquidation following its dissolution, the

conjugal partnership of gains is converted into an implied ordinary co-ownership among the surviving spouse and the

other heirs of the deceased.[17]

In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property relationship between the

former spouses, where:

Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in
its enjoyment, except when personal rights are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted
to him in the division upon the termination of the co-ownership. (Emphasis supplied.)

In the case at bar, Florencia constituted the mortgage on the disputed lot on April 30, 1997, or a little less than

two years after the dissolution of the conjugal partnership on July 31, 1995, but before the liquidation of the partnership.

Be that as it may, what governed the property relations of the former spouses when the mortgage was given is the

aforequoted Art. 493. Under it, Florencia has the right to mortgage or even sell her one-half (1/2) undivided interest in

the disputed property even without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are

limited only to the 1/2 undivided portion that Florencia owned. Accordingly, the mortgage contract insofar as it covered

the remaining 1/2 undivided portion of the lot is null and void, Nicholson not having consented to the mortgage of his

undivided half.

The conclusion would have, however, been different if Nicholson indeed duly waived his share in the conjugal
partnership. But, as found by the courts a quo, the April 9, 1995 deed of waiver allegedly executed by Nicholson three

months prior to the dissolution of the marriage and the conjugal partnership of gains on July 31, 1995 bore his forged

signature, not to mention that of the notarizing officer. A spurious deed of waiver does not transfer any right at all, albeit

it may become the root of a valid title in the hands of an innocent buyer for value.
 Upon the foregoing perspective, Metrobanks right, as mortgagee and as the successful bidder at the auction

of the lot, is confined only to the 1/2 undivided portion thereof heretofore pertaining in ownership to Florencia. The other
undivided half belongs to Nicholson. As owner pro indiviso of a portion of the lot in question, Metrobank may ask for

the partition of the lot and its property rights shall be limited to the portion which may be allotted to [the bank] in the

division upon the termination of the co-ownership.[18] This disposition is in line with the well-established principle that
the binding force of a contract must be recognized as far as it is legally possible to do soquando res non valet ut ago,

valeat quantum valere potest.[19]

In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to

discuss at length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where

the mortgagee is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond

the four corners of the title is inapplicable.[20] Unlike private individuals, it behooves banks to exercise greater care and

due diligence before entering into a mortgage contract. The ascertainment of the status or condition of the property

offered as security and the validity of the mortgagors title must be standard and indispensable part of the banks
operation.[21] A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee,[22] as

here.

But as found by the CA, however, Metrobanks failure to comply with the due diligence requirement was not

the result of a dishonest purpose, some moral obliquity or breach of a known duty for some interest or ill-will that

partakes of fraud that would justify damages.

WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision of the CA dated January 28, 2004,

upholding with modification the Decision of the RTC, Branch 65 in Makati City, in Civil Case No. 00-789,
is AFFIRMED with the MODIFICATION that the REM over the lot covered by TCT No. 156283 of the Registry of Deeds

of Makati City is hereby declared valid only insofar as the pro indiviso share of Florencia thereon is concerned.

As modified, the Decision of the RTC shall read:

PREMISES CONSIDERED, the real estate mortgage on the property covered by TCT No. 156283 of the Registry of

Deeds of Makati City and all proceedings thereon are NULL and VOID with respect to the undivided 1/2 portion of the

disputed property owned by Nicholson, but VALID with respect to the other undivided 1/2 portion belonging to

Florencia.

The claims of Nicholson for moral damages and attorneys fees are DENIED for lack of merit.
No pronouncement as to costs.

SO ORDERED.

Dio vs Dio

The Case

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

The Antecedent Facts

Alain M. Dio (petitioner) and Ma. Caridad L. Dio (respondent) were childhood friends and sweethearts. They started
living together in 1984 until they decided to separate in 1994. In 1996, petitioner and respondent decided to live
together again. On 14 January 1998, they were married before Mayor Vergel Aguilar of Las Pias City.

On 30 May 2001, petitioner filed an action for Declaration of Nullity of Marriage against respondent, citing
psychological incapacity under Article 36 of the Family Code. Petitioner alleged that respondent failed in her marital
obligation to give love and support to him, and had abandoned her responsibility to the family, choosing instead to go
on shopping sprees and gallivanting with her friends that depleted the family assets. Petitioner further alleged that
respondent was not faithful, and would at times become violent and hurt him.

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

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

Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a psychological report establishing that respondent
was suffering from Narcissistic Personality Disorder which was deeply ingrained in her system since her early
formative years. Dr. Tayag found that respondents disorder was long-lasting and by nature, incurable.
In its 18 October 2006 Decision, the trial court granted the petition on the ground that respondent was
psychologically incapacited to comply with the essential marital obligations at the time of the celebration of the
marriage.

The Decision of the Trial Court

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

The dispositive portion of the trial courts decision reads:

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

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

2. Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon compliance with Article[s] 50
and 51 of the Family Code.

Let copies of this Decision be furnished the parties, the Office of the Solicitor General, Office of the City
Prosecutor, Las Pias City and the Office of the Local Civil Registrar of Las PiasCity, for their information and
guidance.

SO ORDERED.4

Petitioner filed a motion for partial reconsideration questioning the dissolution of the absolute community of property
and the ruling that the decree of annulment shall only be issued upon compliance with Articles 50 and 51 of the
Family Code.
In its 12 March 2007 Order, the trial court partially granted the motion and modified its 18 October 2006 Decision as
follows:

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

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

2) Dissolving the regime of absolute community of property.

A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be issued after liquidation, partition and
distribution of the parties properties under Article 147 of the Family Code.

Let copies of this Order be furnished the parties, the Office of the Solicitor General, the Office of the City
Prosecutor of Las Pias City and the Local Civil Registrar of Las Pias City, for their information and guidance.5

Hence, the petition before this Court.

The Issue

The sole issue in this case is whether the trial court erred when it ordered that a decree of absolute nullity of marriage
shall only be issued after liquidation, partition, and distribution of the parties properties under Article 147 of the Family
Code.

The Ruling of this Court

The petition has merit.

Petitioner assails the ruling of the trial court ordering that a decree of absolute nullity of marriage shall only be issued
after liquidation, partition, and distribution of the parties properties under Article 147 of the Family Code. Petitioner
argues that Section 19(1) of the Rule on Declaration of Absolute Nullity of Null Marriages and Annulment of Voidable
Marriages6 (the Rule) does not apply to Article 147 of the Family Code.

We agree with petitioner.

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

Article 147 of the Family Code provides:

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

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

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

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

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

1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and

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

All these elements are present in this case and there is no question that Article 147 of the Family Code applies to the
property relations between petitioner and respondent.
We agree with petitioner that the trial court erred in ordering that a decree of absolute nullity of marriage shall be
issued only after liquidation, partition and distribution of the parties properties under Article 147 of the Family Code.
The ruling has no basis because Section 19(1) of the Rule does not apply to cases governed under Articles 147 and
148 of the Family Code. Section 19(1) of the Rule provides:

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

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

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

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

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

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

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

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

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

Article 40 of the Family Code contemplates a situation where a second or bigamous marriage was contracted. Under
Article 40, [t]he absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely
of a final judgment declaring such previous marriage void. Thus we ruled:

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

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

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

WHEREFORE, we AFFIRM the Decision of the trial court with the MODIFICATION that the decree of absolute nullity
of the marriage shall be issued upon finality of the trial courts decision without waiting for the liquidation, partition, and
distribution of the parties properties under Article 147 of the Family Code.

SO ORDERED.

Ventura vs Abuda

The Case
This petition for review on certiorari seeks to annul the Decision [1] dated 9 March 2012 of the Court of Appeals (CA) in
CA-G.R. CV No. 92330 and the Resolution[2] dated 3 August 2012 denying the motion for reconsideration. The
Decision and Resolution dismissed the Appeal dated 23 October 2009 and affirmed with modification the
Decision[3] dated 24 November 2008 of the Regional Trial Court of Manila, Branch 32 (RTC Manila).

The Facts

The RTC-Manila and the CA found the facts to be as follows:

Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June 1980. Although Socorro and
Esteban never had common children, both of them had children from prior marriages: Esteban had a daughter named
Evangeline Abuda (Evangeline), and Socorro had a son, who was the father of Edilberto U. Ventura, Jr. (Edilberto),
the petitioner in this case.

Evidence shows that Socorro had a prior subsisting marriage to Crispin Roxas (Crispin) when she married Esteban.
Socorro married Crispin on 18 April 1952. This marriage was not annulled, and Crispin was alive at the time of
Socorro's marriage to Esteban.

Esteban's prior marriage, on the other hand, was dissolved by virtue of his wife's death in 1960.

According to Edilberto, sometime in 1968, Esteban purchased a portion of a lot situated at 2492 State Alley, Bonifacio
Street, Vitas, Tondo, Manila (Vitas property). The remaining portion was thereafter purchased by Evangeline on her
father's behalf sometime in 1970.[4] The Vitas property was covered by Transfer Certificate of Title No. 141782, dated
11 December 1980, issued to "Esteban Abletes, of legal age, Filipino, married to Socorro Torres." [5]

Edilberto also claimed that starting 1978, Evangeline and Esteban operated small business establishments located at
903 and 905 Delpan Street, Tondo, Manila (Delpan property). [6]

On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline and her husband, Paulino Abuda
(Paulino).[7]According to Edilberto:

[w]hen Esteban was diagnosed with colon cancer sometime in 1993, he decided to sell the Delpan and Vitas properties
to Evangeline. Evangeline continued paying the amortizations on the two (2) properties situated in Delpan Street. The
amortizations, together with the amount of Two Hundred Thousand Pesos (Php 200,000.00), which Esteban requested
as advance payment, were considered part of the purchase price of the Delpan properties. Evangeline likewise gave
her father Fifty Thousand Pesos (Php 50,000.00) for the purchase of the Vitas properties and [she] shouldered his
medical expenses.[8]

Esteban passed away on 11 September 1997, while Socorro passed away on 31 July 1999.

Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered the sale. Thus, Edilberto,
represented by Leonora, filed a Petition for Annulment of Deeds of Sale before the RTC-Manila. Edilberto alleged that
the sale of the properties was fraudulent because Esteban's signature on the deeds of sale was forged.
Respondents, on the other hand, argued that because of Socorro's prior marriage to Crispin, her subsequent
marriage to Esteban was null and void. Thus, neither Socorro nor her heirs can claim any right or interest over the
properties purchased by Esteban and respondents.[9]

The Ruling of the RTC-Manila

The RTC-Manila dismissed the petition for lack of merit.

The RTC-Manila ruled that the marriage between Socorro and Esteban was void from the beginning. [10] Article 83 of
the Civil Code, which was the governing law at the time Esteban and Socorro were married, provides:

Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first spouse of such person shall
be illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or

2. The first spouse had been absent for seven consecutive years at the time of the second marriage without the spouse
present having news of the absentee being alive, or if the absentee, though he has been absent for less than seven
years, is generally considered as dead and believed to be so by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead according to articles 390 and 391. The marriage so
contracted shall be valid in any of the three cases until declared null and void.

During trial, Edilberto offered the testimony of Socorro's daughter- in-law Conchita Ventura (Conchita). In her first
affidavit, Conchita claimed that Crispin, who was a seaman, had been missing and unheard from for 35 years.
However, Conchita recanted her earlier testimony and executed an Affidavit of Retraction. [11]

The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the status of the union. It applied our
ruling in Niñal v. Badayog:[12]

Jurisprudence under the Civil Code states that no judicial decree is necessary in order to establish the nullity of a
marriage. x x x

Under ordinary circumstances, the effect of a void marriage, so far as concerns the conferring of legal rights upon the
parties, is as though no marriage had ever taken place. And therefore, being good for no legal purpose, its invalidity
can be maintained in any proceeding in which [the] fact of marriage may be material, either direct or collateral, in any
civil court between any parties at any time, whether before or after the death of either or both the husband and the wife,
and upon mere proof of the facts rendering such marriage void, it will be disregarded or treated as non- existent by the
courts.[13]

According to the RTC-Manila, the Vitas and Delpan properties are not conjugal, and are governed by Articles 144 and
485 of the Civil Code, to wit:

Art. 144. When a man and a woman live together as husband and wife, but they are not married, or their marriage is
void from the beginning, the property acquired by either or both of them through their work or industry or their wages
and salaries shall be governed by the rules on co-ownership.

Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective
interests. Any stipulation in a contract to the contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved.

