acquired by Nicolas Delizo, among which are sixty-six (66) hectares of
Republic of the Philippines agricultural lands in San Jose City, Nueva Ecija; fifty-eight (58) hectares of
SUPREME COURT
Manila
G.R. No. L-32820-21 January 30, 1976
DOROTEA DE OCAMPO VDA. DE DELIZO and her nine (9) children, named
REGINO, CRISPINA, CARMEN, BASILIO, HILARIO, MACARIO, SENDON
MARCIANO and HERMOGENES, all surnamed DELIZO y OCAMPO, petitioners-
appellants,
vs.
URBANA DELIZO, assisted by her husband, AMBROCIO FLORA, SEVERINO
DELIZO and the Heirs of FRANCISCO DELIZO, namely, RANCIVILLANO
SOLTRIFILO, JOSEFINA, EUPROCINA, AUREA, EDITA and FE all surnamed DELIZO,
and ROSENDA GENOVE VDA. DE DELIZO, respondents-appellees.
Leandro C. Sevilla for petitioners-appellants.
Romeo J. Callejo respondents-appellees.
ANTONIO, J.:
These two cases involve the partition of the conjugal partnership properties of
two marriages contracted by Nicolas Delizo. The first, was with Rosa Villasfer,
which lasted from April 20, 1891 until Rows death on December 7, 1909, or a
period of eighteen (18) years; and the second, with Dorotea de Ocampo,
which existed for a period of forty-six (46) years, or from October, 1911 until the
death of Nicolas Delizo on May 3, 1957 at the age of ninety (90) years. The
action for partition was instituted on April 15, 1957 by a daughter and a son of
the first marriage, namely, Urbana Delizo and Severino Delizo, and the heirs of
Francisco Delizo, another son, who died in 1943, specifically, Rancivillano
Soltrifilo Josefina, Eufrocina, Aurea, Edita, and Fe, all surnamed Delizo (the last
three being minors were represented by their mother, Rosenda Genove) all
against their father, Nicolas Delizo, and his second wife, Dorotea de Ocampo,
and their nine (9) children, the herein petitioners-appellants, namely Regino,
Crispina, Carmen, Basilio, Hilario, Macario, Sendon, Marciano, and
Hermogenes, all surnamed Delizo.
The aforesaid defendants opposed the partition, claiming that the properties
described in the complaint were those of the second marriage. On May 3,
1957, Nicolas Delizo died and was substituted by his children in the second m
as party defendants. In the meantime, Special Proceedings No. 1058
(Intestate Estate of the late Nicolas Delizo) was filed by Dorotea de Ocampo
on June 3, 1957. Thereafter, or on August 23, 1971, Severino De died intestate
and is now represented by his children, namely, Federico, Severina, Angelina,
Segundina and Brigida, all surnamed Delizo. Involved are the properties
riceland in Muoz of the same province; and a square meter lot at 1056-M P.
Campa, Sampaloc, Manila. The properties are specifically described as
follows:
(1) Lots Nos. 210, 211, 388, 389, 390, and 407 of the San Jose Cadastre
situation in Rizal, San Jose with a combined area of about sixty-six (66)
hectares covered by OCT No. 6176-N.E. issued in the name of Nicolas Delizo,
married to Dorotea de Ocampo (Exh. F or 11);
(2) Lot No. 1915 of the San Jose Cadastre with an area of about 1,056
square meters and covered by OCT No. 5783 in the name of Nicolas Delizo,
married to Dorotea de Ocampo (Exh. G or 12);
(3) Lot No. 498 of the San Jose Cadastre with an area of about 3,366
square meters and covered by OCT No. 5622, N.E. issued in the name of
Nicolas Delizo, married to Dorotea de Ocampo (Exh. H. or 13);
(4) A parcel of land in San Jose, Nueva Ecija containing an area of
13.2948 hectares and covered by TCT No. 2985-N.E. (Exh. I. or 13-A);
(5) An agricultural land of about 17.4753 hectares situated in sitio
Rangayan, Muoz and covered by TCT No. 5162 (Exh. J or 14);
(6) A parcel of land in Barrio Caanawan, San Jose, with an area of about
14.0354 hectares and covered by TCT No. 11910 (Exh. K or 10);
(7) A cornland in Barrio Rangayan, Muoz, Nueva Ecija, of about 1,500
square meters and covered by Tax Declaration No. 5476;
(8) Riceland in Barrio San Andres, Muoz of about 5,083 square meters
and covered by Tax Declaration No. 7083;
(9) Riceland in Barrio Rangayan, Muoz, Nueva Ecija, containing an area
of about 17.4755 hectares and covered by Tax Declaration No. 812;
(10) Lot No. 847-a riceland in Barrio Bayan, Muoz, with an area of about
13.0902 hectares and covered by TCT No. 3585 issued in the name of Nicolas
Delizo, married to Dorotea de Ocampo on April 25,1929 (Exhs. L or 15 & 15-A);
(11) A camarin of strong materials, with galvanized iron roofing in San
Jose, Nueva Ecija, about eight (8) meters by twelve
(12) meters; (12) A residential house and lot at Sanchez Street, San Jose,
Nueva Ecija;
(13) Lot No. 1790 of San Jose Cadastre of about 2,840 square meters and
covered by Original Certificate of Title No. 8131 in the names of spouses
Silvestre Batara and Maria Soriano issued on November 16, 1927 (Exh. M or 16),
superseded by Transfer Certificate of Title No. NT-29524 issued in the name of
Juan T. Gualberto on May 25,1959 (Exh. N or 17) claimed by the heirs of
Nicolas Delizo and Dorotea de Ocampo pursuant to deed of sale (Exh. N1);
(14) An urban lot and coconut plantation in San Fabian, Pangasinan;
(15) A lot and residential house consisting Of a two-door accessoria at No.
