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G.R. No. 55322. February 16, 1989.

MOISES JOCSON, petitioner, vs. HON. COURT OF


APPEALS, AGUSTINA JOCSON-VASQUEZ, ERNESTO
VASQUEZ, respondents.
*

Civil
Law; Obligations
and
Contracts; Voidable
Contracts;Sales; Contract
of
Sale;Consideration; The
slight
difference between the market value and the purchase price of the
properties in question may be disregarded considering that the
contracts of sale were executed between the father and the daughter,
in which case, filial love must be taken into consideration.
Secondly, neither may the contract be declared void because of
alleged inadequacy of price. To begin with, there was no showing
that the prices were grossly inadequate. In fact, the total purchase
price paid by Agustina Jocson-Vasquez is above the total assessed
value of the properties alleged by petitioner. In his Second
Amended Complaint, petitioner alleged that the total assessed
value of the properties mentioned in Exhibit 3 was P8.920; Exhibit
4, P3,500; and Exhibit 2, P24,840, while the purchase price paid
was P10,000, P5,000, and P8,000, respectively, the latter for the
1/3 share of Emilio Jocson from the paraphernal properties of his
wife, Alejandra Poblete. And any difference between the market
value and the purchase price, which as admitted by Emilio Jocson
was only slight, may not be so shocking considering that the sales
were effected by a father to her daughter in which case filial love
must be taken into consideration (Alsua-Betts vs. Court of
Appeals, No. L-46430-31, April 30, 1979, 92 SCRA 332).
Same; Property; Persons and Family Relations; Conjugal
Partnership; Proof of acquisition during the coverture is a condition
sine qua non for the application of the presumption in favor of
conjugal partnership.There is another ground relied upon by
petitioner in assailing Exhibits 3 and 4, that the properties subject
matter therein are conjugal properties of Emilio Jocson and
Alejandra Poblete. It is the position of petitioner that since the
properties sold to Agustina Jocson-Vasquez under Exhibit 3 were
registered in the name of Emilio Jocson, married to Alejandra

Poblete, the certificates of title he presented as evidence (Exhibits


E to J, pp. 4-9, Records) were enough proof to show that the
properties covered therein were acquired during the marriage of
their parents, and, therefore, under Article 160 of the Civil Code,
presumed to be conjugal properties. Article 160 of the Civil Code
provides that: All property of the marriage is presumed to belong
to the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife. In Cobb-Perez vs. Hon.
Gregorio Lantin, No. L-22320, May 22, 1968, 23 SCRA 637, 644,
We held that: Anent their claim that the shares in question are
conjugal assets, the spouses Perez adduced not a modicum of
evidence, although they repeatedly invoked article 160 of the New
Civil Code which provides that x x x. As interpreted by this Court,
the party who invokes this presumption must first prove that the
property in controversy was acquired during the marriage. In
other words, proof of acquisition during the coverture is a
condition sine qua non for the operation of the presumption in
favor of conjugal ownership. Thus in Camia de Reyes vs. Reyes de
Ilano [62 Phil. 629, 639], it was held that according to law and
jurisprudence, it is sufficient to prove that the property was
acquired during the marriage in order that the same may be
deemed conjugal property, In the recent case of Maramba vs.
Lozano, et. al, [L-21533, June 29, 1967, 20 SCRA 474], this Court,
thru Mr. Justice Makalintal, reiterated that the presumption
under Article 160 of the Civil Code refers to property acquired
during the marriage, and then concluded that since there is no
showing as to when the property in question was acquired x x x the
fact that the title is in the wifes name alone is determinative.
Similarly, in the case at bar, since there is no evidence as to when
the shares of stock were acquired, the fact that they are registered
in the name of the husband alone is an indication that the shares
belong exclusively to said spouse.
Same; Same; Same; Same;Same; The fact that the subject
properties were registered in the name of Emilio Jocson married to
Alejandro Poblete is no proof that said properties were acquired
1

during the spouses marriage.It is thus clear that before Moises


Jocson may validly invoke the presumption under Article 160 he
must first present proof that the disputed properties were acquired
during the marriage of Emilio Jocson and Alexandra Poblete. The
certificates of title, however, upon which petitioner rests his claim
is insufficient. The fact that the properties were registered in the
name of Emilio Jocson, married to Alejandra Poblete is no proof
that the properties were acquire during the spouses coverture.
Acquisition of title and registration thereof are two different acts.
It is well settled that registration does not confer title but merely
confirms one already existing (See Torela vs. Torela, supra). It may
be that the properties under dispute were acquired by Emilio
Jocson when he was still a bachelor but were registered only after
his marriage to Alejandra Poblete, which explains why he was
described in the certificates of title as married to the latter.
Same; Same; Same; Same;Same; Same; The words married
to preceding the name Alejandra Poblete are merely descriptive of
Emilio Jocsonss civil status.Contrary to petitioners position, the
certificates of title show, on their face, that the properties were
exclusively Emilio Jocsons, the registered owner. This is so
because the words married to preceding Alejandra Poblete are
merely descriptive of the Civil status of Emilio Jocson (Litam v.
Rivera, 100 Phil. 354; Stuart v. Yatco, No. L-16467, April 27, 1962,
4 SCRA 1143; Magallon V. Montejo, G.R. No. 73733, December 16,
1986, 146 SCRA 282). In other words, the import from the
certificates of title is that Emilio Jocson is the owner of the
properties, the same having been registered in his name alone, and
that he is married to Alejandra Poblete.

PETITION for certiorari to review the decision of the Court


of Appeals.
336

336

SUPREME COURT
REPORTS

ANNOTATED
Jocson vs. Court of Appeals
The facts are stated in the opinion of the Court.
Dolorfino and Dominguez Law Offices for petitioner.
Gabriel G. Mascardo for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court of the decision of the Court of Appeals in CAG.R. No. 63474, promulgated on April 30, 1980, entitled
MOISES JOCSON, plaintiff-appellee, versus AGUSTINA
JOCSON-VASQUEZ and ERNESTO VASQUEZ, defendantappellants, upholding the validity of three (3) documents
questioned by Moises Jocson, in total reversal of the decision
of the then Court of First Instance of Cavite, Branch I, which
declared them as null and void; and of its resolution, dated
September 30, 1980, denying therein appellees motion for
reconsideration.
Petitioner Moises Jocson and respondent Agustina JocsonVasquez are the only surviving offsprings of the spouses
Emilio Jocson and Alejandra Poblete, while respondent
Ernesto Vasquez is the husband of Agustina. Alejandra
Poblete predeceased her husband without her intestate
estate being settled. Subsequently, Emilio Jocson also died
intestate on April 1, 1972.
As adverted to above, the present controversy concerns the
validity of three (3) documents executed by Emilio Jocson
during his lifetime. These documents purportedly conveyed,
by sale, to Agustina Jocson-Vasquez what apparently covers
almost all of his properties, including his one-third (1/3)
share in the estate of his wife. Petitioner Moises Jocson
assails these documents and prays that they be declared null
and void and the properties subject matter therein be
2

partitioned between him and Agustina as the only heirs of


their deceased parents.
The documents, which were presented as evidence not by
Moises Jocson, as the party assailing its validity, but rather
by herein respondents, are the following:
1) Kasulatan ng Bilihan ng Lupa, marked as Exhibit 3
(pp. 12-13, Records) for the defendant in the court
a quo,dated July 27, 1968. By this document Emilio Jocson
sold to Agustina Jocson-Vasquez six (6) parcels of land, all
located at Naic,
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16, 1989
Jocson vs. Court of Appeals
Cavite, for the sum often thousand (P10,000.00) pesos. On
the same document Emilio Jocson acknowledged receipt of
the purchase price, thus:
Na ngayon, akmg-alang sa halagang SAMPUNG LIBONG PISO
(P10,000) salaping Pilipino na aking tinanggap ng buong
kasiyahan loob at ang pagkakatanggap ay aking hayagang
inaamin sa pamamagitan ng kasulatang ito, sa aking anak na si
Agustina Jocson, na may sapat na gulang, mamamayang Pilipino,
asawa ni Ernesto Vasquez, at naninirahan sa Poblacion, Naic,
Cavite, ay aking ipinagbile ng lubusan at kagyat at walang ano
mang pasubali ang nabanggit na anim na pirasong lupa na nasa
unang dahon ng dokumentong ito, sa nabanggit na Agustina
Jocson, at sa kaniyang taga-pagmana o makakahalili at gayon
din nais kong banggitin na kahit na may kamurahan ang ginawa
kong pagbibile ay dahilan sa ang nakabile ay aking anak na
mahal sa akin at mapaglingkod, madamayin at ma-alalahanin, na
tulad din ng isa ko pang anak na lalaki. Ang kuartang tinanggap
ko na P10,000.00, ay gagamitin ko sa aking katandaan at mga
huling araw at sa aking mga ibang mahahalagang
pangangailangan. [Italics supplied]

Na nais ko ring banggitin na ang ginawa kong ito ay hindi


labag sa ano mang batas o kautusan, sapagkat ang aking pinagbile
ay akin at nasa aking pangalan. Ang mga lupang nasa pangalan
ng aking nasirang asawa ay hindi ko ginagalaw ni pinakikialaman
at iyon ay dapat na hatiin ng dalawa kong anak alinsunod sa
umiiral na batas (p. 13, Records.)

2) Kasulatan ng Ganap na Bilihan dated July 27, 1968,


marked as Exhibit 4 (p. 14, Records). On the face of this
document, Emilio Jocson purportedly sold to Agustina
Jocson-Vasquez, for the sum of FIVE THOUSAND
(P5,000.00)
PESOS,
two
rice
mills
and
a
camarin (camalig)located at Naic, Cavite. As in the first
document, Moises Jocson acknowledged receipt of the
purchase price:
Na alang-alang sa halagang LIMANG LIBONG PISO (P5,000.00)
salaping pilipino na aking tinanggap ng buong kasiyahan loob sa
aking anak na Agustina Jocson x x x. Na ang halagang ibinayad sa
akin ay may kamurahan ng kaunti ngunit dahil sa malaking
pagtingin ko sa kaniya x x x kaya at pinagbile ko sa kaniya ang
mga nabanggit na pagaari kahit na hindi malaking halaga x x x (p.
14,
338

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SUPREME COURT
REPORTS
ANNOTATED
Jocson vs. Court of Appeals

Records).

3) Lastly, the Deed of Extrajudicial Partition and


Adjudication with Sale, dated March 9, 1969, marked as
Exhibit 2 (p. 10-11, Records), whereby Emilio Jocson and
Agustina Jocson-Vasquez, without the participation and
intervention of Moises Jocson, extrajudicially partitioned the
unsettled estate of Alejandra Poblete, dividing the same into
three parts, one-third (1/3) each for the heirs of Alejandra
Poblete, namely: Emilio Jocson, Agustina Jocson-Vasquez
3

and Moises Jocson. By the same instrument, Emilio sold his


one-third (1/3) share to Agustina for the sum of EIGHT
THOUSAND (P8,000.00) PESOS. As in the preceding
documents, Emilio Jocson acknowledged receipt of the
purchase price:
Now for and in consideration of the sum of only eight thousand
(P8,000.00) pesos, which I, the herein Emilio Jocson had received
from my daughter Agustina Jocson, do herebvy sell, cede, convey
and transfer, unto the said Agustina Jocson, her heirs and assigns,
administrators and successors in interests, in the nature of
absolute and irrevocable sale, all my rights, interest, shares and
participation, which is equivalent to one third (1/3) share in the
properties herein mentioned and described, the one third being
adjudicated unto Agustina Jocson and the other third (1/3) portion
being the share of Moises Jocson, (p. 11, Records).

These documents were executed before a notary public.


Exhibits 3 and 4 were registered with the Office of the
Register of Deeds of Cavite on July 29, 1968 and the transfer
certificates of title covering the properties therein in the
name of Emilio Jocson, married to Alejandra Poblete, were
cancelled and new certificates of title were issued in the
name of Agustina Jocson-Vasquez. Exhibit 2 was not
registered with the Office of the Register of Deeds.
Herein petitioner filed his original complaint (Record on
Appeal, p. 27, Rollo) on June 20, 1973 with the then Court of
First Instance of Naic, Cavite (docketed as Civil Case No.
TM-531), and which was twice amended. In his Second
Amended Complaint (pp. 47-58, Record on Appeal), herein
petitioner assailed the above documents, as aforementioned,
for being null and
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Jocson vs. Court of Appeals
void.

It is necessary to partly quote the allegation of petitioner


in his complaint for the reason that the nature of his causes
of action is at issue, thus:
8. [With regard the first document, that] the defendants, through
fraud, deceit, undue pressure and influence and other illegal
machinations, were able to induce, led, and procured their father x
x x to sign [the] contract of sale xxx, for the simulated price of
P10,000.00, which is a consideration that is shocking to the
conscience of ordinary man and despite the fact that said
defendants have no work or livelihood of their own x x x; that the
sale is null and void, also, because it is fictitious, simulated and
fabricated contract xxx (pp. 52-53, Record on Appeal). [Italics
supplied]
x x x.
12. [With regards the second and third document, that they]
are null and void because the consent of the father, Emilio Jocson,
was
obtained
with
fraud,
deceit,
undue
pressure,
misrepresentation and unlawful machinations and trickeries
committed by the defendant on him; and that the said contracts
are simulated, fabricated and fictitious, having been made
deliberately to exclude the plaintiff from participating and with
the dishonest and selfish motive on the part of the defendants to
defraud him of his legitimate share on said properties [subject
matter thereof); and that without any other business or
employment or any other source of income, defendants who were
just employed in the management and administration of the
business of their parents, would not have the sufficient and ample
means to purchase the said propertiesexcept by getting the
earnings of the business or by simulated consideration x x x (pp.
54-55, Record on Appeal). [Italics supplied]

Petitioner explained that there could be no real sale between


a father and daughter who are living under the same roof,
especially so when the father has no need of money as the
properties supposedly sold were all income-producing.
Further, petitioner claimed that the properties mentioned in
4

Exhibits 3 and 4 are the unliquidated conjugal properties of


Emilio Jocson and Alejandra Poblete which the former,
therefore, cannot validly sell (pp. 53, 57, Record on Appeal).
As far as Exhibit 2 is concerned, petitioner questions not the
extrajudicial partition but only the sale by his father to
Agustina of
340

340

SUPREME COURT
REPORTS
ANNOTATED
Jocson vs. Court of Appeals

the formers 1/3 share (p. 13, Rollo).


The trial court sustained the foregoing contentions of
petitioner (pp. 59-81, Record on Appeal). It declared that the
considerations mentioned in the documents were merely
simulated and fictitious because: 1) there was no showing
that Agustina Jocson-Vasquez paid for the properties; 2) the
prices were grossly inadequate which is tantamount to lack
of consideration at all; and 3) the improbability of the sale
between Emilio Jocson and Agustina Jocson-Vasquez, taking
into consideration the circumstances obtaining between the
parties; and that the real intention of the parties were
donations designed to exclude Moises Jocson from
participating in the estate of his parents. It further declared
the properties mentioned in Exhibits 3 and 4 as conjugal
properties of Emilio Jocson and Alejandra Poblete, because
they were registered in the name of Emilio Jocson, married
to Alejandra Poblete and ordered that the properties subject
matter of all the documents be registered in the name of
herein petitioners and private respondents.
On appeal, the Court of Appeals in CA-G.R. No. 63474R rendered a decision (pp. 29-42, Rollo) and reversed that of
the trial courts and ruled that:

1. 1.That insofar as Exhibits 3 and 4 are concerned the


appellees complaint for annulment, which is indisputably
based on fraud, and undue influence, is now barred by
prescription, pursuant to the settled rule that an action for
annulment of a contract based on fraud must be filed
within four (4) years, from the discovery of the fraud, xxx
which in legal contemplation is deemed to be the date of
the registration of said document with the Register of
Deeds x x x and the records admittedly show that both
Exhibits 3 and 4, were all registered on July 29, 1968,
while on the other hand, the appellees complaint was filed
on June 20, 1973, clearly beyond the aforesaid four-year
prescriptive period provided by law;
2. 2.That the aforesaid contracts, Exhibits 2, 3, and 4, are
decisively not simulated or fictitious contracts, since
Emilio Jocson actually and really intended them to be
effective and binding against him, as to divest him of the
full dominion and ownership over the properties subject of
said assailed contracts, as in fact all his titles over the
same were all cancelled and new ones issued to appellant
Agustina
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Jocson vs. Court of Appeals
1. Jocson Vasquez x x x;
2. 3.That in regard to Exhibit 2, the same is valid and
subsisting, and the partition with sale therein made by
and between Emilio Jocson and Agustina Jocson Vasquez,
affecting the 2/3 portion of the subject properties described
therein have all been made in accordance with Article 996
of the New Civil Code on intestate succession, and the
5

appellees (herein petitioner) remaining 1/3 has not been


prejudiced (pp. 41-42, Rollo).

In this petition for review, Moises Jocson raised the following


assignments of errors:
1. I.HAS THE RESPONDENT COURT OF APPEALS ERRED
IN CONCLUDING THAT THE SUIT POR THE
ANNULMENT
OF
CONTRACTS
FILED
BY
PETITIONERS WITH THE TRIAL COURT IS BASED
ON FRAUD AND NOT ON ITS INEXISTENCE AND
NULLITY BECAUSE OF ITS BEING SIMULATED OR
FICTITIOUS OR WHOSE CAUSE IS CONTRARY TO
LAW, MORALS AND GOOD CUSTOMS?
2. II.HAS THE RESPONDENT COURT OF APPEALS
ERRED IN CONCLUDING THAT THE COMPLAINT
FILED BY PETITIONER IN THE TRIAL COURT IS
BARRED BY PRESCRIPTION?
3. III.HAS THE RESPONDENT COURT OF APPEALS
ERRED IN NOT DECLARING AS INEXISTENT AND
NULL AND VOID THE CONTRACTS IN QUESTION
AND IN REVERSING THE DECISION OF THE TRIAL
COURT? (p. 2, Rollo)

I.
The first and second assignments of errors are related and
shall be jointly discussed.
According to the Court of Appeals, herein petitioners
causes of action were based on fraud. Under Article 1330 of
the Civil Code, a contract tainted by vitiated consent, as
when consent was obtained through fraud, is voidable; and
the action for annulment must be brought within four years
from the time of the discovery of the fraud (Article 1391, par.
4, Civil Code), otherwise the contract may no longer be
contested. Under present jurisprudence, discovery of fraud is

deemed to have taken place at the time the convenant was


registered with the Register of Deeds (Gerona vs. De
Guzman, No. L-19060, May
342

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SUPREME COURT
REPORTS
ANNOTATED
Jocson vs. Court of Appeals

29, 1964, 11 SCRA 153). Since Exhibits 3 and 4 were


registered on July 29, 1968 but Moises Jocson filed his
complaint only on June 20, 1973, the Court of Appeals ruled
that insofar as these documents were concerned, petitioners
annulment suit had prescribed.
If fraud were the only ground relied upon by Moises
Jocson in assailing the questioned documents, We would
have sustained the above pronouncement. But it is not so. As
pointed out by petitioner, he further assailed the deeds of
conveyance on the ground that they were without
consideration since the amounts appearing thereon as paid
were in fact merely simulated.
According to Article 1352 of the Civil Code, contracts
without cause produce no effect whatsoever. A contract of
sale with a simulated price is void (Article 1471; also Article
1409 [3]), and an action for the declaration of its nullity does
not prescribe (Article 1410, Civil Code; See also, Castillo v.
Galvan, No. L-27841, October 20, 1978, 85 SCRA 526).
Moises Jocsons action, therefore, being for the judicial
declaration of nullity of Exhibits 3 and 4 on the ground of
simulated price, is imprescriptible.
II.
For petitioner, however, the above discussion may be purely
academic. The burden of proof in showing that contracts lack
consideration rests on he who alleged it. The degree of proof
becomes more stringent where the documents themselves
show that the vendor acknowledged receipt of the price, and
6

more so where the documents were notarized, as in the case


at bar. Upon consideration of the records of this case, We are
of the opinion that petitioner has not sufficiently proven that
the questioned documents are without consideration.
Firstly, Moises Jocsons claim that Agustina JocsonVasquez had no other source of income other than what she
derives from helping in the management of the family
business (ricefields and ricemills), and which was insufficient
to pay for the purchase price, was contradicted by his own
witness, Isaac Bagnas, who testified that Agustina and her
husband were engaged in the buy and sell of palay and rice
(p. 10, t.s.n.,
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Jocson vs. Court of Appeals
January 14, 1975). Amazingly, petitioner himself and his
wife testified that they did not know whether or not Agustina
was involved in some other business (p. 40, t.s.n., July 30,
1974; p. 36, t.s.n., May 24, 1974).
On the other hand, Agustina testified that she was
engaged in the business of buying and selling palay and rice
even before her marriage to Ernesto Vasquez sometime in
1948 and continued doing so thereafter (p. 4, ts.n., March 15,
1976). Considering the foregoing and the presumption that a
contract is with a consideration (Article 1354, Civil Code), it
is clear that petitioner miserably failed to prove his
allegation.
Secondly, neither may the contract be declared void
because of alleged inadequacy of price. To begin with, there
was no showing that the prices were grossly inadequate. In
fact, the total purchase price paid by Agustina JocsonVasquez is above the total assessed value of the properties
alleged by petitioner. In his Second Amended Complaint,
petitioner alleged that the total assessed value of the

properties mentioned in Exhibit 3 was P8,920; Exhibit 4,


P3,500; and Exhibit 2, P24,840, while the purchase price paid
was P10,000, P5,000, and P8,000, respectively, the latter for
the 1/3 share of Emilio Jocson from the paraphernal
properties of his wife, Alejandra Poblete. And any difference
between the market value and the purchase price, which as
admitted by Emilio Jocson was only slight, may not be so
shocking considering that the sales were effected by a father
to her daughter in which case filial love must be taken into
consideration (Alsua-Betts vs. Court of Appeals, No. L-4643031, April 30, 1979, 92 SCRA 332).
Further, gross inadequacy of price alone does not affect a
contract of sale, except that it may indicate a defect in the
consent, or that the parties really intended a donation or
some other act or contract (Article 1470, Civil Code) and
there is nothing in the records at all to indicate any defect in
Emilio Jocsons consent.
Thirdly, any discussion as to the improbability of a sale
between a father and his daughter is purely speculative
which has no relevance to a contract where all the essential
requisites of consent, object and cause are clearly present.
There is another ground relied upon by petitioner in
assail344

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SUPREME COURT
REPORTS
ANNOTATED
Jocson vs. Court of Appeals

ing Exhibits 3 and 4, that the properties subject matter


therein are conjugal properties of Emilio Jocson and
Alejandra Poblete. It is the position of petitioner that since
the properties sold to Agustina Jocson-Vasquez under
Exhibit 3 were registered in the name of Emilio Jocson,
married to Alejandra Poblete, the certificates of title he
presented as evidence (Exhibits E, to J, pp. 4-9, Records)
7

were enough proof to show that the properties covered


therein were acquired during the marriage of their parents,
and, therefore, under Article 160 of the Civil Code, presumed
to be conjugal properties.
Article 160 of the Civil Code provides that:
All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the
husband or to the wife.

In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May


22, 1968, 23 SCRA 637, 644, We held that:
Anent their claim that the shares in question are conjugal assets,
the spouses Perez adduced not a modicum of evidence, although
they repeatedly invoked article 160 of the New Civil Code which
provides that x x x. As interpreted by this Court, the party who
invokes this presumption must first prove that the property in
controversy was acquired during the marriage. In other words,
proof of acquisition during the coverture is a condition sine qua
non for the operation of the presumption in favor of conjugal
ownership. Thus in Camia de Reyes vs. Reyes de Ilano [62 Phil.
629, 639], it was held that according to law and jurisprudence, it is
sufficient to prove that the property was acquired during the
marriage in order that the same may be deemed conjugal
property. In the recent case of Maramba vs. Lozano, et. al. [L21533, June 29, 1967, 20 SCRA 474], this Court, thru Mr. Justice
Makalintal, reiterated that the presumption under Article 160 of
the Civil Code refers to property acquired during the marriage,
and then concluded that since there is no showing as to when the
property in question was acquired x x x the fact that the title is in
the wifes name alone is determinative. Similarly, in the case at
bar, since there is no evidence as to when the shares of stock were
acquired, the fact that they are registered in the name of the
husband alone is an indication that the shares belong exclusively
to said spouse.
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Jocson vs. Court of Appeals
This pronouncement was reiterated in the case of Ponce de
Leon vs. Rehabilitation Finance Corporation, No. L-24571,
December 18, 1970, 36 SCRA 289, and later in Torela vs
Torela, No. L-27843, October 11, 1979, 93 SCRA 391.
It is thus clear that before Moises Jocson may validly
invoke the presumption under Article 160 he must first
present proof that the disputed properties were acquired
during the marriage of Emilio Jocson and Alejandra Poblete.
The certificates of title, however, upon which petitioner rests
his claim is insufficient. The fact that the properties were
registered in the name of Emilio Jocson, married to
Alejandra Poblete is no proof that the properties were
acquired during the spouses coverture. Acquisition of title
and registration thereof are two different acts. It is well
settled that registration does not confer title but merely
confirms one already existing (See Torela vs. Torela, supra).
It may be that the properties under dispute were acquired by
Emilio Jocson when he was still a bachelor but were
registered only after his marriage to Alejandra Poblete,
which explains why he was described in the certificates of
title as married to the latter.
Contrary to petitioners position, the certificates of title
show, on their face, that the properties were exclusively
Emilio Jocsons, the registered owner. This is so because the
words married to preceding Alejandra Poblete are merely
descriptive of the civil status of Emilio Jocson (Litam v.
Rivera, 100 Phil. 354; Stuart v. Yatco, No. L-16467, April 27,
1962, 4 SCRA 1143; Magallon v. Montejo, G.R. No. L-73733,
December 16, 1986, 146 SCRA 282). In other words, the
import from the certificates of title is that Emilio Jocson is
the owner of the properties, the same having been registered
in his name alone, and that he is married to Alejandra
Poblete.
8

We are not unmindful that in numerous cases We


consistently held that registration of the property in the
name of only one spouse does not negate the possibility of it
being conjugal (SeeBucoy vs. Paulino, No. L-25775, April 26,
1968, 23 SCRA 248). But this ruling is not inconsistent with
the above pronouncement for in those cases there was proof
that the properties, though registered in the name of only
one spouse, were indeed conjugal properties, or that they
have been acquired
346

346

SUPREME COURT
REPORTS
ANNOTATED
Jocson vs. Court of Appeals

ACCORDINGLY, the petition is DISMISSED and the


decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Narvasa, Cruz,Gancayco and Grio-Aquino,
JJ., concur.
Petition dismissed; decision affirmed.
Note.Close relatives may plausibly find it unnecessary
to reduce a novated written agreement into writing. (Goni vs.
Court of Appeals, 144 SCRA 222.)
o0o

during the marriage of the spouses, and therefore, presumed


conjugal, without the adverse party having presented proof to
rebut the presumption (See Mendoza vs. Reyes, No. L-31618,
August 17, 1983,124 SCRA 154).
In the instant case, had petitioner, Moises Jocson,
presented sufficient proof to show that the disputed
properties were acquired during his parents coverture. We
would have ruled that the properties, though registered in
the name of Emilio Jocson alone, are conjugal properties in
view of the presumption under Article 160. There being no
such proof, the condition sine qua non for the application of
the presumption does not exist. Necessarily, We rule that the
properties under Exhibit 3 are the exclusive properties of
Emilio Jocson.
There being no showing also that the camarin and the two
ricemills, which are the subject of Exhibit 4, were conjugal
properties of the spouses Emilio Jocson and Alejandra
Poblete, they should be considered, likewise, as the exclusive
properties of Emilio Jocson, the burden of proof being on
petitioner.
9

G.R. Nos. 78583-84. March 26, 1990.


BENIGNO TODA, JR., petitioner, vs. COURT OF APPEALS
and ROSE MARIE TUASON-TODA, respondents.
G.R. Nos. 78696-97. March 26, 1990.
ROSE MARIE TUASON-TODA, petitioner, vs.BENIGNO
TODA, JR., respondent.
*

Civil Law; Property;Conjugal Partnership; The separation of


property is not effected by the mere execution of the contract or
agreement of the parties but by the decree of the court approving the
same; The conjugal partnership is dissolved only upon the issuance
of a decree of separation of property.We are in agreement with
the holding of the Court of Appeals that the compromise
agreement became effective only on June 9, 1981, the date when it
was approved by the trial court, and not on March 30, 1981 when
it was signed by the parties. Under Article 190 of the Civil Code,
(i)n the absence of an express declaration in the marriage
settlements, the separation of property between spouses during
the marriage shall not take place save in virtue of a judicial order.
Hence, the separation of property is not effected by the mere
execution of the contract or agreement of the parties, but by the
decree of the court approving the same. It, therefore, becomes
effective only upon judicial approval, without which it is void.
Furthermore, Article 192 of said Code explicitly provides that
________________
*

SECOND DIVISION.

714

7
14

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of
Appeals

the conjugal partnership is dissolved only upon the issuance


of a decree of separation of property.