The RTC-Manila then determined the respective shares of Socorro and Esteban in the properties. It found that:

[w]ith respect to the property located at 2492 State Alley, Bonifacio St. Vitas, Tondo, Manila covered by TCT No.
141782, formerly Marcos Road, Magsaysay Village, Tondo, Manila, [Evangeline] declared that part of it was first
acquired by [her] father Esteban Abletes sometime in 1968 when he purchased the right of Ampiano Caballegan. Then,
in 1970, she x x x bought the right to one-half of the remaining property occupied by Ampiano Caballegan. However,
during the survey of the National Housing Authority, she allowed the whole lot [to be] registered in her father's name.
As proof thereof, she presented Exhibits "8" to "11" x x x. [These documents prove that] that she has been an occupant
of the said property in Vitas, Tondo even before her father and Socorro Torres got married in June, 1980. [14]

Anent the parcels of land and improvements thereon 903 and 905 Del Pan Street, Tondo, Manila, x x x Evangeline
professed that in 1978, before [her] father met Socorro Torres and before the construction of the BLISS Project thereat,
[her] father [already had] a bodega of canvas (lona) and a sewing machine to sew the canvas being sold at 903 Del
Pan Street, Tondo Manila. In 1978, she was also operating Vangie's Canvas Store at 905 Del Pan [Street], Tondo,
Manila, which was evidenced by Certificate of Registration of Business Name issued in her favor on 09 November 1998
x x x. When the BLISS project was constructed in 1980, [the property] became known as Unit[s] D-9 and D-10. At first,
[her] father [paid] for the amortizations [for] these two (2) parcels of land but when he got sick [with] colon cancer in
1993, he asked [respondents] to continue paying for the amortizations x x x. [Evangeline] paid a total of P195,259.52
for Unit D-9 as shown by the 37 pieces of receipts x x x and the aggregate amount of P188,596.09 for Unit D-10, [as
evidenced by] 36 receipts x x x.[15]
The RTC-Manila concluded that Socorro did not contribute any funds for the acquisition of the properties. Hence, she
cannot be considered a co- owner, and her heirs cannot claim any rights over the Vitas and Delpan properties. [16]

Aggrieved, Edilberto filed an appeal before the CA.

The Ruling of the CA

In its Decision[17] dated 9 March 2012, the CA sustained the decision of the RTC-Manila. The dispositive portion of
the CA Decision reads:

WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the court a quo STANDS.

SO ORDERED.[18]

The CA ruled, however, that the RTC-Manila should have applied Article 148 of the Family Code, and not Articles 144
and 485 of the Civil Code. Article 148 of the Family Code states that in unions between a man and a woman who are
incapacitated to marry each other:

x x x only the properties acquired by both of the parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to
the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption
shall apply to joint deposits of money and evidences of credit.

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

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.

The CA applied our ruling in Saguid v. Court of Appeals,[19] and held that the foregoing provision applies "even if the
cohabitation or the acquisition of the property occurred before the [effectivity] of the Family Code." [20] The CA found
that Edilberto failed to prove that Socorro contributed to the purchase of the Vitas and Delpan properties. Edilberto
was unable to provide any documentation evidencing Socorro's alleged contribution.[21]

On 2 April 2012, Edilberto filed a Motion for Reconsideration,[22] which was denied by the CA in its Resolution dated 3
August 2012.[23]

Hence, this petition.

The Ruling of this Court

We deny the petition.

Edilberto admitted that in unions between a man and a woman who are incapacitated to marry each other, the
ownership over the properties acquired during the subsistence of that relationship shall be based on the actual
contribution of the parties. He even quoted our ruling in Borromeo v. Descallar[24] in his petition:

It is necessary for each of the partners to prove his or her actual contribution to the acquisition of property in order to
be able to lay claim to any portion of it. Presumptions of co-ownership and equal contribution do not apply.[25]

This is a reiteration of Article 148 of the Family Code, which the CA applied in the assailed decision:

Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry each other], only the properties
acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by
them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions
and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of
money and evidences of credit.

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

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.

Applying the foregoing provision, the Vitas and Delpan properties can be considered common property if: (1) these
were acquired during the cohabitation of Esteban and Socorro; and (2) there is evidence that the properties were
acquired through the parties' actual joint contribution of money, property, or industry.

Edilberto argues that the certificate of title covering the Vitas property shows that the parcel of land is co-owned by
Esteban and Socorro because: (1) the Transfer Certificate of Title was issued on 11 December 1980, or several
months after the parties were married; and (2) title to the land was issued to "Esteban Abletes, of legal age, married
to Socorro Torres."[26]

We disagree. The title itself shows that the Vitas property is owned by Esteban alone. The phrase "married to Socorro
Torres" is merely descriptive of his civil status, and does not show that Socorro co-owned the property.[27] The
evidence on record also shows that Esteban acquired ownership over the Vitas property prior to his marriage to
Socorro, even if the certificate of title was issued after the celebration of the marriage. Registration under the Torrens
title system merely confirms, and does not vest title. This was admitted by Edilberto on page 9 of his petition wherein
he quotes an excerpt of our ruling in Borromeo:

[R]egistration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice
to the world at large. Certificates of title are not a source of right. The mere possession of a title does not make one the
true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name
does not necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does
not apply to respondent. A certificate of title implies that the title is quiet, and that it is perfect, absolute and indefeasible.
However, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not
acquire the subject properties for a valuable consideration.

Edilberto claims that Esteban's actual contribution to the purchase of the Delpan property was not sufficiently proven
since Evangeline shouldered some of the amortizations. [28] Thus, the law presumes that Esteban and Socorro jointly
contributed to the acquisition of the Del pan property.

We cannot sustain Edilberto's claim. Both the RTC-Manila and the CA found that the Delpan property was acquired
prior to the marriage of Esteban and Socorro.[29] Furthermore, even if payment of the purchase price of the Delpan
property was made by Evangeline, such payment was made on behalf of her father. Article 1238 of the Civil Code
provides:

Art. 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a
donation, which requires the debtor's consent. But the payment is in any case valid as to the creditor who has accepted
it.

Thus, it is clear that Evangeline paid on behalf of her father, and the parties intended that the Delpan property would
be owned by and registered under the name of Esteban.

During trial, the Abuda spouses presented receipts evidencing payments of the amortizations for the Delpan
property. On the other hand, Edilberto failed to show any evidence showing Socorro's alleged monetary contributions.
As correctly pointed out by the CA:

[s]ettled is the rule that in civil cases x x x the burden of proof rests upon the party who, as determined by the pleadings
or the nature of the case, asserts the affirmative of an issue. x x x. Here it is Appellant who is duty bound to prove the
allegations in the complaint which undoubtedly, he miserably failed to do so.[30]
WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the Court of Appeals in CA-G.R. CV No.
92330 is AFFIRMED.

SO ORDERED.

Beumer vs Beumer
The Factual Antecedents Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980. After
several years, the RTC of Negros Oriental, Branch 32, declared the nullity of their marriage in the Decision5 dated
November 10, 2000 on the basis of the former’s psychological incapacity as contemplated in Article 36 of the Family
Code. Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership6 dated December 14, 2000
praying for the distribution of the following described properties claimed to have been acquired during the subsistence
of their marriage, to wit: By Purchase: a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by Transfer Certificate of Title (TCT) No. 22846, containing an area of 252 square
meters (sq.m.), including a residential house constructed thereon. b. Lot 2142 of the Dumaguete Cadastre, covered
by TCT No. 21974, containing an area of 806 sq.m., including a residential house constructed thereon. c. Lot 5845 of
the Dumaguete Cadastre, covered by TCT No. 21306, containing an area of 756 sq.m. d. Lot 4, Block 4 of the
consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre, covered by TCT No. 21307, containing an area
of 45 sq.m. 5 See Annex “E” of the Petition. Penned by Judge Eleuterio E. Chiu (Civil Case No. 11754). Id. at 53- 62.
6 Annex “E” of the Petition. Id. at 47-52. Decision 3 G.R. No. 195670 By way of inheritance: e. 1/7 of Lot 2055-A of
the Dumaguete Cadastre, covered by TCT No. 23567, containing an area of 2,635 sq.m. (the area that appertains to
the conjugal partnership is 376.45 sq.m.). f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No.
23575, containing an area of 360 sq.m. (the area that appertains to the conjugal partnership is 24 sq.m.).7 In
defense,8 respondent averred that, with the exception of their two (2) residential houses on Lots 1 and 2142, she and
petitioner did not acquire any conjugal properties during their marriage, the truth being that she used her own
personal money to purchase Lots 1, 2142, 5845 and 4 out of her personal funds and Lots 2055-A and 2055-I by way
of inheritance.9 She submitted a joint affidavit executed by her and petitioner attesting to the fact that she purchased
Lot 2142 and the improvements thereon using her own money.10 Accordingly, respondent sought the dismissal of
the petition for dissolution as well as payment for attorney’s fees and litigation expenses.11 During trial, petitioner
testified that while Lots 1, 2142, 5845 and 4 were registered in the name of respondent, these properties were
acquired with the money he received from the Dutch government as his disability benefit12 since respondent did not
have sufficient income to pay for their acquisition. He also claimed that the joint affidavit they submitted before the
Register of Deeds of Dumaguete City was contrary to Article 89 of the Family Code, hence, invalid. 13 7 Id. at 48-
49a. 8 See attached as Annex ”E” of the Petitioner. Respondent’s Answer. Id. at 76-79. 9 Id. at 76. 10 Id. at 79. 11 Id.
at 77. 12 Id. at 81. 13 Id. at 82. Decision 4 G.R. No. 195670 For her part, respondent maintained that the money used
for the purchase of the lots came exclusively from her personal funds, in particular, her earnings from selling jewelry
as well as products from Avon, Triumph and Tupperware.14 She further asserted that after she filed for annulment of
their marriage in 1996, petitioner transferred to their second house and brought along with him certain personal
properties, consisting of drills, a welding machine, grinders, clamps, etc. She alleged that these tools and equipment
have a total cost of P500,000.00.15 The RTC Ruling On February 28, 2007, the RTC of Negros Oriental, Branch 34
rendered its Decision, dissolving the parties’ conjugal partnership, awarding all the parcels of land to respondent as
her paraphernal properties; the tools and equipment in favor of petitioner as his exclusive properties; the two (2)
houses standing on Lots 1 and 2142 as co-owned by the parties, the dispositive of which reads: WHEREFORE,
judgment is hereby rendered granting the dissolution of the conjugal partnership of gains between petitioner Willem
Beumer and [respondent] Avelina Amores considering the fact that their marriage was previously annulled by Branch
32 of this Court. The parcels of land covered by Transfer Certificate of Titles Nos. 22846, 21974, 21306, 21307,
23567 and 23575 are hereby declared paraphernal properties of respondent Avelina Amores due to the fact that
while these real properties were acquired by onerous title during their marital union, Willem Beumer, being a
foreigner, is not allowed by law to acquire any private land in the Philippines, except through inheritance. The
personal properties, i.e., tools and equipment mentioned in the complaint which were brought out by Willem from the
conjugal dwelling are hereby declared to be exclusively owned by the petitioner. The two houses standing on the lots
covered by Transfer Certificate of Title Nos. 21974 and 22846 are hereby declared to be coowned by the petitioner
and the respondent since these were acquired 14 Id. 15 Id. Decision 5 G.R. No. 195670 during their marital union
and since there is no prohibition on foreigners from owning buildings and residential units. Petitioner and respondent
are, thereby, directed to subject this court for approval their project of partition on the two house[s] aforementioned.
The Court finds no sufficient justification to award the counterclaim of respondent for attorney’s fees considering the
well settled doctrine that there should be no premium on the right to litigate. The prayer for moral damages are
likewise denied for lack of merit. No pronouncement as to costs. SO ORDERED.16 It ruled that, regardless of the
source of funds for the acquisition of Lots 1, 2142, 5845 and 4, petitioner could not have acquired any right
whatsoever over these properties as petitioner still attempted to acquire them notwithstanding his knowledge of the
constitutional prohibition against foreign ownership of private lands.17 This was made evident by the sworn
statements petitioner executed purporting to show that the subject parcels of land were purchased from the exclusive
funds of his wife, the herein respondent.18 Petitioner’s plea for reimbursement for the amount he had paid to
purchase the foregoing properties on the basis of equity was likewise denied for not having come to court with clean
hands. The CA Ruling Petitioner elevated the matter to the CA, contesting only the RTC’s award of Lots 1, 2142,
5845 and 4 in favor of respondent. He insisted that the money used to purchase the foregoing properties came from
his own capital funds and that they were registered in the name of hisformer wife only 16 Id. at 85-86. 17 Id. at 84,
citing Cheesman v. Intermediate Appellate Court, G.R. No. 74833, January 21, 1991, 193 SCRA 93, 103. 18 Id.
Decision 6 G.R. No. 195670 because of the constitutional prohibition against foreign ownership. Thus, he prayed for
reimbursement of one-half (1/2) of the value of what he had paid in the purchase of the said properties, waiving the
other half in favor of his estranged ex-wife.19 On October 8, 2009, the CA promulgated a Decision20 affirming in toto
the judgment rendered by the RTC of Negros Oriental, Branch 34. The CA stressed the fact that petitioner was “well-
aware of the constitutional prohibition for aliens to acquire lands in the Philippines.”21 Hence, he cannot invoke equity
to support his claim for reimbursement. Consequently, petitioner filed the instant Petition for Review on Certiorari
assailing the CA Decision due to the following error: UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN
NOT SUSTAINING THE PETITIONER’S ATTEMPT AT SUBSEQUENTLY ASSERTING OR CLAIMING A RIGHT OF
HALF OR WHOLE OF THE PURCHASE PRICE USED IN THE PURCHASE OF THE REAL PROPERTIES
SUBJECT OF THIS CASE.22 (Emphasis supplied) The Ruling of the Court The petition lacks merit. The issue to be
resolved is not of first impression. In In Re: Petition For Separation of Property-Elena Buenaventura Muller v. Helmut
Muller23 19 Id. at 91. 20 Id. at 26-38. 21 Id. at 33. 22 Id. at 17. 23 G.R. No. 149615, August 29, 2006, 500 SCRA 65.
Decision 7 G.R. No. 195670 the Court had already denied a claim for reimbursement of the value of purchased
parcels of Philippine land instituted by a foreigner Helmut Muller, against his former Filipina spouse, Elena
Buenaventura Muller. It held that Helmut Muller cannot seek reimbursement on the ground of equity where it is clear
that he willingly and knowingly bought the property despite the prohibition against foreign ownership of Philippine
land24 enshrined under Section 7, Article XII of the 1987 Philippine Constitution which reads: Section 7. Save in
cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain. Undeniably, petitioner openly admitted that he
“is well aware of the [above-cited] constitutional prohibition”25 and even asseverated that, because of such
prohibition, he and respondent registered the subject properties in the latter’s name.26 Clearly, petitioner’s actuations
showed his palpable intent to skirt the constitutional prohibition. On the basis of such admission, the Court finds no
reason why it should not apply the Muller ruling and accordingly, deny petitioner’s claim for reimbursement. As also
explained in Muller, the time-honored principle is that he who seeks equity must do equity, and he who comes into
equity must come with clean hands. Conversely stated, he who has done inequity shall not be accorded equity. Thus,
a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful. 27 24 Id. at 72. 25 Rollo, p. 17. 26 Id. at 18. 27 Supra note 23 at 73, citing
University of the Philippines v. Catungal, Jr., 338 Phil. 728, 734-744 (1997). Decision 8 G.R. No. 195670 In this case,
petitioner’s statements regarding the real source of the funds used to purchase the subject parcels of land dilute the
veracity of his claims: While admitting to have previously executed a joint affidavit that respondent’s personal funds
were used to purchase Lot 1,28 he likewise claimed that his personal disability funds were used to acquire the same.
Evidently, these inconsistencies show his untruthfulness. Thus, as petitioner has come before the Court with unclean
hands, he is now precluded from seeking any equitable refuge. In any event, the Court cannot, even on the grounds
of equity, grant reimbursement to petitioner given that he acquired no right whatsoever over the subject properties by
virtue of its unconstitutional purchase. It is wellestablished that equity as a rule will follow the law and will not permit
that to be done indirectly which, because of public policy, cannot be done directly.29 Surely, a contract that violates
the Constitution and the law is null and void, vests no rights, creates no obligations and produces no legal effect at
all.30 Corollary thereto, under Article 1412 of the Civil Code,31 petitioner cannot have the subject properties deeded
to him or allow him to recover the money he had spent for the purchase thereof. The law will not aid either party to an
illegal contract or agreement; it leaves the parties where it finds them.32 Indeed, one cannot salvage any rights from
an unconstitutional transaction knowingly entered into. 28 Id. at 82. 29 Frenzel v. Catito, G.R. No. 143958, July 11,
2003, 406 SCRA 55, 70. 30 Id. at 69-70, citing Chavez s. Presidential Commission on Good Government, 307 SCRA
394 (1998). 31 Re: Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a
criminal offense, the following rules shall be observed: (1) When the fault is on the part of both contracting parties,
neither may recover what he has given by virtue of the contract, or demand the performance of the other's
undertaking x x x x 32 Id., citing Rellosa v. Hun, 93 Phil. 827 (1953). Decision 9 G.R. No. 195670 Neither can the
Court grant petitioner’s claim for reimbursement on the basis of unjust enrichment.33 As held in Frenzel v. Catito, a
case also involving a foreigner seeking monetary reimbursement for money spent on purchase of Philippine land, the
provision on unjust enrichment does not apply if the action is proscribed by the Constitution, to wit: Futile, too, is
petitioner's reliance on Article 22 of the New Civil Code which reads: Art. 22. Every person who through an act of
performance by another, or any other means, acquires or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same to him. The provision is expressed in the maxim: "MEMO
CUM ALTERIUS DETER DETREMENTO PROTEST" (No person should unjustly enrich himself at the expense of
another). An action for recovery of what has been paid without just cause has been designated as an accion in rem
verso. This provision does not apply if, as in this case, the action is proscribed by the Constitution or by the
application of the pari delicto doctrine. It may be unfair and unjust to bar the petitioner from filing an accion in rem
verso over the subject properties, or from recovering the money he paid for the said properties, but, as Lord
Mansfield stated in the early case of Holman v. Johnson: "The objection that a contract is immoral or illegal as
between the plaintiff and the defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake,
however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has
the advantage of, contrary to the real justice, as between him and the plaintiff."34 (Citations omitted) Nor would the
denial of his claim amount to an injustice based on his foreign citizenship.35 Precisely, it is the Constitution itself
which demarcates the rights of citizens and non-citizens in owning Philippine land. To be sure, the constitutional ban
against foreigners applies only to ownership of Philippine land and not to the improvements built thereon, such as the
two (2) houses standing on Lots 1 and 2142 which were properly declared to be 33 Rollo, p. 20. 34 Supra note 29 at
74, citing I. Tolentino, Civil Code of the Philippines (1990 ), p. 85 and Marissey v. Bologna, 123 So. 2d 537 (1960). 35
Rollo, pp. 19-21. Decision 10 G.R. No. 195670 co-owned by the parties subject to partition. Needless to state, the
purpose of the prohibition is to conserve the national patrimoni6 and it is this policy which the Court is duty-bound to
protect. WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009 Decision and January 24,
201 I Resolution of the Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED

Ocampo vs Ocampo

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the
Decision1 dated August 11, 2010 and Resolution2� dated October 5, 2011, respectively, of the Court of Appeals (CA)
in CA-G.R. CV No. 82318, which denied the petitioner's appeal and motion for reconsideration.

The facts of the case, as culled from the records, are as follows:LawlibraryofCRAlaw

On September 10, 1990, petitioner Virginia Sy Ocampo (Virginia) filed a Petition for Declaration of Nullity of her Marriage
with Deogracio Ocampo (Deogracio) before Regional Trial Court of Quezon City, Branch 87, on the ground of
psychological incapacity, docketed as Civil Case No. Q-90-6616.3redarclaw

On January 22, 1993, the trial court rendered a Decision 4 declaring the marriage between Virginia and Deogracio as
null and void, the dispositive� portion of which reads:LawlibraryofCRAlaw

WHEREFORE, the petition is hereby GRANTED. The marriage between the petitioner and the respondent is hereby
declared null and void from the beginning under Article 36 of the Family Code. The status of their children, however,
shall remain legitimate and their custody is hereby awarded to the petitioner.

As to the couple's property relations, their conjugal partnership of gains shall necessarily be dissolved and liquidated
but since the petitioner has not submitted any detailed and formal listing or inventory of such property, the court cannot
act now on the liquidation aspect. The parties are given thirty (30) days to submit an inventory of their conjugal
partnership for the purpose of liquidation.

IT IS SO ORDERED.5

The decision became final, since no party appealed the judgment annulling the marriage.

On March 31, 1999, the trial court directed the parties to submit a project of partition of their inventoried properties,
and if they failed to do so, a hearing will be held on the factual issues with regard to said properties. Having failed to
agree on a project of partition of their conjugal properties, hearing ensued where the parties adduced evidence in
support of their respective stand.

On January 13, 2004, the trial court rendered the assailed Order6 stating that the properties declared by the parties
belong to each one of them on a 50-50 sharing.

On February 2, 2004, Virginia filed a Notice of Appeal before the trial court.

On February 13, 2004, Deogracio filed a Motion to Deny and/or Dismiss the Notice of Appeal and for immediate
execution pursuant to Section 20 of A.M. No. 02-1-10.
On February 20, 2004, the trial court denied the aforesaid motion to deny and/or dismiss the notice of appeal for lack
of merit.

On March 4, 2004, Deogracio filed a Motion for Reconsideration. On March 22, 2004, the trial court denied anew the
motion for reconsideration.

In the disputed Decision dated August 11, 2010, the Court of Appeals denied Virginia's appeal. Virginia moved for
reconsideration, but was denied� in a Resolution dated October 5, 2011.

Thus, the instant petition for review substantially questioning whether respondent should be deprived of his share in
the conjugal partnership of gains by reason of bad faith and psychological perversity.

The petition lacks merit.

While Virginia and Deogracio tied the marital knot on January 16, 1978, it is still the Family Code provisions on
conjugal partnerships, however, which will govern the property relations between Deogracio and Virginia even if they
were married before the effectivity of the Family Code.

Article 105 of the Family Code explicitly mandates that the Family Code shall apply to conjugal partnerships
established before the Family Code without prejudice to vested rights already acquired under the Civil Code or other
laws. Thus, under the Family Code, if the properties are acquired during the marriage, the presumption is that they
are conjugal. Hence, the burden of proof is on the party claiming that they are not conjugal. This is counter-balanced
by the requirement that the properties must first be proven to have been acquired during the marriage before they are
presumed conjugal.7redarclaw

The applicable law, however, in so far as the liquidation of the conjugal partnership assets and liability is concerned,
is Article 1298 of the Family Code in relation to Article 147 of the Family Code. 9redarclaw

The Court held that in a void marriage, as in those declared void under Article 36 10 of the Family Code, the property
relations of the parties during the period of cohabitation is governed either by Article 147 or Article 148 of the Family
Code.11 Article 147 of the Family Code applies to union of parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is nonetheless void, as in this case. Article 147 of the Family
Code provides:LawlibraryofCRAlaw

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

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

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

When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children
or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination
of the cohabitation.12

This particular kind of co-ownership applies when a man and a woman, suffering no illegal impediment to marry each
other, exclusively live together as husband and wife under a void marriage or without the benefit of marriage. It is
clear, therefore, that for Article 147 to operate, the man and the woman: (1) must be capacitated to marry each other;
(2) live exclusively with each other as husband and wife; and (3) their union is without the benefit of marriage or their
marriage is void, as in the instant case. The term "capacitated" in the first paragraph of the provision pertains to the
legal capacity of a party to contract marriage. Any impediment to marry has not been shown to have existed on the
part of either Virginia or Deogracio. They lived exclusively with each other as husband and wife. However, their
marriage was found to be void under Article 36 of the Family Code on the ground of psychological
incapacity.13redarclaw

From the foregoing, property acquired by both spouses through their work and industry should, therefore, be
governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to
have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall
be considered as having contributed to the same jointly if said party's efforts consisted in the care and maintenance
of the family household.� Efforts in the care and maintenance of the family and household are regarded as
contributions to the acquisition of common property by one who has no salary or income or work or
industry.14redarclaw

Citing Valdes v. RTC,15 the Court held that the court a quo did not commit a reversible error in utilizing Article 147 of
the Family Code and in ruling that the former spouses 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 that they owned in common, the
provisions on co-ownership under the Civil Code should aptly prevail. The rules which are 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, are irrelevant to the liquidation of the co-ownership that exists between common-law
spouses or spouses of void marriages.

Thus, the trial court and the appellate court correctly held that the parties will share on equal shares considering that
Virginia failed to prove that the properties were acquired solely on her own efforts, to wit:LawlibraryofCRAlaw

This Court keenly observes that only testimonial evidence was presented by the parties respectively, to prove and
dispute the claim of the other with regard to the properties and assets acquired during the marriage. In the absence,
therefore, of any documentary evidence to prove the contrary, all the properties acquired by the spouses during the
marriage are presumed conjugal. Further, the testimonial evidence adduced by the petitioner aimed at establishing that
respondent took no part in acquiring said properties failed to convince this Court that the latter be given only a meager
share thereof.

While it may be true that management of the businesses referred to herein may have been actively undertaken by the
petitioner, it cannot be gainsaid that petitioner was able to do so without the invaluable help of respondent. Even a plain
housewife who stays all the time in the house and take[s] care of the household while the husband indulges in lucrative
and gainful activities is entitled to a share in the same proportion the husband is, to the property� or properties acquired
by the marriage. In the same breadth, respondent must be considered to be entitled to the same extent. Petitioner's
claim that the seed money in that business was provided by her mother and that, had it not been for that reason, the
properties now subject of controversy could not have been acquired. That may be true but the Court is not prone to
believe so because of insufficient evidence to prove such contention but petitioner's self-serving allegations. Of course,
attempts to establish respondent as an irresponsible and unfaithful husband, as well as family man were made but the
testimonies adduced towards that end, failed to fully convince the Court that respondent should be punished by
depriving him of his share of the conjugal property because of his indiscretion.16

In the instant case, both the trial and appellate courts agreed that the subject properties were in fact acquired during
the marriage of Virginia and Deogracio. We give due deference to factual findings of trial courts, especially when
affirmed by the appellate court, as in this case. A reversal of this finding can only occur if petitioners show sufficient
reason for us to doubt its correctness. There is none, in this case.

Likewise, we note that the former spouses both substantially agree that they acquired the subject properties during
the subsistence of their marriage.17� The certificates of titles and tax declarations are not sufficient proof to
overcome the presumption under Article 116 of the Family Code. All properties acquired by the spouses during the
marriage, regardless in whose name the properties are registered, are presumed conjugal unless proved otherwise.
The presumption is not rebutted by the mere fact that the certificate of title of the property or the tax declaration is in
the name of one of the spouses only. Article 116 expressly provides that the presumption remains even if the
property is "registered in the name of one or both of the spouses." 18� Thus, the failure of Virginia to rebut this
presumption, said properties were obtained by the spouses' joint efforts, work or industry, and shall be jointly owned
by them in equal shares.� Accordingly, the partition of the former spouses' properties on the basis of co-ownership,
as ordered by the RTC and the appellate court, should be affirmed, and not on the regime of conjugal partnership of
gains.
WHEREFORE, the petition is DENIED. The Decision dated August 11, 2010 and the Resolution dated October 5,
2011 of the Court of Appeals in CA-G.R. CV No. 82318 are AFFIRMED. The case is REMANDED to the trial court for
proper disposition.

SO ORDERED.cralawlawlibrary

Agapay vs Palang (art 148)

ERLINDA A. AGAPAY, petitioner, vs. CARLINA (CORNELIA) V. PALANG and HERMINIA P. DELA
CRUZ, respondents.

DECISION
ROMERO, J.:

Before us is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 24199 entitled Erlinda
Agapay v. Carlina (Cornelia) Palang and Herminia P. Dela Cruz dated June 22, 1994 involving the ownership of two
parcels of land acquired during the cohabitation of petitioner and private respondents legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949 when he took private respondent Carlina (or Cornelia)
Vallesterol as a wife at the Pozorrubio Roman Catholic Church in Pangasinan. A few months after the wedding, in
October 1949, he left to work in Hawaii. Miguel and Carlinas only child, Herminia Palang, was born on May 12, 1950.
Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and during the entire duration of
his year-long sojourn he stayed in Zambales with his brother, not in Pangasinan with his wife and child. The trial court
found evidence that as early as 1957, Miguel had attempted to divorce Carlina in Hawaii.[1] When he returned for good
in 1972, he refused to live with private respondents, but stayed alone in a house in Pozorrubio, Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel contracted his second marriage with nineteen-year-old
Erlinda Agapay, herein petitioner.[2] Two months earlier, on May 17, 1973, Miguel and Erlinda, as evidenced by the
Deed of Sale, jointly purchased a parcel of agricultural land located at San Felipe, Binalonan, Pangasinan with an area
of 10,080 square meters. Consequently, Transfer Certificate of Title No. 101736 covering said rice land was issued in
their names.
A house and lot in Binalonan, Pangasinan was likewise purchased on September 23, 1975, allegedly by Erlinda
as the sole vendee. TCT No. 143120 covering said property was later issued in her name.
On October 30, 1975, Miguel and Cornelia Palang executed a Deed of Donation as a form of compromise
agreement to settle and end a case filed by the latter. [3] The parties therein agreed to donate their conjugal property
consisting of six parcels of land to their only child, Herminia Palang. [4]
Miguel and Erlindas cohabitation produced a son, Kristopher A. Palang, born on December 6, 1977. In 1979,
Miguel and Erlinda were convicted of Concubinage upon Carlinas complaint. [5] Two years later, on February 15, 1981,
Miguel died.
On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz, herein private respondents,
instituted the case at bar, an action for recovery of ownership and possession with damages against petitioner before
the Regional Trial Court in Urdaneta, Pangasinan (Civil Case No. U-4265). Private respondents sought to get back the
riceland and the house and lot both located at Binalonan, Pangasinan allegedly purchased by Miguel during his
cohabitation with petitioner.
Petitioner, as defendant below, contended that while the riceland covered by TCT No. 101736 is registered in
their names (Miguel and Erlinda), she had already given her half of the property to their son Kristopher Palang. She
added that the house and lot covered by TCT No. 143120 is her sole property, having bought the same with her own
money.Erlinda added that Carlina is precluded from claiming aforesaid properties since the latter had already donated
their conjugal estate to Herminia.
After trial on the merits, the lower court rendered its decision on June 30, 1989 dismissing the complaint after
declaring that there was little evidence to prove that the subject properties pertained to the conjugal property of Carlina
and Miguel Palang. The lower court went on to provide for the intestate shares of the parties, particularly of Kristopher
Palang, Miguels illegitimate son. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered-

1) Dismissing the complaint, with costs against plaintiffs;

2) Confirming the ownership of defendant Erlinda Agapay of the residential lot located at Poblacion, Binalonan,
Pangasinan, as evidenced by TCT No. 143120, Lot 290-B including the old house standing therein;

3) Confirming the ownership of one-half (1/2) portion of that piece of agricultural land situated at Balisa, San Felipe,
Binalonan, Pangasinan, consisting of 10,080 square meters and as evidenced by TCT No. 101736, Lot 1123-A to
Erlinda Agapay;

4) Adjudicating to Kristopher Palang as his inheritance from his deceased father, Miguel Palang, the one-half (1/2) of
the agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan, under TCT No. 101736 in the name of
Miguel Palang, provided that the former (Kristopher) executes, within 15 days after this decision becomes final and
executory, a quit-claim forever renouncing any claims to annul/reduce the donation to Herminia Palang de la Cruz of
all conjugal properties of her parents, Miguel Palang and Carlina Vallesterol Palang, dated October 30, 1975,
otherwise, the estate of deceased Miguel Palang will have to be settled in another separate action;

5) No pronouncement as to damages and attorneys fees.

SO ORDERED.[6]

On appeal, respondent court reversed the trial courts decision. The Court of Appeals rendered its decision on July
22, 1994 with the following dispositive portion:

WHEREFORE, PREMISES CONSIDERED, the appealed decision is hereby REVERSED and another one entered:

1. Declaring plaintiffs-appellants the owners of the properties in question;

2. Ordering defendant-appellee to vacate and deliver the properties in question to herein plaintiffs-appellants;

3. Ordering the Register of Deeds of Pangasinan to cancel Transfer Certificate of Title Nos. 143120 and 101736 and
to issue in lieu thereof another certificate of title in the name of plaintiffs-appellants.

No pronouncement as to costs.[7]

Hence, this petition.

Petitioner claims that the Court of Appeals erred in not sustaining the validity of two deeds of absolute sale
covering the riceland and the house and lot, the first in favor of Miguel Palang and Erlinda Agapay and the second, in
favor of Erlinda Agapay alone. Second, petitioner contends that respondent appellate court erred in not declaring
Kristopher A. Palang as Miguel Palangs illegitimate son and thus entitled to inherit from Miguels estate. Third,
respondent court erred, according to petitioner, in not finding that there is sufficient pleading and evidence that Kristoffer
A. Palang or Christopher A. Palang should be considered as party-defendant in Civil Case No. U-4625 before the trial
court and in CA-G.R. No. 24199.[8]
After studying the merits of the instant case, as well as the pertinent provisions of law and jurisprudence, the Court
denies the petition and affirms the questioned decision of the Court of Appeals.
The first and principal issue is the ownership of the two pieces of property subject of this action. Petitioner assails
the validity of the deeds of conveyance over the same parcels of land. There is no dispute that the transfers of
ownership from the original owners of the riceland and the house and lot, Corazon Ilomin and the spouses Cespedes,
respectively, were valid.
 The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. The provision of law applicable
here is Article 148 of the Family Code providing for cases of cohabitation when a man and a woman who
are not capacitated to marry each other live exclusively with each other as husband and wife without the benefit of
marriage or under a void marriage. While Miguel and Erlinda contracted marriage on July 15, 1973, said union was
patently void because the earlier marriage of Miguel and Carlina was still susbsisting and unaffected by the latters de
facto separation.
Under Article 148, only the properties acquired by both of the parties through their actual joint contribution of
money, property or industry shall be owned by them in common in proportion to their respective contributions. It must
be stressed that actual contribution is required by this provision, in contrast to Article 147 which states that efforts in
the care and maintenance of the family and household, are regarded as contributions to the acquisition of common
property by one who has no salary or income or work or industry. If the actual contribution of the party is not proved,
there will be no co-ownership and no presumption of equal shares. [9]
In the case at bar, Erlinda tried to establish by her testimony that she is engaged in the business of buy and sell
and had a sari-sari store[10] but failed to persuade us that she actually contributed money to buy the subject
riceland. Worth noting is the fact that on the date of conveyance, May 17, 1973, petitioner was only around twenty
years of age and Miguel Palang was already sixty-four and a pensioner of the U.S. Government. Considering her
youthfulness, it is unrealistic to conclude that in 1973 she contributed P3,750.00 as her share in the purchase price of
subject property,[11] there being no proof of the same.
Petitioner now claims that the riceland was bought two months before Miguel and Erlinda actually cohabited. In
the nature of an afterthought, said added assertion was intended to exclude their case from the operation of Article 148
of the Family Code. Proof of the precise date when they commenced their adulterous cohabitation not having been
adduced, we cannot state definitively that the riceland was purchased even before they started living together. In any
case, even assuming that the subject property was bought before cohabitation, the rules of co-ownership would still
apply and proof of actual contribution would still be essential.
Since petitioner failed to prove that she contributed money to the purchase price of the riceland in Binalonan,
Pangasinan, we find no basis to justify her co-ownership with Miguel over the same. Consequently, the riceland should,
as correctly held by the Court of Appeals, revert to the conjugal partnership property of the deceased Miguel and private
respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina previously agreed to donate their conjugal property in favor
of their daughter Herminia in 1975. The trial court erred in holding that the decision adopting their compromise
agreement in effect partakes the nature of judicial confirmation of the separation of property between spouses and the
termination of the conjugal partnership.[12] Separation of property between spouses during the marriage shall not take
place except by judicial order or without judicial conferment when there is an express stipulation in the marriage
settlements.[13] The judgment which resulted from the parties compromise was not specifically and expressly for
separation of property and should not be so inferred.
With respect to the house and lot, Erlinda allegedly bought the same for P20,000.00 on September 23, 1975 when
she was only 22 years old. The testimony of the notary public who prepared the deed of conveyance for the property
reveals the falsehood of this claim. Atty. Constantino Sagun testified that Miguel Palang provided the money for the
purchase price and directed that Erlindas name alone be placed as the vendee. [14]
The transaction was properly a donation made by Miguel to Erlinda, but one which was clearly void and inexistent
by express provision of law because it was made between persons guilty of adultery or concubinage at the time of the
donation, under Article 739 of the Civil Code. Moreover, Article 87 of the Family Code expressly provides that the
prohibition against donations between spouses now applies to donations between persons living together as husband
and wife without a valid marriage,[15] for otherwise, the condition of those who incurred guilt would turn out to be better
than those in legal union.[16]
The second issue concerning Kristopher Palangs status and claim as an illegitimate son and heir to Miguels estate
is here resolved in favor of respondent courts correct assessment that the trial court erred in making pronouncements
regarding Kristophers heirship and filiation inasmuch as questions as to who are the heirs of the decedent, proof of
filiation of illegitimate children and the determination of the estate of the latter and claims thereto should be ventilated
in the proper probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of ownership and possession. [17]
As regards the third issue, petitioner contends that Kristopher Palang should be considered as party-defendant
in the case at bar following the trial courts decision which expressly found that Kristopher had not been impleaded as
party defendant but theorized that he had submitted to the courts jurisdiction through his mother/guardian ad
litem.[18]The trial court erred gravely. Kristopher, not having been impleaded, was, therefore, not a party to the case at
bar. His mother, Erlinda, cannot be called his guardian ad litem for he was not involved in the case at bar. Petitioner
adds that there is no need for Kristopher to file another action to prove that he is the illegitimate son of Miguel, in order
to avoid multiplicity of suits.[19] Petitioners grave error has been discussed in the preceeding paragraph where the need
for probate proceedings to resolve the settlement of Miguels estate and Kristophers successional rights has been
pointed out.
WHEREFORE, the instant petition is hereby DENIED. The questioned decision of the Court of Appeals is
AFFIRMED. Costs against petitioner.
SO ORDERED.

EUSTAQUIO MALLILIN, JR., petitioner, vs. MA. ELVIRA CASTILLO, respondent.

DECISION

MENDOZA, J.: batas

This is a petition for review of the amended decision[1] of the Court of Appeals dated May 7, 1998 in CA G.R. CV No.
48443 granting respondents motion for reconsideration of its decision dated November 7, 1996, and of the resolution
dated December 21, 1998 denying petitioners motion for reconsideration.

The factual and procedural antecedents are as follows:

On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint [2] for "Partition and/or Payment of Co-
Ownership Share, Accounting and Damages" against respondent Ma. Elvira Castillo. The complaint, docketed as
Civil Case No. 93-656 at the Regional Trial Court in Makati City, alleged that petitioner and respondent, both married
and with children, but separated from their respective spouses, cohabited after a brief courtship sometime in 1979
while their respective marriages still subsisted. During their union, they set up the Superfreight Customs Brokerage
Corporation, with petitioner as president and chairman of the board of directors, and respondent as vice-president
and treasurer. The business flourished and petitioner and respondent acquired real and personal properties which
were registered solely in respondents name. In 1992, due to irreconcilable differences, the couple separated.
Petitioner demanded from respondent his share in the subject properties, but respondent refused alleging that said
properties had been registered solely in her name.

In her Amended Answer,[3] respondent admitted that she engaged in the customs brokerage business with petitioner
but alleged that the Superfreight Customs Brokerage Corporation was organized with other individuals and duly
registered with the Securities and Exchange Commission in 1987. She denied that she and petitioner lived as
husband and wife because the fact was that they were still legally married to their respective spouses. She claimed to
be the exclusive owner of all real and personal properties involved in petitioners action for partition on the ground that
they were acquired entirely out of her own money and registered solely in her name.