Same; Same; Same; Same;Conjugal partnership of Benigno


and Rose Marie should be considered dissolved only on June 9,
1981 when the Trial Court approved their joint petition for
voluntary
dissolution
of
their
conjugal
partnership.
Consequently, the conjugal partnership of Benigno and Rose Marie
should be considered dissolved only on June 9, 1981 when the trial
court approved their joint petition for voluntary dissolution of their
conjugal partnership. Conformably thereto, the cash dividends
declared on July 1, 1981 and July 25, 1981 in the amount of
P2,191.62 and P40,196.12, respectively, should pertain to Rose
Marie; and that declared on April 25, 1981 in the amount of
P37,126.30 ought to be paid to Benigno, pursuant to Paragraph 4
(c) of the compromise agreement which awards to Benigno the
conjugal assets not otherwise specifically assigned to Rose Marie.
Same; Same; Same; Legal presumption that all property of the
marriage belongs to the conjugal partnership absent any proof that
it is the exclusive property of either spouse.With respect to the
amount of P360,095.12 which Benigno deducted from the P2
million supposed to be paid to Rose Marie, it is not clear from the
records where said amount came from. The Court of Appeals, in
holding that it is conjugal and therefore belongs to Benigno,
presumed it to be in the nature of cash dividends declared prior to
the approval of the compromise agreement by reason of the fact
that the amount was deducted by Benigno from the P2 million
which he paid on April 14, 1981. While no sufficient proof was
adduced to conclusively explain such deduction, there exists the
legal presumption that all property of the marriage belongs to the
conjugal partnership absent any proof that it is the exclusive
property of either spouse. Since Rose Marie failed to prove that the
amount forms part of her paraphernal property, it is presumed to
be conjugal property. Consequently, Benigno is entitled to the said
amount of P360,095.12, hence he rightfully deducted the same
from the amount due to Rose Marie.

PETITION to review the decision of the Court of Appeals.


10

The facts are stated in the opinion of the Court.


Bautista, Picazo, Buyco, Tan & Fider for Benigno Toda,
Jr.
Belo, Abiera & Associates for petitioner Rose Marie
Tuason-Toda.
715

VOL. 183, MARCH 26, 715


1990
Toda, Jr. vs. Court of Appeals
REGALADO, J.:

4. 4.Setting aside the order of the lower court directing the


annotation of lien on the property of Benigno Toda, Jr.
SO ORDERED.

Benigno Toda, Jr. (Benigno for brevity) and Rose Marie


Tuason-Toda (Rose Marie for brevity) were married on June
9, 1951 and were blessed with two children. Individual
differences and the alleged infidelity of Benigno, however,
marred the conjugal union thereby prompting Rose Marie to
file on December 18, 1979 in the former Court of First
Instance of Rizal, as Civil Case No. 35566, a petition for
termination
of
conjugal
partnership
for
alleged
mismanagement and dissipation of conjugal funds against
Benigno.
After hearings were held, the parties in order to avoid
further
2

These consolidated cases seek a review of the decision of the


Court of Appeals promulgated on January 29, 1987 in CAG.R. CV Nos. 06675 and 07936, the dispositive portion of
which reads:
1

WHEREFORE, judgment is hereby rendered:

________________

1. 1.Ordering the payment of the cash dividends declared on


July 1, 1981 amounting to P2,191.62 and those declared on
July 25, 1981 amounting to P40,196.12 to Rose Marie
Toda as her separate property. The cash dividends
declared on April 25, 1981 amounting to P37,196.30 (sic)
are hereby adjudicated to Benigno Toda, Jr. as his share in
the conjugal partnership assets; the portion of the order
dated November 2, 1981 with respect to the payment of
the amount of P360,095.12 to Rose Marie T. Toda is set
aside;
2. 2.Ordering the payment of the amount of P4,623,982.24 to
Rose Marie Toda representing the balance of
P15,749,135.32 obligated to be paid as estate taxes by
Benigno Toda, Jr.;
3. 3.Setting aside the order of the lower court dated June 2,
1982 directing Benigno Toda, Jr. to pay interest and nonpayment penalty of 18% and 5%, respectively; and

Justice Jose A.R. Melo, ponente, with Justices Ricardo P. Tensuan and

Jaime M. Lantin, concurring; Rollo, G.R. Nos. 78583-84, 29-45.


2

Presided over by then Judge Rizalina Bonifacio Vera.

716

716

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of Appeals

disagreeable proceedings, filed on April 1, 1981 a joint


petition for judicial approval of dissolution of conjugal
partnership under Article 191 of the Civil Code, docketed as
Special Proceeding No. 9478, which was consolidated with
the aforesaid civil case. This petition which was signed by the
parties on March 30, 1981, embodied a compromise
agreement allocating to the spouses their respective shares
in the conjugal partnership assets and dismissing with
3

11

prejudice the said Civil Case No. 35566,CA-G.R. No. 11123SP of the Court of Appeals and G.R. No. 56121 of this Court.
The said petition and the compromise agreement therein
were approved by the trial court in its order of June 9, 1981.
Thereafter, several orders were issued by the lower court
pertaining to the interpretation and implementation of the
compromise agreement, as follows:
4

1. 1.Order, dated November 20, 1981, ordering Benigno, inter


alia, to pay Rose Marie the cash dividends on the shares
declared on April 25, 1981 amounting to P37,126.30; that
declared on July 25, 1981 amounting to P40,196.12; that
declared on July 1, 1981, given on September 25, 1981
amounting to P2,191.62; and the payment of P360,095.12
to Rose Marie which is the balance of P2 million paid on
April 4, 1981;
2. 2.Order, dated June 2, 1982, ordering Benigno to pay Rose
Marie interest at 18% per annum on the amounts required
to be paid in the order of November 20, 1981, as well as 5%
non-payment penalty should the said order of November
20, 1981 be sustained on appeal;
3. 3.Order, dated December 9, 1982, denying Benignos motion
to inhibit Judge Rizalina Bonifacio Vera from hearing the
case;
4. 4.Order, dated March 1, 1983, ordering the annotation of a
lien on certain properties of Benigno as security for any
and all amounts that he may finally be ordered to pay to
Rose Marie under the compromise agreement; and
5. 5.Order, dated March 14, 1983, ordering Benigno to pay
Rose Marie the amount of P4,623,929.24, with interest
and penalties thereon
5

Ibid., 75-84.

Ibid., 85-98.

Ibid., 102-105.

Ibid., 62.

Ibid., 122-125.

717

VOL. 183, MARCH 26, 717


1990
Toda, Jr. vs. Court of Appeals
at the rates stipulated in the compromise agreement from
date of demand by Rose Marie.
The compromise agreement which, as earlier stated, was
incorporated in the petition for dissolution of the conjugal
partnership and was approved by the court below, contains
the following stipulations:
9

xxx
4. For the best interest of each of them, petitioners have agreed
to dissolve their conjugal partnership and to partition the assets
thereof, under the following terms and conditionsthis document,
a pleading, being intended by them to embody and evidence their
agreement;
1. (a)Petitioners as the parties hereto agree upon the
dissolution of their conjugal partnership during the
marriage and further agree to obtain judicial approval of
their said agreement as provided by Article 191 of the
Civil Code.
2. (b)The following shall be adjudicated to petitioner Rose
Marie Tuason-Toda:
1. (1)Forty Million Pesos (P40,000,000.00) to be paid as
follows:

________________
3

Rollo, G.R. Nos. 78696-97, 69-74.

1. (a)Petitioner Benigno Toda, Jr. shall assume the payment


of the estate taxes, interest and penalties thereon,
12

pertaining to the estate of petitioner Rose Marie TuasonTodas late brother Manuel Tuason, Jr. in the sum of
P15,749,135.32 as of March 31, 1981all interest and
penalty charges after March 31, 1981 to be the
responsibility of petitioner Benigno Toda, Jr.
2. (b)P2,000,000.00 to be paid within 30 days after signing of
this agreement.
3. (c)The balance shall be paid within six (6) months after date
of signing of this agreement. If not paid when due, the
balance shall bear interest at 18% per annum until paid
and there shall be a 5% non-payment penalty. The
proceeds from any sale of or loss with respect to, Rubicons
shares in Philippine Air Lines, Inc., shares of Cibeles
Insurance Corporation or Hermana Mayor shall be applied
when received against the aforesaid balance, except to the
extent such proceeds are used to satisfy any
________________
9

Ibid., 110-115.

718

718

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of Appeals
1. other obligation under this agreement.
2. (2)All shares of stock in San Miguel Corporation registered
solely in the name of petitioner Rose Marie Tuason-Toda
whether stock dividends or stocks acquired on pre-emptive
rights including those acquired in the names of both
petitioners Benigno Toda, Jr. and Rose Marie TuasonToda (whether jointly or alternately and/or), free from all
liens and encumbrances.

3. (3)All shares of stock in San Miguel Corporation acquired


whether as stock dividends of or on pre-emptive rights
pertaining to the shares of stock in said corporation of
petitioner Rose Marie Tuason-Todas brother the late
Manuel Tuason, Jr. (of course, the original shares of the
latter pertain to petitioner Rose Marie Tuason-Toda also),
free from all liens and encumbrances except for the estate
tax lien. Petitioner Rose Marie Tuason-Toda hereby grants
petitioner Benigno Toda, Jr. an irrevocable proxy, for
three years through the 1983 stockholders meeting
whether annual or special to elect directors for all shares
of stock she owns directly or indirectly including those
from the late Manuel Tuason, Jr. in San Miguel
Corporation.
4. (4)The Banaba Forbes Park conjugal dwelling and its
contents free from all liens and encumbrances except that
petitioner Benigno Toda, Jr. shall remove therefrom his
personal effects including furniture and appliances in his
study room and T.V. room and, from the family room, all
antiques, rugs, paintings of Old Fort Manila, books and
mementos. Petitioner Benigno Toda, Jr. commits that no
servant now living in the Tolentino street apartments
shall be evicted.
5. (5)The San Francisco apartment at Apartment 905, No.
1750 Taylor Street, San Francisco, California, U.S.A., and
its contents, free from all liens and encumbrances, except
that petitioner Benigno Toda, Jr. shall remove therefrom
his personal effects.
6. (6)The artifacts already removed by petitioner Rose Marie
Tuason-Toda from the Madrid Apartment at No. 4 San
Pedro de Valdivia. She shall return to it its silver ware,
china ware, paintings and etchings. She may retain the
three fans encased in glass and may remove her clothes,
perfumes and toiletries, the Sansa painting of a shell
dedicated to her, the painting of the Madonna and
13

tapestry hanging in her bedroom, 5 Persian rugs, 1 writing


desk and chair and the 2 lamps thereon and 1 lamp on the
night table, and the statuette given her by Hagedorn.
7. (7)Jewelry.
8. (8)Motor vehicles registered in her name.

2. (d)Petitioner Benigno Toda, Jr. shall assume the payment


of all conjugal obligations, petitioner Rose Marie TuasonToda representing and warranting that she has no
pending obligation or incurred no obligation chargeable to
the conjugal partnership except those listed in Annex A
hereof.If the Rosaria Apartment is subject to a mortgage
loan and such loan is a conjugal debt, petitioner Benigno
Toda, Jr. shall assume such loan and shall obtain the
discharge of the mortgage.
3. (e)After the signing of this document:

719

VOL. 183, MARCH 26, 719


1990
Toda, Jr. vs. Court of Appeals
1. (9)Within forty-five (45) days from signing of this
agreement, One Million Pesos (P1,000,000.00) as
attorneys feespetitioner Rose Marie Tuason-Toda
agreeing to hold petitioner Benigno Toda, Jr. harmless
from any claim for attorneys fees and expenses that may
be filed against the conjugal partnership or herself for
services rendered to her in the prosecution of her claims
against said conjugal partnership or against petitioner
Benigno Toda, Jr. or to secure her paraphernal estate.
2. (10)Two shares with two lots in Valley Golf & Country
Club.
3. (11)One share in Club Puerta de Hierro in Madrid, Spain if
there is one registered in petitioner Rose Marie TuasonTodas name.
4. (12)Share in Montemar Beach Club in Bagac, Bataan
petitioner Rose Marie Tuason-Toda agreeing to asume the
balance of the acquisition cost thereof.
1. (c)All other properties of the conjugal partnership of
whatever kind wherever located shall be adjudicated to
petitioner Benigno Toda, Jr. even though acquired in the
name of petitioner Rose Marie Tuason-Toda or both of
themshe undertaking to execute the corresponding
deeds of conveyances.

1. (1)Each of them shall own, dispose of, possess, administer


and enjoy his or her separate estate, present and future,
without the consent of the other;
2. (2)All earnings from any profession business or industry
shall likewise belong to each of them respectively;
3. (3)All expenses and obligations incurred by each of them
shall be their respective and separate responsibilities.
1. (f)With the signing of this document, Civil Case No.
35566 of this same Court,CA-G.R. No. 11123-SPand SCG.R. No. L-56121shall be deemed dismissed with prejudice
as between the parties
720

720

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of Appeals

hereto.
The parties then prayed that judgment be rendered:
10

1. (a)Approving the agreement for voluntary dissolution and


partition of the conjugal partnership;
14

2. (b)declaring the conjugal partnership of petitioners


dissolved and adjudicating to each of them his or her share
in the properties and assets of said conjugal partnership in
accordance with the agreement embodied in paragraph 4
hereof; and
3. (c)enjoining the parties to comply with the terms and
conditions of the aforesaid agreement.
11

Ironically, the said agreement failed to fully subserve the


intended amicable settlement of all the disputes of the
spouses. Instead, as lamented by the counsel of one of them,
the compromise agreement which was designed to terminate
a litigation spawned two new petitions, with each party
initiating one against the other. Thus, illustrative of the
saying that a solution which creates another problem is no
solution, the contradictory interpretations placed by the
parties on some provisions of the agreement resulted in
appeals to respondent court and, eventually, the present
recourse to us.
Benigno appealed from the aforestated orders of the trial
court of November 20, 1981, June 2, 1982, December 9, 1982,
March 1, 1983 and March 14, 1983 containing the directives
hereinbefore respectively set out. The same were disposed of
by the Court of Appeals as explained at the start of this
decision.
Rose Marie now submits that the Court of Appeals erred:
1. 1.In holding that the compromise agreement of the parties
herein became effective only after its judicial approval on
June 9, 1981 and not upon its execution on March 30,
1981;
2. 2.In setting aside the order of the lower court dated June 2,
1981 directing Benigno to pay interest of eighteen percent
and non-payment penalty of five percent; and
3. 3.In setting aside the order of the lower court directing the

_______________
10

Ibid., 69-73.

11

Ibid., 73.

721

VOL. 183, MARCH 26, 721


1990
Toda, Jr. vs. Court of Appeals
On the other hand, Benigno contends in his present petition
before us that:
1. 1.The Court of Appeals erred on a question of law when it
affirmed the lower courts award of P4,623,929.24 without
trial and evidence-taking and overruled petitioners claim
of violation of his due process right;
2. 2.The Court of Appeals erred on a question of law and due
process when it upheld the lower courts denial of
petitioners motion for her inhibition/disqualification;
3. 3.Since the document (the parties compromise agreement)
explicitly provided for assumption of liability rather than
agency to pay and since there was no evidence-taking, the
Court of Appeals finding of an agency to pay is reviewable
as a question of law; and
4. 4.The Court of Appeals erred on a question of law involving
the parol evidence rule.
13

The award of cash dividends basically depends on the date of


effectivity of the compromise agreement as this will
determine whether the same is conjugal property or separate
property of the spouses.
We are in agreement with the holding of the Court of
Appeals that the compromise agreement became effective
only on June 9, 1981, the date when it was approved by the
trial court, and not on March 30, 1981 when it was signed by
the parties. Under Article 190 of the Civil Code, (i)n the
14

15

absence of an express declaration in the marriage


settlements, the separation of property between spouses
during the marriage shall not take place save in virtue of a
judicial order. Hence, the separation of property is not
effected by the mere execution of the contract or agreement of
the parties, but by the decree of the court approving the
same. It, therefore, becomes effective only upon judicial
approval, without which it is void. Furthermore, Article 192
of
15

_________________
12

Ibid., 22.

13

Ibid., G.R. Nos. 78583-84, 13-26.

14

Now Art. 134 of the Family Code.

15

Lacson vs. Lacson, et al., 24 SCRA 837 (1968); see also Tolentino,Civil

Code, Vol. I, 1987 Ed., 487.


722

722

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of Appeals

dissolved only upon the issuance of a decree of separation of


property.
Consequently, the conjugal partnership of Benigno and
Rose Marie should be considered dissolved only on June 9,
1981 when the trial court approved their joint petition for
voluntary dissolution of their conjugal partnership.
Conformably thereto, the cash dividends declared on July 1,
1981 and July 25, 1981 in the amount of P2,191.62 and
P40,196.12, respectively, should pertain to Rose Marie; and
that declared on April 25, 1981 in the amount of P37,126.30
ought to be paid to Benigno, pursuant to Paragraph 4 (c) of
the compromise agreement which awards to Benigno the

conjugal assets not otherwise specifically assigned to Rose


Marie.
With respect to the amount of P360,095.12 which Benigno
deducted from the P2 million supposed to be paid to Rose
Marie, it is not clear from the records where said amount
came from. The Court of Appeals, in holding that it is
conjugal and therefore belongs to Benigno, presumed it to be
in the nature of cash dividends declared prior to the approval
of the compromise agreement by reason of the fact that the
amount was deducted by Benigno from the P2 million which
he paid on April 14, 1981. While no sufficient proof was
adduced to conclusively explain such deduction, there exists
the legal presumption that all property of the marriage
belongs to the conjugal partnership absent any proof that it
is the exclusive property of either spouse. Since Rose Marie
failed to prove that the amount forms part of her
paraphernal property, it is presumed to be conjugal property.
Consequently, Benigno is entitled to the said amount of
P360,095.12, hence he rightfully deducted the same from the
amount due to Rose Marie.
The issue regarding the annotation of the lien on
Benignos properties has been mooted by our resolution dated
April 3, 1989 wherein, at his instance, we ordered the
cancellation thereof upon his posting of the corresponding
bond. In our resolution of February 26, 1990, we noted
Benignos compliance, approved the bond he filed, and
ordered the cancellation of the liens annotated on the
certificates of title of the properties
16

_______________
16

Article 160, Civil Code.

723

VOL. 183, MARCH 26,


1990

723
16

Toda, Jr. vs. Court of Appeals


Likewise, the order denying the motion to inhibit Judge
Rizalina Bonifacio Vera has become academic considering
that she no longer presides over the court where the case was
filed. Besides, as correctly explained by respondent court, the
ground for inhibition raised by Benigno is not valid it being
merely on the basis of the judge having acquired knowledge
of the facts surrounding the agreement of the parties, hence
she would be a material witness to the issue of the true
agreement which is contested by the parties. However, those
facts came to the knowledge of the judge in the course of her
efforts to effect a compromise between parties and are also
known to the parties. This is not a ground for
disqualification; on the contrary, said acts of the judge were
in accord with the rule encouraging compromises in
litigations, especially between members of the same family.
Anent the tax savings of P4,623,982.24 obtained by
Benigno, we hold that this forms part of the P40 million
allocated to Rose Marie under paragraph 4 (b) (1) of the
compromise agreement. We give credit to the ratiocination
thereon of the trial court as quoted with approval by
respondent court:
The records show that petitioner Benigno Toda, Jr. paid only
P1,125,152.48 in estate taxes, although the amount stated in the
Compromise Agreement was P15,749,135.32. The balance of
P4,623,929.24 is now being claimed by both parties as aforestated.
In the opinion of this court, the pertinent terms of the Agreement
as quoted, are clear and do not require any interpretation. In brief,
under the Agreement, petitioner Rose Marie T. Toda is adjudicated
the fixed sum of P40 million, to be paid as follows: (a) Payment by
petitioner Benigno Toda, Jr. of the estate taxes, interests and
penalties thereon, pertaining to the estate of the late Manuel
Tuason, Jr. in the amount of P15,749,135.32 as of March 31, 1982;
(b) P2 million within 30 days after signing of the Agreement; (c)
the balance within six months after date of signing of the

Agreement. This Court notes that the amount of taxes, interests


and penalties is fixed at P15,749,135.32 and this figure was
provided by Benigno Toda, Jr. There is no provision as contended
by petitioner Benigno Toda, Jr. that the amount was only an
assumed liability and that he could attempt to reduce it by suit or
compromise. It is clear that if the amount of P4,623,929.24 is to be
credited to Benigno Toda, Jr. then the P40 million which petitioner
Rose Marie T. Toda is to receive would be short by that amount.
This VOL. 183, MARCH 26, 1990
724

724

SUPREME COURT
REPORTS
ANNOTATED
Toda, Jr. vs. Court of Appeals

Benigno Toda, Jr. was constituted as agent to pay to the


government the liability of the estate of the late Manuel Tuason,
Jr. in the fixed amount of P15,749,135.32 and if he was able to
secure a reduction thereof, then he should deliver to his principal
such reduction. . . xxx
17

We do not believe that Benigno was denied due process when


the trial court resolved the motion of Rose Marie for the
payment of P4,623,982.24 without the benefit of a hearing.
The records disclose that the hearing thereon was postponed
twice at the instance of Benigno, which prompted the court to
thereafter consider the motion submitted for resolution on
the basis of the allegations therein and the answer filed by
counsel for both parties. Benigno cannot now be heard to
claim that he was deprived of his day in court. Furthermore,
respondent court correctly held that the issue involved was
more of a question of interpretation of a contract rather than
a determination of facts. Benigno failed to make a plausible
showing that the supposed evidence he had intended to
present, if any, would not be merely collateral matters.
Considering that the amount of P4,623,982.24 actually
forms an integral part of the P40 million (minus the lawful
17

and authorized deductions that may be made therefrom)


which Benigno categorically undertook to pay to Rose Marie,
the same must earn interest at the rate of 18% per annum
and 5% non-payment penalty, the same being included in
and within the contemplation of Paragraph 4 (b) (1) (c) of the
compromise agreement. Said provision of the agreement
provides for the payment of the interest and penalty upon
non-payment of the balance of the P40 million after the
specific authorized deductions therefrom. Since the amount
of P4,623,982.24 was not to be lawfully deducted by Benigno,
as hereinbefore explained, it constitutes part of the
contemplated contingent balance which might turn out to be
due to Rose Marie and, therefore, subject to the imposition of
said increments on Benignos liability.
WHEREFORE, the judgment appealed from is hereby
AFFIRMED, with the modification that Benigno Toda, Jr. is
hereby

Note.When the property is registered in the name of a


Spouse only and there is no showing as to when the property
was acquired by said spouse, the property belongs exclusively
to said spouse. (PNB vs. Court of Appeals,153 SCRA 435.)
o0o

________________
17

Rollo, G.R. Nos. 78696-97, 61-62.

725

VOL. 183, MARCH 27,


725
1990
United Realty Corporation vs.
Court of Appeals
18% per annum and 5% non-payment penalty on the tax
savings of P4,623,982.24 from date of formal demand until
the same is fully paid.
SO ORDERED.
MelencioHerrera(Chairman), Paras, PadillaandSarmiento,
JJ.,
concur.
Judgment affirmed with modification.
18

G.R. No. 70082. August 19, 1991.


SPOUSES RICKY WONG and ANITA CHAN, LEONARDO
JOSON, JUANITO SANTOS, EMERITO SICAT and
CONRADO
LAGMAN,
petitioners, vs. HON.
INTERMEDIATE APPELLATE COURT and ROMARICO
HENSON, respondents.
*

Civil Law; Laches; There is no laches or even finality of


decision to speak of with respect to Romarico since the decision in
Civil Case No. 2224 is null and void for having been rendered
without jurisdiction for failure to observe the notice requirements
prescribed by law.Hence, laches may not be charged against
Romarico because, aside from the fact that he had no knowledge of
the transactions of his estranged wife, he was also not afforded an
opportunity to defend himself in Civil Case No. 2224. There is no
laches or even finality of decision to speak of with respect to
Romarico since the decision in Civil Case No. 2224 is null and void
for having been rendered without jurisdiction for failure to observe
the notice requirements prescribed by law. Failure to notify
Romarico may not be attributed to the fact that the plaintiffs in
Civil Case No. 2224 acted on the presumption that the Hensons
were still happily married because the complaint itself shows that
they did not consider Romarico as a party to the transaction which
Katrina undertook with Anita Wong. In all likelihood, the
plaintiffs merely impleaded Romarico as a nominal party in the
case pursuant to the provisions of Rule 3, Section 4 of the Rules of
Court.
Same; Property; Properties acquired during the marriage
presumed to belong to the conjugal partnership.On the matter of
ownership of the properties involved, however, the Court disagrees
with the appellate court that the said properties are exclusively
owned by Romarico. Having been acquired during the marriage,
they are still presumed to belong to the conjugal partnership even
though Romarico and Katrina had been living separately.
Same; Same; Same; In the determination of the nature of a
property acquired by a person during coverture, the controlling

factor is the source of the money utilized in the purchase.The


presumption of the conjugal nature of the properties subsists in
the absence of clear, satisfactory and convincing evidence to
overcome said presumption or to prove that the properties are
exclusively owned by Romarico. While there is proof that Romarico
acquired the properties with money he had borrowed from an
officemate, it is unclear where he obtained the money to repay the
loan. If he paid it out of his salaries, then the money is part of the
conjugal assets and not exclusively his. Proof on this matter is of
paramount importance considering that in the determination of
the nature of a property acquired by a person during covertrue, the
controlling factor is the source of the money utilized in the
purchase.
Same; Same; Same;Circumstances when wife may bind the
conjugal partnership.Furthermore, under the Civil Code (before
the effectivity of the Family Code on August 3, 1988), a wife may
bind the conjugal partnership only when she purchases things
necessary for the support of the family or when she borrows money
for the purpose of purchasing things necessary for the support of
the family if the husband fails to deliver the proper sum; when the
administration of the conjugal partnership is transferred to the
wife by the courts or by the husband, and when the wife gives
moderate donations for charity.

PETITION for certiorari to review the decisions of the then


Intermediate Appellate Court.
The facts are stated in the opinion of the Court.
Feliciano C. Tumale for petitioners.
Benjamin Dadios andBausa, Ampil, Suarez,Paredes &
Bausa for private respondent.
FERNAN, C.J.:

19

Submitted for adjudication in the instant petition for review


on certiorari is the issue of whether or not the execution of a
decision in an action for collection of a sum of money may be
nullified on the ground that the real properties levied upon
and sold at public auction are the alleged exclusive
properties of a husband who did not participate in his wifes
business transaction from which said action stemmed.
Private respondent Romarico Henson married Katrina
Pineda on January 6, 1964. They have three children but
even during the early years of their marriage, Romarico and
Katrina had been most of the time living separately. The
former stayed in Angeles City while the latter lived in
Manila. During the marriage or on January 6, 1971,
Romarico bought a 1,787-square-meter parcel of land in
Angeles City for P11,492 from his father, Dr. Celestino L.
Henson with money borrowed from an officemate. His father
needed the amount for investments in Angeles City and
Palawan.
Meanwhile, in Hongkong sometime in June 1972, Katrina
entered into an agreement with Anita Chan whereby the
latter consigned to Katrina pieces of jewelry for sale valued
at 199,895 Hongkong dollars or P321,830.95. When Katrina
failed to return the pieces of jewelry within the 20-day period
agreed upon, Anita Chan demanded payment of their value.
On September 18, 1972, Katrina issued in favor of Anita
Chan a check for P55,000 which, however, was dishonored for
lack of funds. Hence, Katrina was charged with estafa before
the then Court of First Instance of Pampanga and Angeles
City, Branch IV. After trial, the lower court rendered a
decision dismissing the case on the ground that Katrinas
liability was not criminal but civil in nature as no estafa was
committed by the issuance of the check in payment of a preexisting obligation.
In view of said decision, Anita Chan and her husband
Ricky Wong filed against Katrina and her husband Romarico
1

Henson, an action for collection of a sum of money also in the


same branch of the aforesaid court. The records of the case
show that Atty. Gregorio Albino, Jr. filed an answer with
counterclaim but only in behalf of Katrina. When the case
was called for pretrial, Atty. Albino once again appeared as
counsel for Katrina only. While it is true that during
subsequent hearings, Atty. Expedito Yumul, who
collaborated with Atty. Albino, appeared for the defendants,
it is not shown on record that said counsel also represented
Romarico. In fact, a power of attorney which Atty. Albino
produced during the trial, showed that the same was
executed solely by Katrina.
After trial, the court promulgated a decision in favor of
the Wongs. It ordered Katrina and Romarico Henson to pay
the Wongs HK$199,895.00 or P321,830.95 with legal interest
from May 27, 1975, the date of filing of the complaint, until
fully paid; P20,000 as expenses for litigation; P15,000 as
attorneys fees, and the costs of the suit.
A writ of execution was thereafter issued. Levied upon
were four lots in Angeles City covered by Transfer
Certificates of Title Nos. 30950, 30951, 30952 and 30953 all
in the name of Romarico Henson x x x married to Katrina
Henson.
The public auction sale was first set for October 30, 1977
but since said date was declared a public holiday, Deputy
Sheriff Emerito Sicat reset the sale to November 11, 1977.
On said date, the following properties registered in the name
of Romarico Henson married to Katrina Henson were sold
at public auction: (a) two parcels of land covered by Transfer
Certificates of Title Nos. 30950 and 30951 with respective
areas of 293 and 289 square meters at P145,000 each to
Juanito L. Santos, and (b) two parcels of land covered by
Transfer Certificates of Title Nos. 30952 and 30953 with
respective areas of 289 and 916 square meters in the amount
of P119,000.00 to Leonardo B. Joson.
7

10

11

12

20

After the inscription on Transfer Certificate of Title No.


30951 of the levy on execution of the judgment in Civil Case
No. 2224, the property covered by said title was
extrajudicially foreclosed by the Rural Bank of Porac,
Pampanga on account of the mortgage loan of P8,000 which
Romarico and Katrina had obtained from said bank. The
property was sold by the sheriff to the highest bidder for
P57,000 on September 9, 1977. On September 14, 1978,
Juanito Santos, who had earlier bought the same property at
public auction on November 11, 1977, redeemed it by paying
the sum of P57,000 plus the legal interest
_______________

while Atty. Albino received a copy of the decision, he and his


wife were never personally served a copy thereof; that he had
nothing to do with the business transactions of Katrina as he
did not authorize her to enter into such transactions; and
that the properties levied on execution and sold at public
auction by the sheriff were his capital properties and
therefore, as to him, all the proceedings had in the case were
null and void.
On November 10, 1978, the lower court issued an order
restraining the Register of Deeds of Angeles City from
issuing the final bill of sale of Transfer Certificates of Title
Nos. 30950 and 30951 in favor of Juanito Santos and
Transfer Certificates of Title Nos. 30952 and 30953 in favor
of Leonardo Joson until further orders of the court. On
January 22, 1979, upon motion of Romarico, the court issued
a writ of preliminary injunction enjoining the sheriff from
approving the final bill of sale of the land covered by the
aforementioned certificates of title and the Register of Deeds
of Angeles City from registering said certificates of title in
the names of Santos and Joson until the final outcome of the
case subject to Romaricos posting of a bond in the amount of
P321,831.00.
After trial on the merits, the lower court rendered a
decision
15

Decision in Civil Case No. 2859, pp. 12-15.

Penned by Judge Felisa de la Fuente-Samson.

10

Exhs. Nos. A to D.

11

Exh. 5Juanito Santos.

12

Exh. 6Joson.

796

796

SUPREME COURT
REPORTS
ANNOTATED
Wong vs. Intermediate
Appellate Court

16

17

of P6,840.00 or a total amount of P63,840.00.


About a month before such redemption or on August 8,
1978, Romarico filed an action for the annulment of the
decision in Civil Case No. 2224 as well as the writ of
execution, levy on execution and the auction sale therein in
the same Court of First Instance. Romarico alleged that he
was not given his day in court because he was not
represented by counsel as Attys. Albino and Yumul appeared
solely for Katrina; that although he did not file an answer to
the complaint he was not declared in default in the case; that
13

14

_______________
13

Exh. 4Santos.

14

Civil Case No. 2859.

15

Record on Appeal, p. 25.

16

Ibid., p. 54.

17

Presided by Judge Ignacio M. Capulong. The presiding judge of Branch

IV had earlier inhibited himself from taking cognizance of the case. Hence,
Civil Case No. 2859 was transferred to Branch V of the same court.
797

21

(a) The Decision of the Court of First Instance of Pampanga


and Angeles City, Branch IV, rendered in Civil Case No. 2224,
entitled RICKY WONG, ET AL. vs. KATRINA PINEDA HENSON
and RO-

VOL. 200, AUGUST 19, 797


1991
Wong vs. Intermediate
Appellate Court
holding that Romarico was indeed not given his day in court
as he was not represented by counsel nor was he notified of
the hearings therein although he was never declared in
default. Noting that the complaint in Civil Case No. 2224 as
well as the testimonial and documentary evidence adduced at
the trial in said case do not show that Romarico had
anything to do with the transactions between Katrina and
Anita Chan, the court ruled that the judgment in Civil Case
No. 2224 is devoid of legal or factual basis which is not even
supported by a finding of fact or ratio decidendi in the body of
the decision, and may be declared null and void x x x
pursuant to a doctrine laid down by the Supreme Court to
the effect that the Court of First Instance or a branch
thereof, has authority and jurisdiction to try and decide an
action for annulment of a final and executory judgment or
order rendered by another court of first instance or of a
branch thereof (Gianan vs. Imperial,55 SCRA 755).
On whether or not the properties levied upon and sold at
public auction may be reconveyed to Romarico, the court,
finding that there was no basis for holding the conjugal
partnership liable for the personal indebtedness of Katrina,
ruled in favor of reconveyance in view of the jurisprudence
that the interest of the wife in the conjugal partnership
property being inchoate and therefore merely an expectancy,
the same may not be sold or disposed of for value until after
the liquidation and settlement of the community assets. The
dispositive portion of the decision reads:
18

WHEREFORE, and in view of the foregoing, judgment is hereby


rendered in favor of the plaintiff and against all the defendants, as
follows:

_______________
18

Pursuant to Section 9 (2) of Batas Pambansa Blg. 129, the Court of Appeals

now exercises exclusive original jurisdiction over actions for annulment of


judgments of the Regional Trial Courts (Islamic DaWah Council of the
Philippines vs. Court of Appeals, G.R. No. 80892, September 29, 1989, 178 SCRA
178; Liwag vs. Court of Appeals, G.R. No. 86094, December 20, 1989, 180 SCRA
420).

798

798

SUPREME COURT
REPORTS
ANNOTATED
Wong vs. Intermediate
Appellate Court

MARICO HENSON, is hereby declared null and void, only as far


as it affects plaintiff herein Romarico Henson;
1. (b)The Writ of Execution, levy in execution and auction
sale of the conjugal property of the spouses Romarico
Henson and Katrina Pineda Henson which were sold at
public auction on November 11, 1977, without notice to
plaintiff herein, by Deputy Sheriff Emerito Sicat, are
likewise declared null and void and of no force and effect;
2. (c)Defendants Emerito Sicat and Conrado Lagman, in their
official capacity as Sheriff and Register of Deeds,
respectively, are enjoined permanently from issuing and/or
registering the corresponding deeds of sale affecting the
property;

22

3. (d)The aforementioned buyers are directed to reconvey the


property they have thus purchased at public auction to
plaintiff Romarico Henson;
4. (e)As far as the claim for reimbursement filed by Juanito
Santos concerning the redemption of the property covered
by Transfer Certificate of Title No. 30951 from the Rural
Bank of Porac, which foreclosed the same extrajudicially,
is concerned, plaintiff Romarico Henson may redeem the
same within the period and in the manner prescribed by
law, after the corresponding deed of redemption shall have
been registered in the Office of the Registry of Deeds for
Angeles City;
5. (f)Defendants Spouses Ricky Wong and Anita Chan are,
with the exception of the defendants Juanito Santos,
Leonardo Joson, Sheriff and Register of Deeds, are ordered
jointly and severally, to pay the plaintiff Romarico Henson
the sum of P10,000.00, corresponding to the expenses of
litigation, with legal interest thereon from the time this
suit was filed up to the time the same shall have been
paid, plus P5,000.00 for and as attorneys fees, and the
costs of suit; and
6. (g)The counterclaims respectively filed on behalf of all the
defendants in the above-entitled case are hereby
DISMISSED.
SO ORDERED.

The defendants appealed to the then Intermediate Appellate


Court. In its decision of January 22, 1985 the said court
affirmed in toto the decision of the lower court. It added that
as to Romarico, the judgment in Civil Case No. 2224 had not
attained finality as the decision therein was not served on
him
19

_______________

19

Penned by Justice Eduardo P. Caguioa and concurred in by Justices

Ramon G. Gaviola, Jr., Ma. Rosario Quetulio-Losa and Leonor Ines Luciano.
799

VOL. 200, AUGUST 19, 799


1991
Wong vs. Intermediate
Appellate Court
and that he was not represented by counsel. Therefore,
estoppel may not be applied against him as, not having been
served with the decision, Romarico did not know anything
about it. Corollarily, there can be no valid writ of execution
inasmuch as the decision had not become final as far as
Romarico is concerned.
On whether the properties may be levied upon as conjugal
properties, the appellate court ruled in the negative. It noted
that the properties are Romaricos exclusive capital having
been bought by him with his own funds. But granting that
the properties are conjugal, they cannot answer for Katrinas
obligations as the latter were exclusively hers because they
were incurred without the consent of her husband, they were
not for the daily expenses of the family and they did not
redound to the benefit of the family. The court underscored
the fact that no evidence has been submitted that the
administration of the conjugal partnership had been
transferred to Katrina either by Romarico or by the court
before said obligations were incurred.
The appellants filed a motion for reconsideration of the
decision of the appellate court but the same was denied for
lack of merit on February 6, 1985.
Hence, the instant petition for review on certiorari.
Petitioners contend that, inasmuch as the Henson spouses
were duly represented by Atty. Albino as shown by their
affidavit of August 25, 1977 wherein they admitted that they
were represented by said counsel until Atty. Yumul took over
the actual management and conduct of the case and that
20

23

Atty. Albino had not withdrawn as their counsel, the lower


court did not commit an error in serving a copy of the
decision in Civil Case No. 2224 only on Atty. Albino.
Moreover, during the 2-year period between the filing of the
complaint in Civil Case No. 2224 and the public auction sale
on November 11, 1977, Romarico remained silent thereby
making him in estoppel and guilty of laches.
Petitioners further aver that there being sufficient
evidence that the auction sale was conducted in accordance
with law, the acts of the sheriffs concerned are presumed to
be regular and valid. But granting that an irregularity
consisting of the nonnotification of Romarico attended the
conduct of the auction sale, the rights of Santos and Joson
who were mere strangers
_______________
20

Rollo, p. 56.

800

800

SUPREME COURT
REPORTS
ANNOTATED
Wong vs. Intermediate
Appellate Court

who participated as the highest bidders therein, may not be


prejudiced. Santos and Joson bought the properties sincerely
believing that the sheriff was regularly performing his duties
and no evidence was presented to the effect that they acted
with fraud or that they connived with the sheriff. However,
should the auction sale be nullified, petitioners assert that
Romarico should not be unduly enriched at the expense of
Santos and Joson.
The petitioners theory is that Romarico Henson was
guilty of laches and may not now belatedly assert his rights
over the properties because he and Katrina were represented

by counsel in Civil Case No. 2224. Said theory is allegedly


founded on the perception that the Hensons were like any
other ordinary couple wherein a spouse knows or should
know the transactions of the other spouse which necessarily
must be in interest of the family. The factual background of
this case, however, takes it out of said ideal situation.
Romarico and Katrina had in fact been separated when
Katrina entered into a business deal with Anita Wong. Thus,
when that business transaction eventually resulted in the
filing of Civil Case No. 2224, Romarico acted, or, as charged
by petitioners, failed to act, in the belief that he was not
involved in the personal dealings of his estranged wife. That
belief was buttressed by the fact that the complaint itself did
not mention or implicate him other than as the husband of
Katrina. On whether Romarico was also represented by Atty.
Albino, Katrinas counsel, the courts below found that:
x x x Atty. Albino filed an Answer with Counterclaims dated July
25, 1975 solely on behalf of defendant Katrina Henson. The
salutary statement in that Answer categorically reads: x x x
COMES NOW THE DEFENDANT KATRINA HENSON by and
through undersigned counsel, in answer to plaintiffs complaint
respectfully alleges: x x x.
That Answer was signed by GREGORIO ALBINO, JR., over
the phrase COUNSEL FOR DEFENDANT KATRINA HENSON.
Again, when Civil Case No. 2224 was called for pre-trial on
November 27, 1975, before then Presiding Judge Bienvenido
Ejercito, it is clearly stated on page 2 of the days stenographic
notes, under APPEARANCES that Atty. Albino, Jr. appeared as
COUNSEL FOR DEFENDANT KATRINA HENSON. And when
the case was called, Atty. Jose Baltazar, Sr. appeared for the
plaintiffs while Atty. Albino
801

VOL. 200, AUGUST 19, 801


1991
Wong vs. Intermediate
24

Appellate Court
categorically appeared FOR DEFENDANT KATRINA HENSON.
It might be true that in subsequent hearings, Atty. Expedito
Yumul appeared as counsel for the defendants, but the whole
trouble is that he never expressly manifested to the Court that he
was likewise actually representing defendant ROMARICO
HENSON, for it cannot be disputed that Atty. Yumul only entered
his appearance in collaboration with Atty. Albino (see p. 2 tsn,
January 26, 1976, Espinosa), who in turn entered his initial
appearance during the pre-trial, and through the filing of an
Answer, for defendant KATRINA HENSON. As a matter of fact
the Power of Attorney which Atty. Albino produced during the pretrial was executed solely by defendant KATRINA HENSON.
Accordingly, as collaborating counsel, Atty. Yumul cannot, by any
stretch of the imagination, be considered as duly authorized to
formally appear likewise on behalf of defendant ROMARICO
HENSON for whom principal counsel of record Atty. Gregorio
Albino, Jr. never made any formal appearance. On this score, it is
not amiss to state that A spring cannot rise higher than its
source.
Now, what about that statement in the aforementioned joint
affidavit of the spouses KATRINA HENSON and ROMARICO
HENSON, to the effect that our first lawyer in said case was Atty.
Gregorio Albino, Jr., and sometime later Atty. Expedito B. Yumul
took over x x x.
That statement which plaintiff ROMARICO HENSON was
made to sign by Atty. Yumul on August 25, 1977, after the filing of
this case, allegedly for the purpose of dissolving the writ of
execution, as claimed in paragraph XIV of the complaint herein,
and is satisfactorily explained by both plaintiff herein and his wife,
while on cross-examination by Atty. Baltazar, Sr., and We quote:

Q So, the summons directed


your filing of your Answer
for both of you, your wife
and your good self?

A Yes, sir but may I add, I


received the summons but
I did not file an answer
because my wife took a
lawyer and that lawyer I
think will protect her
interest and my interest
being so I did not have
nothing to do in the
transaction which is
attached to the complaint.
(TSN, Jan. 14, 1980, pp.
52-53).
That plaintiff never appeared
in Civil Case No. 2224, nor
was
he therein represented by
counsel was impliedly
admitted
by defendants counsel of
records thru a question he
propounded on cross, and the
answer given by Katrina Pineda, to wit:
Q How about your husband,
do you remember if he
physically appeared in that
Civil Case No. 2224, will
you tell us
802

802

SUPREME COURT
REPORTS
ANNOTATED
Wong vs. Intermediate
25

A
Q

Appellate Court
if he was represented by
counsel as a party
defendant?
No, sir, he did not appear.
You are husband and
wife, please tell us the
reason why you have
your own counsel in that
case whereas Romarico
Henson did not appear
nor a counsel did not
appear in that
proceedings? (TSN, Feb.
25, 1980, pp. 6-7).
xxx
xxx
x x x.
Because that case is my
exclusive and personal
case, he has nothing to do
with that, sir. (TSN, Feb.
25, 1980, p. 9).
(Rollo, pp. 17-20)

Hence, laches may not be charged against Romarico because,


aside from the fact that he had no knowledge of the
transactions of his estranged wife, he was also not afforded
an opportunity to defend himself in Civil Case No.
2224. There is no laches or even finality of decision to speak
of with respect to Romarico since the decision in Civil Case
No. 2224 is null and void for having been rendered without
jurisdiction for failure to observe the notice requirements
prescribed by law. Failure to notify Romarico may not be
attributed to the fact that the plaintiffs in Civil Case No.
2224 acted on the presumption that the Hensons were still
happily married because the complaint itself shows that they
did not consider Romarico as a party to the transaction which
21

22

Katrina undertook with Anita Wong. In all likelihood, the


plaintiffs merely impleaded Romarico as a nominal party in
the case pursuant to the provisions of Rule 3, Section 4 of the
Rules of Court.
Consequently, the writ of execution cannot be issued
against Romarico as he has not yet had his day in court and,
necessarily, the public auction sale is null and
void. Moreover, the power of the court in the execution of
judgments extends only
23

24

_______________
21

Bailon-Casilao v. Court of Appeals, G.R. No. 78178, April 15, 1988, 160

SCRA 738, 747.


22

Portugal v. Reantasa, L-46078, November 24, 1988, 167 SCRA 712.

23

New Owners/Management of TML Garments, Inc. v. Zaragoza,G.R. No.

75866, February 23, 1989,170 SCRA 563; Vda. de Medina v. Cruz, L-39272,
May 4, 1988, 161 SCRA 36.
24

Ver v. Quetulio, G.R. No. 77526, June 29, 1988, 163 SCRA 80.

803

VOL. 200, AUGUST 19, 803


1991fs
Wong vs. Intermediate
Appellate Court
over properties unquestionably belonging to the judgment
debtor.
On the matter of ownership of the properties involved,
however, the Court disagrees with the appellate court that
the said properties are exclusively owned by Romarico.
Having been acquired during the marriage, they are still
presumed to belong to the conjugal partnership even though
Romarico and Ka-trina had been living separately.
The presumption of the conjugal nature of the properties
subsists in the absence of clear, satisfactory and convincing
evidence to overcome said presumption or to prove that the
25

26

27

26

properties are exclusively owned by Romarico. While there


is proof that Romarico acquired the properties with money he
had borrowed from an officemate, it is unclear where he
obtained the money to repay the loan. If he paid it out of his
salaries, then the money is part of the conjugal assets and
not exclusively his. Proof on this matter is of paramount
importance considering that in the determination of the
nature of a property acquired by a person during covertrue,
the controlling factor is the source of the money utilized in
the purchase.
The conjugal nature of the properties notwithstanding,
Katrinas indebtedness may not be paid for with them her
obligation not having been shown by the petitioners to be one
of the charges against the conjugal partnership. In addition
to the fact that her rights over the properties are merely
inchoate prior to the liquidation of the conjugal partnership,
the consent of her husband and her authority to incur such
indebtedness had not been alleged in the complaint and
proven at the trial.
28

29

30

31

_______________
25

Escovilla, Jr. v. Court of Appeals, G.R. No. 84497, November 6,

1989, 179 SCRA 109; Ong v. Tating, G.R. No. 61042, April 15, 1987, 149
SCRA 265.
26

Art. 160, Civil Code; Cuenca v. Cuenca, G.R. No. 72321, December 8,

1988, 168 SCRA 335.


27

Art. 178, Ibid., Flores v. Escudero, 92 Phil. 786.

28

Ahern v. Julian, 39 Phil. 607.

29

Art. 153 (2), Civil Code.

30

Art. 161, Ibid.; Lacson v. Diaz,L-19346, May 31, 1965, 14 SCRA 183.

31

Art. 172, Ibid.; Manaois-Salonga v. Natividad, 107 Phil. 268.

804

804

SUPREME COURT
REPORTS

ANNOTATED
Wong vs. Intermediate
Appellate Court
Furthermore, under the Civil Code (before the effectivity of
the Family Code on August 3, 1988), a wife may bind the
conjugal partnership only when she purchases things
necessary for the support of the family or when she borrows
money for the purpose of purchasing things necessary for the
support of the family if the husband fails to deliver the
proper sum; when the administration of the conjugal
partnership is transferred to the wife by the courts or by the
husband, and when the wife gives moderate donations for
charity. Having failed to establish that any of these
circumstances occurred, the Wongs may not bind the
conjugal assets to answer for Katrinas personal obligation to
them.
Petitioners contention that the rights of Santos and Joson
as innocent buyers at the public auction sale may not be
prejudiced, is, to a certain extent, valid. After all, in the
absence of proof that irregularities attended the sale, the
same must be presumed to have been conducted in
accordance with law. There is, however, a peculiar factual
circumstance that goes against the grain of that general
presumptionthe properties levied upon and sold at the
public auction do not exclusively belong to the judgment
debtor. Thus, the guiding jurisprudence is as follows:
32

33

34

35

The rule in execution sales is that an execution creditor acquires


no higher or better right than what the execution debtor has in the
property levied upon. The purchaser of property on sale under
execution and levy takes as assignee only, as the judicial seller
possesses no title other than that which would pass by an
assignment by the owner. An execution purchaser generally
acquires such estate or interest as was vested in the execution
debtor at the time of the seizure on execution, and only such
interest, taking merely a quit-claim of the execution debtors title,
27

without warranty on the part of either the execution officer or of


the parties, whether the property is realty or personalty. This rule
prevails even if a larger interest in the property was intended to be
sold. Accordingly, if the judgment debtor had no
_______________
32

Art. 115.

33

Arts. 196, 167 & 178.

34

Art. 168.

35

Art. 174.

805

VOL. 200, AUGUST 19, 805


1991
Wong vs. Intermediate
Appellate Court
interest in the property, the execution purchaser acquires no
interest therein. (Pacheco vs. Court of Appeals, L-48689, August
31, 1987, 153 SCRA 382, 388-389 quoting Laureano vs.
Stevenson, 45 Phil. 252; Cabuhat vs. Ansery, 42 Phil. 170; Fore v.
Manove, 18 Cal. 436 and 21 Am. Jur., 140-141. Italics supplied.)

The redemption made by Santos in the foreclosure


proceeding against Romarico and Katrina Henson filed by
the Rural Bank of Porac should, however, be respected unless
Romarico exercises his right of redemption over the property
covered by Transfer Certificate of Title No. 30951 in
accordance with law.
WHEREFORE, the decisions of the appellate court and
the lower court in Civil Case No. 2859 are hereby
AFFIRMED subject to the modifications above-stated. No
costs.
SO ORDERED.
Gutierrez,
Jr.,Feliciano, Bidin and Davide,
Jr.,
JJ., concur.
Decisions affirmed with modifications.
o0o
_______________
36

See: Segura v. Segura, L-29320, September 19, 1988, 165 SCRA 368, 374

Applying this jurisprudence, execution purchasers Santos


and Joson possess no rights which may rise above judgment
debtor Katrinas inchoate proprietary rights over the
properties sold at public auction. After all, a person can sell
only what he owns or is authorized to sell and the buyer can,
as a consequence, acquire no more than what the seller can
legally transfer. But, inasmuch as the decision in Civil Case
No. 2224 is void only as far as Romarico and the conjugal
properties are concerned, the same may still be executed by
the Spouses Wong against Katrina Henson personally and
exclusively. The Spouses Wong must return to Juanito
Santos and Leonardo Joson the purchase prices of P145,000
and P119,000 respectively, received by said spouses from the
public auction sale.
36

28

G.R. No. 122749. July 31, 1996.


ANTONIO A.S. VALDES, petitioner, vs. REGIONAL TRIAL
COURT, BRANCH 102, QUEZON CITY, and CONSUELO
M. GOMEZ-VALDES, respondents.
*

Civil Law; Family Code; In a void marriage, regardless of the


cause thereof, the property relations of the parties during the period
of cohabitation is governed by the provisions of Article 147 or
Article 148 of the Family Code.The trial court correctly applied
the law. In a void marriage, regardless of the cause thereof, the
property relations of the parties during the period of cohabitation
is governed by the provisions of Article 147 or Article 148, such as
the case may be, of the Family Code.
Same; Same; Property acquired by both spouses through their
work and industry shall be governed by the rules on equal coownership.Under this property regime, property acquired by
both spouses through their workand 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 partys efforts consisted in the care and
maintenance of the family household. Unlike the conjugal
partnership of gains, the fruits of the couples separate property
are not included in the co-ownership.
Same; Same; When the common-law spouses suffer from a
legal impediment to marry or when they do not live exclusively with
each other, only the property acquired by both of them through their
actual joint contribution of money, property or industry shall be
owned in common and in proportion to their respective
contributions.When the common-law spouses suffer from a legal
impediment to marry or when they do not live exclusively with
each other (as husband and wife), only the property acquired by
both of them through theiractual joint contribution of money,
property or industry shall be owned in common and inproportion to
their
respective
contributions. Such
contributions
and

corresponding shares, however, are prima faciepresumed to be


equal. The share of any party who is married to another shall
accrue to the absolute community or conjugal partnership, as the
case may be, if so existing under a valid marriage. If the party who
has acted in bad faith is not validly married to another, his or her
share shall be forfeited in the manner already heretofore
expressed.
Same; Same; The first paragraph of Article 50 of the Family
Code, applying paragraphs (2), (3), (4) and (5) of Article 43 relates
only by its explicit terms, to voidable marriages and exceptionally,
to void marriages under Article 40 of the Code.The rules set up to
govern the liquidation of either the absolute community or the
conjugal partnership of gains, the property regimes recognized for
valid and voidable marriages (in the latter case until the contract
is annulled), are irrelevant to the liquidation of the co-ownership
that exists between common-law spouses. The first paragraph of
Article 50 of the Family Code, applying paragraphs (2), (3), (4) and
(5)of Article 43, relates only, by its explicit terms,
to voidablemarriages and, exceptionally, tovoid 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.

PETITION for review of a decision of the Regional Trial


Court of Quezon City, Br. 102.
The facts are stated in the opinion of the Court.
Romulo, Mabanta,Buenaventura, Sayoc &
Angeles for petitioner.
Roco, Buag, Kapunan
&
Migallos for
respondent.

De

los

private
29

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 initiobecause of
psychological incapacity on the part of either or both of the
parties to the contract.
The pertinent facts giving rise to this incident are, by and
large, not in dispute.
Antonio Valdes and Consuelo Gomez were married on 05
January 1971. Begotten during the marriage were five
children. In a petition, dated 22 June 1992, Valdes sought
the declaration of nullity of the marriage pursuant to Article
36 of the Family Code (docketed Civil Case No. Q-92-12539,
Regional Trial Court of Quezon City, Branch 102). After
hearing the parties following the joinder of issues, the trial
court, in its decision of 29 July 1994, granted the
petition; viz:
1

WHEREFORE, judgment is hereby rendered as follows:


(1) The marriage of petitioner Antonio Valdez and respondent
Consuelo Gomez-Valdes is hereby declared null and void under
________________
1

Hon. Perlita Tria Tirona, presiding.

224

224

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

Article 36 of the Family Code on the ground of their mutual


psychological incapacity to comply with their essential marital
obligations;
(2) The three older children, Carlos Enrique III, Antonio
Quintin and Angela Rosario shall choose which parent they would
want to stay with.
Stella Eloisa and Joaquin Pedro shall be placed in the custody
of their mother, herein respondent Consuelo Gomez-Valdes.
The petitioner and respondent shall have visitation rights over
the children who are in the custody of the other.
(3) The petitioner and respondent are directed to start
proceedings on the liquidation of their common properties as
defined by Article 147 of the Family Code, and to comply with the
provisions of Articles 50, 51 and 52 of the same code, within thirty
(30) days from notice of this decision.
Let a copy of this decision be furnished the Local Civil
Registrar of Mandaluyong, Metro Manila, for proper recording in
the registry of marriages. (Italics ours.)
2

Consuelo Gomez sought a clarification of that portion of the


decision directing compliance with Articles 50, 51 and 52 of
the Family Code. She asserted that the Family Code
contained no provisions on the procedure for the liquidation
of common property in unions without marriage.
Parenthetically, during the hearing on the motion, the
children filed a joint affidavit expressing their desire to
remain with their father, Antonio Valdes, herein petitioner.
In an Order, dated 05 May 1995, the trial court made the
following clarification:
Consequently, considering that Article 147 of the Family Code
explicitly provides that the property acquired by both parties
during their union, in the absence of proof to the contrary, are
presumed to have been obtained through the joint efforts of the
parties and will be owned by them in equal shares, plaintiff and
defendant will own their family home and all their other
properties for that matter in equal shares.
30

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.

_________________
2

Rollo, p. 22.

225

VOL. 260, JULY 31,


225
1996
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

_________________

In the liquidation and partition of the properties owned in


common by the plaintiff and defendant, the provisions on coownership found in the Civil Code shall apply. (Emphasis
supplied.)
3

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.

Rollo, p. 42.

Rollo, pp. 38-39.

226

226

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City
III

Assuming arguendo that Article 147 applies to marriages


declared void ab initio on the ground of the psychological
incapacity of a spouse, the same may be read consistently with
Article 129.

Petitioner moved for a reconsideration of the order. The


motion was denied on 30 October 1995.
In his recourse to this Court, petitioner submits that
Articles 50, 51 and 52 of the Family Code should be held
controlling; he argues that:
I
Article 147 of the Family Code does not apply to cases where the
parties are psychologically incapacitated.
II

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

The trial court correctly applied the law. In a void marriage,


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

31

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 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

shall belong to the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.

__________________

beginning, whether the relationship between the parties be legitimate or

This peculiar kind of co-ownership applies when a man and a


woman, suffering no legal impediment to marry each other,
so exclusively live together as husband and wife under a void
marriage or without the benefit of marriage. The term
capacitated in the provision (in the first paragraph of the
law) refers to the legal capacity of a party to contract
marriage, i.e., any male or female of the age of eighteen
years or upwards not under any of the impediments
mentioned in Articles 37 and 38 of the Code.
7

___________________
7

Art. 5. Any male or female of the age of eighteen years or upwards not

under any of the impediments mentioned in Articles 37 and 38, may contract
marriage.
Art. 37. Marriages between the following are incestuous and void from the
illegitimate:

Rollo, pp. 24-25.

See Margaret Maxey vs. Court of Appeals, 129 SCRA 187; Aznar, et al. vs.

Garcia, et al., 102 Phil. 1055.

1. (1)Between ascendants and descendants of any degree; and


2. (2)Between brothers and sisters, whether of the full-or half-blood.

227

VOL. 260, JULY 31,


227
1996
Valdes vs. Regional Trial
Court, Br. 102, Quezon City
termination of their cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership shall
be forfeited in favor of their common children. In case of default of
or waiver by any or all of the common children or their
descendants, each vacant share shall belong to the respective
surviving descendants. In the absence of descendants, such share

Art. 38. The following marriages shall be void from the beginning for
reasons of public policy:
1. (1)Between

collateral

blood

relatives;

whether

legitimate

or

illegitimate, up to the fourth civil degree;


2. (2)Between step-parents and stepchildren;
3. (3)Between parents-in-law and children-in-law;
4. (4)Between the adopting parent and the adopted child;
5. (5)Between the surviving spouse of the adopting parent and the
adopted child;

32

228

__________________

228

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

1. (6)Between the surviving spouse of the adopted child and the


adopter;
2. (7)Between an adopted child and a legitimate child of the adopter;
3. (8)Between adopted children of the same adopter; and

Under this property regime, property acquired by both


spouses through their workand industry shall be governed by
the rules onequal co-ownership. Any property acquired
during the union is prima faciepresumed 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
partys efforts consisted in the care and maintenance of the
family household. Unlike the conjugal partnership of gains,
the fruits of the couples 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 actinter
vivos his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith
shall forfeit his or her share in the co-ownership in favor of
their common children; in default thereof or waiver by any or
all of the common children, each vacant share shall belong to
the respective surviving descendants, or still in default
thereof, to the innocent party. The forfeiture shall take place
upon the termination of the cohabitation or declaration of
nullity of the marriage.
When the common-law spouses suffer from a legal
impediment to marry or when they do not live exclusively with
each
8

10

4. (9)Between parties where one, with the intention to marry the other,
killed that other persons spouse or his or her own spouse.
8

Article 147, Family Code.