On November 25, 1994, respondent filed a Motion for Summary Judgment, [4] in accordance with Rule 34 of the Rules
of Court.[5] She contended that summary judgment was proper, because the issues raised in the pleadings were
sham and not genuine, to wit: CODES

A.

The main issue is -- Can plaintiff validly claim the partition and/or payment of co-
ownership share, accounting and damages, considering that plaintiff and defendant are
admittedly both married to their respective spouses under still valid and subsisting
marriages, even assuming as claimed by plaintiff, that they lived together as husband and wife
without benefit of marriage? In other words, can the parties be considered as co-owners of the
properties, under the law, considering the present status of the parties as both married and
incapable of marrying each other, even assuming that they lived together as husband and wife (?)

B.
 As a collateral issue, can the plaintiff be considered as an unregistered co-owner of the real
properties under the Transfer Certificates of Title duly registered solely in the name of
defendant Ma. Elvira Castillo? This issue is also true as far as the motor vehicles in question are
concerned which are also registered in the name of defendant. [6]

On the first point, respondent contended that even if she and petitioner actually cohabited, petitioner could not validly
claim a part of the subject real and personal properties because Art. 144 of the Civil Code, which provides that the
rules on co-ownership shall govern the properties acquired by a man and a woman living together as husband and
wife but not married, or under a marriage which is void ab initio, applies only if the parties are not in any way
incapacitated to contract marriage.[7] In the parties case, their union suffered the legal impediment of a prior
subsisting marriage. Thus, the question of fact being raised by petitioner, i.e., whether they lived together as husband
and wife, was irrelevant as no co-ownership could exist between them.

As to the second issue, respondent maintained that petitioner can not be considered an unregistered co-owner of the
subject properties on the ground that, since titles to the land are solely in her name, to grant petitioners prayer would
be to allow a collateral attack on the validity of such titles.

Petitioner opposed respondents Motion for Summary Judgment. [8] He contended that the case presented genuine
factual issues and that Art. 144 of the Civil Code had been repealed by the Family Code which now allows, under Art.
148, a limited co-ownership even though a man and a woman living together are not capacitated to marry each other.
Petitioner also asserted that an implied trust was constituted when he and respondent agreed to register the
properties solely in the latters name although the same were acquired out of the profits made from their brokerage
business. Petitioner invoked the following provisions of the Civil Code: yacats

Art. 1452. If two or more persons agree to purchase property and by common consent the legal title
is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of
the others in proportion to the interest of each.

Art. 1453. When the property is conveyed to a person in reliance upon his declared intention to
hold it for, or transfer it to another grantor, there is an implied trust in favor of the person whose
benefit is contemplated.

On January 30, 1995, the trial court rendered its decision [9] granting respondents motion for summary judgment. It
ruled that an examination of the pleadings shows that the issues involved were purely legal. The trial court also
sustained respondents contention that petitioners action for partition amounted to a collateral attack on the validity of
the certificates of title covering the subject properties. It held that even if the parties really had cohabited, the action
for partition could not be allowed because an action for partition among co-owners ceases to be so and becomes one
for title if the defendant, as in the present case, alleges exclusive ownership of the properties in question. For these
reasons, the trial court dismissed Civil Case No. 93-656.

On appeal, the Court of Appeals on November 7, 1996, ordered the case remanded to the court of origin for trial on
the merits. It cited the decision in Roque v. Intermediate Appellate Court[10] to the effect that an action for partition is
at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the
properties involved. If the defendant asserts exclusive title over the property, the action for partition should not be
dismissed. Rather, the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-
owner, the court should dismiss the action, not because the wrong remedy was availed of, but because no basis
exists for requiring the defendant to submit to partition. Resolving the issue whether petitioners action for partition
was a collateral attack on the validity of the certificates of title, the Court of Appeals held that since petitioner sought
to compel respondent to execute documents necessary to effect transfer of what he claimed was his share, petitioner
was not actually attacking the validity of the titles but in fact, recognized their validity. Finally, the appellate court
upheld petitioners position that Art. 144 of the Civil Code had been repealed by Art. 148 of the Family Code. haideem

Respondent moved for reconsideration of the decision of the Court of Appeals. On May 7, 1998, nearly two years
after its first decision, the Court of Appeals granted respondents motion and reconsidered its prior decision. In its
decision now challenged in the present petition, it held

Prefatorily, and to better clarify the controversy on whether this suit is a collateral attack on the
titles in issue, it must be underscored that plaintiff-appellant alleged in his complaint that all the nine
(9) titles are registered in the name of defendant-appellee, Ma. Elvira T. Castillo, except one which
 appears in the name of Eloisa Castillo (see par. 9, Complaint). However, a verification of the
annexes of such initiatory pleading shows some discrepancies, to wit:

1. TCT No. 149046 (Annex A) =.Elvira T. Castillo, single

2. TCT No. 168208 ( Annex B) =..........-do-

3. TCT No. 37046 (Annex C) =..........-do-

4. TCT No. 37047 (Annex D) = ..... ...-do-

5. TCT No. 37048 (Annex E) =..........-do-

6. TCT No. 30368 (Annex F) =.Steelhaus Realty & Dev. Corp.

7. TCT No. 30369 (Annex G) =..........-do-

8. TCT No. 30371 (Annex F) =..........-do-

9.TCT No. (92323) 67881 (Annex I) = Eloisa Castillo

hustisya

In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner of the real properties covered
by the above listed titles and eventually for their partition [par. (a), Prayer; p. 4 Records]. Notably, in
order to achieve such prayer for a joint co-ownership declaration, it is unavoidable that the
individual titles involved be altered, changed, canceled or modified to include therein the name of
the appellee as a registered 1/2 co-owner. Yet, no cause of action or even a prayer is contained in
the complaint filed. Manifestly, absent any cause or prayer for the alteration, cancellation,
modification or changing of the titles involved, the desired declaration of co-ownership and eventual
partition will utterly be an indirect or collateral attack on the subject titles in this suit.

It is here that We fell into error, such that, if not rectified will surely lead to a procedural lapse and a
possible injustice. Well settled is the rule that a certificate of title cannot be altered, modified or
canceled except in a direct proceeding in accordance with law. Jksm

In this jurisdiction, the remedy of the landowner whose property has been wrongfully or erroneously
registered in another name is, after one year from the date of the decree, not to set aside the
decree, but respecting it as incontrovertible and no longer open to review, to bring an action for
reconveyance or, if the property had passed into the hands of an innocent purchaser for value, for
damages. Verily, plaintiff-appellant should have first pursued such remedy or any other relief
directly attacking the subject titles before instituting the present partition suit. Apropos, the case at
bench appears to have been prematurely filed.

Lastly, to grant the partition prayed for by the appellant will in effect rule and decide against the
properties registered in the names of Steelhouse Realty and Development Corporation and Eloisa
Castillo, who are not parties in the case. To allow this to happen will surely result to injustice and
denial of due process of law. . . .[11]

Petitioner moved for reconsideration but his motion was denied by the Court of Appeals in its resolution dated
December 21, 1998. Hence this petition.

Petitioner contends that: (1) the Court of Appeals, in its first decision of November 7, 1996, was correct in applying
the Roque ruling and in rejecting respondents claim that she was the sole owner of the subject properties and that the
partition suit was a collateral attack on the titles; (2) the Court of Appeals correctly ruled in its first decision that Art.
148 of the Family Code governs the co-ownership between the parties, hence, the complaint for partition is proper;
(3) with respect to the properties registered in the name of Steelhouse Realty, respondent admitted ownership thereof
and, at the very least, these properties could simply be excluded and the partition limited to the remaining real and
personal properties; and (4) the Court of Appeals erred in not holding that under the Civil Code, there is an implied
trust in his favor.[12]

The issue in this case is really whether summary judgment, in accordance with Rule 35 of the Rules of Court, is
proper. We rule in the negative.

First. Rule 35, 3 of the Rules of Court provides that summary judgment is proper only when, based on the pleadings,
depositions, and admissions on file, and after summary hearing, it is shown that except as to the amount of damages,
there is no veritable issue regarding any material fact in the action and the movant is entitled to judgment as a matter
of law.[13] Conversely, where the pleadings tender a genuine issue, i.e., an issue of fact the resolution of which calls
for the presentation of evidence, as distinguished from an issue which is sham, fictitious, contrived, set-up in bad
faith, or patently unsubstantial, summary judgment is not proper.[14] Chiefx

In the present case, we are convinced that genuine issues exist. Petitioner anchors his claim of co-ownership on two
factual grounds: first, that said properties were acquired by him and respondent during their union from 1979 to 1992
from profits derived from their brokerage business; and second, that said properties were registered solely in
respondents name only because they agreed to that arrangement, thereby giving rise to an implied trust in
accordance with Art. 1452 and Art. 1453 of the Civil Code. These allegations are denied by respondent. She denies
that she and petitioner lived together as husband and wife. She also claims that the properties in question were
acquired solely by her with her own money and resources. With such conflicting positions, the only way to ascertain
the truth is obviously through the presentation of evidence by the parties.

The trial court ruled that it is immaterial whether the parties actually lived together as husband and wife because Art.
144 of the Civil Code can not be made to apply to them as they were both incapacitated to marry each other. Hence,
it was impossible for a co-ownership to exist between them.

We disagree.

Art. 144 of the Civil Code provides:

When a man and a woman live together as husband and wife, but they are not married, or their
marriage is void from the beginning, the property acquired by either or both of them through their
work or industry or their wages and salaries shall be governed by the rules on co-ownership.

This provision of the Civil Code, applies only to cases in which a man and a woman live together as husband and
wife without the benefit of marriage provided they are not incapacitated or are without impediment to marry each
other,[15] or in which the marriage is void ab initio, provided it is not bigamous. Art. 144, therefore, does not cover
parties living in an adulterous relationship. However, Art. 148 of the Family Code now provides for a limited co-
ownership in cases where the parties in union are incapacitated to marry each other. It states:

In cases of cohabitation not falling under the preceding article, [16] 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 credits. HTML

If one of the parties is validly married to another, his or her share in the co-ownership shall accrue
to the absolute community or conjugal partnership existing in such valid marriage. If the party who
acted in bad faith is not validly married to another, his or her share shall be forfeited in the manner
provided in the last paragraph of the preceding article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.

It was error for the trial court to rule that, because the parties in this case were not capacitated to marry each other at
the time that they were alleged to have been living together, they could not have owned properties in common. The
Family Code, in addition to providing that a co-ownership exists between a man and a woman who live together as
husband and wife without the benefit of marriage, likewise provides that, if the parties are incapacitated to marry each
other, properties acquired by them through their joint contribution of money, property or industry shall be owned by
them in common in proportion to their contributions which, in the absence of proof to the contrary, is presumed to be
equal. There is thus co-ownership eventhough the couple are not capacitated to marry each other.

In this case, there may be a co-ownership between the parties herein. Consequently, whether petitioner and
respondent cohabited and whether the properties involved in the case are part of the alleged co-ownership are
genuine and material. All but one of the properties involved were alleged to have been acquired after the Family
Code took effect on August 3, 1988. With respect to the property acquired before the Family Code took effect if it is
shown that it was really acquired under the regime of the Civil Code, then it should be excluded.

Petitioner also alleged in paragraph 7 of his complaint that:

Due to the effective management, hardwork and enterprise of plaintiff assisted by defendant, their
customs brokerage business grew and out of the profits therefrom, the parties acquired real and
personal properties which were, upon agreement of the parties, listed and registered in defendants
name with plaintiff as the unregistered co-owner of all said properties.[17] Esmsc

On the basis of this, he contends that an implied trust existed pursuant to Art. 1452 of the Civil Code which provides
that "(I)f two or more persons agree to purchase property and by common consent the legal title is taken in the name
of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest
of each." We do not think this is correct. The legal relation of the parties is already specifically covered by Art. 148 of
the Family Code under which all the properties acquired by the parties out of their actual joint contributions of money,
property or industry shall constitute a co-ownership. Co-ownership is a form of trust and every co-owner is a trustee
for the other.[18] The provisions of Art. 1452 and Art. 1453 of the Civil Code, then are no longer material since a trust
relation already inheres in a co-ownership which is governed under Title III, Book II of the Civil Code.

Second. The trial court likewise dismissed petitioners action on the ground that the same amounted to a collateral
attack on the certificates of title involved. As already noted, at first, the Court of Appeals ruled that petitioners action
does not challenge the validity of respondents titles. However, on reconsideration, it reversed itself and affirmed the
trial court. It noted that petitioners complaint failed to include a prayer for the alteration, cancellation, modification, or
changing of the titles involved. Absent such prayer, the appellate court ruled that a declaration of co-ownership and
eventual partition would involve an indirect or collateral attack on the titles. We disagree.