Article 147, Family Code.

10

Articles 43, 50 and 51, Family Code.

229

VOL. 260, JULY 31,


229
1996
Valdes vs. Regional Trial
Court, Br. 102, Quezon City
other (as husband and wife), only the property acquired by
both of them through theiractual 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
faciepresumed to be equal. The share of any party who is
married to another shall accrue to the absolute community or
conjugal partnership, as the case may be, if so existing under
a valid marriage. If the party who has acted in bad faith is
not validly married to another, his or her share shall be
forfeited in the manner already heretofore expressed.
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
11

33

the family home and all their common property inequal


shares, as well as in concluding that, in the liquidation and
partition of the property owned in common by them, the
provisions on co-ownership under the Civil Code, not Articles
50, 51 and 52, in relation to Articles 102 and 129, of the
Family Code,
12

Articles 102 and 129.


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

_______________
11

Article 148, Family Code.

12

Art. 50. The effects provided for in paragraph (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.
The final judgment in such cases shall provide for the liquidation,
partition and distribution of the properties of the spouses, the custody and
support of the common children, and the delivery of their presumptive
legitimes, unless such matters had been adjudicated in previous judicial
proceedings.
All creditors of the spouses as well as of the absolute community or the
conjugal partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated,
shall be adjudicated in accordance with the provisions of
230

230

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

should aptly prevail. The rules set up to govern the


liquidation of either the absolute community or the conjugal
partnership
__________________

for the enforcement of the judgment.


The delivery of the presumptive legitimes herein prescribed shall in no
way prejudice the ultimate successional rights of the children accruing upon
the death of either or both of the parents; but the value of the properties
already received under the decree of annulment or absolute nullity shall be
considered as advances on their legitime.
Art. 52. The judgment of annulment or of absolute nullity of the marriage,
the partition and distribution of the properties of the spouses, and the
delivery of the childrens presumptive legitimes shall be recorded in the
appropriate civil registry and registries of property; otherwise, the same shall
not affect their persons.
Art. 102. Upon dissolution of the absolute community regime, the
following procedure shall apply:
1. (1)An inventory shall be prepared, listing separately all the
properties of the absolute community and the exclusive properties
of each spouse.
2. (2)The debts and obligations of the absolute community shall be paid
out of its assets. In case of insufficiency of said assets, the spouses
shall be solidarily liable for the unpaid balance with their separate
properties in accordance with the provisions of the second
paragraph of Article 94.
3. (3)Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
4. (4)The net remainder of the properties of the absolute community
shall constitute its net assets, which shall be divided equally
between husband and wife, unless a different proportion or division
was agreed upon in the marriage settlements, or unless there has

34

been a voluntary waiver of such share as provided in this Code. For

1. (1)An inventory shall be prepared, listing separately all the

purposes of computing the net profits subject to forfeiture in

properties of the conjugal partnership and the exclusive properties

accordance with Article 43, No. (2) and 63, No. (2), the said profits

of each spouse.

shall be the increase in

2. (2)Amounts advanced by the conjugal partnership in payment of


personal debts and obligations of either spouse shall be credited to

231

the conjugal partnership as an asset thereof.

VOL. 260, JULY 31,


231
1996
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

3. (3)Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her
exclusive property, the ownership of which has been vested by law
in the conjugal partnership.

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 coownership

4. (4)The debts and obligations of the conjugal partnership shall be paid


out of the conjugal assets. In case of insufficiency of said assets, the
spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph
(2) of Article 121.

_________________

5. (5)Whatever remains of the exclusive properties of the spouses shall


thereafter be delivered to each of them.

value between the market value of the community property at the time of

6. (6)Unless the owner has been indemnified from whatever source, the

the celebration of the marriage and the market value at the time of its

loss or deterioration of movables used for the benefit of the family,

dissolution.

belonging to either spouse, even due to fortuitous event, shall be


paid to said spouse from the conjugal

1. (5)The presumptive legitimes of the common children shall be


delivered upon partition, in accordance with Article 51.
2. (6)Unless otherwise agreed upon by the parties, in the partition of
the properties, the conjugal dwelling and the lot on which it is
situated shall be adjudicated to the spouse with whom the majority
of the common children choose to remain. Children below the age of
seven years are deemed to have chosen the mother, unless the court
has decided otherwise. In case there is no such majority, the court
shall decide, taking into consideration the best interests of said
children.
Art. 129. Upon the dissolution of the conjugal partnership regime, the
following procedure shall apply;

232

232

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

that exists between common-law spouses. The first


paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43, relates only, by
its explicit terms, to
13

________________

35

1. funds, if any.

4. (4)The innocent spouse may revoke the designation of the other

2. (7)The net remainder of the conjugal partnership properties shall

spouse who acted in bad faith as a beneficiary in any insurance


policy, even if such designation be stipulated as ir-

constitute the profits, which shall be divided equally between


husband and wife, unless a different proportion or division was
agreed upon in the marriage settlements or unless there has been a
voluntary waiver or forfeiture of such share as provided in this
Code.
3. (8)The presumptive legitimes of the common children shall be
delivered upon partition in accordance with Article 51.
4. (9)In the partition of the properties, the conjugal dwelling and the lot
on which it is situated shall, unless otherwise agreed upon by the
parties, be adjudicated to the spouse with whom the majority of the
common children choose to remain. Children below the age of seven
years are deemed to have chosen the mother, unless the court has
decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children.
13

Art. 43. The termination of the subsequent marriage referred to in the

preceding Article shall produce the following effects:


1. (1)The children of the subsequent marriage conceived prior to its
termination shall be considered legitimate, and their custody and
support in case of dispute shall be decided by the court in a proper

233

VOL. 260, JULY 31,


233
1996
Valdes vs. Regional Trial
Court, Br. 102, Quezon City
voidable marriages and, exceptionally, to voidmarriages
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
14

15

16

proceeding;
2. (2)The absolute community of property or the conjugal partnership,

_________________

as the case may be, shall be dissolved and liquidated, but if either
spouse contracted said marriage in bad faith, his or her share of the

1. revocable; and

net profits of the community property or conjugal partnership

2. (5)The spouse who contracted the subsequent marriage in bad faith

property shall be forfeited in favor of the common children or, if

shall be disqualified to inherit from the innocent spouse by testate

there are none, the children of the guilty spouse by a previous

and intestate succession.

marriage or, in default of children, the innocent spouse;


3. (3)Donations by reason of marriage shall remain valid, except that if

14

Art. 40. The absolute nullity of a previous marriage may be invoked for

the donee contracted the marriage in bad faith, such donations

purposes of remarriage on the basis solely of a final judgment declaring such

made to said donee are revoked by operation of law;

previous marriage void.

36

15

Art. 41. A marriage contracted by any person during the subsistence of a

previous marriage shall be null and void, unless before the celebration of the
subsequent marriage, the prior spouse had been absent for four consecutive
years and the spouse present had a well-founded belief that the absent
spouse was already dead. In case of disappearance where there is danger of
death under the circumstances set forth in the provisions of Article 391 of the
Civil Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the
preceding paragraph, the spouse present must institute a summary
proceeding as provided in this Code for the declaration of presumptive death
of the absentee, without prejudice to the effect of reappearance of the absent
spouse.
16

obvious, that the provisions of the Family Code on the


family home, i.e., the provisions found in Title V, Chapter
2, of the Family Code, remain in force and effect regardless of
the property regime of the spouses.
WHEREFORE, the questioned orders, dated 05 May 1995
and 30 October 1995, of the trial court are AFFIRMED. No
costs.
SO ORDERED.
Padilla (Chairman),Kapunan and Hermosisima, Jr.,
JJ., concur.
Bellosillo, J., On leave.
Orders affirmed.

Art. 42. The subsequent marriage referred to in the preceding Article

o0o

shall be automatically terminated by the recording of the affidavit of


reappearance of the absent spouse, unless there is a judgment annulling the
previous marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of reappearance shall be
recorded in the civil registry of the residence of the
234

234

SUPREME COURT
REPORTS
ANNOTATED
Valdes vs. Regional Trial
Court, Br. 102, Quezon City

________________
parties to the subsequent marriage at the instance of any interested
person, with due notice to the spouses of the subsequent marriage and
without prejudice to the fact of reappearance being judicially determined in
case such fact is disputed.

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
37

G.R. No. 111547. January 27, 1997.


SPS. TRINIDAD S. ESTONINA and PAULINO ESTONINA,
petitioners, vs.COURT OF APPEALS, SPS. CELSO ATAYAN
and NILDA HICBAN and CONSUELO VDA. DE GARCIA,
REMEDIOS, ELVIRA, OFELIA, VIRGILIO, MARILOU, and
LOLITA all surnamed GARCIA, and HEIRS OF CASTOR
GARCIA and of SANTIAGO GARCIA, JR., respondents.
*

Remedial Law; Appeal;Factual findings of the appellate court


deemed conclusive.The settled rule is that the factual findings of
the appellate court are deemed conclusive. Thus, the jurisdiction of
this Court in cases brought to it from the Court of Appeals is
generally limited to the review and revision of errors of law
allegedly committed by the appellate court. As such, this Court is
generally not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below. This is,
however, subject to several exceptions, one of which is when there
is a conflict between the factual findings of the Court of Appeals
and the trial court, as in this case, warranting a review by this
Court of such factual findings.
Same; Execution; The levy by the sheriff of a property by virtue
of a writ of attachment may be considered as made under the
authority of the court only when the property levied upon belongs to
the defendant.Being the exclusive property of Santiago Garcia, it
_______________
*

THIRD DIVISION.

628

6
28

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of
Appeals

was the entire parcel of land in question that formed part of


his estate and which passed to his ten heirs by compulsory

succession upon his death. And as correctly held by the Court of


Appeals, what could therefore be attached and sold at public
auction in Civil Case No. 88430 was only the one-tenth (1/10) pro
indiviso share of Consuelo Garcia in the said parcel of land. The
sale at public auction of the disputed property in its entirety by the
Sheriff in favor of Trinidad Estonina over and above the one-tenth
(1/10) share of Consuelo Garcia is null and void, belonging as it
does to the other heirs of Santiago Garcia and later to the spouses
Atayan. Worth reiterating is the basic precept that the power of
the court in the execution of judgments extends only over
properties unquestionably belonging to the judgment debtor. The
levy by the sheriff of a property by virtue of a writ of attachment
may be considered as made under the authority of the court only
when the property levied upon belongs to the defendant. For, as
the sayings goes, one mans goods shall not be sold for another
mans debts.
Same; Same; Right of a third-party claimant to file an
independent action to vindicate his claim of ownership over the
properties seized reserved by Section 17, Rule 39 of the Rules of
Court.The right of a third-party claimant to file an independent
action to vindicate his claim of ownership over the properties
seized is reserved by Section 17, Rule 39 of the Rules of Court.
Same; Same; The proper action is and should be an entirely
separate and distinct action from that in which execution has
issued, if instituted by a stranger to the latter suit.As stated in
the case of Sy v. Discaya, this proper action would have for its
object the recovery of ownership or possession of the property
seized by the sheriff, as well as damages resulting from the
allegedly wrongful seizure and detention thereof despite the third
party claim and it may be brought against the sheriff and such
other parties as may be alleged to have colluded with him in the
supposedly wrongful execution proceedings, such as the judgment
creditor himself. Such proper action, as above pointed out, is and
should be an entirely separate and distinct action from that in
38

which execution has issued, if instituted by a stranger to the latter


suit.
Same; Same; The filing by the spouses Atayan of an
independent action with the court other than the one which issued
the writ of execution is proper.In the case at bench, the filing by
the spouses
629

VOL. 266,
6
JANUARY 27, 1997
29
Estonina vs. Court of
Appeals
Atayan of an independent action with the court other than the
one which issued the writ of execution is proper as they were
strangers to Civil Case No. 88430. Such an independent action
cannot be considered as an encroachment upon the jurisdiction of a
co-equal and coordinate court. While it is true that property in
custody of the law may not be interfered with, without the
permission of the proper court, this rule is confined to cases where
the property belongs to the defendant or one in which the
defendant has proprietary interests. But when the Sheriff, acting
beyond the bounds of his office seizes a strangers property, the
rule does not apply and interference with his custody is not
interference with another courts custody.
Civil Law; Property;Conjugal Partnership; Proof of acquisition
during the marriage is a condition sine qua non for the operation of
the presumption in favor of the conjugal partnership.The
evidence on record as well as established jurisprudence on the
matter, lead us to concur with the finding of the Court of Appeals
that the property involved in this dispute is indeed the exclusive
property of the deceased Santiago Garcia. It has been repeatedly
held by this Court that the presumption under Article 160 of the
Civil Code that all property of the marriage belong to the conjugal
partnership applies only when there is proof that the property was
acquired during the marriage. Otherwise stated, proof of
acquisition during the marriage is a condition sine qua non for the

operation of the presumption in favor of the conjugal partnership.


In the case at bench, the petitioners have been unable to present
any proof that the property in question was acquired during the
marriage of Santiago and Consuelo. They anchor their claim solely
on the fact that when the title over the land in question was
issued, Santiago was already married to Consuelo as evidenced by
the registration in the name of Santiago Garcia married to
Consuelo Gaza. This, according to the spouses Estonina, suffices
to establish the conjugal nature of the property. The foregoing
contention has no merit.

PETITION for review on certiorari of a decision of the Court


of Appeals.
The facts are stated in the resolution of the Court.
Diosdado N. Silva for petitioners.
Leopoldo N. Consunto, Jr. for respondent spouses
Atayan and Nilda Hicban.
630

630

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

Balagtas P. Ilagan for respondents Garcia, et al.


RESOLUTION
FRANCISCO, J.:
The instant controversy involves Lot C of the amended plan
Psu-22983 Amd., situated in Barrio Santisima Cruz, Sta.
Cruz, Laguna with an area of 273 square meters. The said
parcel of land was covered by Transfer Certificate of Title No.
T-19175 issued in the name of Santiago Garcia who died on
October 2, 1967. Some six years after Santiago Garcias
death, or on March 10, 1973, the then Court of First Instance
39

of Manila issued an order granting Trinidad Estoninas


application for a writ of preliminary attachment in Civil Case
No. 88430 entitled Trinidad Estonina, et al., plaintiffs versus Consuelo Garcia, et al., defendants. Consequently, a
notice of attachment was inscribed as a memorandum of
encumbrance at the back of TCT No.T-19175 in favor of
Trinidad Estonina covering all the rights, title, interest, and
participation that Consuelo Garcia, the widow of Santiago
Garcia, may have in and to the parcel of land covered by the
said title.
As a result of a prior sale made by Santiago Garcia to
Anselmo Balasoto of a sixty square meter portion of the said
parcel of land, TCT No. T-19175 was cancelled and in lieu
thereof, TCT No. 77215 was issued on July 25, 1975 in the
name of Santiago Garcia covering the remaining 213 square
meters. TCT No. 77215 was in turn cancelled on June 27,
1977 because of another sale purportedly made during his
lifetime by Santiago Garcia to his wifes niece, Ofelia Garcia,
and TCT No. 82229 was issued in the name of the latter.
On August 14, 1977, the children of Santiago Garcia with
his first wife, Adela Isoreta, namely Ofelia, Remedios, Elvira
and Castor, all surnamed Garcia, executed a deed selling,
transferring and conveying unto the spouses Celso Atayan
and Nilda Hicban (hereinafter referred to as the spouses
Atayan for brevity) their title, rights, interest and
participation which is four tenths (4/10) pro indivisoshare in
the said
631

VOL. 266, JANUARY


631
27, 1997
Estonina vs. Court of Appeals
parcel of land covered by TCT No. T-82229. About a year
after, Santiago Garcias second wife and widow, Consuelo
Garcia and their children, Virgilio, Marilou and Lolita, all
surnamed Garcia, followed suit and also sold to the spouses

Atayan, their four-tenths (4/10) pro indiviso share in the


same parcel of land. On February 22, 1980, Estrella R.
Garcia, the widow of Santiago Garcia, Jr. (Santiago Garcias
son from his first marriage), and their children, Roderick,
Elizabeth, Dorothy and Erlinda, likewise sold to the spouses
Atayan, their onetenth (1/10) pro indivisoshare in the parcel
of land covered by TCT No. T-82229.
Subsequent to a favorable decision obtained by Trinidad
Estonina in Civil Case No. 88430 against Consuelo Garcia,
execution pending appeal was made on the parcel of land
formerly covered by TCT No. T-19175 (now covered by TCT
No. T-82229) on July 20, 1979. The said parcel of land was
sold at a public auction where Trinidad Estonina was the
highest bidder. Consuelo Garcia appealed the decision in
Civil Case No. 88430 before the then Intermediate Appellate
Court which, however, ruled in favor of Trinidad Estonina.
Thus, on February 29, 1984, the Intermediate Appellate
Court rendered a decision declaring owners copy of
Certificate of Title No. T-82229 a NULLITY and/or
CANCELLED. Upon the finality of the said decision, TCT
No. T-82229 was cancelled by the Register of Deeds of
Laguna and in lieu thereof, TCT No. T-99961 was issued in
favor of Trinidad Estonina married to Paulino Estonina.
On July 25, 1985, the spouses Atayan filed a complaint for
annulment of sheriffs sale and transfer certificate of title
with damages before Branch 28 of the Regional Trial Court
(RTC) of Santa Cruz, Laguna, impleading as defendants
therein the spouses Trinidad and Paulino Estonina
(hereinafter referred to as the spouses Estonina for brevity),
Nicanor E. Silvano, Reynaldo G. Javier, Edmund R. Solidum,
the
1

_______________
1

DECISION in CA-G.R. CV No. 28276, pp. 1-3; Rollo, pp. 2426.

40

PETITION in G.R. No. 111547, p. 4; Rollo, p. 10.

632

632

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

Register of Deeds of Laguna, and the heirs of Santiago


Garcia who sold to the spouses Atayan their pro
indiviso shares in the parcel of land covered by TCT No. T82229. The complaint prayed:
that the sale at public auction of the parcel of land covered by
TCT No. 77215 x x x and the Sheriffs final deed x x x be declared
null and void; that the Register of Deeds be ordered to cancel TCT
No. T-99961 in the name of Trinidad S. Estonina married to
Paulino Estonina x x x; that the plaintiffs be declared owners of
nine-tenths (9/10) pro indivisointerests, shares and participation
in the parcel of land covered by TCT No. T-77215, x x x, and the
Register of Deeds ordered to issue a new certificate of title
corresponding thereto; and that the defendants Nicanor E. Silvano,
Reynaldo G. Javier and Edmund R. Solidum be ordered to pay,
jointly and severally, the plaintiffs spouses and (sic) amount of
P30,000 for attorneys fees, P15,000 for litigation expenses
incurred, P20,000 for moral damages and P15,000 for exemplary
damages x x x.
3

In their amended answer to the plaintiffs complaint, the


spouses Estonina claimed that:
the plaintiffs (spouses Atayan) had acted in bad faith in allegedly
purchasing the parcel of land, they being aware that it was the
subject of a lawful and valid attachment; that there was no valid
extrajudicial settlement of agreement executed by the heirs of
Santiago Garcia by which their rights could have been adjusted
and settled before doing anything with his property; that the deeds
of sale executed by his heirs were anomalous, fictitious and
simulated intended to defeat the adverse judgment rendered by
the Court against them and the writ of attachment issued

pursuant thereto as they were derived from a falsified deed of sale


purportedly executed by Santiago Garcia on June 23, 1967; that
the property in question is presumed to be conjugal answerable for
obligations and liabilities of the conjugal partnership incurred
during the existence of the partnership; and that the plaintiffs
were guilty of laches (pp. 90-99, rec.).
4

_______________
3

Supra, p. 5; Rollo, p. 28.

Ibid.

633

VOL. 266, JANUARY


633
27, 1997
Estonina vs. Court of Appeals
After trial, the RTC rendered a decision dismissing the
complaint for lack of merit. It found, among others, that the
property covered by TCT No. T-19175 and now covered by
TCT No. T-82229, was acquired during the marriage of
Santiago Garcia and Consuelo Gaza, and is presumed to be
conjugal in nature. Upon the death of Santiago Garcia on
October 2, 1967, his conjugal share of one-half (1/2) of the
said parcel of land was transmitted to his heirs by intestate
succession. By the law on intestate succession, his nine
children, five by his first wife and four out of the subsequent
marriage, and Consuelo Garcia, his second wife and widow,
inherited the same at one-tenth (1/10) eachpro indiviso. The
remaining one-half (1/2) pertained to the conjugal share of
Consuelo Garcia. Thus, inasmuch as Consuelo Garcia
inherited one-tenth (1/10) of her husbands conjugal share in
the said property and is the owner of one-half (1/2) thereof as
her conjugal share, she owns a total of 55% (or 1/10 plus 1/2)
of the said parcel of land. Finding as such, the RTC held that
what could be attached by the spouses Estonina and later
levied on execution and sold at public auction was only
5

41

Consuelo Garcias rights and interests which is fifty five per


cent (55%) of the property. Thus, the RTC ordered the
Register of Deeds of the Province of Laguna, to cancel
Transfer Certificate of Title No. T-99961 in the name of
TRINIDAD S. ESTONINA, married to Paulino Estonina, and
issue another one, also in her name, married to the same
person, stating therein that said person is the owner of the
property therein covered to the extent of 55%pro indiviso,
and the remaining 45% belongs to the heirs of Santiago
Garcia pro indiviso.
Both the spouses Atayan and the heirs of Santiago Garcia
appealed to the herein public respondent Court of Appeals.
After a thorough review of the evidence on record, the Court
of Appeals concluded that contrary to the finding of the RTC,
the parcel of land in question was not the conjugal property
of Santiago and Consuelo Garcia, but was the formers
exclusive
6

_______________
5

Supra, p. 11; Rollo, p. 34.

Supra, p. 6; Rollo, p. 29.

Trinidad Estonina in Civil Case No. 88430. On August 12,


1993, the Court of Appeals rendered a decision, the
dispositive portion of which reads as follows:
WHEREFORE, the judgment appealed from is REVERSED and
SET ASIDE. Accordingly, Transfer Certificate of Title No. T99961,
covering Lot 2-C (LRC) Psd 223486, situated in Sta. Cruz, Laguna
issued in the name of Trinidad S. Estonina, married to Paulino
Estonina x x x, is hereby ordered cancelled and nullified and the
Register of Deeds of Laguna ordered to issue another in lieu
thereof covering the same parcel of land in the name of Trinidad S.
Estonina, widow, one-tenth (1/10) pro indiviso share, and spouses
Celso Atayan and Nilda Hicban, nine-tenths (9/10) pro
indiviso share.
7

Aggrieved, the spouses Estonina filed this petition and raised


the following issues:
I.
The Court of Appeals, in declaring the property in question as
exclusive property of Santiago Garcia, DISREGARDED the long
established doctrine that the trial courts findings especially as to
the credibility of the witnesses should be respected.

634

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

II.

634

property. It was therefore the entire property that formed


part of Santiago Garcias estate upon his death. When
Santiago Garcia died, his nine children and Consuelo Garcia
inherited the said property each to the extent of one/tenth
(1/10) pro indivisoshare. Hence, it was only Consuelo Garcias
one tenth (1/10) pro indiviso share in the parcel of land in
question which could be validly attached, levied and sold in
execution to satisfy the judgment against her and in favor of

The Court of Appeals, in issuing the questioned decision, solely


centered on the nature of the property in question, and
conveniently brushed aside the following legal issues raised on
appeal (thereby leading to an erroneous judgment), to wit:
_______________
7

Ibid., p. 15; Rollo, p. 38.

635

VOL. 266, JANUARY


27, 1997

635
42

Estonina vs. Court of Appeals

_______________

1. (a)That the plaintiffs-appellants (Sps. Atayan and now


private respondents) have no cause of action and/or lack of
cause of action against Estoninas (now petitioners).
Assuming, arguendo that they have, the same is now
barred by laches. The same is true with the appellants
Garcias (now also private respondents). Hence, the title of
Estonina should have been declared valid.
2. (b)That the plaintiffs-appellants (Sps. Atayan and now
private respondents) are not parties to Civil Case No.
88430 where the writ of attachment was issued and which
resulted in the execution pending appeal. Hence, they
cannot attack the validity of the execution in this
proceedings especially so when judgment therein had
already attained finality.
III.
Consequently, by virtue of the foregoing errors, the Court of
Appeals erred in not granting herein petitioners prayer that the
trial courts findings be modified by upholding Estoninas title to
the property under TCT No. T-99961, and affirming in all other
respect the order of the trial court.
8

The settled rule is that the factual findings of the appellate


court are deemed conclusive. Thus, the jurisdiction of this
Court in cases brought to it from the Court of Appeals is
generally limited to the review and revision of errors of law
allegedly committed by the appellate court. As such, this
Court is generally not duty-bound to analyze and weigh all
over again the evidence already considered in the
proceedings below. This is, however, subject to several
exceptions, one of which is when there is a conflict between
the factual findings
9

10

Supra, pp. 8-9; Rollo, pp. 14-15.

Industrial Textile Manufacturing Company of the Philippines vs. LPJ

Enterprises, Inc., 217 SCRA 322, 325 [1993]; Guinsatao vs. Court of
Appeals, 218 SCRA 708 [1993];Bustamante vs. Court of Appeals, 193 SCRA
603 [1991]; Radiowealth Finance Company vs. Palileo, 197 SCRA 245 [1991].
10

Gaw vs. Intermediate Appellate Court, 220 SCRA 405, 413 [1993].

636

636

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

of the Court of Appeals and the trial court, as in this case,


warranting a review by this Court of such factual findings.
In concluding that the parcel of land in question was the
conjugal property of Santiago and Consuelo Garcia, the trial
court relied solely on the fact that when TCT No. T-19175
covering the said land was issued, Santiago Garcia was
already married to Consuelo Garcia, thus giving rise to the
presumption that the same was indeed conjugal. It found the
testimony of Consuelo Garcia that the said property was
inherited by Santiago Garcia from his deceased mother to be
self-serving and completely disregarded the said testimony.
And as regards the inscription at the back of the TCT No.
T19175 that:
11

[t]he property described in this title is subject to the claims of the


heirs of the deceased Eugenia Clemente, within two (2) years from
January 27, 1961, in accordance with the provision of Section 4,
Rule 74 of the Rules of Court,
12

the trial court held that there is no showing at all from said
inscription that said property came from the parents of
Santiago Garcia.
On the other hand, the Court of Appeals in taking the
stance that the said land was the exclusive property of
13

43

Santiago Garcia, gave credence to the unrebutted testimony


of Consuelo Garcia that the said parcel of land was inherited
by Santiago Garcia from his deceased mother Eugenia
Clemente and that it used to be part of a big tract of land
which was divided among Santiago and his sisters.
The evidence on record as well as established
jurisprudence on the matter, lead us to concur with the
finding of the Court of Appeals that the property involved in
this dispute is indeed the exclusive property of the deceased
Santiago Garcia. It has been repeatedly held by this Court
that the presumption
______________
11

Ibid.

12

Supra, 10; Rollo, p. 33.

13

Ibid.

637

VOL. 266, JANUARY


637
27, 1997
Estonina vs. Court of Appeals
under Article 160 of the Civil Code that all property of the
marriage belong to the conjugal partnership applies only
when there is proof that the property was acquired during
the marriage. Otherwise stated, proof of acquisition during
the marriage is a condition sine qua non for the operation of
the presumption in favor of the conjugal partnership. In the
case at bench, the petitioners have been unable to present
any proof that the property in question was acquired during
the marriage of Santiago and Consuelo. They anchor their
claim solely on the fact that when the title over the land in
question was issued, Santiago was already married to
Consuelo as evidenced by the registration in the name of
Santiago Garcia married to Consuelo Gaza. This, according
to the spouses Estonina, suffices to establish the conjugal
14

nature of the property. The foregoing contention has no


merit. In the case of Jocson v. Court of Appeals we held that:
15

The certificates of title, however, upon which petitioner rests his


claim is insufficient. The fact that the properties were registered in
the name of Emilio Jocson, married to Alejandra Poblete is no
proof that the properties were acquired during the spouses
coverture. Acquisition of title and registration thereof are two
different acts. It is well settled that registration does not confer
title but merely confirms one already existing x x x. It may be that
the properties under dispute were acquired by Emilio Jocson when
he was still a bachelor but were registered only after his marriage
to Alejandra Poblete, which explains why he was described in the
certificates of title as married to the latter.
Contrary to petitioners position, the certificates of title show,
on their face, that the properties were exclusively Emilio Jocsons,
the registered owner. This is so because the words married to
preceding Alejandra Poblete are merely descriptive of the civil
status of Emilio Jocson x x x. In other words, the import from the
certificates of title is that Emilio Jocson is the owner of the proper_______________
14

Jocson vs. Court of Appeals, 170 SCRA 333, 344 [1989]; Ong vs. Court of

Appeals, 204 SCRA 297, 302 [1989];Cobb-Perez vs. Hon. Gregorio Lantin, 23
SCRA 637 [1968]; Maramba vs. Lozano, et al., 20 SCRA 474 [1967].
15

Ibid.