A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D. No. 1529, [19] 48 provides that a
certificate of title shall not be subject to collateral attack and can not be altered, modified, or canceled except in a
direct proceeding. When is an action an attack on a title? It is when the object of the action or proceeding is to nullify
the title, and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the
object of an action or proceeding is to annul or set aside such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is
nevertheless made as an incident thereof.[20]

In his complaint for partition, consistent with our ruling in Roque regarding the nature of an action for partition,
petitioner seeks first, a declaration that he is a co-owner of the subject properties; and second, the conveyance of his
lawful shares. He does not attack respondents titles. Petitioner alleges no fraud, mistake, or any other irregularity that
would justify a review of the registration decree in respondents favor. His theory is that although the subject
properties were registered solely in respondents name, but since by agreement between them as well as under the
Family Code, he is co-owner of these properties and as such is entitled to the conveyance of his shares. On the
premise that he is a co-owner, he can validly seek the partition of the properties in co-ownership and the conveyance
to him of his share. Esmmis

Thus, in Guevara v. Guevara,[21] in which a parcel of land bequeathed in a last will and testament was registered in
the name of only one of the heirs, with the understanding that he would deliver to the others their shares after the
debts of the original owner had been paid, this Court ruled that notwithstanding the registration of the land in the
name of only one of the heirs, the other heirs can claim their shares in "such action, judicial or extrajudicial, as may
be necessary to partition the estate of the testator."[22]

Third. The Court of Appeals also reversed its first decision on the ground that to order partition will, in effect, rule and
decide against Steelhouse Realty Development Corporation and Eloisa Castillo, both strangers to the present case,
as to the properties registered in their names. This reasoning, however, ignores the fact that the majority of the
properties involved in the present case are registered in respondents name, over which petitioner claims rights as a
co-owner. Besides, other than the real properties, petitioner also seeks partition of a substantial amount of personal
properties consisting of motor vehicles and several pieces of jewelry. By dismissing petitioners complaint for partition
on grounds of due process and equity, the appellate court unwittingly denied petitioner his right to prove ownership
over the claimed real and personal properties. The dismissal of petitioners complaint is unjustified since both ends
may be amply served by simply excluding from the action for partition the properties registered in the name of
Steelhouse Realty and Eloisa Castillo.

WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is REVERSED and the case is
REMANDED to the Regional Trial Court, Branch 59, Makati City for further proceedings on the merits.

SO ORDERED.

JACINTO SAGUID, petitioner, vs. HON. COURT OF APPEALS, THE REGIONAL TRIAL COURT, BRANCH 94,
BOAC, MARINDUQUE and GINA S. REY, respondents.

DECISION
YNARES-SANTIAGO, J.:

The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to
marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said
cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven
actual contribution of money, property or industry. Absent proof of the extent thereof, their contributions and
corresponding shares shall be presumed to be equal. [1]
Seventeen-year old Gina S. Rey was married,[2] but separated de facto from her husband, when she met
petitioner Jacinto Saguid in Marinduque, sometime in July 1987. [3]After a brief courtship, the two decided to cohabit as
husband and wife in a house built on a lot owned by Jacintos father.[4] Their cohabitation was not blessed with any
children.Jacinto made a living as the patron of their fishing vessel Saguid Brothers.[5] Gina, on the other hand, worked
as a fish dealer, but decided to work as an entertainer in Japan from 1992 to 1994 when her relationship with Jacintos
relatives turned sour. Her periodic absence, however, did not ebb away the conflict with petitioners relatives. In 1996,
the couple decided to separate and end up their 9-year cohabitation.[6]
On January 9, 1997, private respondent filed a complaint for Partition and Recovery of Personal Property with
Receivership against the petitioner with the Regional Trial Court of Boac, Marinduque. She alleged that from her salary
of $1,500.00 a month as entertainer in Japan, she was able to contribute P70,000.00 in the completion of their
unfinished house. Also, from her own earnings as an entertainer and fish dealer, she was able to acquire and
accumulate appliances, pieces of furniture and household effects, with a total value of P111,375.00. She prayed that
she be declared the sole owner of these personal properties and that the amount of P70,000.00, representing her
contribution to the construction of their house, be reimbursed to her.
Private respondent testified that she deposited part of her earnings in her savings account with First Allied
Development Bank.[7] Her Pass Book shows that as of May 23, 1995, she had a balance of P21,046.08. [8] She further
stated that she had a total of P35,465.00[9] share in the joint account deposit which she and the petitioner maintained
with the same bank.[10] Gina declared that said deposits were spent for the purchase of construction materials,
appliances and other personal properties.[11]
In his answer[12] to the complaint, petitioner claimed that the expenses for the construction of their house were
defrayed solely from his income as a captain of their fishing vessel. He averred that private respondents meager income
as fish dealer rendered her unable to contribute in the construction of said house. Besides, selling fish was a mere
pastime to her; as such, she was contented with the small quantity of fish allotted to her from his fishing trips. Petitioner
further contended that Gina did not work continuously in Japan from 1992 to 1994, but only for a 6-month duration each
year. When their house was repaired and improved sometime in 1995-1996, private respondent did not share in the
expenses because her earnings as entertainer were spent on the daily needs and business of her parents. From his
income in the fishing business, he claimed to have saved a total of P130,000.00, P75,000.00 of which was placed in a
joint account deposit with private respondent. This savings, according to petitioner was spent in purchasing the disputed
personal properties.
 On May 21, 1997, the trial court declared the petitioner as in default for failure to file a pre-trial brief as required
by Supreme Court Circular No. 1-89.[13]
On May 26, 1997, petitioner filed a motion for reconsideration [14] of the May 21, 1997 order, which was denied on
June 2, 1997, and private respondent was allowed to present evidence ex parte.[15] Petitioner filed another motion for
reconsideration but the same was also denied on October 8, 1997.
On July 15, 1998, a decision[16] was rendered in favor of private respondent, the dispositive portion of which reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiff Gina S. Rey against
defendant Jacinto Saguid:

a) Ordering the partition of the house identified as plaintiffs Exhibit C and D and directing the defendant to return
and/or reimburse to the plaintiff the amount of seventy thousand pesos (P70,000,00) which the latter actually
contributed to its construction and completion;

b) Declaring the plaintiff as the exclusive owner of the personal properties listed on Exhibit M;

c) Ordering the defendant, and/or anyone in possession of the aforesaid personal properties, to return and/or deliver
the same to the plaintiff; and

d) Ordering the defendant to pay the plaintiff moral damages in the sum of fifty thousand pesos (P50,000.00) plus the
costs of suit.

SO ORDERED.[17]

On appeal, said decision was affirmed by the Court of Appeals; however, the award of P50,000.00 as moral
damages was deleted for lack of basis.[18] The appellate court ruled that the propriety of the order which declared the
petitioner as in default became moot and academic in view of the effectivity of the 1997 Rules of Civil Procedure. It
explained that the new rules now require the filing of a pre-trial brief and the defendants non-compliance therewith
entitles the plaintiff to present evidence ex parte.
Both parties filed motions for reconsideration which were denied; hence, petitioner filed the instant petition based
on the following assigned errors:
A.

THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE ERROR IN APPLYING

RETROACTIVELY THE 1997 RULES OF CIVIL PROCEDURE IN THE PRESENT CASE AND HOLDING THE
FIRST ASSIGNED ERROR THEREIN MOOT AND ACADEMIC THUS, FAILED TO RULE ON THE PROPRIETY OF
THE TRIAL COURTS REFUSAL TO SET ASIDE THE ORDER OF DEFAULT DUE TO MISTAKE AND/OR
EXCUSABLE NEGLIGENCE COMMITTED BY PETITIONER.

B.

THE HONORABLE COURT OF APPEALS COMMIT[TED] A REVERSIBLE ERROR IN RELYING ON THE

FACTUAL FINDINGS OF THE TRIAL COURT WHICH RECEIVED THE EVIDENCE OF HEREIN RESPONDENT
ONLY EX PARTE.[19]

The issues for resolution are: (1) whether or not the trial court erred in allowing private respondent to present
evidence ex parte; and (2) whether or not the trial courts decision is supported by evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the failure of the defendant to file a pre-trial brief
shall have the same effect as failure to appear at the pre-trial, i.e., the plaintiff may present his evidence ex parte and
the court shall render judgment on the basis thereof.[20] The remedy of the defendant is to file a motion for
reconsideration[21] showing that his failure to file a pre-trial brief was due to fraud, accident, mistake or excusable
neglect.[22] The motion need not really stress the fact that the defendant has a valid and meritorious defense because
his answer which contains his defenses is already on record. [23]
 In the case at bar, petitioner insists that his failure to file a pre-trial brief is justified because he was not represented
by counsel. This justification is not, however, sufficient to set aside the order directing private respondent to present
evidence ex parte, inasmuch as the petitioner chose at his own risk not to be represented by counsel. Even without the
assistance of a lawyer, petitioner was able to file a motion for extension to file answer, [24] the required answer stating
therein the special and affirmative defenses, [25] and several other motions.[26] If it were true that petitioner did not
understand the import of the April 23, 1997 order directing him to file a pre-trial brief, he could have inquired from the
court or filed a motion for extension of time to file the brief. Instead, he waited until May 26, 1997, or 14 days from his
alleged receipt of the April 23, 1997 order before he filed a motion asking the court to excuse his failure to file a
brief. Pre-trial rules are not to be belittled or dismissed because their non-observance may result in prejudice to a partys
substantive rights. Like all rules, they should be followed except only for the most persuasive of reasons when they
may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not
complying with the procedure prescribed.[27]
In the instant case, the fact that petitioner was not assisted by a lawyer is not a persuasive reason to relax the
application of the rules. There is nothing in the Constitution which mandates that a party in a non-criminal proceeding
be represented by counsel and that the absence of such representation amounts to a denial of due process. The
assistance of lawyers, while desirable, is not indispensable. The legal profession is not engrafted in the due process
clause such that without the participation of its members the safeguard is deemed ignored or violated. [28]
However, the Court of Appeals erred in ruling that the effectivity of the 1997 Rules of Civil Procedure, specifically,
Section 6, Rule 18 thereof, rendered moot and academic the issue of whether or not the plaintiff may be allowed to
present evidence ex parte for failure of the defendant to file a pre-trial brief. While the rules may indeed be applied
retroactively, the same is not called for in the case at bar. Even before the 1997 Rules of Civil Procedure took effect on
July 1, 1997, the filing of a pre-trial brief was required under Circular No. 1-89 which became effective on February 1,
1989. Pursuant to the said circular, [f]ailure to file pre-trial briefs may be given the same effect as the failure to appear
at the pre-trial, that is, the party may be declared non-suited or considered as in default.[29]
Coming now to the substantive issue, it is not disputed that Gina and Jacinto were not capacitated to marry each
other because the former was validly married to another man at the time of her cohabitation with the latter. Their
property regime therefore is governed by Article 148 [30] of the Family Code, which applies to bigamous marriages,
adulterous relationships, relationships in a state of concubinage, relationships where both man and woman are married
to other persons, and multiple alliances of the same married man.Under this regime, 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 ...[31] Proof of actual contribution is required.[32]
In the case at bar, although the adulterous cohabitation of the parties commenced in 1987, which is before the
date of the effectivity of the Family Code on August 3, 1998, Article 148 thereof applies because this provision was
intended precisely to fill up the hiatus in Article 144 of the Civil Code.[33] Before Article 148 of the Family Code was
enacted, there was no provision governing property relations of couples living in a state of adultery or
concubinage. Hence, even if the cohabitation or the acquisition of the property occurred before the Family Code took
effect, Article 148 governs.[34]
In the cases of Agapay v. Palang,[35] and Tumlos v. Fernandez,[36] which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that
proof of actual contribution in the acquisition of the property is essential. The claim of co-ownership of the petitioners
therein who were parties to the bigamous and adulterous union is without basis because they failed to substantiate
their allegation that they contributed money in the purchase of the disputed properties. Also in Adriano v. Court of
Appeals,[37] we ruled that the fact that the controverted property was titled in the name of the parties to an adulterous
relationship is not sufficient proof of co-ownership absent evidence of actual contribution in the acquisition of the
property.
As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature
of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be
had on the strength of the partys own evidence and not upon the weakness of the opponents defense. [38] This applies
with more vigor where, as in the instant case, the plaintiff was allowed to present evidence ex parte. The plaintiff is not
automatically entitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff
must still prove the allegations in the complaint. Favorable relief can be granted only after the court is convinced that
the facts proven by the plaintiff warrant such relief. [39] Indeed, the party alleging a fact has the burden of proving it and
a mere allegation is not evidence.[40]
In the case at bar, the controversy centers on the house and personal properties of the parties. Private respondent
alleged in her complaint that she contributed P70,000.00 for the completion of their house. However, nowhere in her
testimony did she specify the extent of her contribution. What appears in the record are receipts[41] in her name for the
purchase of construction materials on November 17, 1995 and December 23, 1995, in the total amount of P11,413.00.
 On the other hand, both parties claim that the money used to purchase the disputed personal properties came
partly from their joint account with First Allied Development Bank. While there is no question that both parties
contributed in their joint account deposit, there is, however, no sufficient proof of the exact amount of their respective
shares therein. Pursuant to Article 148 of the Family Code, in the absence of proof of extent of the parties respective
contribution, their share shall be presumed to be equal. Here, the disputed personal properties were valued at
P111,375.00, the existence and value of which were not questioned by the petitioner. Hence, their share therein is
equivalent to one-half, i.e., P55,687.50 each.
The Court of Appeals thus erred in affirming the decision of the trial court which granted the reliefs prayed for by
private respondent. On the basis of the evidence established, the extent of private respondents co-ownership over the
disputed house is only up to the amount of P11,413.00, her proven contribution in the construction thereof. Anent the
personal properties, her participation therein should be limited only to the amount of P55,687.50.
As regards the trial courts award of P50,000.00 as moral damages, the Court of Appeals correctly deleted the
same for lack of basis.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R. CV No. 64166 is
AFFIRMED with MODIFICATION. Private respondent Gina S. Rey is declared co-owner of petitioner Jacinto Saguid in
the controverted house to the extent of P11,413.00 and personal properties to the extent of P55,687.50. Petitioner is
ordered to reimburse the amount of P67,100.50 to private respondent, failing which the house shall be sold at public
auction to satisfy private respondents claim.
SO ORDERED.