638

638

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

ties, the same having been registered in his name alone, and that
he is married to Alejandra Poblete.
16

Being the exclusive property of Santiago Garcia, it was the


entire parcel of land in question that formed part of his
44

estate and which passed to his ten heirs by compulsory


succession upon his death. And as correctly held by the Court
of Appeals, what could therefore be attached and sold at
public auction in Civil Case No. 88430 was only the one-tenth
(1/10) pro indiviso share of Consuelo Garcia in the said parcel
of land. The sale at public auction of the disputed property in
its entirety by the Sheriff in favor of Trinidad Estonina over
and above the one-tenth (1/10) share of Consuelo Garcia is
null and void, belonging as it does to the other heirs of
Santiago Garcia and later to the spouses Atayan. Worth
reiterating is the basic precept that the power of the court in
the execution of judgments extends only over properties
unquestionably belonging to the judgment debtor. The levy
by the sheriff of a property by virtue of a writ of attachment
may be considered as made under the authority of the court
only when the property levied upon belongs to the
defendant. For, as the saying goes, one mans goods shall not
be sold for another mans debts.
The right of a third-party claimant to file an independent
action to vindicate his claim of ownership over the properties
seized is reserved by Section 17, Rule 39 of the Rules of
Court:
17

18

SEC. 17. Proceedings where property claimed by third person.If


property levied on be claimed by any other person than the
judgment debtor or his agent, and such person make an affidavit of
his title thereto or his right to the possession thereof, stating the
grounds of his right or title, and serve the same upon the officer
_______________
16

Ibid., p. 345.

17

Uy, Jr. vs. Court of Appeals, 191 SCRA 275, 281 [1990]; Consolidated Bank

and Trust Corp. vs. Court of Appeals, 193 SCRA 158 [1991]; Ong vs. Tating, 149
SCRA 265 [1987]; Traders Royal Bank vs. IAC, 133 SCRA 141[1984].
18

Ong vs. Tating, ibid., p. 275.

639

VOL. 266, JANUARY


639
27, 1997
Estonina vs. Court of Appeals
making the levy, and a copy thereof upon the judgment creditor,
the officer shall not be bound to keep the property, unless such
judgment creditor or his agent, on demand of the officer, indemnify
the officer against such claim by a bond in a sum not greater than
the value of the property levied on. In case of disagreement as to
such value, the same shall be determined by the court issuing the
writ of execution.
The officer is not liable for damages, for the taking or the
keeping of the property, to any third-party claimant unless a claim
is made by the latter and unless an action for damages is brought
by him against the officer within one hundred twenty (120) days
from the date of the filing of the bond. But nothing herein
contained shall prevent such claimant or any third person from
vindicating his claim to the property by any other proper action.
x x x x x x x x x. (Italics supplied.)

As stated in the case of Sy v. Discaya, this proper action


would have for its object the recovery of ownership or
possession of the property seized by the sheriff, as well as
damages resulting from the allegedly wrongful seizure and
detention thereof despite the third party claim and it may be
brought against the sheriff and such other parties as may be
alleged to have colluded with him in the supposedly wrongful
execution proceedings, such as the judgment creditor himself.
Such proper action, as above pointed out, is and should be
an entirely separate and distinct action from that in which
execution has issued, if instituted by a stranger to the latter
suit.
In the case at bench, the filing by the spouses Atayan of
an independent action with the court other than the one
which issued the writ of execution is proper as they were
strangers to Civil Case No. 88430. Such an independent
19

20

45

action cannot be considered as an encroachment upon the


jurisdiction of a coequal and coordinate court. While it is
true that property in custody of the law may not be interfered
with, without the
21

Atayan seeking the annulment of the sheriffs sale and the


transfer certificate of title with damages immediately
thereafter or on July 25, 1985 cannot be considered as undue
delay nor does it imply a lack of interest to enforce their
claim over the disputed property.

_______________
19

181 SCRA 378 [1990].

20

Ibid., p. 383.

21

Ibid., p. 384; Uy, Jr. vs. Court of Appeals, supra, p. 281.

640

640

SUPREME COURT
REPORTS
ANNOTATED
Estonina vs. Court of Appeals

permission of the proper court, this rule is confined to cases


where the property belongs to the defendant or one in which
the defendant has proprietary interests. But when the
Sheriff, acting beyond the bounds of his office seizes a
strangers property, the rule does not apply and interference
with his custody is not interference with another courts
custody.
The foregoing puts to rest any and all questions raised
regarding the propriety of the course of action taken by the
spouses Atayan in vindication of their claim over the land in
question. Anent the contention that the spouses Atayan are
guilty of laches, suffice it to state that this residual argument
deserves scant consideration. Being strangers to Civil Case
No. 88430 where the writ of execution over the land in
question was issued, they cannot be faulted for filing the
proper action only in 1985 or six (6) years after the levy on
execution. Besides, it was only in 1984 that the Court of
Appeals rendered a decision finally cancelling the title of
their predecessors-in-interest and issuing another one in
favor of Trinidad Estonina. The action filed by the spouses

WHEREFORE, the petition is DENIED and the assailed


decision of the Court of Appeals is affirmed in toto.
SO ORDERED.
Narvasa (C.J.,
Jr., Meloand Panganiban, JJ., concur.

Chairman), Davide,

Petition denied, judgment affirmed in toto.


Note.All property of the marriage is presumed to belong
to the conjugal partnership unless it be proved that it
pertains exclusively to the husband or to the wife. (Salvador
vs. Court of Appeals, 243 SCRA 239[1995])
o0o

22

46

G.R. No. 118305. February 12, 1998.


AYALA INVESTMENT & DEVELOPMENT CORP. and
ABELARDO MAGSAJO, petitioners, vs. COURT OF APPEALS and SPOUSES ALFREDO & ENCARNACION
CHING, respondents.
*

Civil Law; Family Code;Conjugal Partnerships; Where the


husband contracts obligations on behalf of the family business, the
law presumes, and rightly so, that such obligation will redound to
the benefit of the conjugal partnership.If the husband himself is
the principal obligor in the contract, i.e., he directly received the
money and services to be used in or for his own business or his own
profession, that contract falls within the term x x x x obligations
for the benefit of the conjugal partnership. Here, no actual benefit
may be proved. It is enough that the benefit to the family is
apparent at the time of the signing of the contract. From the very
nature of the contract of loan or services, the family stands to
benefit from the loan facility or services to be rendered to the
business or profession of the husband. It is immaterial, if in the
end, his business or profession fails or does not succeed. Simply
stated, where the husband contracts obligations on behalf of the
family business, the law presumes, and rightly so, that such
obligation will redound to the benefit of the conjugal partnership.
Same; Same; Same; If the money or services are given to
another person or entity and the husband acted only as a surety or
guarantor, that contract cannot, by itself, alone be categorized as
falling within the context of obligations for the benefit of the
conjugal partnership.On the other hand, if the money or
services are given to another person or entity, and the husband
acted only as a surety orguarantor, that contract cannot, by itself,
alone be categorized as falling within the context of obligations for
the benefit of the conjugal partnership. The contract of loan or
services is clearly for the benefit of the principal debtor and not for
the surety or his family. No presumption can be inferred that,
when a husband enters into a contract of surety or accommodation
agreement, it is for the benefit of the conjugal partnership. Proof

must be presented to establish benefit redounding to the conjugal


partnership.
Same; Same; Same; The burden of proof that the debt was
contracted for the benefit of the conjugal partnership of gains, lies
with the creditor-party litigant claiming as such.The burden of
proof that the debt was contracted for the benefit of the conjugal
partnership of gains, lies with the creditor-party litigant claiming
as such. In the case at bar, respondent-appellant AIDC failed to
prove that the debt was contracted by appellee-husband, for the
benefit of the conjugal partnership of gains. What is apparent from
the facts of the case is that the judgment debt was contracted by or
in the name of the Corporation Philippine Blooming Mills and
appellee-husband only signed as surety thereof. The debt is clearly
a corporate debt and respondent-appellants right of recourse
against appellee-husband as surety is only to the extent of his
corporate stockholdings. It does not extend to the conjugal
partnership of gains of the family of petitioners-appellees.
Same; Same; Same; Signing as a surety is certainly not an
exercise of an industry or profession.Signing as a surety is
certainly not an exercise of an industry or profession, hence the
cited cases of Cobb-Perez vs. Lantin; Abella de Diaz vs. Erlanger &
Galinger; G-Tractors, Inc. vs. CA do not apply in the instant case.
Signing as a surety is not embarking in a business.
Same; Same; Same; Payment of personal debts contracted by
the husband or the wife before or during the marriage shall not be
charged to the conjugal partnership except to the extent that they
redounded to the benefit of the family.Article 121, paragraph 3, of
the Family Code is emphatic that the payment of personal debts
contracted by the husband or the wife before or during the
marriage shall not be charged to the conjugal partnership except to
the extent that they redounded to the benefit of the family.

PETITION for review on certiorari of a decision of the Court


of Appeals.
47

The facts are stated in the opinion of the Court.


Acosta and Corvera Law Offices for petitioners.
Quiason, Makalintal,Barot, Torres & Ibarra for private
respondents.
MARTINEZ, J.:
Under Article 161 of the Civil Code, what debts and
obligations contracted by the husband alone are considered
for the benefit of the conjugal partnership which are
chargeable against the conjugal partnership? Is a surety
agreement or an accommodation contract entered into by the
husband in favor of his employer within the contemplation of
the said provision?
These are the issues which we will resolve in this petition
for review.
275

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12, 1998
Ayala Investment &
Development Corp. vs. Court
of Appeals
The petitioner assails the decision dated April 14, 1994 of the
respondent Court of Appeals in Spouses Alfredo and
Encarnacion Ching vs. Ayala Investment and Development
Corporation, et al., docketed as CA-G.R. CV No.
29632, upholding the decision of the Regional Trial Court of
Pasig, Branch 168, which ruled that the conjugal partnership
of gains of respondents-spouses Alfredo and Encarnacion
Ching is not liable for the payment of the debts secured by
respondent-husband Alfredo Ching.
A chronology of the essential antecedent facts is necessary
for a clear understanding of the case at bar.
Philippine Blooming Mills (hereinafter referred to as
PBM) obtained a P50,300,000.00 loan from petitioner Ayala
1

Investment and Development Corporation (hereinafter


referred to as AIDC). As added security for the credit line
extended to PBM, respondent Alfredo Ching, Executive Vice
President of PBM, executed security agreements on
December 10, 1980 and on March 20, 1981 making himself
jointly and severally answerable with PBMs indebtedness to
AIDC.
PBM failed to pay the loan. Thus, on July 30, 1981, AIDC
filed a case for sum of money against PBM and respondenthusband Alfredo Ching with the then Court of First Instance
of Rizal (Pasig), Branch VIII, entitled Ayala Investment and
Development Corporation vs. Philippine Blooming Mills and
Alfredo Ching, docketed as Civil Case No. 42228.
After trial, the court rendered judgment ordering PBM
and respondent-husband Alfredo Ching to jointly and
severally pay AIDC the principal amount of P50,300,000.00
with interests.
Pending appeal of the judgment in Civil Case No. 42228,
upon motion of AIDC, the lower court issued a writ of
execution pending appeal. Upon AIDCs putting up of an
_______________
1

Penned by Hon. Associate Justice Asaali S. Isnani and concurred in by

Associate Justices Nathanael P. de Pano, Jr. and Co-rona Ibay-Somera,


Former Fourth Division, Decision, pp. 34-39, Rollo.
276

276

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

P8,000,000.00 bond, a writ of execution dated May 12, 1982


was issued. Thereafter, petitioner Abelardo Magsajo, Sr.,
48

Deputy Sheriff of Rizal and appointed sheriff in Civil Case


No. 42228, caused the issuance and service upon
respondents-spouses of a notice of sheriff sale dated May 20,
1982 on three (3) of their conjugal properties. Petitioner
Magsajo then scheduled the auction sale of the properties
levied.
On June 9, 1982, private respondents filed a case of
injunction against petitioners with the then Court of First
Instance of Rizal (Pasig), Branch XIII, to enjoin the auction
sale alleging that petitioners cannot enforce the judgment
against the conjugal partnership levied on the ground that,
among others, the subject loan did not redound to the benefit
of the said conjugal partnership. Upon application of private
respondents, the lower court issued a temporary restraining
order to prevent petitioner Magsajo from proceeding with the
enforcement of the writ of execution and with the sale of the
said properties at public auction.
AIDC filed a petition for certiorari before the Court of
Appeals, questioning the order of the lower court enjoining
the sale. Respondent Court of Appeals issued a Temporary
Restraining Order on June 25, 1982, enjoining the lower
court from enforcing its Order of June 14, 1982, thus paving
the way for the scheduled auction sale of respondentsspouses conjugal properties.
On June 25, 1982, the auction sale took place. AIDC being
the only bidder, was issued a Certificate of Sale by petitioner
Magsajo, which was registered on July 2, 1982. Upon
expiration of the redemption period, petitioner sheriff issued
the final deed of sale on August 4, 1982 which was registered
on August 9, 1983.
In the meantime, the respondent court, on August 4, 1982,
decided CA-G.R. SP No. 14404, in this manner:
2

_______________

Annex C, petition; pp. 43-52, rollo.

CA-G.R. No. SP-14404.

Branch VIII, CFI of Rizal.

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Ayala Investment &
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WHEREFORE, the petition for certiorari in this case is granted
and the challenged order of the respondent Judge dated June 14,
1982 in Civil Case No. 46309 is hereby set aside and nullified. The
same petition insofar as it seeks to enjoin the respondent Judge
from proceeding with Civil Case No. 46309 is, however, denied. No
pronouncement is here made as to costs. x x x x.
5

On September 3, 1983, AIDC filed a motion to dismiss the


petition for injunction filed before Branch XIII of the CFI of
Rizal (Pasig) on the ground that the same had become moot
and academic with the consummation of the sale.
Respondents filed their opposition to the motion arguing,
among others, that where a third party who claims
ownership of the property attached or levied upon, a different
legal situation is presented; and that in this case, two (2) of
the real properties are actually in the name of Encarnacion
Ching, a non-party to Civil Case No. 42228.
The lower court denied the motion to dismiss. Hence, trial
on the merits proceeded. Private respondents presented
several witnesses. On the other hand, petitioners did not
present any evidence.
On September 18, 1991, the trial court promulgated its
decision declaring the sale on execution null and void.
Petitioners appealed to the respondent court, which was
docketed as CA-G.R. CV No. 29632.

49

On April 14, 1994, the respondent court promulgated the


assailed decision, affirming the decision of the regional trial
court. It held that:

WHEREFORE, in view of all the foregoing, judgment is hereby


rendered DISMISSING the appeal. The decision of the Regional
Trial Court is AFFIRMED in toto.

The loan procured from respondent-appellant AIDC was for the


advancement and benefit of Philippine Blooming Mills and not for
the benefit of the conjugal partnership of petitioners-appellees.
xxx
xxx
xxx
As to the applicable law, whether it is Article 161 of the New
Civil Code or Article 1211 of the Family Code-suffice it to say that

Petitioner filed a Motion for Reconsideration which was


denied by the respondent court in a Resolution dated
November 28, 1994.
Hence, this petition for review. Petitioner contends that
the respondent court erred in ruling that the conjugal
partnership of private respondents is not liable for the
obligation by the respondent-husband.
Specifically, the errors allegedly committed by the
respondent court are as follows:

_______________
5

Pars. 4, 5, dispositive portion of the Decision in CA-G.R. No. SP-14404; p. 36,

rollo.

1. I.RESPONDENT COURT ERRED IN RULING THAT


THE OBLIGATION INCURRED BY RESPONDENT
HUSBAND DID NOT REDOUND TO THE BENEFIT OF
THE CONJUGAL PARTNERSHIP OF THE PRIVATE
RESPONDENT.
2. II.RESPONDENT COURT ERRED IN RULING THAT
THE ACT OF RESPONDENT HUSBAND IN SECURING
THE SUBJECT

278

278

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

the two provisions are substantially the same. Nevertheless, We


agree with the trial court that the Family Code is the applicable
law on the matter x x x x x x.
Article 121 of the Family Code provides that The conjugal
partnership shall be liable for: x x x (2) All debts and obligations
contracted during the marriage by the designated AdministratorSpouse for the benefit of the conjugal partnership of gains x x x.
The burden of proof that the debt was contracted for the benefit of
the conjugal partnership of gains, lies with the creditor-party
litigant claiming as such. In the case at bar, respondent-appellant
AIDC failed to prove that the debt was contracted by appelleehusband, for the benefit of the conjugal partnership of gains.

The dispositive portion of the decision reads:

_______________
6

Decision in CA-G.R. CV No. 29632; p. 39, rollo.

See p. 41, rollo.

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Ayala Investment &
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of Appeals
LOAN IS NOT PART OF HIS INDUSTRY, BUSINESS OR
CAREER FROM WHICH HE SUPPORTS HIS FAMILY.
50

Petitioners in their appeal point out that there is no need


to prove that actual benefit redounded to the benefit of the
partnership; all that is necessary, they say, is that the
transaction was entered into for the benefit of the conjugal
partnership. Thus, petitioners aver that:
The wordings of Article 161 of the Civil Code is very clear: for the
partnership to be held liable, the husband must have contracted
the debt for the benefit of the partnership, thus:
Art. 161. The conjugal partnership shall be liable for:

See p. 18, pars. 3-6, rollo.

280

280

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

the case of Cobb-Perez vs. Lantin, that the husband as head


of the family and as administrator of the conjugal
partnership is presumed to have contracted obligations for
the benefit of the family or the conjugal partnership.
Contrary to the contention of the petitioners, the case of
Cobb-Perez is not applicable in the case at bar. This Court
has, on several instances, interpreted the term for the
benefit of the conjugal partnership.
In the cases of Javier vs. Osmea, Abella de Diaz vs.
Erlanger & Galinger, Inc., Cobb-Perez vs. Lantin and GTractors, Inc. vs. Court of Appeals, cited by the petitioners,
we held that:
9

1) all debts and obligations contracted by the husband for the benefit
of the conjugal partnership x x x.

There is a difference between the phrases: redounded to the


benefit of or benefited from (on the one hand) and for the benefit
of (on the other). The former require that actual benefit must have
been realized; the latter requires only that the transaction should
be one which normally would produce benefit to the partnership,
regardless of whether or not actual benefit accrued.
8

We do not agree with petitioners that there is a difference


between the terms redounded to the benefit of or benefited
from on the one hand; and for the benefit of on the other.
They mean one and the same thing. Article 161(1) of the Civil
Code and Article 121(2) of the Family Code are similarly
worded,i.e., both use the term for the benefit of. On the
other hand, Article 122 of the Family Code provides that
The payment of personal debts by the husband or the wife
before or during the marriage shall not be charged to the
conjugal partnership except insofar as they redounded to the
benefit of the family. As can be seen, the terms are used
interchangeably.
Petitioners further contend that the ruling of the
respondent court runs counter to the pronouncement of this
Court in
_______________

10

11

12

13

The debts contracted by the husband during the marriage


relation, for and in the exercise of the industry or profession by
which he contributes toward the support of his family, are not his
personal and private debts, and the products or income from the
wifes own property, which, like those of her husbands, are liable
for the payment of the marriage expenses, cannot be excepted from
the payment of such debts. (Javier)
The husband, as the manager of the partnership (Article 1412,
Civil Code), has a right to embark the partnership in an ordinary
commercial enterprise for gain, and the fact that the wife may not
approve of a venture does not make it a private and personal one of
the husband. (Abella de Diaz)
Debts contracted by the husband for and in the exercise of the
industry or profession by which he contributes to the support of
51

the family, cannot be deemed to be his exclusive and private


debts. (Cobb-Perez)
x x x if he incurs an indebtedness in the legitimate pursuit of
his career or profession or suffers losses in a legitimate business,
the conjugal partnership must equally bear the indebtedness and
the
_______________
9

No. L-22320, May 22, 1968, 23 SCRA 637; 645.

10

No. 9984, March 23, 1916, 34 Phil. 336.

11

No. 38052, December 23, 1933, 59 Phil. 326.

12

No. L-22320, May 23, 1968, supra.

13

No. L-57402, February 28, 1995, 135 SCRA 193.

281

the undertaking is not a conjugal debt but an obligation personal


to him. (Liberty Insurance)
In the most categorical language, a conjugal partnership under
Article 161 of the new Civil Code is liable only for such debts and
obligations contracted by the husband for the benefit of the
conjugal partnership. There must be the requisite showing then of
some advantage which clearly accrued to the welfare of the
spouses. Certainly, to make a conjugal partnership respond for a
liability that should appertain to the husband alone is to defeat
and frustrate the avowed objective of the new Civil Code to show
the utmost concern for the solidarity and well-being of the family
as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the
conjugal partnership. (Luzon Surety, Inc.)

From the foregoing jurisprudential rulings of this Court, we


can derive the following conclusions:
(A) If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and services to
be used in or for his own business or his own profession, that

VOL. 286, FEBRUARY 281


12, 1998
Ayala Investment &
Development Corp. vs. Court
of Appeals
losses, unless he deliberately acted to the prejudice of his family.
(G-Tractors)

However, in the cases ofAnsaldo vs. Sheriff of Manila,


Fidelity Insurance & Luzon Insurance Co., Liberty
Insurance Corporation vs. Banuelos, and Luzon Surety, Inc.
vs. De Garcia, cited by the respondents, we ruled that:
14

15

16

The fruits of the paraphernal property which form part of the


assets of the conjugal partnership, are subject to the payment of
the debts and expenses of the spouses, but not to the payment of
the personal obligations (guaranty agreements) of the husband,
unless it be proved that such obligations were productive of some
benefit to the family. (Ansaldo; parenthetical phrase ours.)
When there is no showing that the execution of an indemnity
agreement by the husband redounded to the benefit of his family,

_______________
14

No. 43257, February 19, 1937,64 Phil. 115.

15

59 OG No. 29,4526.

16

No. L-25659, October 31, 1969,30 SCRA 111.

282

282

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

contract falls within the term x x x x obligations for the


benefit of the conjugal partnership. Here, no actual benefit
may be proved. It is enough that the benefit to the family is
52

apparent at the time of the signing of the contract. From the


very nature of the contract of loan or services, the family
stands to benefit from the loan facility or services to be
rendered to the business or profession of the husband. It is
immaterial, if in the end, his business or profession fails or
does not succeed. Simply stated, where the husband
contracts obligations on behalf of the family business, the law
presumes, and rightly so, that such obligation will redound to
the benefit of the conjugal partnership.
(B) On the other hand, if the money or services are given
to another person or entity, and the husband acted only as
a surety or guarantor, that contract cannot, by itself, alone be
categorized as falling within the context of obligations for
the benefit of the conjugal partnership. The contract of loan
or services is clearly for the benefit of the principal debtor
and not for the surety or his family. No presumption can be
inferred that, when a husband enters into a contract of
surety or accommodation agreement, it is for the benefit of
the conjugal partnership. Proof must be presented to
establish benefit redounding to the conjugal partnership.
Thus, the distinction between the Cobb-Perez case, and we
add, that of the three other companion cases, on the one
hand, and that of Ansaldo, Liberty Insurance and Luzon
Surety, is that in the former, the husband contracted the
obligation for his own business; while in the latter, the
husband merely acted as a surety for the loan contracted by
another for the latters business.
The evidence of petitioner indubitably show that corespondent Alfredo Ching signed as surety for the P50M loan
contracted on behalf of PBM. Petitioner should have adduced
evidence to prove that Alfredo Chings acting as surety
redounded to the benefit of the conjugal partnership. The
reason for this is as lucidly explained by the respondent
court:
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Ayala Investment &
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of Appeals
The loan procured from respondent-appellant AIDC was for the
advancement and benefit of Philippine Blooming Mills and not for
the benefit of the conjugal partnership of petitioners-appellees.
Philippine Blooming Mills has a personality distinct and separate
from the family of petitioners-appelleesthis despite the fact that
the members of the said family happened to be stockholders of said
corporate entity.
xxx
xxx
xxx
x x x. The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains, lies with the creditorparty litigant claiming as such. In the case at bar, respondentappellant AIDC failed to prove that the debt was contracted by
appellee-husband, for the benefit of the conjugal partnership of
gains. What is apparent from the facts of the case is that the
judgment debt was contracted by or in the name of the Corporation
Philippine Blooming Mills and appellee-husband only signed as
surety thereof. The debt is clearly a corporate debt and
respondent-appellants right of recourse against appellee-husband
as surety is only to the extent of his corporate stockholdings. It
does not extend to the conjugal partnership of gains of the family
of petitioners-appellees. x x x x x x.
17

Petitioners contend that no actual benefit need accrue to the


conjugal partnership. To support this contention, they cite
Justice J.B.L. Reyes authoritative opinion in the Luzon
Surety Company case:
I concur in the result, but would like to make of record that, in my
opinion, the words all debts and obligations contracted by the
husband for the benefit of the conjugal partnership used in Article
161 of the Civil Code of the Philippines in describing the charges
and obligations for which the conjugal partnership is liable do not
53

require that actual profit or benefit must accrue to the conjugal


partnership from the husbands transaction; but it suffices that the
transaction should be one that normally would produce such
benefit for the partnership. This is the ratio behind our ruling in
Javier vs. Osmea, 34 Phil. 336, that obligations incurred by the
husband in the practice of his profession are collectible from the
conjugal partnership.
_______________
17

See pp. 38-39, rollo.

284

284

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

The aforequoted concurring opinion agreed with the majority


decision that the conjugal partnership should not be made
liable for the surety agreement which was clearly for the
benefit of a third party. Such opinion merely registered an
exception to what may be construed as a sweeping statement
that in all cases actual profit or benefit must accrue to the
conjugal partnership. The opinion merely made it clear that
no actual benefits to the family need be proved in some cases
such as in the Javier case. There, the husband was the
principal obligor himself. Thus, said transaction was found to
be one that would normally produce x x x benefit for the
partnership. In the later case of G-Tractors, Inc., the
husband was also the principal obligornot merely the
surety. This latter case, therefore, did not create any
precedent. It did not also supersede the Luzon Surety
Company case, nor any of the previous accommodation

contract cases, where this Court ruled that they were for the
benefit of third parties.
But it could be argued, as the petitioner suggests, that
even in such kind of contract of accommodation, a benefit for
the family may also result,when the guarantee is in favor of
the husbands employer.
In the case at bar, petitioner claims that the benefits the
respondent family would reasonably anticipate were the
following:
1. (a)The employment of co-respondent Alfredo Ching would
be prolonged and he would be entitled to his monthly
salary of P20,000.00 for an extended length of time
because of the loan he guaranteed;
2. (b)The shares of stock of the members of his family would
appreciate if the PBM could be rehabilitated through the
loan obtained;
3. (c)His prestige in the corporation would be enhanced and
his career would be boosted should PBM survive because
of the loan.

However, these are not the benefits contemplated by Article


161 of the Civil Code. The benefits must be one directly
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12, 1998
Ayala Investment &
Development Corp. vs. Court
of Appeals
resulting from the loan. It cannot merely be a by-product or a
spin-off of the loan itself.
In all our decisions involving accommodation contracts of
the husband, we underscored the requirement that: there
must be the requisite showing x x x of some advantage which
clearly accrued to the welfare of the spouses or benefits to
18

54

his family or that such obligations are productive of some


benefit to the family. Unfortunately, the petition did not
present any proof to show: (a) Whether or not the corporate
existence of PBM was prolonged and for how many months or
years; and/or (b) Whether or not the PBM was saved by the
loan and its shares of stock appreciated, if so, how much and
how substantial was the holdings of the Ching family.
Such benefits (prospects of longer employment and
probable increase in the value of stocks) might have been
already apparent or could be anticipated at the time the
accommodation agreement was entered into. But would those
benefits qualify the transaction as one of the obligations x
x x for the benefit of the conjugal partnership? Are indirect
and remote probable benefits, the ones referred to in Article
161 of the Civil Code? The Court of Appeals in denying the
motion for reconsideration, disposed of these questions in the
following manner:
No matter how one looks at it, the debt/credit extended by
respondents-appellants is purely a corporate debt granted to PBM,
with petitioner-appellee-husband merely signing as surety. While
such petitioner-appellee-husband, as such surety, is solidarily
liable with the principal debtor AIDC, such liability under the
Civil Code provisions is specifically restricted by Article 122 (par.
1) of the Family Code, so that debts for which the husband is liable
may not be charged against conjugal partnership properties.
Article 122 of the Family Code is explicitThe payment of
personal debts contracted by the husband or the wife before or
during the marriage shall not be charged to the conjugal
partnership except insofar as they redounded to the benefit of the
family.
_______________
18

Ansaldo, et al. vs. Liberty Insurance Company, Inc. & Luzon Surety

Company, supra.

286

286

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

Respondents-appellants insist that the corporate debt in question


falls under the exception laid down in said Article 122 (par. one).
We do not agree. The loan procured from respondent-appellant
AIDC was for the sole advancement and benefit of Philippine
Blooming Mills and not for the benefit of the conjugal partnership
of petitioners-appellees.
x x x appellee-husband derives salaries, dividends benefits from
Philippine Blooming Mills (the debtor corporation), only because
said husband is an employee of said PBM. These salaries and
benefits, are not the benefits contemplated by Articles 121 and
122 of the Family Code. The benefits contemplated by the
exception in Article 122 (Family Code) is that benefit derived
directly from the use of the loan. In the case at bar, the loan is a
corporate loan extended to PBM and used by PBM itself, not by
petitioner-appellee-husband or his family. The alleged benefit, if
any, continuously harped by respondents-appellants, are not only
incidental but also speculative.
19

We agree with the respondent court. Indeed, considering the


odds involved in guaranteeing a large amount
(P50,000,000.00) of loan, the probable prolongation of
employment in PBM and increase in value of its stocks,
would be too small to qualify the transaction as one for the
benefit of the suretys family. Verily, no one could say, with
a degree of certainty, that the said contract is even
productive of some benefits to the conjugal partnership.
We likewise agree with the respondent court (and this
view is not contested by the petitioners) that the provisions of
the Family Code is applicable in this case. These provisions
55

highlight the underlying concern of the law for the


conservation of the conjugal partnership; for the husbands
duty to protect and safeguard, if not augment, not to
dissipate it.
This is the underlying reason why the Family Code
clarifies that the obligations entered into by one of the
spouses must be those that redounded to the benefit of the
family and that
_______________
19

Court of Appeals Resolution of Nov. 28, 1994 denying the motion for

reconsideration, pp. 1-2; Annex B; p. 41, rollo.