Atienza vs de Castro

Assailed and sought to be set aside in this petition for review on certiorari is the Decision[1] dated April 29, 2005 of the
Court of Appeals (CA) in CA-G.R. CV No. 69797, as reiterated in its Resolution[2] of September 16, 2005, reversing an

earlier decision of the Regional Trial Court (RTC) of Makati City, Branch 61, in an action for Judicial Partition of Real

Property thereat commenced by the herein petitioner Lupo Atienza against respondent Yolanda de Castro.

The facts:

Sometime in 1983, petitioner Lupo Atienza, then the President and General Manager of Enrico Shipping Corporation
and Eurasian Maritime Corporation, hired the services of respondent Yolanda U. De Castro as accountant for the two

corporations.

In the course of time, the relationship between Lupo and Yolanda became intimate. Despite Lupo being a married man,

he and Yolanda eventually lived together in consortium beginning the later part of 1983. Out of their union, two children

were born. However, after the birth of their second child, their relationship turned sour until they parted ways.

On May 28, 1992, Lupo filed in the RTC of Makati City a complaint against Yolanda for the judicial partition between

them of a parcel of land with improvements located in Bel-Air Subdivision, Makati City and covered by Transfer

Certificate of Title No. 147828 of the Registry of Deeds of Makati City. In his complaint, docketed in said court as Civil
Case No. 92-1423, Lupo alleged that the subject property was acquired during his union with Yolanda as common-law

husband and wife, hence the property is co-owned by them.

Elaborating, Lupo averred in his complaint that the property in question was acquired by Yolanda sometime in 1987

using his exclusive funds and that the title thereto was transferred by the seller in Yolandas name without his knowledge

and consent. He did not interpose any objection thereto because at the time, their affair was still thriving. It was only

after their separation and his receipt of information that Yolanda allowed her new live-in partner to live in the disputed

property, when he demanded his share thereat as a co-owner.

In her answer, Yolanda denied Lupos allegations. According to her, she acquired the same property for Two Million Six

Hundred Thousand Pesos (P2,600,000.00) using her exclusive funds. She insisted having bought it thru her own

savings and earnings as a businesswoman.

In a decision[3] dated December 11, 2000, the trial court rendered judgment for Lupo by declaring the contested property

as owned in common by him and Yolanda and ordering its partition between the two in equal shares, thus:
WHEREFORE, judgment is hereby rendered declaring the property covered by Transfer Certificate
of Title No. 147828 of the Registry of Deeds of Makati City to be owned in common by plaintiff LUPO
ATIENZA and the defendant YOLANDA U. DE CASTRO share-and-share alike and ordering the
partition of said property between them. Upon the finality of this Decision, the parties are hereby
directed to submit for the confirmation of the Court a mutually agreed project of partition of said
property or, in case the physical partition of said property is not feasible because of its nature, that
either the same be assigned to one of the parties who shall pay the value corresponding to the share
of the other or that the property to be sold and the proceeds thereof be divided equally between the
parties after deducting the expenses incident to said sale.

The parties shall bear their own attorneys fees and expenses of litigation.

Costs against the defendant.

SO ORDERED.

From the decision of the trial court, Yolanda went on appeal to the CA in CA-G.R. CV No. 69797, therein arguing that

the evidence on record preponderate that she purchased the disputed property in her own name with her own money.
She maintained that the documents appertaining to her acquisition thereof are the best evidence to prove who actually

bought it, and refuted the findings of the trial court, as well as Lupos assertions casting doubt as to her financial capacity

to acquire the disputed property.

As stated at the threshold hereof, the appellate court, in its decision [4] of April 29, 2005, reversed and set aside

that of the trial court and adjudged the litigated property as exclusively owned by Yolanda, to wit:

WHEREFORE, the foregoing considered, the assailed decision is

hereby REVERSED and SET ASIDE . The subject property is hereby declared to be exclusively
owned by defendant-appellant Yolanda U. De Castro. No costs.

SO ORDERED.
In decreeing the disputed property as exclusively owned by Yolanda, the CA ruled that under the provisions of Article
148 of the Family Code vis--vis the evidence on record and attending circumstances, Yolandas claim of sole ownership

is meritorious, as it has been substantiated by competent evidence. To the CA, Lupo failed to overcome the burden of

proving his allegation that the subject property was purchased by Yolanda thru his exclusive funds.

With his motion for reconsideration having been denied by the CA in its Resolution of September 16,
2005,[5] Lupo is now with this Court via the present recourse arguing that pursuant to Article 144[6] of the Civil Code, he

was in no way burdened to prove that he contributed to the acquisition of the subject property because with or without

the contribution by either partner, he is deemed a co-owner thereof, adding that under Article 484 [7] of Civil Code, as
long as the property wasacquired by either or both of them during their extramarital union, such property would be

legally owned by them in common and governed by the rules on co-ownership, which apply in default of contracts, or

special provisions.

We DENY.

It is not disputed that the parties herein were not capacitated to marry each other because petitioner Lupo Atienza was

validly married to another woman at the time of his cohabitation with the respondent. Their property regime, therefore,

is governed by Article 148[8] of the Family Code, which applies to bigamous marriages, adulterous relationships,

relationships in a state of concubinage, relationships where both man and woman are married to other persons, and
multiple alliances of the same married man. Under this regime, 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 ...[9] Proof of actual contribution is required.[10]

As it is, the regime of limited co-ownership of property governing the union of parties who are not legally capacitated to

marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said

cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven

actual contribution of money, property or industry. Absent proof of the extent thereof, their contributions and

corresponding shares shall be presumed to be equal.[11]

Here, although the adulterous cohabitation of the parties commenced in 1983, or way before the effectivity of the Family

Code on August 3, 1998, Article 148 thereof applies because this provision was intended precisely to fill up the hiatus

in Article 144 of the Civil Code.[12] Before Article 148 of the Family Code was enacted, there was no provision governing

property relations of couples living in a state of adultery or concubinage. Hence, even if the cohabitation or the

acquisition of the property occurred before the Family Code took effect, Article 148 governs.[13]

The applicable law being settled, we now remind the petitioner that here, as in other civil cases, the burden of proof

rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative
issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the partys own

evidence and not upon the weakness of the opponents defense. The petitioner as plaintiff below is not automatically

entitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove

the allegations in the complaint. Favorable relief can be granted only after the court is convinced that the facts proven

by the plaintiff warrant such relief.[14] Indeed, the party alleging a fact has the burden of proving it and a mere allegation

is not evidence.[15]

It is the petitioners posture that the respondent, having no financial capacity to acquire the property in question, merely

manipulated the dollar bank accounts of his two (2) corporations to raise the amount needed therefor. Unfortunately for

petitioner, his submissions are burdened by the fact that his claim to the property contradicts duly written
instruments, i.e., the Contract to Sell dated March 24, 1987, the Deed of Assignment of Redemption dated March 27,

1987 and the Deed of Transfer dated April 27, 1987, all entered into by and between the respondent and the vendor of

said property, to the exclusion of the petitioner. As aptly pointed out by the CA:

Contrary to the disquisition of the trial court, [Lupo] failed to overcome this burden. Perusing the
records of the case, it is evident that the trial court committed errors of judgment in its findings of fact
and appreciation of evidence with regard to the source of the funds used for the purchase of the
disputed property and ultimately the rightful owner thereof. Factual findings of the trial court are
indeed entitled to respect and shall not be disturbed, unless some facts or circumstances of weight
and substance have been overlooked or misinterpreted that would otherwise materially affect the
disposition of the case.

In making proof of his case, it is paramount that the best and most complete evidence be formally
entered. Rather than presenting proof of his actual contribution to the purchase money used as
consideration for the disputed property, [Lupo] diverted the burden imposed upon him to [Yolanda]
by painting her as a shrewd and scheming woman without the capacity to purchase any property.
Instead of proving his ownership, or the extent thereof, over the subject property, [Lupo] relegated
his complaint to a mere attack on the financial capacity of [Yolanda]. He presented documents
pertaining to the ins and outs of the dollar accounts of ENRICO and EURASIAN, which unfortunately
failed to prove his actual contribution in the purchase of the said property. The fact that [Yolanda]
had a limited access to the funds of the said corporations and had repeatedly withdrawn money from
their bank accounts for their behalf do not prove that the money she used in buying the disputed
property, or any property for that matter, came from said withdrawals.
As it is, the disquisition of the court a quo heavily rested on the apparent financial capacity of the
parties. On one side, there is [Lupo], a retired sea captain and the President and General Manager
of two corporations and on the other is [Yolanda], a Certified Public Accountant. Surmising that [Lupo]
is financially well heeled than [Yolanda], the court a quo concluded, sans evidence, that [Yolanda]
had taken advantage of [Lupo]. Clearly, the court a quo is in error. (Words in brackets supplied.)

As we see it, petitioners claim of co-ownership in the disputed property is without basis because not only did he fail to

substantiate his alleged contribution in the purchase thereof but likewise the very trail of documents pertaining to its

purchase as evidentiary proof redounds to the benefit of the respondent. In contrast, aside from his mere say so and

voluminous records of bank accounts, which sadly find no relevance in this case, the petitioner failed to overcome his

burden of proof. Allegations must be proven by sufficient evidence. Simply stated, he who alleges a fact has the burden
of proving it; mere allegation is not evidence.
True, the mere issuance of a certificate of title in the name of any person does not foreclose the possibility that the real

property covered thereby may be under co-ownership with persons not named in the certificate or that the registrant

may only be a trustee or that other parties may have acquired interest subsequent to the issuance of the certificate of

title. However, as already stated, petitioners evidence in support of his claim is either insufficient or immaterial to warrant

the trial courts finding that the disputed property falls under the purview of Article 148 of the Family Code. In contrast

to petitioners dismal failure to prove his cause, herein respondent was able to present preponderant evidence of her

sole ownership. There can clearly be no co-ownership when, as here, the respondent sufficiently established that she

derived the funds used to purchase the property from her earnings, not only as an accountant but also as a

businesswoman engaged in foreign currency trading, money lending and jewelry retail. She presented her clientele

and the promissory notes evincing substantial dealings with her clients. She also presented her bank account

statements and bank transactions, which reflect that she had the financial capacity to pay the purchase price of the

subject property.

All told, the Court finds and so holds that the CA committed no reversible error in rendering the herein challenged

decision and resolution.

WHEREFORE, the instant petition is DENIED and the assailed issuances of the CA are AFFIRMED.

Costs against the petitioner.

SO ORDERED.

Borromeo vs Descallar

What are the rights of an alien (and his successor-in-interest) who acquired real properties in the country as against

his former Filipina girlfriend in whose sole name the properties were registered under the Torrens system?

The facts are as follows:

Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by his employer,

Simmering-Graz Panker A.G., an Austrian company, to work at a project in Mindoro. In 1984, he transferred

to Cebu and worked at the Naga II Project of the National Power Corporation. There, he met respondent Antonietta

Opalla-Descallar, a separated mother of two boys who was working as a waitress at St. Moritz Hotel. Jambrich
befriended respondent and asked her to tutor him in English. In dire need of additional income to support her

children, respondent agreed. The tutorials were held in Antoniettas residence at a squatters area in Gorordo

Avenue.

Jambrich and respondent fell in love and decided to live together in a rented house in Hernan

Cortes, Mandaue City. Later, they transferred to their own house and lots at Agro-Macro Subdivision,

Cabancalan, Mandaue City. In the Contracts to Sell dated November 18, 1985 [1] and March 10, 1986[2] covering

the properties,Jambrich and respondent were referred to as the buyers. A Deed of Absolute Sale dated November

16, 1987[3] was likewise issued in their favor. However, when the Deed of Absolute Sale was presented for

registration before the Register of Deeds, registration was refused on the ground that Jambrich was an alien and

could not acquire alienable lands of the public domain. Consequently, Jambrichs name was erased from the

document. But it could be noted that his signature remained on the left hand margin of page 1, beside respondents

signature as buyer on page 3, and at the bottom of page 4 which is the last page. Transfer Certificate of Title

(TCT) Nos.24790, 24791 and 24792 over the properties were issued in respondents name alone.

Jambrich also formally adopted respondents two sons in Sp. Proc. No. 39-MAN,[4] and per Decision of

the Regional Trial Court of Mandaue City dated May 5, 1988.[5]

However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich

began to live with another woman in Danao City.Jambrich supported respondents sons for only two months after

the break up.

Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate

business. He also built and repaired speedboats as a hobby. In 1989, Jambrich purchased an engine and some

accessories for his boat from petitioner, for which he became indebted to the latter for about P150,000.00. To pay

for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced

by a Deed of Absolute Sale/Assignment.[6] On July 26, 1991, when petitioner sought to register the deed of

assignment, he discovered that titles to the three lots have been transferred in the name of respondent, and that

the subject property has already been mortgaged.