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Ayala Investment &
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the measure of the partnerships liability is to the extent
that the family is benefited.
These are all in keeping with the spirit and intent of the
other provisions of the Civil Code which prohibits any of the
spouses to donate or convey gratuitously any part of the
conjugal property. Thus, when co-respondent Alfredo Ching
entered into a surety agreement he, from then on, definitely
put in peril the conjugal property (in this case, including the
family home) and placed it in danger of being taken
gratuitously as in cases of donation.
In the second assignment of error, the petitioner advances
the view that acting as surety is part of the business or
profession of the respondent-husband.
This theory is new as it is novel.
The respondent court correctly observed that:
20

21

Signing as a surety is certainly not an exercise of an industry or


profession, hence the cited cases of Cobb-Perez vs. Lantin; Abella
de Diaz vs. Erlanger & Galinger; G-Tractors, Inc. vs. CA do not
apply in the instant case. Signing as a surety is not embarking in a
business.
22

We are likewise of the view that no matter how often an


executive acted or was persuaded to act, as a surety for his
own employer, this should not be taken to mean that he had
thereby embarked in the business of suretyship or guaranty.
This is not to say, however, that we are unaware that
executives are often asked to stand as surety for their
companys loan obligations. This is especially true if the
corporate officials have sufficient property of their own;
otherwise, their spouses signatures are required in order to
bind the conjugal partnerships.
_______________
20

Article 121, Nos. 2 & 3, Family Code.

21

Article 174, Civil Code.

22

Denial of motion for reconsideration, supra.

288

288

SUPREME COURT
REPORTS
ANNOTATED
Ayala Investment &
Development Corp. vs. Court
of Appeals

The fact that on several occasions the lending institutions did


not require the signature of the wife and the husband signed
alone does not mean that being a surety became part of his
profession. Neither could he be presumed to have acted for
the conjugal partnership.
Article 121, paragraph 3, of the Family Code is emphatic
that the payment of personal debts contracted by the
56

husband or the wife before or during the marriage shall not


be charged to the conjugal partnership except to the extent
that they redounded to the benefit of the family.
Here, the property in dispute also involves the family
home. The loan is a corporate loan not a personal one.
Signing as a surety is certainly not an exercise of an industry
or profession nor an act of administration for the benefit of
the family.
On the basis of the facts, the rules, the law and equity, the
assailed decision should be upheld as we now uphold it. This
is, of course, without prejudice to petitioners right to enforce
the obligation in its favor against the PBM receiver in
accordance with the rehabilitation program and payment
schedule approved or to be approved by the Securities &
Exchange Commission.
WHEREFORE, the petition for review should be, as it is
hereby, DENIED for lack of merit.
SO ORDERED.
Regalado (Chairman),Melo, Puno and Mendoza,
JJ.,concur.
Petition denied.
Note.Property acquired by both spouses through their
work and industry shall be governed by the rules on equal coownership. (Valdes vs. Regional Trial Court, Br. 102, Quezon
City, 260 SCRA 221 [1996])
o0o

57

G.R. No. 125172. June 26, 1998.


Spouses
ANTONIO
and
LUZVIMINDA
GUIANG,
petitioners, vs. COURT OF APPEALS and GILDA CORPUZ,
respondents.
*

Contracts; Sales; Husband


and
Wife; Conjugal
Partnerships;The absence of the consent of one spouse in the sale of
a conjugal property renders the sale null and void, while the
vitiation thereof makes it merely voidable.The sale of a conjugal
property requires the consent of both the husband and the wife.
The absence of the consent of one renders the sale null and void,
while the vitiation thereof makes it merely voidable. Only in the
latter case can ratification cure the defect.
Same; Same; Same; Same;Family
Code; Article
1390,
paragraph 2, of the Civil Code refers to contracts visited by vices of
consent, but where a spouses consent to the contract of sale of the
conjugal property is totally inexistent or absent, the contract falls
within the ambit of Article 124 of the Family Code.The error in
petitioners contention is evident. Article 1390, par. 2, refers to
contracts visited by vices of consent, i.e., contracts which were
entered into by a person whose consent was obtained and vitiated
through mistake, violence, intimidation, undue influence or fraud.
In this instance, private respondents consent to the contract of
sale of their conjugal property was totally inexistent or absent. x x
x This being the case, said contract properly falls within the ambit
of Article 124 of the Family Code, which was correctly applied by
the two lower courts. 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
the powers of disposition or encumbrance which must have the
authority of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a binding

contract upon the acceptance by the other spouse or authorization


by the court before the offer is withdrawn by either or both
offerors. (165a) (Italics supplied)
Same; Same; Same; Same; A void contract cannot be
ratified.The position is not well taken. The trial and the
appellate courts have resolved this issue in favor of the private
respondent. The trial court correctly held: By the specific
provision of the law [Art. 1390, Civil Code] therefore, the Deed of
Transfer of Rights (Exh. A) cannot be ratified, even by an
amicable settlement. The participation by some barangay
authorities in the amicable settlement cannot otherwise validate
an invalid act. Moreover, it cannot be denied that the amicable
settlement (Exh. B) entered into by plaintiff Gilda Corpuz and
defendant spouses Guiang is a contract. It is a direct offshoot of
the Deed of Transfer of Rights (Exh. A). By express provision of
law, such a contract is also void. Thus, the legal provision, to wit:
Art. 1422. A contract which is the direct result of a previous illegal
contract, is also void and inexistent. (Civil Code of the
Philippines). In summation therefore, both the Deed of Transfer of
Rights (Exh. A) and the amicable settlement (Exh. 3) are null
and void. Doctrinally and clearly, a void contract cannot be
ratified.

PETITION for review on certiorari of a decision of the Court


of Appeals.
The facts are stated in the opinion of the Court.
Public Attorneys Officefor petitioners.
Arnold D. Cruz for private respondent.
PANGANIBAN, J.:
The sale of a conjugal property requires the consent of both
the husband and the wife. The absence of the consent of one
renders the sale null and void, while the vitiation thereof
58

makes it merely voidable. Only in the latter case can


ratification cure the defect.
The Case
These were the principles that guided the Court in deciding
this petition for review of the Decision dated January 30,
1996 and the Resolution dated May 28, 1996, promulgated
by the Court of Appeals in CA-GR CV No. 41758, affirming
the Decision of the lower court and denying reconsideration,
respectively.
On May 28, 1990, Private Respondent Gilda Corpuz filed
an Amended Complaint against her husband Judie Corpuz
and Petitioners-Spouses Antonio and Luzviminda Guiang.
The said Complaint sought the declaration of a certain deed
of sale, which involved the conjugal property of private
respondent and her husband, null and void. The case was
raffled to the Regional Trial Court of Koronadal, South
Cotabato, Branch 25. In due course, the trial court rendered
a Decision dated September 9, 1992, disposing as follows:
1

Manuel Callejo, and another sum of P379.62 representing


one-half of the amount of realty taxes paid by defendants
Guiangs on Lot 9, Block 8, (LRC) Psd-165409, both with
legal interests thereon computed from the finality of the
decision.

ACCORDINGLY, judgment is rendered for the plaintiff and


against the defendants,
1. 1.Declaring both the Deed of Transfer of Rights dated
March 1, 1990 (Exh. A) and the amicable settlement
dated March 16, 1990 (Exh. B) as null and void and of no
effect;
2. 2.Recognizing as lawful and valid the ownership and
possession of plaintiff Gilda Corpuz over the remaining
one-half portion of Lot 9, Block 8, (LRC) Psd-165409 which
has been the subject of the Deed of Transfer of Rights
(Exh. A);
3. 3.Ordering plaintiff Gilda Corpuz to reimburse defendants
Luzviminda and Antonio Guiang the amount of NINE
THOUSAND (P9,000.00) PESOS corresponding to the
payment made by defendants Guiangs to Manuel Callejo
for the unpaid balance of the account of plaintiff in favor of

No pronouncement as to costs in view of the factual circumstances


of the case.

Dissatisfied, petitioners-spouses filed an appeal with the


Court of Appeals. Respondent Court, in its challenged
Decision, ruled as follows:
6

WHEREFORE, the appealed decision of the lower court in Civil


Case No. 204 is hereby AFFIRMED by this Court. No costs
considering plaintiff-appellees failure to file her brief, despite
notice.

Reconsideration was similarly denied by the same court in its


assailed Resolution:
7

Finding that the issues raised in defendants-appellants motion


for reconsideration of Our decision in this case of January 30,
1996, to be a mere rehash of the same issues which We have
already passed upon in the said decision, and there [being] no
cogent reason to disturb the same, this Court RESOLVES to
DENY the instant motion for reconsideration for lack of merit.

The Facts
The facts of this case are simple. Over the objection of private
respondent and while she was in Manila seeking
employment, her husband sold to the petitioners-spouses one
half of their conjugal property, consisting of their residence
and the lot on which it stood. The circumstances of this sale
are set forth in the Decision of Respondent Court, which
quoted from the Decision of the trial court as follows:
8

1. Plaintiff Gilda Corpuz and defendant Judie Corpuz are legally


married spouses. They were married on December 24, 1968 in
59

Bacolod City, before a judge. This is admitted by defendantsspouses Antonio and Luzviminda Guiang in their answer, and also
admitted by defendant Judie Corpuz when he testified in court
(tsn. p. 3, June 9, 1992), although the latter says that they were
married in 1967. The couple have three children, namely: Junie
18 years old, Harriet17 years of age, and Jodie or Joji, the
youngest, who was 15 years of age in August, 1990 when her
mother testified in court. Sometime on February 14, 1983, the
couple Gilda and Judie Corpuz, with plaintiff-wife Gilda Corpuz as
vendee, bought a 421 sq. meter lot located in Barangay Gen.
Paulino Santos (Bo. 1), Koronadal, South Cotabato, and
particularly known as Lot 9, Block 8, (LRC) Psd-165409 from
Manuel Callejo who signed as vendor through a conditional deed of
sale for a total consideration of P14,735.00. The consideration was
payable in installment, with right of cancellation in favor of vendor
should vendee fail to pay three successive installments (Exh. 2,
tsn, p. 6, February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one-half portion of their Lot No. 9, Block 8, (LRC) Psd165409 to the defendants-spouses Antonio and Luzviminda
Guiang. The latter have since then occupied the one-half portion
[and] built their house thereon (tsn, p. 4, May 22, 1992). They are
thus adjoining neighbors of the Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June 1989.
She was trying to look for work abroad, in [the] Middle East.
Unfortunately, she became a victim of an unscrupulous illegal
recruiter. She was not able to go abroad. She stayed for sometime
in Manila however, coming back to Koronadal, South Cotabato, x x
x on March 11, 1990. Plaintiffs departure for Manila to look for
work in the Middle East was with the consent of her husband
Judie Corpuz (tsn, p. 16, Aug. 12, 1990; p. 10, Sept. 6, 1991).
After his wifes departure for Manila, defendant Judie Corpuz
seldom went home to the conjugal dwelling. He stayed most of the
time at his place of work at Samahang Nayon Building, a hotel,
restaurant, and a cooperative. Daughter Harriet Corpuz went to

school at Kings College, Bo. 1, Koronadal, South Cotabato, but she


was at the same time working as household help of, and staying at,
the house of Mr. Panes. Her brother Junie was not working. Her
younger sister Jodie (Joji) was going to school. Her mother
sometimes sent them money (tsn, p. 14, Sept. 6, 1991).
Sometime in January 1990, Harriet Corpuz learned that her
father intended to sell the remaining one-half portion including
their house, of their homelot to defendants Guiangs. She wrote a
letter to her mother informing her. She [Gilda Corpuz] replied that
she was objecting to the sale. Harriet, however, did not inform her
father about this; but instead gave the letter to Mrs. Luzviminda
Guiang so that she [Guiang] would advise her father (tsn, pp. 1617, Sept. 6, 1991).
4. However, in the absence of his wife Gilda Corpuz, defendant
Judie Corpuz pushed through the sale of the remaining one-half
portion of Lot 9, Block 8, (LRC) Psd-165409. On March 1, 1990, he
sold to defendant Luzviminda Guiang thru a document known as
Deed of Transfer of Rights (Exh. A) the remaining one-half
portion of their lot and the house standing thereon for a total
consideration of P30,000.00 of which P5,000.00 was to be paid in
June, 1990. Transferor Judie Corpuzs children Junie and Harriet
signed the document as witnesses.
Four (4) days after March 1, 1990 or on March 5, 1990,
obviously to cure whatever defect in defendant Judie Corpuzs title
over the lot transferred, defendant Luzviminda Guiang as vendee
executed another agreement over Lot 9, Block 8, (LRC) Psd-165408
(Exh. 3), this time with Manuela Jimenez Callejo, a widow of the
original registered owner from whom the couple Judie and Gilda
Corpuz originally bought the lot (Exh. 2), who signed as vendor
for a consideration of P9,000.00. Defendant Judie Corpuz signed as
a witness to the sale (Exh. 3-A). The new sale (Exh. 3) describes
the lot sold as Lot 8, Block 9, (LRC) Psd-165408 but it is obvious
from the mass of evidence that the correct lot is Lot 8, Block 9,
(LRC) Psd-165409, the very lot earlier sold to the couple Gilda and
Judie Corpuz.
60

1. 5.Sometime on March 11, 1990, plaintiff returned home.


She found her children staying with other households.
Only Junie was staying in their house. Harriet and Joji
were with Mr. Panes. Gilda gathered her children together
and stayed at their house. Her husband was nowhere to be
found. She was informed by her children that their father
had a wife already.
2. 6.For staying in their house sold by her husband, plaintiff
was complained against by defendant Luzviminda Guiang
and her husband Antonio Guiang before the Barangay
authorities of Barangay General Paulino Santos (Bo. 1),
Koronadal, South Cotabato, for trespassing (tsn. p. 34,
Aug. 17, 1990). The case was docketed by the barangay
authorities as Barangay Case No. 38 for trespassing. On
March 16, 1990, the parties thereat signed a document
known as amicable settlement. In full, the settlement
provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her three children, namely:
Junie, Harriet and Judie to leave voluntarily the house of Mr. and Mrs.
Antonio Guiang, where they are presently boarding without any charge,
on or before April 7, 1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.

Believing that she had received the shorter end of the bargain,
plaintiff went to the Barangay Captain of Barangay Paulino
Santos to question her signature on the amicable settlement. She
was referred however to the Officer-In-Charge at the time, a
certain Mr. de la Cruz. The latter in turn told her that he could not
do anything on the matter (tsn. p. 31, Aug. 17, 1990).
This particular point was not rebutted. The Barangay Captain
who testified did not deny that Mrs. Gilda Corpuz approached him
for the annulment of the settlement. He merely said he forgot
whether Mrs. Corpuz had approached him (tsn. p. 13, Sept. 26,
1990). We thus conclude that Mrs. Corpuz really approached the
Barangay Captain for the annulment of the settlement.

Annulment not having been made, plaintiff stayed put in her


house and lot.
7. Defendant-spouses Guiang followed thru the amicable
settlement with a motion for the execution of the amicable
settlement, filing the same with the Municipal Trial Court of
Koronadal, South Cotabato. The proceedings [are] still pending
before the said court, with the filing of the instant suit.
379

VOL. 291, JUNE 26,


379
1998
Guiang vs. Court of Appeals
8. As a consequence of the sale, the spouses Guiang spent P600.00
for the preparation of the Deed of Transfer of Rights, Exh. A;
P9,000.00 as the amount they paid to Mrs. Manuela Callejo,
having assumed the remaining obligation of the Corpuzes to Mrs.
Callejo (Exh. 3); P100.00 for the preparation of Exhibit 3; a total
of P759.62 basic tax and special educational fund on the lot;
P127.50 as the total documentary stamp tax on the various
documents; P535.72 for the capital gains tax; P22.50 as transfer
tax; a standard fee of P17.00; certification fee of P5.00. These
expenses particularly the taxes and other expenses towards the
transfer of the title to the spouses Guiangs were incurred for the
whole Lot 9, Block 8, (LRC) Psd-165409.

Ruling of Respondent Court


Respondent Court found no reversible error in the trial
courts ruling that any alienation or encumbrance by the
husband of the conjugal property without the consent of his
wife is null and void as provided under Article 124 of the
Family Code. It also rejected petitioners contention that the
amicable settlement ratified said sale, citing Article 1409 of
the Code which expressly bars ratification of the contracts
specified therein, particularly those prohibited or declared
void by law.
61

Hence, this petition.

respondents consent merely rendered the Deed voidable


under Article 1390 of the Civil Code, which provides:

The Issues
In their Memorandum, petitioners
respondent the following errors:

assign

to

public

10

I
Whether or not the assailed Deed of Transfer of Rights was validly
executed.
II
Whether or not the Court of Appeals erred in not declaring as
voidable contract under Art. 1390 of the Civil Code the impugned
Deed of Transfer of Rights which was validly ratified thru the
execution of the amicable settlement by the contending parties.
III
Whether or not the Court of Appeals erred in not setting aside
the findings of the Court a quo which recognized as lawful and
valid the ownership and possession of private respondent over the
remaining one-half (1/2) portion of the subject property.

In a nutshell, petitioners-spouses contend that (1) the


contract of sale (Deed of Transfer of Rights) was merely
voidable, and (2) such contract was ratified by private
respondent when she entered into an amicable settlement
with them.
This Courts Ruling
The petition is bereft of merit.
First Issue: Void or Voidable Contract?
Petitioners insist that the questioned Deed of Transfer of
Rights was validly executed by the parties-litigants in good
faith and for valuable consideration. The absence of private

ART. 1390. The following contracts are voidable or annullable,


even though there may have been no damage to the contracting
parties:
xxx
xxx
xxx
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a
proper action in court. They are susceptible of ratification.(n)

The error in petitioners contention is evident. Article 1390,


par. 2, refers to contracts visited by vices of consent, i.e.,
contracts which were entered into by a person whose consent
was obtained and vitiated through mistake, violence,
intimidation, undue influence or fraud. In this instance,
private respondents consent to the contract of sale of their
conjugal property was totally inexistent or absent. Gilda
Corpuz, on direct examination, testified thus:
11

Q Now, on March 1, 1990,


could you still recall
where you were?
A I was still in Manila
during that time.
xxxxxxxxx
ATTY. FUENTES:
Q When did you come back
to Koronadal, South
Cotabato?
A That was on March 11,
1990, Maam.
Q Now, when you arrived at
Koronadal, was there any
problem which arose
concerning the ownership
62

of your residential house


at Callejo Subdivision?
When I arrived here in
Koronadal, there was a
problem which arose
regarding my residential
house and lot because it
was sold by my husband
without my knowledge.

This being the case, said contract properly falls within the
ambit of Article 124 of the Family Code, which was correctly
applied by the two lower courts:
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, which must be
availed of within five years from the date of the contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance

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. (165a) (Italics supplied)

Comparing said law with its equivalent provision in the Civil


Code, the trial court adroitly explained the amendatory effect
of the above provision in this wise:
12

The legal provision is clear. The disposition or encumbrance is


void. It becomes still clearer if we compare the same with the
equivalent provision of the Civil Code of the Philippines. Under
Article 166 of the Civil Code, the husband cannot generally
alienate or encumber any real property of the conjugal partnership
without the wifes consent. The alienation or encumbrance if so
made however is not null and void. It is merely voidable. The
offended wife may bring an action to annul the said alienation or
encumbrance. Thus, the provision of Article 173 of the Civil Code
of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs after the

________________
11

TSN, August 17, 1990, pp. 16-17.

382

382

SUPREME COURT
REPORTS
ANNOTATED
Guiang vs. Court of Appeals

which must have the authority of the court or the written consent
of the other spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the transaction

dissolution of the marriage, may demand the value of property


fraudulently alienated by the husband.(n)

This particular provision giving the wife ten (10) years x x x


during [the] marriage to annul the alienation or encumbrance was
not carried over to the Family Code. It is thus clear that any
alienation or encumbrance made after August 3, 1988 when the
Family Code took effect by the husband of the conjugal
partnership property without the consent of the wife is null and
void.
________________

63

12

direct offshoot of the Deed of Transfer of Rights (Exh. A). By


express provi-

Rollo, p. 37.

383

VOL. 291, JUNE 26,


383
1998
Guiang vs. Court of Appeals

________________

Furthermore, it must be noted that the fraud and the


intimidation referred to by petitioners were perpetrated in
the execution of the document embodying the amicable
settlement. Gilda Corpuz alleged during trial that barangay
authorities made her sign said document through
misrepresentation and coercion. In any event, its execution
does not alter the void character of the deed of sale between
the husband and the petitioners-spouses, as will be discussed
later. The fact remains that such contract was entered into
without the wifes consent.
In sum, the nullity of the contract of sale is premised on
the absence of private respondents consent. To constitute a
valid contract, the Civil Code requires the concurrence of the
following elements: (1) cause, (2) object, and (3) consent, the
last element being indubitably absent in the case at bar.
Second Issue: Amicable Settlement
Insisting that the contract of sale was merely voidable,
petitioners aver that it was duly ratified by the contending
parties through the amicable settlement they executed on
March 16, 1990 in Barangay Case No. 38.
The position is not well taken. The trial and the appellate
courts have resolved this issue in favor of the private
respondent. The trial court correctly held:
13

14

15

By the specific provision of the law [Art. 1390, Civil Code]


therefore, the Deed of Transfer of Rights (Exh. A) cannot be
ratified, even by an amicable settlement. The participation by
some barangay authorities in the amicable settlement cannot
otherwise validate an invalid act. Moreover, it cannot be denied
that the amicable settlement (Exh. B) entered into by plaintiff
Gilda Corpuz and defendant spouses Guiang is a contract. It is a

13

TSN, August 17, 1990, pp. 13-14.

14

Art. 1318, Civil Code.

15

Rollo, p. 38.

384

384

SUPREME COURT
REPORTS
ANNOTATED
Guiang vs. Court of Appeals

sion of law, such a contract is also void. Thus, the legal provision,
to wit:
Art. 1422. A contract which is the direct result of a previous illegal
contract, is also void and inexistent. (Civil Code of the Philippines).

In summation therefore, both the Deed of Transfer of Rights


(Exh. A) and the amicable settlement (Exh. 3) are null and
void.

Doctrinally and clearly, a void contract cannot be


ratified. Neither can the amicable settlement be considered
a continuing offer that was accepted and perfected by the
parties, following the last sentence of Article 124. The order
of the pertinent events is clear: after the sale, petitioners
filed a complaint for trespassing against private respondent,
after which the barangay authorities secured an amicable
settlement and petitioners filed before the MTC a motion for
its execution. The settlement, however, does not mention a
continuing offer to sell the property or an acceptance of such
a continuing offer. Its tenor was to the effect that private
respondent would vacate the property. By no stretch of the
imagination, can the Court interpret this document as the
acceptance mentioned in Article 124.
16

64

WHEREFORE, the Court hereby DENIES the petition


and AFFIRMS the challenged Decision and Resolution. Costs
against petitioners.
SO ORDERED.
Davide,
Jr.(Chairman), Bellosillo, Vitugand Quisumbing, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.The presumption is that all property of the
marriage belongs to the conjugal partnership, unless it is
proved that it pertains exclusively to the husband or the
wife. (Cuenca vs. Cuenca, 168 SCRA 335 [1988])
Where a woman who cohabited with a married man fails
to prove that she contributed money to the purchase price of
a riceland, there is no basis to justify her co-ownership over
the samethe riceland should revert to the conjugal
partnership property of the man and his lawful wife. (Agapay
vs. Palang, 276 SCRA 340[1997])
o0o

65

G.R. No. 166496. November 29, 2006.


JOSEFA
BAUTISTA
FERRER,
petitioner, vs. SPS.
MANUEL M. FERRER & VIRGINIA FERRER and SPS.
ISMAEL M. FERRER and FLORA FERRER, respondents.
*

Actions; Causes of Action;Elements; Failure to make a


sufficient allegation of a cause of action in the complaint warrants
the dismissal thereof.Section 1(g) Rule 16 of the 1997 Rules of
Civil Procedure makes it clear that failure to make a sufficient
allegation of a cause of action in the complaint warrants the
dismissal thereof. Section 2, Rule 2 of the 1997 Rules of Civil
Procedure defines a cause of action as the act or omission by which
a party violates the right of another. It is the delict or the wrongful
act or omission committed by the defendant in violation of the
primary right of the plaintiff. A cause of action has the following
essential elements, viz.: (1) A right in favor of the plaintiff by
whatever means and under whatever law it arises or is created; (2)
An obligation on the part of the named defendant to respect or not
to violate such right; and (3) Act or omission on the part of such
defendant in violation of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff for which
the latter may maintain an action for recovery of damages or other
appropriate relief.
Husband
and
Wife; Conjugal
Partnerships; Sales; The
obligation to reimburse for the cost of improvements, under Article
120 of the Family Code, rests on the spouse upon whom ownership
of the
_______________
*

FIRST DIVISION.

571

VOL. 508,
NOVEMBER 29, 2006
Ferrer vs. Ferrer

5
71

entire property is vestedthere is no obligation on the part of


the purchaser of the property, in case the property is sold by the
ownerspouse; When the cost of the improvement and any resulting
increase in value are more than the value of the property at the time
of the improvement, the entire property of one of the spouses shall
belong to the conjugal partnership, subject to reimbursement of the
value of the property of the owner-spouse at the time of the
improvement, otherwise, said property shall be retained in
ownership by the ownerspouse.Petitioner was not able to show
that there is an obligation on the part of the respondents to respect
or not to violate her right. While we could concede that Civil Case
No. 61327 made a reference to the right of the spouse as
contemplated in Article 120 of the Family Code to be reimbursed
for the cost of the improvements, the obligation to reimburse rests
on the spouse upon whom ownership of the entire property is
vested. There is no obligation on the part of the purchaser of the
property, in case the property is sold by the ownerspouse. Indeed,
Article 120 provides the solution in determining the ownership of
the improvements that are made on the separate property of the
spouses at the expense of the partnership or through the acts or
efforts of either or both spouses. Thus, when the cost of the
improvement and any resulting increase in value are more than
the value of the property at the time of the improvement, the
entire property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the property
of the owner-spouse at the time of the improvement; otherwise,
said property shall be retained in ownership by the owner-spouse,
likewise subject to reimbursement of the cost of the improvement.
The subject property was precisely declared as the exclusive
property of Alfredo on the basis of Article 120 of the Family Code.

PETITION for review on certiorari of the decision and


resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
66

Romualdo M. Jubay for petitioner.


Tambio Law Office for private respondents.

however, in September 1991, he stopped paying rentals


thereon, alleging that he had acquired ownership over the
property by virtue of a Deed of Sale executed by Alfredo in
favor of respondents,

572

572

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

_______________
1

Penned by Associate Justice Delilah Vidallon-Magtolis with Associate

Justices Eliezer R. De Los Santos and Arturo D. Brion, concurring; Rollo, pp.

CHICO-NAZARIO, J.:

2735.

Before this Court is an Appeal by Certiorari which assails the


Decision of the Court of Appeals dated 16 August 2004
in CA-G.R. SP No. 78525, reversing and setting aside the
Order dated 16 December 2002 of the Regional Trial Court
(RTC), Mandaluyong City, Branch 212 in Civil Case No.
MC021780. The Court of Appeals ordered the dismissal of
the Complaint filed by petitioner Josefa Bautista Ferrer
against respondents Sps. Manuel M. Ferrer and Virginia
Ferrer, and Sps. Ismael M. Ferrer and Flora Ferrer in the
aforesaid Civil Case No. MC021780.
In her Complaint for payment of conjugal improvements,
sum of money, and accounting with prayer for injunction and
damages, petitioner alleged that she is the widow of Alfredo
Ferrer (Alfredo), a half-brother of respondents Manuel M.
Ferrer (Manuel) and Ismael M. Ferrer (Ismael). Before her
marriage to Alfredo, the latter acquired a piece of lot, covered
by Transfer Certificate of Title (TCT) No. 67927. He applied
for a loan with the Social Security System (SSS) to build
improvements thereon, including a residential house and a
twodoor apartment building. However, it was during their
marriage that payment of the loan was made using the
couples conjugal funds. From their conjugal funds, petitioner
posited, they constructed a warehouse on the lot. Moreover,
petitioner averred that respondent Manuel occupied one door
of the apartment building, as well as the warehouse;
1

Id., at pp. 4041.

Records, pp. 19.

Id., at pp. 1112.

573

VOL. 508, NOVEMBER


29, 2006
Ferrer vs. Ferrer

573

Manuel and Ismael and their spouses. TCT No. 67927 was
cancelled, and TCT. No. 2728 was issued and registered in
the names of respondents.
It is petitioners contention that on 2 October 1989, when
her husband was already bedridden, respondents Ismael and
Flora Ferrer made him sign a document, purported to be his
last will and testament. The document, however, was a Deed
of Sale covering Alfredos lot and the improvements thereon.
Learning of this development, Alfredo filed with the RTC of
Pasig, a Complaint for Annulment of the said sale against
respondents, docketed as Civil Case No. 61327. On 22 June
1993, the RTC dismissed the same. The RTC found that the
terms and conditions of the Deed of Sale are not contrary to
law, morals, good customs, and public policy, and should be
complied with by the parties in good faith, there being no
compelling reason under the law to do otherwise. The
dismissal was affirmed by the Court of Appeals.
Subsequently, on 7 November 1994, this Court, in G.R. No.
5

67

L-117067, finding no reversible error committed by the


appellate court in affirming the dismissal of the RTC,
affirmed the Decision of the Court of Appeals.
Further, in support of her Complaint, petitioner alluded to
a portion of the Decision dated 22 June 1993 of the RTC
in Civil Case No. 61327, which stated, to wit:
7

In determining which property is the principal and which is the


accessory, the property of greater value shall be considered the
principal. In this case, the lot is the principal and the
improvements the accessories. Since Article 120 of the Family
Code provides the rule that the ownership of accessory follows the
ownership of the principal, then the subject lot with all its
improvements became an exclusive and capital property of Alfredo
with an obligation to reim

amounted to P500,000.00; hence, one-half thereof should be


reimbursed and paid by respondents as they are now the
registered owners of Alfredos lot. She averred that
respondents cannot claim lack of knowledge about the fact
that the improvements were constructed using conjugal
funds as they had occupied one of the apartment buildings on
Alfredos lot, and even paid rentals to petitioner. In addition,
petitioner prayed that respondents be ordered to render an
accounting from September, 1991, on the income of the
boarding house constructed thereon which they had
appropriated for themselves, and to remit one-half thereof as
her share. Finally, petitioner sought from respondents moral
and exemplary damages, litigation and incidental expenses.
For their part, respondents filed a Motion to
Dismiss, contending that petitioner had no cause of action
against them, and that the cause of action was barred by
prior judgment.
On 16 December 2002, the RTC rendered an
Order, denying the Motion to Dismiss. According to the RTC,
no pronouncement as to the improvements constructed on
Alfredos lot has been made in Civil Case No. 61327, and the
payment of petitioners share in the conjugal partnership
constitutes a separate cause of action. A subsequent
Order dated 17
9

_______________
5

Entitled, Sps. Alfredo S. Ferrer and Josefa Jimenez Ferrer v. Sps. Ismael

R. Ferrer and Flora C. Ferrer and Sps. Manuel M. Ferrer and Virginia Ferrer.
6

Penned by Jose H. Hernandez; Records, pp. 1722.

Id., at p. 3.

574

574

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

burse the conjugal partnership of the cost of improvements at the


time of liquidation of [the] conjugal partnership. Clearly, Alfredo
has all the rights to sell the subject property by himself without
need of Josefas consent.
8

According to petitioner, the ruling of the RTC shows that,


when Alfredo died on 29 September 1999, or at the time of
the liquidation of the conjugal partnership, she had the right
to be reimbursed for the cost of the improvements on
Alfredos lot. She alleged that the cost of the improvements

10

11

_______________
8

Id., at p. 20.

Id., at pp. 201210.

10

Id., at pp. 244245.

11

Id., at p. 251.

575

VOL. 508, NOVEMBER


29, 2006
Ferrer vs. Ferrer

575

68

January 2003 was issued by the RTC, denying respondents


Motion for Reconsideration.
Aggrieved, respondents elevated the case to the Court of
Appeals by way of a Petition for Certiorari, alleging grave
abuse of discretion amounting to lack or excess of jurisdiction
on the RTC in denying the dismissal.
On 16 August 2004, the Court of Appeals rendered a
Decision granting the Petition. It held that petitioners
Complaint failed to state a cause of action. The appellate
court rationalized as follows:
[W]e believe that the instant complaint is not the proper action
for the respondent to enforce her right of reimbursement of the
cost of the improvement[s] on the subject property. As correctly
pointed out by the petitioners, the same should be made and
directed in the settlement of estate of her deceased husband
Alfredo Ferrer pursuant to Article 129 of the Family Code. Such
being the case, it ap
12

_______________
12

Art. 129. Upon the dissolution of the conjugal partnership regime, the

following procedure shall apply:


1. (1)An inventory shall be prepared, listing separately all the
properties of the conjugal partnership and the exclusive properties
of each spouse.
2. (2)Amounts advanced by the conjugal partnership in payment of
personal debts and obligations of either spouse shall be credited to
the conjugal partnership as an asset thereof.
3. (3)Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her
exclusive property, the ownership of which has been vested by law
in the conjugal partnership.
4. (4)The debts and obligations of the conjugal partnership shall be paid
out of the conjugal assets. In case of insufficiency of said assets, the

spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph
(2) of Article 121.
5. (5)Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
576

576

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

pears that the complaint herein fails to state a cause of action


against the petitioners, the latter not being the proper parties
against whom the subject action for reimbursement must be
directed to. A complaint states a cause of action where it contains
three essential elements of a cause of action, namely: (1) the legal
right of the plaintiff; (2) the correlative obligation of the defendant,
and (3) the act or omission of the defendant in violation of said
legal right. If these elements are absent, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to state
a cause of action. Albeit the respondent herein has the legal right
to be reimbursed of the cost of the improvements of the subject
property, it is not the petitioners but the estate of her deceased
husband which has the obligation to pay the same. The complaint
herein is therefore dismissible for failure to state a cause of action
against the petitioners. Needless to say, the respondent is not
without any further recourse as she may file her claim against the
estate of her deceased husband.
_______________
1. (6)Unless the owner had been indemnified from whatever source, the
loss or deterioration of movables used for the benefit of the family,
belonging to either spouse, even due to fortuitous event, shall be
paid to said spouse from the conjugal funds, if any.

69

ACTION FOR REIMBURSEMENT MUST BE DIRECTED


TO.
2. B.THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT THE PUBLIC RESPONDENT, HON.
RIZALINA T. CAPCO-UMALI, COMMITTED GRAVE
ABUSE OF DISCRETION IN DENYING THE
[RESPONDENTS] MOTION TO
DISMISS FOR
FAILURE TO STATE A CAUSE OF ACTION.

2. (7)The net remainder of the conjugal partnership properties shall


constitute the profits, which shall be divided equally between
husband and wife, unless a different proportion or division was
agreed upon in the marriage settlements or unless there has been a
voluntary waiver or forfeiture of such share as provided in this
Code.
3. (8)The presumptive legitimes of the common children shall be
delivered upon the partition in accordance with Article 51.
4. (9)In the partition of the properties, the conjugal dwelling and the lot
on which it is situated shall, unless otherwise agreed upon by the
parties, be adjudicated to the spouse with whom the majority of the
common children choose to remain. Children below the age of seven
years are deemed to have chosen the mother, unless the court has
decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children.

15

Both arguments raise the sole issue of whether the Court of


Appeals erred in dismissing petitioners Complaint for failure
to state a cause of action.
Section 1(g) Rule 16 of the 1997 Rules of Civil Procedure
makes it clear that failure to make a sufficient allegation of a
16

_______________

577

VOL. 508, NOVEMBER


29, 2006
Ferrer vs. Ferrer

577

13

Rollo, pp. 3334.

14

Penned by Associate Justice Delilah Vidallon-Magtolis with Associate

Justices

In light of the foregoing, we find that the public respondent


committed grave abuse of discretion in denying the petitioners
motion to dismiss for failure to state a cause of action.
13

Aggrieved, petitioner filed a Motion for Reconsideration


thereon. However, on 17 December 2004, the Court of
Appeals rendered a Resolution denying the motion.
Hence, the present recourse.
Petitioner submits the following grounds for the allowance
of the instant Petition, to wit:
14

1. A.THE HONORABLE COURT OF APPEALS ERRED IN


RULING THAT PETITIONERS COMPLAINT FAILS TO
STATE A CAUSE OF ACTION AGAINST THE
RESPONDENTS, THE LATTER NOT BEING THE
PROPER PARTIES AGAINST WHOM THE SUBJECT

Eliezer

R.

De

Los

Santos

and

Monina

ArevaloZenarosa,

concurring; Rollo, pp. 3839.


15

Id., at p. 16.

16

Section 1. Grounds.Within the time for but before filing the answer to

the complaint or pleading asserting a claim, a motion to dismiss may be made


on any of the following grounds:
578

578

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

cause of action in the complaint warrants the dismissal


thereof. Section 2, Rule 2 of the 1997 Rules of Civil Procedure
defines a cause of action as the act or omission by which a
party violates the right of another. It is the delict or the
70

wrongful act or omission committed by the defendant in


violation of the primary right of the plaintiff.
A cause of action has the following essential elements,viz.:
17

1. (1)A right in favor of the plaintiff by whatever means and


under whatever law it arises or is created;
2. (2)An obligation on the part of the named defendant to
respect or not to violate such right; and
3. (3)Act or omission on the part of such defendant in violation
of the right of the plaintiff or constituting a breach of the
obligation
_______________

VOL. 508, NOVEMBER


29, 2006
Ferrer vs. Ferrer

579

1. of the defendant to the plaintiff for which the latter may


maintain an action for recovery of damages or other
appropriate relief.
18

A complaint states a cause of action only when it has the


three indispensable elements.
In the determination of the presence of these elements,
inquiry is confined to the four corners of the complaint. Only
the statements in the Complaint may be properly
considered. The absence of any of these elements makes a
complaint vulnerable to a Motion to Dismiss on the ground of
a failure to state a cause of action.
After a reading of the allegations contained in petitioners
Complaint, we are convinced that the same failed to state a
cause of action.
In the case at bar, petitioner asserts a legal right in her
favor by relying on the Decision of the RTC inCivil Case No.
61327. It can be recalled that the aforesaid case is an action
for Annulment filed by Alfredo and petitioner against the
respondents to seek annulment of the Deed of Sale, executed
by Alfredo in respondents favor and covering the herein
subject premises. The Complaint was dismissed by the RTC,
and subsequently affirmed by the Court of Appeals and by
this Court in G.R. No. L-117067.
According to petitioner, while the RTC in Civil Case No.
61327 recognized that the improvements constructed on
Alfredos lots were deemed as Alfredos exclusive and capital
property, the court also held that petitioner, as Alfredos
19

20

1. (a)That the court has no jurisdiction over the person of the defending
party;
2. (b)That the court has no jurisdiction over the subject matter of the
claim;
3. (c)That venue is improperly laid;
4. (d)That the plaintiff has no legal capacity to sue;
5. (e)That there is another action pending between the same parties for
the same cause;
6. (f)That the cause of action is barred by a prior judgment or by the
statute of limitations;
7. (g)That the pleading asserting the claim states no cause of action;
8. (h)That the claim or demand set forth in the plaintiffs pleading has
been paid, waived, abandoned, or otherwise extinguished;
9. (i)That the claim on which the action is founded is unenforceable
under the provisions of the statute of frauds; and
10. (j)That a condition precedent for filing the claim has not been
complied with.
17

21

Danfoss, Incorporated v. Continental Cement Corporation,G.R. No.

143788, 9 September 2005,469 SCRA 505, 511.

_______________

579

71

18

Swagman Hotels and Travel, Inc. v. Court of Appeals and Neal B.

Christian, G.R. No. 161135, 8 April 2005, 455 SCRA 175, 183.
19

Goodyear Philippines, Inc. v. Anthony Sy and Jose L. Lee, G.R. No.

154554, 9 November 2005, 474 SCRA 427, 435.


20

Concepcion V. Vda. de Daffon v. Court of Appeals, G.R. No. 129017,436

Phil. 233, 238; 387 SCRA 427, 432 (2002).


21

Victoria J. Ilano v. Hon. Dolores L. Espaol, G.R. No. 161756, 16

December 2005, 478 SCRA 365, 372.

Art. 120. The ownership of improvements, whether for utility or

adornment, made on the separate property of the spouses at the expense of


the partnership or through the acts or efforts of either or both spouses shall
pertain to the conjugal partnership, or to the original owner-spouse, subject
to the following rules:
When the cost of the improvement made by the conjugal partnership and
any resulting increase in value are more than the value of the property at the
time of the improvement, the entire property of one of the spouses shall

580

580

22

belong to the conjugal partnership, subject to reimbursement of the value of

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

the property of the owner-spouse at the time of the improvement; otherwise,


said property shall be retained in ownership by the owner-spouse, likewise
subject to reimbursement of the cost of the improvement.
In either case, the ownership of the entire property shall be vested upon

spouse, has the right to claim reimbursement from the estate


of Alfredo. It is argued by petitioner that her husband had no
other property, and his only property had been sold to the
respondents; hence, she has the legal right to claim for
reimbursement from the respondents who are now the
owners of the lot and the improvements thereon. In fine,
petitioner asseverates that the Complaint cannot be
dismissed on the ground of failure to state a cause of action
because the respondents have the correlative obligation to
pay the value of the improvements.
Petitioner was not able to show that there is an obligation
on the part of the respondents to respect or not to violate her
right. While we could concede that Civil Case No.
61327 made a reference to the right of the spouse as
contemplated in Article 120 of the Family Code to be
reimbursed for the cost of the improvements, the obligation
to reimburse rests on the spouse upon whom ownership of
the entire property is vested. There is no obligation on the
part of the purchaser of the property, in case the property is
sold by the owner-spouse.
22

the reimbursement, which shall be made at the time of the liquidation of the
conjugal partnership.
581

VOL. 508, NOVEMBER


29, 2006
Ferrer vs. Ferrer

581

Indeed, Article 120 provides the solution in determining the


ownership of the improvements that are made on the
separate property of the spouses at the expense of the
partnership or through the acts or efforts of either or both
spouses. Thus, when the cost of the improvement and any
resulting increase in value are more than the value of the
property at the time of the improvement, the entire property
of one of the spouses shall belong to the conjugal partnership,
subject to reimbursement of the value of the property of the
owner-spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-spouse,
likewise subject to reimbursement of the cost of the
improvement. The subject property was precisely declared as
the exclusive property of Alfredo on the basis of Article 120 of
the Family Code.

_______________

72

What is incontrovertible is that the respondents, despite


the allegations contained in the Complaint that they are the
buyers of the subject premises, are not petitioners spouse nor
can they ever be deemed as the owner-spouse upon whom the
obligation to reimburse petitioner for her costs rested. It is
the owner-spouse who has the obligation to reimburse the
conjugal partnership or the spouse who expended the acts or
efforts, as the case may be. Otherwise stated, respondents do
not have the obligation to respect petitioners right to be
reimbursed.
On this matter, we do not find an act or omission on the
part of respondents in violation of petitioners rights. The
right of the respondents to acquire as buyers the subject
premises from Alfredo under the assailed Deed of Sale in
Civil Case No. 61327 had been laid to rest. This is because
the validity of the Deed of Sale had already been determined
and upheld with finality. The same had been similarly
admitted by petitioner in her Complaint. It can be said, thus,
that respondents act of acquiring the subject property by
sale was not in violation of petitioners rights. The same can
also be said of the respondents objection to reimburse
petitioner. Simply, no correlative obligation exists on the part
of the
582

582

SUPREME COURT
REPORTS
ANNOTATED
Ferrer vs. Ferrer

WHEREFORE, the Petition is DENIED. The Decision


dated 16 August 2004 and the Resolution dated 17 December
2004 of the Court of Appeals in CA-G.R. SP. No. 78525 are
AFFIRMED. Costs de oficio.
SO ORDERED.
Panganiban (C.J.,
Chairperson), YnaresSantiago, Austria-Martinezand Callejo, Sr., JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.A spouse who desires to sell real property as such
administrator of the conjugal property must observe the
procedure for the sale of the wards estate required of judicial
guardians under Rule 95, 1964 Revised Rules of Court, not
the summary judicial proceedings under the Family Code.
(Uy vs. Court of Appeals, 346 SCRA 246 [2000])
In the enforcement of a writ of execution relative to a
judgment arising from a transaction of the husband which
did not redound to the benefit of the family, nor with her
consent, the wife is deemed a stranger to the action and is
justified in bringing an independent action to vindicate her
right of ownership over her separate property which is levied
upon. (Naguit vs. Court of Appeals, 347 SCRA 60[2000])
o0o

respondents to reimburse the petitioner. Corollary thereto,


neither can it be said that their refusal to reimburse
constituted a violation of petitioners rights. As has been
shown in the foregoing, no obligation by the respondents
under the law exists. Petitioners Complaint failed to state a
cause of action against the respondents, and for this reason,
the Court of Appeals was not in error in dismissing the same.
73

G.R. No. 140153. March 28, 2001.


ANTONIO
DOCENA
and
ALFREDA
DOCENA,
petitioners, vs. HON. RICARDO P. LAPESURA, in his
capacity as Presiding Judge of the RTC, Branch III, Guian,
Eastern Samar; RUFINO M. GARADO, Sheriff IV; and
CASIANO HOMBRIA, respondents.
*

Actions; Certiorari;Pleadings and Practice; The retroactive


application of procedural laws, such as the Resolution in A.M. No.
00-03-SC, which amended Section 4 of Rule 65 of the 1997 Revised
Rules of Civil Procedure, is not violative of any right of a person
who may feel adversely affected thereby, as no vested right may
attach to nor arise from procedural laws.In the case of iSystems
Factors Corporation versus NLRC, we held that the abovequoted
Resolution, being procedural in nature, is applicable to actions
pending and undetermined at the time of their passage. The
retroactive application of procedural laws such as this Resolution
is not violative of any right of a person who may feel adversely
affected thereby, as no vested right may attach to nor arise from
procedural laws. The ruling in the Systems Factors case was
reiterated in the recent case of Unity Fishing Development
Corporation, et al. vs. Court of Appeals, et al.Applying the
Resolution to the case at bar, the 60-day period for the filing of a
petition for certiorari and prohibition should be reckoned from the
date of receipt of the order denying the motion for
reconsideration, i.e., May 4, 1999, and thus, the filing made on
June 14, 1999 was well within the 60-day reglementary period.
Same; Same; Same;Certificate of Non-Forum Shopping; The
certificate of non-forum shopping should be signed by all the
petitioners or plaintiffs in a case, and that the signing by only one
of them is insufficient.It has been our previous ruling that the
certificate of non-forum shopping should be signed by all the
petitioners or plaintiffs in a case, and that the signing by only one
of them is insufficient. In the case of Efren Loquias, et al. vs. Office
of the Ombudsman, et al.we held that the signing of the
Verification and the Certification on Non-Forum Shopping by only

one of the petitioners constitutes a defect in the petition. The


attestation contained in the certification on non-forum shopping
requires personal knowledge by the party executing the same, and
the lone signing petitioner cannot be presumed to have personal
knowledge of the filing or non-filing by his co-petitioners of any
action or claim the same as or similar to the current petition. To
merit the Courts consideration, petitioners must show reasonable
cause for failure to personally sign the certification.
Same; Same; Same; Same;Husband and Wife; If suits to
defend an interest in the conjugal properties may be filed by the
husband alone, with more reason, he may sign the certificate of
non-forum shopping to be attached to the petition.Under the New
Civil Code, the husband is the administrator of the conjugal
partnership. In fact, he is the sole administrator, and the wife is
not entitled as a matter of right to join him in this endeavor. The
husband may defend the conjugal partnership in a suit or action
without being joined by the wife. Corollarily, the husband alone
may execute the necessary certificate of non-forum shopping to
accompany the pleading. The husband as the statutory
administrator of the conjugal
660

6
60

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura

property could have filed the petition for certiorari and


prohibition alone, without the concurrence of the wife. If suits to
defend an interest in the conjugal properties may be filed by the
husband alone, with more reason, he may sign the certificate of
non-forum shopping to be attached to the petition.
Same; Same; Same; Same;Same; Family Code; It is believed
that even under the provisions of the Family Code, the husband
alone could file the petition for certiorari and prohibition to contest
the writs of demolition issued against the conjugal property without
being joined by his wife.Under the Family Code, the
74

administration of the conjugal property belongs to the husband


and the wife jointly. However, unlike an act of alienation or
encumbrance where the consent of both spouses is required, joint
management or administration does not require that the husband
and wife always act together. Each spouse may validly exercise full
power of management alone, subject to the intervention of the
court in proper cases as provided under Article 124 of the Family
Code. It is believed that even under the provisions of the Family
Code, the husband alone could have filed the petition for certiorari
and prohibition to contest the writs of demolition issued against
the conjugal property with the Court of Appeals without being
joined by his wife. The signing of the attached certificate of nonforum shopping only by the husband is not a fatal defect.
Same; Same; Same; Same;Same; The husband may reasonably
be presumed to have personal knowledge of the filing or non-filing
by his wife of any action or claim similar to the petition for
certiorari and prohibition given the notices and legal processes
involved in a legal proceeding involving real property.More
important, the signing petitioner here made the certification in his
behalf and that of his wife. The husband may reasonably be
presumed to have personal knowledge of the filing or non-filing by
his wife of any action or claim similar to the petition for certiorari
and prohibition given the notices and legal processes involved in a
legal proceeding involving real property. We also see no justifiable
reason why he may not lawfully undertake together with his wife
to inform the court of any similar action or proceeding which may
be filed. If anybody may repudiate the certification or undertaking
for having been incorrectly made, it is the wife who may
conceivably do so.
Same; Same; Same; Same;Same; In view of the circumstances
of the instant case, namely, the property involved is a conjugal
property, the petition questioning the writ of demolition thereof
originated from an action for recovery brought against the spouses,
and is clearly intended for the benefit of the conjugal partnership,
and the wife was in Samar whereas the

661

VOL. 355, MARCH


6
28, 2001
61
Docena vs. Lapesura
petition was prepared in Metro Manila, a rigid application of
the rules on forum shopping that would disauthorize a husbands
signing the certification in his behalf and that of his wife is too
harsh and is clearly uncalled for.In view of the circumstances of
this case, namely, the property involved is a conjugal property, the
petition questioning the writ of demolition thereof originated from
an action for recovery brought against the spouses, and is clearly
intended for the benefit of the conjugal partnership, and the wife,
as pointed out in the Motion for Reconsideration in respondent
court, was in the province of Guian, Samar, whereas the petition
was prepared in Metro Manila, a rigid application of the rules on
forum shopping that would disauthorize a husbands signing the
certification in his behalf and that of his wife is too harsh and is
clearly uncalled for. It bears stressing that the rules on forum
shopping, which were designed to promote and facilitate the
orderly administration of justice, should not be interpreted with
such absolute literalness as to subvert its own ultimate and
legitimate objective.

PETITION for review on certiorari of the resolutions of the


Court of Appeals.
The facts are stated in the opinion of the Court.
Zaldy B. Docena for petitioners.
Elvira De Vera Bitoniofor private respondents.
GONZAGA-REYES, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking the nullification of the Court of
Appeals Resolutions dated June 18, 1999 and September 9,
1

75

1999 which dismissed the Petition for Certiorari and


Prohibition under Rule 65 and denied the corresponding
motion for reconsideration, respectively.
The antecedent facts are as follows:
On June 1, 1977, private respondent Casiano Hombria
filed a Complaint for the recovery of a parcel of land against
his lessees,
2

________________
1

Fourth

Division

composed

of J.Salome

A.

Montoya, ponente; and JJ.Conrado M. Vasquez and Teodoro P. Regino,


members.
2

Docketed as CA-G.R. SP No. 53211.

662

662

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura

petitioner-spouses Antonio and Alfreda Docena. The


petitioners claimed ownership of the land based on
occupation since time immemorial. A certain Guillermo
Abuda intervened in the case. In a Decision dated November
24, 1989, the trial court ruled in favor of the petitioners and
the intervenor Abuda. On appeal, the Court of Appeals
reversed the judgment of the trial court and ordered the
petitioners to vacate the land they have leased from the
plaintiff-appellant [private respondent Casiano Hombria],
excluding the portion which the petitioners reclaimed from the
sea and forms part of the shore, as shown in the
Commissioners Report, and to pay the plaintiff-appellant the
agreed rental of P1.00 per year from the date of the filing of
the Complaint until they shall have actually vacated the
premises. The Complaint in Intervention of Abuda was
dismissed.
3

On May 22, 1995, private respondent Hombria filed a


Motion for Execution of the above decision which has already
become final and executory. The motion was granted by the
public respondent judge, and a Writ of Execution was issued
therefor.
However,
the
public
respondent
sheriff
subsequently filed a Manifestation requesting that he be
clarified in the determination of that particular portion which
is sought to be excluded prior to the delivery of the land
adjudged in favor of plaintiff Casiano Hombria in view of
the defects in the Commissioners Report and the Sketches
attached thereto. After requiring the parties to file their
Comment on the sheriffs Manifestation, the public
respondent judge, in a Resolution dated August 30, 1996,
held that x x x no attempt should be made to alter or modify
the decision of the Court of Appeals. What should be delivered
therefore to the plaintiff x x x is that portion leased by the
defendant-appellees from the plaintiff-appellant excluding the
portion that the defendant-appellee have reclaimed
8

_______________
3

Petition, p. 4; Rollo, p. 11. The case was docketed as RTC (of Guian,

Eastern Samar, Branch 3) Civil Case No. 446.


4

Ibid.

Id.

Id.

Id.

Id.

Id., p. 6; Rollo, p. 13.

663

VOL. 355, MARCH 28, 663


2001
Docena vs. Lapesura
from the sea and forms part of the shore as shown in the
commissioners report x x x. Pursuant to the Resolution, the
10

76

public respondent sheriff issued an alias Writ of Demolition.


The petitioners filed a Motion to Set Aside or Defer the
Implementation of Writ of Demolition. This motion was
denied by the public respondent judge in an Order dated
November 18, 1998, a copy of which was received by the
petitioners on December 29, 1998. Also on December 29,
1998, the public respondent judge, in open court, granted the
petitioners until January 13, 1999 to file a Motion for
Reconsideration. On January 13, 1999, petitioners moved for
an extension of the period to file a motion for reconsideration
until January 28, 1999. The motion was finally filed by the
petitioners on January 27, 1999, but was denied by the trial
court in an Order dated March 17, 1999. A copy of the Order
was received by the petitioners on May 4, 1999.
A Petition for Certiorari and Prohibition was filed by the
petitioners with the Court of Appeals, alleging grave abuse of
discretion on the part of the trial court judge in issuing the
Orders dated November 18, 1998 and March 17, 1999, and of
the sheriff in issuing the aliasWrit of Demolition. In a
Resolution dated June 18, 1999, the Court of Appeals
dismissed the petition on the grounds that the petition was
filed beyond the 60-day period provided under Section 4 of
Rule 65 of the 1997 Revised Rules of Civil Procedure as
amended by Bar Matter No. 803 effective September 1, 1998,
and that the certification of non-forum shopping attached
thereto was signed by only one of the petitioners The Motion
for Reconsideration filed by the petitioners was denied by the
Court of Appeals in a Resolution dated September 9, 1999.
Hence this petition.
11

12

13

14

15

16

17

______________
10

Id., p. 7; Rollo, p. 14.

11

Id.

12

Id., p. 8; Rollo, pp. 15 and 88.

13

Id.

14

Id.

15

Id.

16

Court of Appeals Resolution dated June 18, 18999, p. 1; Rollo, p. 32.

17

Court of Appeals Resolution dated September 9, 1999, pp. 1 to 2; Rollo,

pp. 35-36.
664

664

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura

The sole issue in this case is whether or not the Court of


Appeals erred in dismissing the Petition for Certiorari and
Prohibition.
The petition is meritorious.
The Court of Appeals dismissed the Petition for Certiorari
upon the following grounds, viz.: (1) the petition was filed
beyond the 60-day period provided under Sec. 4, Rule 65 of
the 1997 Revised Rules of Civil Procedure as amended by Bar
Matter No. 803 effective September 1, 1998; and (2) the
certification of non-forum shopping was signed by only one of
the petitioners.
Upon the first ground, the Court of Appeals stated in its
Resolution dated June 18, 1999 that:
x x x the 60-day period is counted not from the receipt of the Order
denying their Motion for Reconsideration but from the date of
receipt of the Order of November 18, 1998 which was on December
29, 1998, interrupted by the filing of the Motion for
Reconsideration on January 27, 1999. The Motion for
Reconsideration was denied in an Order dated March 17, 1999
received by the petitioners on May 4, 1999. Counting the
remaining period, this petition should have been filed on June 4,
1999 but it was filed only on June 14, 1999 or ten (10) days beyond
the 60-day period computed in accordance with Bar Matter No.
803.
77

xxx

xxx

xxx

18

The petitioners agree that the counting of the 60-day period


should commence on December 29, 1998, the date of the
receipt by the petitioners of the assailed trial court order,
interrupted by the filing of a motion for reconsideration on
January 27, 1999, and resume upon receipt by the petitioners
of the denial of the motion by the trial court on May 4, 1999;
however, the petitioners contend that from December 29,
1998 up to January 27, 1999, only the 15-day period allowed
for the filing of a motion for reconsideration should be
deemed to have elapsed considering the grant by the trial
court of an extension of the period to file the motion until
January 13, 1999. Hence, on May 4, 1999, the petitioners still
had
19

________________
18

Supra, p. 1.

19

Under Section 1 of Rule 52 of the 1997 Revised Rules of Civil Procedure.

665

VOL. 355, MARCH 28, 665


2001
Docena vs. Lapesura
45 days to file a petition for certiorari and/or prohibition, and
the filing made on June 14, 1999 was timely.
We hold that the Petition for Certiorari and Prohibition
has been timely filed.
A.M. No. 00-2-03-SC, which took effect on September 1,
2000, amended Section 4 of Rule 65 of the 1997 Revised
Rules of Civil Procedure to provide thus:
20

SEC. 4. When and where petition filed.The petition shall be filed


not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, the sixty (60)
day period shall be counted from notice of the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates


to the acts or omissions of a lower court or of a corporation, board,
officer or person, in the Regional Trial Court exercising jurisdiction
over the territorial area as defined by the Supreme Court. It may
also be filed in the Court of Appeals whether or not the same is in
aid of its appellate jurisdiction, or in the Sandiganbayan if it is in
aid of its appellate jurisdiction. If it involves the acts or omissions
of a quasi-judicial agency, unless otherwise provided by law or
these rules, the petition shall be filed in and cognizable only by the
Court of Appeals.
No extension of time to file the petition shall be granted except
for compelling reason and in no case exceeding fifteen (15) days.
[Emphasis ours]

In the case of Systems Factors Corporation versus NLRC, we


held that the abovequoted Resolution, being procedural in
nature, is applicable to actions pending and undetermined at
the time of their passage. The retroactive application of
procedural laws such as this Resolution is not violative of any
right of a person who may feel adversely affected thereby, as
no vested right may attach to nor arise from procedural
laws. The ruling in theSystems Factors case was reiterated
in the recent case of Unity Fishing Develop21

22

________________
20

As amended by the Resolution of July 21, 1998.