 On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before

the Regional Trial Court of Mandaue City. Petitioner alleged that the Contracts to Sell dated November 18, 1985

and March 10, 1986 and the Deed of Absolute Sale dated November 16, 1987 over the properties which identified

both Jambrich and respondent as buyers do not reflect the true agreement of the parties since respondent did not

pay a single centavo of the purchase price and was not in fact a buyer; that it was Jambrich alone who paid for the

properties using his exclusive funds; that Jambrich was the real and absolute owner of the properties; and, that

petitioner acquired absolute ownership by virtue of the Deed of Absolute Sale/Assignment dated July 11, 1991

which Jambrich executed in his favor.

In her Answer, respondent belied the allegation that she did not pay a single centavo of the purchase

price. On the contrary, she claimed that she solely and exclusively used her own personal funds to defray and pay

for the purchase price of the subject lots in question, and that Jambrich, being an alien, was prohibited to acquire

or own real property in the Philippines.

At the trial, respondent presented evidence showing her alleged financial capacity to buy the disputed

property with money from a supposed copra business.Petitioner, in turn, presented Jambrich as his witness and

documentary evidence showing the substantial salaries which Jambrich received while still employed by the

Austrian company, Simmering-Graz Panker A.G.

In its decision, the court a quo found

Evidence on hand clearly show that at the time of the purchase and acquisition of [the]
properties under litigation that Wilhelm Jambrich was still working and earning much.This fact of
Jambrich earning much is not only supported by documentary evidence but also by the admission
made by the defendant Antoniet[t]a Opalla. So that, Jambrichs financial capacity to acquire and
purchase the properties . . . is not disputed.[7]

xxx

On the other hand, evidence . . . clearly show that before defendant met Jambrich sometime
in the latter part of 1984, she was only working as a waitress at the St. Moritz Hotel with an income
of P1,000.00 a month and was . . . renting and living only in . . . [a] room at . . . [a] squatter area at
Gorordo Ave., Cebu City; that Jambrich took pity of her and the situation of her children that he
offered her a better life which she readily accepted. In fact, this miserable financial situation of hers
and her two children . . . are all stated and reflected in the Child Study Report dated April 20, 1983
(Exhs. G and G-1) which facts she supplied to the Social Worker who prepared the same when she
was personally interviewed by her in connection with the adoption of her two children by Wilhelm
Jambrich. So that, if such facts were not true because these are now denied by her . . . and if it was
also true that during this time she was already earning as much as P8,000.00 to P9,000.00 as profit
per month from her copra business, it would be highly unbelievable and impossible for her to be living
only in such a miserable condition since it is the observation of this Court that she is not only an
extravagant but also an expensive person and not thrifty as she wanted to impress this Court in order
to have a big saving as clearly shown by her actuation when she was already cohabiting and living
 with Jambrich that according to her . . . the allowance given . . . by him in the amount of $500.00 a
month is not enough to maintain the education and maintenance of her children.[8]

This being the case, it is highly improbable and impossible that she could acquire the
properties under litigation or could contribute any amount for their acquisitionwhich according
to her is worth more than P700,000.00 when while she was working as [a] waitress at St. Moritz
Hotel earning P1,000.00 a month as salary and tips of more or less P2,000.00 she could not
even provide [for] the daily needs of her family so much so that it is safe to conclude that she
was really in financial distress when she met and accepted the offer of Jambrich to come and
live with him because that was a big financial opportunity for her and her children who were
already abandoned by her husband.[9]

xxx
The only probable and possible reason why her name appeared and was included in [the
contracts to sell dated November 18, 1985 and March 10, 1986 and finally, the deed of absolute sale
dated November 16, 1987] as buyer is because as observed by the Court, she being a scheming
and exploitive woman, she has taken advantage of the goodness of Jambrich who at that time was
still bewitched by her beauty, sweetness, and good attitude shown by her to him since he could still
very well provide for everything she needs, he being earning (sic) much yet at that time. In fact, as
observed by this Court, the acquisition of these properties under litigation was at the time when their
relationship was still going smoothly and harmoniously. [10] [Emphasis supplied.]

The dispositive portion of the Decision states:

WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the
defendant Antoniet[t]a Opalla by:

1) Declaring plaintiff as the owner in fee simple over the residential house of strong materials
and three parcels of land designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos. 24790,
24791 and 24792 issued by the Register of Deeds of Mandaue City;

2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name of
defendant Antoniet[t]a Descallar by the Register of Deeds of Mandaue City;

3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790, 24791 and
24792 in the name of defendant Antoniet[t]a Descallar and to issue new ones in the name of plaintiff
Camilo F. Borromeo;

4) Declaring the contracts now marked as Exhibits I, K and L as avoided insofar as they
appear to convey rights and interests over the properties in question to the defendant Antoniet[t]a
Descallar;

5) Ordering the defendant to pay plaintiff attorneys fees in the amount of P25,000.00 and
litigation expenses in the amount of P10,000.00; and,

6) To pay the costs.[11]

Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002,[12] the appellate court

reversed the decision of the trial court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances involved in the case cited
by the lower court and similar cases decided on by the Supreme Court which upheld the validity of
the title of the subsequent Filipino purchasers are absent in the case at bar. It should be noted that
in said cases, the title to the subject property has been issued in the name of the alien transferee
(Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of
Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159 SCRA 446, citing
the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA
 78). In the case at bar, the title of the subject property is not in the name of Jambrich but in the name
of defendant-appellant. Thus, Jambrich could not have transferred a property he has no title
thereto.[13]

Petitioners motion for reconsideration was denied.

Hence, this petition for review.

Petitioner assigns the following errors:

I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING
RESPONDENTS JUDICIAL ADMISSION AND OTHER OVERWHELMING EVIDENCE
ESTABLISHING JAMBRICHS PARTICIPATION, INTEREST AND OWNERSHIP OF THE
PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.

II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT

JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT
THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF
PETITIONER.

III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE

WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING DOUBLE
COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFF-APPELLEE).[14]

First, who purchased the subject properties?

The evidence clearly shows, as pointed out by the trial court, who between respondent and Jambrich

possesses the financial capacity to acquire the properties in dispute. At the time of the acquisition of the properties

in 1985 to 1986, Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian company. He was

earning an estimated monthly salary of P50,000.00. Then, Jambrich was assigned to Syria for almost one year

where his monthly salary was approximately P90,000.00.

On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of

not more than P1,000.00. In 1986, when the parcels of land were acquired, she was unemployed, as admitted by

her during the pre-trial conference. Her allegations of income from a copra business were unsubstantiated. The

supposed copra business was actually the business of her mother and their family, with ten siblings. She has no

license to sell copra, and had not filed any income tax return. All the motorized bancas of her mother were lost to

fire, and the last one left standing was already scrap. Further, the Child Study Report[15] submitted by the
Department of Social Welfare and Development (DSWD) in the adoption proceedings of respondents two sons by

Jambrich disclosed that:

Antonietta tried all types of job to support the children until she was accepted as a waitress
at St. Moritz Restaurant in 1984. At first she had no problem with money because most of the
customers of St. Moritz are (sic) foreigners and they gave good tips but towards the end of 1984
there were no more foreigners coming because of the situation in the Philippines at that time. Her
financial problem started then. She was even renting a small room in a squatters area in Gorordo
Ave., Cebu City. It was during her time of great financial distress that she met Wilhelm Jambrich who
later offered her a decent place for herself and her children.[16]

The DSWD Home Study Report[17] further disclosed that:

[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one
of the waitresses of the said Restaurants. He made friends with the girl and asked her to tutor him in
[the] English language. Antonietta accepted the offer because she was in need of additional income
to support [her] 2 young children who were abandoned by their father. Their session was agreed to
be scheduled every afternoon at the residence of Antonietta in the squatters area in Gorordo
Avenue, Cebu City. The Austrian was observing the situation of the family particularly the children
who were malnourished. After a few months sessions, Mr. Jambrich offered to transfer the family into
a decent place. He told Antonietta that the place is not good for the children. Antonietta who was
miserable and financially distressed at that time accepted the offer for the sake of the children. [18]

Further, the following additional pieces of evidence point to Jambrich as the source of fund used to

purchase the three parcels of land, and to construct the house thereon:

(1) Respondent Descallar herself affirmed under oath, during her re-direct examination and during the

proceedings for the adoption of her minor children, that Jambrich was the owner of the properties in question, but

that his name was deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless, his signature

remained in the deed of sale, where he signed as buyer.

(2) The money used to pay the subject parcels of land in installments was in postdated checks issued by

Jambrich. Respondent has never opened any account with any bank. Receipts of the installment payments were

also in the name of Jambrich and respondent.

(3) In 1986-1987, respondent lived in Syria with Jambrich and her two children for ten months, where she

was completely under the support of Jambrich.

(4) Jambrich executed a Last Will and Testament, where he, as owner, bequeathed the subject properties

to respondent.
 Thus, Jambrich has all authority to transfer all his rights, interests and participation over the subject

properties to petitioner by virtue of the Deed of Assignment he executed on July 11, 1991.

Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial court are accorded

great weight and respect, if not finality by this Court, subject to a number of exceptions. In the instant case, we find

no reason to disturb the factual findings of the trial court. Even the appellate court did not controvert the factual

findings of the trial court. They differed only in their conclusions of law.

Further, the fact that the disputed properties were acquired during the couples cohabitation also does not

help respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as

husband and wife without the benefit of marriage, but are otherwise capacitated to marry each other, does not

apply.[19] In the instant case, respondent was still legally married to another when she and Jambrich lived

together. In such an adulterous relationship, no co-ownership exists between the parties. It is necessary for each

of the partners to prove his or her actual contribution to the acquisition of property in order to be able to lay claim to

any portion of it. Presumptions of co-ownership and equal contribution do not apply.[20]

Second, we dispose of the issue of registration of the properties in the name of respondent alone. Having

found that the true buyer of the disputed house and lots was the Austrian Wilhelm Jambrich, what now is the effect

of registration of the properties in the name of respondent?

It is settled that registration is not a mode of acquiring ownership. [21] It is only a means of confirming the

fact of its existence with notice to the world at large. [22] Certificates of title are not a source of right. The mere

possession of a title does not make one the true owner of the property. Thus, the mere fact that respondent has the

titles of the disputed properties in her name does not necessarily, conclusively and absolutely make her the

owner. The rule on indefeasibility of title likewise does not apply to respondent. A certificate of title implies that the

title is quiet,[23] and that it is perfect, absolute and indefeasible. [24] However, there are well-defined exceptions to

this rule, as when the transferee is not a holder in good faith and did not acquire the subject properties for a valuable

consideration.[25] This is the situation in the instant case. Respondent did not contribute a single centavo in the

acquisition of the properties. She had no income of her own at that time, nor did she have any savings. She and

her two sons were then fully supported by Jambrich.

 Respondent argued that aliens are prohibited from acquiring private land. This is embodied in Section 7,

Article XII of the 1987 Constitution,[26] which is basically a reproduction of Section 5, Article XIII of the 1935

Constitution,[27] and Section 14, Article XIV of the 1973 Constitution. [28] The capacity to acquire private land is

dependent on the capacity to acquire or hold lands of the public domain. Private land may be transferred only to

individuals or entities qualified to acquire or hold lands of the public domain. Only Filipino citizens or corporations

at least 60% of the capital of which is owned by Filipinos are qualified to acquire or hold lands of the public

domain. Thus, as the rule now stands, the fundamental law explicitly prohibits non-Filipinos from acquiring or

holding title to private lands, except only by way of legal succession or if the acquisition was made by a former

natural-born citizen.[29]

Therefore, in the instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich,

who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to

petitioner who is a Filipino citizen. In United Church Board for World Ministries v. Sebastian,[30] the Court

reiterated the consistent ruling in a number of cases[31] that if land is invalidly transferred to an alien who

subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered

cured and the title of the transferee is rendered valid. Applying United Church Board for World Ministries, the

trial court ruled in favor of petitioner, viz.:

[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under
litigation [were] void ab initio since [they were] contrary to the Constitution of the Philippines, he being
a foreigner, yet, the acquisition of these properties by plaintiff who is a Filipino citizen from him, has
cured the flaw in the original transaction and the title of the transferee is valid.

The trial court upheld the sale by Jambrich in favor of petitioner and ordered the cancellation of the TCTs in the

name of respondent. It declared petitioner as owner in fee simple of the residential house of strong materials and

three parcels of land designated as Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue City to

issue new certificates of title in his name. The trial court likewise ordered respondent to pay petitioner P25,000 as

attorneys fees and P10,000 as litigation expenses, as well as the costs of suit.

We affirm the Regional Trial Court.

The rationale behind the Courts ruling in United Church Board for World Ministries, as reiterated in

subsequent cases,[32] is this since the ban on aliens is intended to preserve the nations land for future generations
of Filipinos, that aim is achieved by making lawful the acquisition of real estate by aliens who became Filipino

citizens by naturalization or those transfers made by aliens to Filipino citizens. As the property in dispute is already

in the hands of a qualified person, a Filipino citizen, there would be no more public policy to be protected. The

objective of the constitutional provision to keep our lands in Filipino hands has been achieved.

IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals in C.A. G.R. CV No.

42929 dated April 10, 2002 and its Resolution dated July 8, 2003 are REVERSED and SET ASIDE. The Decision

of the Regional Trial Court of Mandaue City in Civil Case No. MAN-1148 is REINSTATED.

SO ORDERED.