21

G.R. No. 143789, November 27, 2000, 346 SCRA 149.

22

Ibid., p.

5,

citing Gregorio

vs.

Court

of

Appeals, 26

SCRA

229(1969); Tinio vs. Mina, 26 SCRA 512(1969); and Billiones vs. CIR, 14
SCRA 674 (1965).
666

666

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura
78

ment Corporation, et al. vs. Court of Appeals, et al. Applying


the Resolution to the case at bar, the 60-day period for the
filing of a petition for certiorari and prohibition should be
reckoned from the date of receipt of the order denying the
motion for reconsideration, i.e., May 4, 1999, and thus, the
filing made on June 14, 1999 was well within the 60-day
reglementary period.
Anent the ground that the certification of non-forum
shopping was signed by only one of the petitioners, it is the
contention of the petitioners that the same is sufficient
compliance with the requirements of Sections 1 and 2 of Rule
65 (Petition for Certiorari and Prohibition) in relation to
Section 3 of Rule 46 (Original Cases Filed in the Court of
Appeals). The petitioners argue that since they are spouses
with joint or indivisible interest over the alleged conjugal
property subject of the original action which gave rise to the
petition for certiorari and prohibition, the signing of the
certificate of non-forum shopping by only one of them would
suffice, especially considering the long distance they had to
travel just to sign the said certificate. Moreover, there is
substantial compliance with the Rules of Court where the
certification was signed by the husband who is the statutory
administrator of the conjugal property.
It has been our previous ruling that the certificate of nonforum shopping should be signed by all the petitioners or
plaintiffs in a case, and that the signing by only one of them
is insufficient. In the case of Efren Loquias, et al. vs. Office of
the Ombudsman, et al. we held that the signing of the
Verification and the Certification on Non-Forum Shopping by
only one of the petitioners constitutes a defect in the
petition. The attestation contained in the certifica23

24

25

26

24

The spouses reside in Guian, Eastern Samar, and had to go to their

counsel in Manila just to sign the Verification/Certification of the petition.


[Reply, p. 4; Rollo, p. 125.]
25

Reply, p. 5; Rollo, p. 126.

26

G.R. No. 139396, August 15, 2000, 338 SCRA 62.

27

Ibid., p. 6. The petitioners in this case are local government officials of

San Miguel, Zamboanga del Sur, specifically, Mayor Efren Loquias, Vice
Mayor Antonio Din, Jr., and Sangguniang Bayan members Angelito Martinez
II, Lovelyn Biador and Gregorio Faciol.
667

VOL. 355, MARCH 28, 667


2001
Docena vs. Lapesura
tion on non-forum shopping requires personal knowledgeby
the party executing the same, and the lone signing
petitioner cannot be presumed to have personal knowledge of
the filing or non-filing by his co-petitioners of any action or
claim the same as or similar to the current petition. To merit
the Courts consideration, petitioners must show reasonable
cause for failure to personally sign the certification.
In the case at bar, however, we hold that the subject
Certificate of Non-Forum Shopping signed by the petitioner
Antonio Docena alone should be deemed to constitute
substantial compliance with the rules. There are only two
petitioners in this case and they are husband and wife. Their
residence is the subject property alleged to be conjugal in the
instant verified petition. The Verification/Certification on
Non-Forum Shopping attached to the Petition for
28

29

30

______________

27

28

_______________

127393, December 4, 1998, p. 712, 299 SCRA 708.


29

23

G.R. No. 145415, February 2, 2001, 351 SCRA 140.

Ibid., see also Sps. Valentin Ortiz, et al. vs. Court of Appeals, G.R. No.
Sections 1 and 2 of Rule 65; Section 3 of Rule 46; and Section 5 of Rule 7

of the 1997 Revised Rules of Civil Procedure.

79

30

The Verification/Certification provides, thus:


VERIFICATION/CERTIFICATION

I. Antonio Docena, of legal age, Filipino, after being duly sworn, hereby depose and
state that:
1. 1.I am one of the petitioners in the above entitled case;
2. 2.I and my co-petitioner wife caused the preparation of the above petition and
have read the same;
3. 3.All the material allegations contained are true and correct based on our
knowledge and based on official records. The annexes attached to the
petition are duplicate original copies or true copies of the pleadings filed
with Regional Trial Court or orders issued by the said court inCivil Case

The property subject of the original action for recovery is


conjugal. Whether it is conjugal under the New Civil Code or
the Family Code, a fact that cannot be determined from the
records before us, it is believed that the certificate on nonforum shopping filed in the Court of Appeals constitutes
sufficient compliance with the rules on forum-shopping.
Under the New Civil Code, the husband is the
administrator of the conjugal partnership. In fact, he is the
sole administrator, and the wife is not entitled as a matter of
right to join him in this endeavor. The husband may defend
the conjugal partnership in a suit or action without being
joined by the wife. Corollarily, the
31

32

33

_______________

No. 446.
4. 4.I further certify that I and my co-petitioner wife have not commenced any

5. I and my co-petitioner wife undertake to inform this Honorable Court

other action or proceeding involving the same issues raised in this petition

within five (5) days from notice of any similar action or proceeding which may

in the Supreme Court, Court of Appeals, or any division thereof, or in any

have been filed.

other tribunal or quasi-judicial agency and to the best of our knowledge, no


such other action is pending therein.

IN WITNESS WHEREOF, I hereunto set my hand this 14th day of June


1999 at Metro Manila.
(Sgd.) ANTONIO DOCENA

668

668

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura

Certiorari and Prohibition was signed only by the husband


who certified, inter alia, that he and his wife have not
commenced any other action or proceeding involving the
same issues raised in the petition in any court, tribunal or
quasi-judicial agency; that to the best of their knowledge no
such action is pending therein; and that he and his wife
undertake to inform the Court within five (5) days from
notice of any similar action or proceeding which may have
been filed.

Petitioner
31

Article 165 of the New Civil Code.

32

Ysasi vs. Fernandez, 23 SCRA 1079 (1968), at p. 1083; Tinitigan vs.

Tinitigan, 100 SCRA 619 (1980), at p. 631. It should be noted, however that
under the New Civil Code, although the husband is the administrator of the
conjugal partnership, he cannot alienate or encumber any real property of the
conjugal partnership without the wifes consent, subject only to certain
exceptions specified in the law. [Heirs of Christina Ayuste vs. Court of
Appeals, 313 SCRA 493(1999), at p. 499.]
33

Vda. de Sta. Romana vs. Philippine Commercial and Industrial

Bank, 118 SCRA 330(1982), at pp. 334 to 335; G-Tractors, Inc. vs. Court of
Appeals, 135 SCRA 192 (1985), at p. 210; Stasa Incorporated vs. Court of
Appeals,182 SCRA 879 (1990).
669

80

VOL. 355, MARCH 28, 669


2001
Docena vs. Lapesura

without authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void.
However, the transaction shall be construed as a continuing offer on the part of the

husband alone may execute the necessary certificate of nonforum shopping to accompany the pleading. The husband as
the statutory administrator of the conjugal property could
have filed the petition for certiorari and prohibition alone,
without the concurrence of the wife. If suits to defend an
interest in the conjugal properties may be filed by the
husband alone, with more reason, he may sign the certificate
of non-forum shopping to be attached to the petition.
Under the Family Code, the administration of the conjugal
property belongs to the husband and the wife
jointly. However, unlike an act of alienation or encumbrance
where the consent of both spouses is required, joint
management or administration does not require that the
husband and wife always act together. Each spouse may
validly exercise full power of management alone, subject to
the intervention of the court in proper cases as provided
under Article 124 of the Family Code. It is believed that
even
34

35

36

_______________
34

Neither this petition nor the original case filed with the regional trial

court involves the alienation, disposition or encumbrance of the conjugal


property.
35

Article 124 of the Family Code provides:

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, which must be availed of
within five years from the date of the contract implementing such decision.
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

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.
A similar provision is found in Article 96.
36

Arturo M. Tolentino,Commentaries and Jurisprudence on the Civil Code

of the Philippines, vol. I (1990), p. 393.


670

670

SUPREME COURT
REPORTS
ANNOTATED
Docena vs. Lapesura

under the provisions of the Family Code, the husband alone


could have filed the petition for certiorari and prohibition to
contest the writs of demolition issued against the conjugal
property with the Court of Appeals without being joined by
his wife. The signing of the attached certificate of non-forum
shopping only by the husband is not a fatal defect.
More important, the signing petitioner here made the
certification in his behalf and that of his wife. The husband
may reasonably be presumed to have personal knowledge of
the filing or non-filing by his wife of any action or claim
similar to the petition for certiorari and prohibition given the
notices and legal processes involved in a legal proceeding
involving real property. We also see no justifiable reason why
he may not lawfully undertake together with his wife to
inform the court of any similar action or proceeding which
may be filed. If anybody may repudiate the certification or
undertaking for having been incorrectly made, it is the wife
who may conceivably do so.
In view of the circumstances of this case, namely, the
property involved is a conjugal property, the petition
questioning the writ of demolition thereof originated from an
81

action for recovery brought against the spouses, and is


clearly intended for the benefit of the conjugal partnership,
and the wife, as pointed out in the Motion for
Reconsideration in respondent court, was in the province of
Guian, Samar, whereas the petition was prepared in Metro
Manila, a rigid application of the rules on forum shopping
that would disauthorize a husbands signing the certification
in his behalf and that of his wife is too harsh and is clearly
uncalled for.
It bears stressing that the rules on forum shopping, which
were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such
absolute literalness as to subvert its own ultimate and
legitimate objective.
The petitioners motion for the issuance of a temporary
restraining order to put on hold the demolition of the subject
prop37

_______________
37

Kavinta vs. Castillo, Jr., 249 SCRA 604 (1995), at p. 608; Loyola vs.

Court of Appeals, 245 SCRA 477(1995), at p. 483; Gabionza vs. Court of


Appeals, 234 SCRA 192 (1994), at p. 198.
671

VOL. 355, MARCH 28, 671


2001
Docena vs. Lapesura

1999 and September 9, 1999 are hereby SET ASIDE and the
case is REMANDED to the Court of Appeals for further
proceedings.
SO ORDERED.
Melo (Chairman),Vitug, Panganiban andSandoval
Gutierrez, JJ.,concur.
Petition granted, resolutions set aside. Case remanded to
Court of Appeals.
Notes.A partys failure to state in the certificate of nonforum shopping that he undertakes to inform the Court of
any petition which might be filed, as required under Revised
Circular No. 28-91, may be overlooked where it does not
appear that any petition related to the case has ever been
filed in any other court. (Cabardo vs. Court of Appeals, 290
SCRA 131 [1998])
Compliance with the certification against forum shopping
is separate from, and independent of, the avoidance of forum
shopping itself. (Melo vs. Court of Appeals, 318 SCRA
94 [1999])
The fact that a party was abroad when the petition for
certiorari was filed is a reasonable cause to exempt him from
compliance with the requirement that he personally execute
the certification on non-forum shopping. (Hamilton vs.
Levy,344 SCRA 821 [2000])
o0o

erty is principally anchored on their alleged right to the


nullification of the assailed orders and writs issued by the
public respondents. As the existence of the right being
asserted by the petitioners is a factual issue proper for
determination by the Court of Appeals, the motion based
thereon should likewise be addressed to the latter court.
WHEREFORE, premises considered, the petition is hereby
GRANTED. The Court of Appeals Resolutions dated June 18,
38

82

G.R. No. 147978. January 23, 2002.


THELMA A. JADER-MANALO, petitioner, vs.NORMA
FERNANDEZ C. CAMAISA and EDILBERTO CAMAISA,
respondents.
*

Actions; Summary Judgment; A summary judgment is one


granted by the court upon motion by a party for an expeditious
settlement of a case, there appearing from the pleadings,
depositions, admissions and affidavits that there are no important
questions or issues of fact involved, and that therefore, the moving
party is entitled to judgment as a matter of law.Petitioner alleges
that the trial court erred when it entered a summary judgment in
favor of respondent spouses there being a genuine issue of fact.
Petitioner maintains that the issue of whether the contracts to sell
between petitioner and respondent spouses was perfected is a
question of fact necessitating a trial on the merits. The Court does
not agree. A summary judgment is one granted by the court upon
motion by a party for an expeditious settlement of a case, there
appearing from the pleadings, depositions, admissions and
affidavits that there are no important questions or issues of fact
involved, and that therefore, the moving party is entitled to
judgment as a matter of law. A perusal of the pleadings submit______________
*

FIRST DIVISION.

499

VOL. 374,
JANUARY 23, 2002
Jader-Manalo vs.
Camaisa

4
99

ted by both parties show that there is no genuine controversy


as to the facts involved therein.
Husband and Wife; Conjugal Property; The disposition of a
conjugal property by the husband as administrator in appropriate
cases must be with the written consent of the wife, otherwise, the

disposition is void.The law requires that the disposition of a


conjugal property by the husband as administrator in appropriate
cases requires the written consent of the wife, otherwise, the
disposition is void. Thus, Article 124 of the Family Code provides:
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 a proper remedy, which must
be availed of within five years from the date of the contract
implementing such decision. In the event that one spouse is
incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may
assume sole powers of administration. These powers do not include
the powers of disposition or encumbrance which must have the
authority of the court or the written consent of the other spouse. In
the absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or authorization
by the court before the offer is withdrawn by either or both
offerers. (Italics ours.)
Same; Same; Even granting that the wife actively participated
in negotiating for the sale of the properties, her written consent to
the sale is required by law for its validity; Being merely aware of a
transaction is not consent.Respondent Norma Camaisa
admittedly did not give her written consent to the sale. Even
granting that respondent Norma actively participated in
negotiating for the sale of the subject properties, which she denied,
her written consent to the sale is required by law for its validity.
Significantly, petitioner herself admits that Norma refused to sign
the contracts to sell. Respondent Norma may have been aware of
the negotiations for the sale of their conjugal properties. However,
being merely aware of a transaction is not consent.
83

Same; Same; The court authorization under Article 124 of the


Family Code is only resorted to in cases where the spouse who does
not give consent is incapacitated.Petitioner argues that since
respondent Norma unjustly refuses to affix her signatures to the
contracts to sell, court authorization under Article 124 of the
Family Code is warranted. The argument is bereft
500

5
00

SUPREME COURT
REPORTS
ANNOTATED
Jader-Manalo vs.
Camaisa

of merit. Petitioner is correct insofar as she alleges that if the


written consent of the other spouse cannot be obtained or is being
withheld, the matter may be brought to court which will give such
authority if the same is warranted by the circumstances. However,
it should be stressed that court authorization under Art. 124 is
only resorted to in cases where the spouse who does not give
consent is incapacitated. In this case, petitioner failed to allege
and prove that respondent Norma was incapacitated to give her
consent to the contracts. In the absence of such showing of the
wifes incapacity, court authorization cannot be sought.

PETITION for review on certiorari of a decision of the Court


of Appeals.
The facts are stated in the opinion of the Court.
Thelma A. Jader-Manalo for and in her own behalf.
Jose R. Ebro, Jr., for private respondents.
KAPUNAN, J.:
The issue raised in this case is whether or not the husband
may validly dispose of a conjugal property without the wifes
written consent.

The present controversy had its beginning when petitioner


Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma
Fernandez C. Camaisa and Edilberto Camaisa, in the
Classified Ads Section of the newspaper BULLETIN TODAY
in its April, 1992 issue, for the sale of their ten-door
apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the
Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated for
the purchase through a real estate broker, Mr. Proceso
Ereno, authorized by respondent spouses. Petitioner made a
visual inspection of the said lots with the real estate broker
and was shown the tax declarations, real property tax
payment receipts, location plans, and
1

______________
1

Paragraph IV of Complaint; Rollo, p. 61.

501

VOL. 374, JANUARY


501
23, 2002
Jader-Manalo vs. Camaisa
vicinity maps relating to the properties. Thereafter,
petitioner met with the vendors who turned out to be
respondent spouses. She made a definite offer to buy the
properties to respondent Edilberto Camaisa with the
knowledge and conformity of his wife, respondent Norma
Camaisa in the presence of the real estate broker. After some
bargaining, petitioner and Edilberto agreed upon the
purchase price of P1,500,000.00 for the Taytay property and
P2,100,000.00 for the Makati property to be paid on
installment basis with downpayments of P100,000.00 and
P200,000.00, respectively, on April 15, 1992. The balance
thereof was to be paid as follows:
2

84

6th
month
12th
month
18th
month

Taytay
Property
P
200,000.00
700,000.00

Makati
Property
P 300,000.00
1,600,000.00

employee in Edilbertos office. The contracts were given to


Edilberto for the formal affixing of his wifes signature.
The following day, petitioner received a call from
respondent Norma requesting a meeting to clarify some
provisions of the contracts. To accommodate her queries,
petitioner, accompanied by her lawyer, met with Edilberto
and Norma and the real estate broker at Cafe Rizal in
Makati. During the meeting, handwritten notations were
made on the contracts to sell, so they arranged to incorporate
the notations and to meet again for the formal signing of the
contracts.
When petitioner met again with respondent spouses and
the real estate broker at Edilbertos office for the formal
affixing of Normas signature, she was surprised when
respondent spouses informed her that they were backing out
of the agreement because they needed spot cash for the full
amount
of
the
consideration. Petitioner
reminded
respondent spouses that the contracts to sell had already
been duly perfected and Normas refusal to sign the same
would unduly prejudice petitioner. Still, Norma refused to
sign the contracts prompting petitioner to file a complaint for
specific performance and damages against respondent
spouses before the Regional Trial Court of Makati, Branch
136 on April 29, 1992, to compel respondent Norma Camaisa
to sign the contracts to sell.
A Motion to Dismiss was filed by respondents which was
denied by the trial court in its Resolution of July 21, 1992.
Respondents then filed their Answer with Compulsory
Counterclaim, alleging that it was an agreement between
herein petitioner and respondent Edilberto Camaisa that the
sale of the subject properties was still subject to the approval
and conformity of his
9

10

500,000.00

This agreement was handwritten by petitioner and signed by


Ediberto. When petitioner pointed out the conjugal nature of
the properties, Edilberto assured her of his wifes conformity
and consent to the sale. The formal typewritten Contracts to
Sell were thereafter prepared by petitioner. The following
day, petitioner, the real estate broker and Edilberto met in
the latters office for the formal signing of the typewritten
Contracts to Sell. After Edilberto signed the contracts,
petitioner delivered to him two checks, namely, UCPB Check
No. 62807 dated April 15, 1992 for P200,000.00 and UCPB
Check No. 62808 also dated April 15, 1992 for P100,000.00 in
the presence of the real estate broker and an
6

______________
2

Paragraph V of Complaint; id.

Paragraph VI of Complaint; id.

Paragraph VII of Complaint, id.,at p. 62.

Id.

The handwritten agreement was attached as Annex E to the

Complaint; Rollo, pp. 80-83.


7

Supra, Note 4.

Paragraph IX of Complaint; Rollo, p. 63.

502

502

Jader-Manalo vs. Camaisa

SUPREME COURT
REPORTS
ANNOTATED

11

12

13

14

15

______________

85

Photocopies of these checks were attached as Annex H to the

Complaint; Rollo, pp. 90-92.


10

Paragraph XI of Complaint; Rollo, pp. 63-64.

11

Paragraph XII of Complaint; id.

12

Paragraph XIII of Complaint;id.

13

Paragraph XIX; id., pp. 64-65.

14

Rollo, pp. 107-110.

15

Id., at p. 143.

shown to be incapacitated. The dispositive portion of the trial


courts decision reads:
WHEREFORE, considering these premises, judgment is hereby
rendered:
1. 1.Dismissing the complaint and ordering the cancellation of
the Notice of Lis Pendens by reason of its filing on TCT
Nos. (464860) S-8724 and (464861) S-8725 of the Registry
of Deeds at Makati and on TCT Nos. 295976 and 295971 of
the Registry of Rizal.

503

VOL. 374, JANUARY


503
23, 2002
Jader-Manalo vs. Camaisa

______________

wife Norma Camaisa. Thereafter, when Norma refused to


give her consent to the sale, her refusal was duly
communicated by Edilberto to petitioner. The checks issued
by petitioner were returned to her by Edilberto and she
accepted the same without any objection. Respondent
further claimed that the acceptance of the checks returned to
petitioner signified her assent to the cancellation of the sale
of the subject properties. Respondent Norma denied that she
ever participated in the negotiations for the sale of the
subject properties and that she gave her consent and
conformity to the same.
On October 20, 1992, respondent Norma F. Camaisa filed
a Motion for Summary Judgment asserting that there is no
genuine issue as to any material fact on the basis of the
pleadings and admission of the parties considering that the
wifes written consent was not obtained in the contract to
sell, the subject conjugal properties belonging to respondents;
hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary
judgment dismissing the complaint on the ground that under
Art. 124 of the Family Code, the court cannot intervene to
authorize the transaction in the absence of the consent of the
wife since said wife who refused to give consent had not been
16

16

Paragraph XI of Answer with Compulsory Counterclaim, id., p. 95.

17

Paragraph XIII, id.

18

Id.

19

Id.

20

Paragraphs 2 and 3 of the Answer with Compulsory Counterclaim; id. at

17

18

93-94.
21

19

20

21

Rollo, p. 186.

504

504

SUPREME COURT
REPORTS
ANNOTATED
Jader-Manalo vs. Camaisa
1. 2.Ordering plaintiff Thelma A. Jader to pay defendant
spouses Norma and Edilberto Camaisa, FIFTY
THOUSAND (P50,000.00) as Moral Damages and FIFTY
THOUSAND (P50,000.00) as Attorneys Fees.

Costs against plaintiff.

22

Petitioner, thus, elevated the case to the Court of Appeals.


On November 29, 2000, the Court of Appeals affirmed the
86

dismissal by the trial court but deleted the award of


P50,000.00 as damages and P50,000.00 as attorneys fees.
The Court of Appeals explained that the properties subject
of the contracts were conjugal properties and as such, the
consent of both spouses is necessary to give effect to the sale.
Since private respondent Norma Camaisa refused to sign the
contracts, the sale was never perfected. In fact, the
downpayment was returned by respondent spouses and was
accepted by petitioner. The Court of Appeals also stressed
that authority of the court to allow sale or encumbrance of a
conjugal property without the consent of the other spouse is
applicable only in cases where the said spouse is
incapacitated or otherwise unable to participate in the
administration of the conjugal property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVOUSLY
ERRED IN RENDERING SUMMARY JUDGMENT IN
DISMISSING THE COMPLAINT ENTIRELY AND ORDERING
THE CANCELLATION OF NOTICE OF LIS PENDENS ON THE
TITLES OF THE SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVOUSLY
ERRED IN FAILING TO CONSIDER THAT THE SALE OF REAL
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER
PAID P300,000.00 DOWNPAYMENT, RESPONDENT MRS.
CAMAISA NEVER OBJECTED TO STIPULATIONS WITH
RESPECT TO PRICE, OBJECT AND TERMS OF PAYMENT IN
THE CONTRACT TO SELL ALREADY SIGNED BY THE
PETITIONER, RESPONDENT MR. CAMAISA AND WITNESSES
MARKED AS ANNEX G IN THE COMPLAINT EXCEPT, FOR
MINOR PROVISIONS ALREADY IMPLIED BY LAW, LIKE
EJECTMENT OF
______________

22

Annex Q, p. 3; Rollo, pp. 224-225.

505

VOL. 374, JANUARY


505
23, 2002
Jader-Manalo vs. Camaisa
TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN
CASE OF NONPAYMENT, WHICH PETITIONER READILY
AGREED AND ACCEDED TO THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVOUSLY
ERRED WHEN IT FAILED TO CONSIDER THAT CONTRACT
OF SALE IS CONSENSUAL AND IT IS PERFECTED BY THE
MERE CONSENT OF THE PARTIES AND THE APPLICABLE
PROVISIONS ARE ARTICLES 1157, 1356, 1357, 1358, 1403, 1405
AND 1475 OF THE CIVIL CODE OF THE PHILIPPINES AND
GOVERNED BY THE STATUTE OF FRAUD.
23

The Court does not find error in the decisions of both the trial
court and the Court of Appeals.
Petitioner alleges that the trial court erred when it
entered a summary judgment in favor of respondent spouses
there being a genuine issue of fact. Petitioner maintains that
the issue of whether the contracts to sell between petitioner
and respondent spouses was perfected is a question of fact
necessitating a trial on the merits.
The Court does not agree. A summary judgment is one
granted by the court upon motion by a party for an
expeditious settlement of a case, there appearing from the
pleadings, depositions, admissions and affidavits that there
are no important questions or issues of fact involved, and
that therefore the moving party is entitled to judgment as a
matter of law. A perusal of the pleadings submitted by both
parties show that there is no genuine controversy as to the
facts involved therein.
Both parties admit that there were negotiations for the
sale of four parcels of land between petitioner and
respondent spouses; that petitioner and respondent Edilberto
24

87

Camaisa came to an agreement as to the price and the terms


of payment, and a downpayment was paid by petitioner to
the latter; and that respondent Norma refused to sign the
contracts to sell. The issue thus posed for resolution in the
trial court was whether or not the contracts to sell between
petitioner and respondent spouses were already per______________
23

Rollo, p. 23.

24

271 SCRA 36 (1997).

506

506

SUPREME COURT
REPORTS
ANNOTATED
Jader-Manalo vs. Camaisa

fected such that the latter could no longer back out of the
agreement.
The law requires that the disposition of a conjugal
property by the husband as administrator in appropriate
cases requires the written consent of the wife, otherwise, the
disposition is void. Thus, Article 124 of the Family Code
provides:
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 a proper remedy, which must
be availed of within five years from the date of the contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the
court or the written consent of the other spouse. In the absence of

such authority or consent the disposition or encumbrance shall be


void. However, the transaction shall be construed as a continuing
offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the offer is
withdrawn by either or both offerers. (Italics ours.)

The properties subject of the contracts in this case were


conjugal; hence, for the contracts to sell to be effective, the
consent of both husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her
written consent to the sale. Even granting that respondent
Norma actively participated in negotiating for the sale of the
subject properties, which she denied, her written consent to
the sale is required by law for its validity. Significantly,
petitioner herself admits that Norma refused to sign the
contracts to sell. Respondent Norma may have been aware of
the negotiations for the sale of their conjugal properties.
However, being merely aware of a transaction is not
consent.
25

______________
25

Tinitigan vs. Tinitigan, 100 SCRA 619 (1980).

507

VOL. 374, JANUARY


507
23, 2002
Jader-Manalo vs. Camaisa
Finally, petitioner argues that since respondent Norma
unjustly refuses to affix her signatures to the contracts to
sell, court authorization under Article 124 of the Family Code
is warranted.
The argument is bereft of merit. Petitioner is correct
insofar as she alleges that if the written consent of the other
spouse cannot be obtained or is being withheld, the matter
may be brought to court which will give such authority if the
88

same is warranted by the circumstances. However, it should


be stressed that court authorization under Art. 124 is only
resorted to in cases where the spouse who does not give
consent is incapacitated.
In this case, petitioner failed to allege and prove that
respondent Norma was incapacitated to give her consent to
the contracts. In the absence of such showing of the wifes
incapacity, court authorization cannot be sought.
Under the foregoing facts, the motion for summary
judgment was proper considering that there was no genuine
issue as to any material fact. The only issue to be resolved by
the trial court was whether the contract to sell involving
conjugal properties was valid without the written consent of
the wife.
WHEREFORE, the petition is hereby DENIED and the
decision of the Court of Appeals dated November 29, 2000 in
CA-G.R. CV No. 43421 is AFFIRMED.
26

______________
26

Commentaries and Jurisprudence on the Civil Code of the Philippines,

Arturo Tolentino, Vol. I, p. 461 citing the case of Nicolas vs. Court of
Appeals, 154 SCRA 635 (1987) which held that:
. . . the very conspicuous absence of the wifes conforme to such

508

508

SUPREME COURT
REPORTS
ANNOTATED
Casano vs. Magat

SO ORDERED.
Davide,
Jr. (C.J.,
Chairman), Puno, Pardo andYnares-Santiago, JJ., concur.
Petition denied, judgment affirmed.
Notes.A motion for summary judgment is premised on
the assumption that a scrutiny of the facts will disclose that
the issues presented need not be tried either because these
are patently devoid of substance or that there is no genuine
issue as to any pertinent factit is a method sanctioned by
the Rules of Court for prompt disposition of a civil action
where there exists no serious controversy. (Raboca vs.
Velez, 341 SCRA 543 [2000])
It is axiomatic under the law on procedure that a
summary judgment is a final disposition in a legal suit which
can be rectified by means of an appeal therefrom. (Aqualyn
Corporation vs. Court of Appeals, 214 SCRA 307[1992])
o0o

disposition of the ganancial property, there being no showing that Lourdes


Manuel, whom respondent Madlangsakay married in 1927, is legally
incapacitatedrenders the alleged sale void ab initio because it is in
contravention of the mandatory requirement in Article 166 of the Civil Code.
This doctrine is too well-settled in our jurisprudence to require further
elucidation.
See also p. 392 of Tolentinos Commentaries relating to an identical
provision, Art. 96 of the Civil Code, on community property. Tolentino writes:
As a result of this joint ownership, neither spouse may alienate or
encumber any common property without the written consent of the other, or,
if the other spouse is incapacitated, the authorization of the court.

89

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