1056-58 (formerly 562) P. Campa, Sampaloc, Manila;
(16) A sawmill with accessories, bulldozers, etc. in San Jose, Nueva Ecija
(bulldozer is now in Gordon, Isabels in the possession of Regino Delizo and
Basilio Delizo); and
(17) Several heads of carabaos. After trial, the lower court rendered
judgment on April 27, 1964, distributing the aforesaid properties as follows: (a)
onehalf () pro indiviso to the three (3) children of the first marriage, namely,
Urbana Delizo, Severino Delizo, and the heirs of the deceased Francisco
Delizo, viz.: Rancivillano Soltrifilo Josefina, Eufrocina, Aurea, Edita, and Fe (b)
one-fourth () pro indiviso to the surviving spouse, Dorotea de Ocampo; and
(c) one-fourth () pro in equal shares to the children of both marriages, nine
(9) of whom were begotten during the second marriage, or into thirteen (13)
parts.
From said judgment. petitioners-appellants appealed to the Court of Appeals.
On August 12, 1970, the Appellate Court rendered judgment, affirming with
modifications the trial court's decision. The facts as found by the Appellate
Court are as follows:
As regards the Caanawan lands situated in Caanawan, San Jose, Nueva
Ecija, comprising some 66 hectares, defendants capitalize on the undisputed
fact that Original Certificate of Title No. 6176 (Exh. F or 11) issued on August 21,
1924, covering these lands is in the name of Nicolas Delizo, ma to Dorotea de
Ocampo. Defendants further point out that the testimonies of defendant
Dorotea de Ocampo and octogenarian Moises Patricio prove that these
lands were acquired during the second marriage.
However, the fact that the disputed lands situated in Caanawan were
registered in the name of 'Nicolas Delizo, married to Dorotea de Ocampo's no
proof that the property is owned by the second conjugal partnership. The
phrase 'married to' is merely descriptive of the civil status of Nicolas Delizo
(Gonzales vs. Miller, 69 Phil. 340; De Jesus vs. Padilla, CA-G.R. No. 12191-R, April
19, 1955; Muoz & Tan Go Inc. vs. Santos CA-G.R. No. "27759-R, October 3,
1963; Pratts vs. Sheriff of Rizal, 53 Phil. 51, 53). Neither is the testimony of
Dorotea de Ocampo that the said lands were acquired by her and her
spouse, altogether clear and persuasive. For while the admitted fact is that
she and Nicolas Delizo were married in 1911, she declared on the witness
stand that the aforesaid properties were given by Pedro Salvador to her and
her spouse in 1908 (t.s.n., p. 288, March 8, 1963), thereby leading the trial court
to infer an admission that these lands were acquired during the first marriage
of Nicolas Delizo. It may likewise be noted that as per her testimony, she and
her father arrived in Caanawan, San Jose, Nueva Ecija, when Rosa Villasfer
was still alive. That would be sometime before 1911. But she admitted that her
father then was not able to acquire lands from Pedro Salvador, their grantor,
because he had no more lands to distribute to settlers. Accordingly, it is
farfetched that after Rosa's death and the subsequent marriage of Nicolas
Delizo to Dorotea de Ocampo, Pedro Salvador would still have those 67
hectares which defendants claimed were acquired by the spouses Nicolas
Delizo and Dorotea de Ocampo by grant from Pedro Salvador (t.s.n., pp. 459-
46, March 15, 1963).
Moises Patricio tried to confirm the widow, declaring that Nicolas Delizo was
married to defendant Dorotea de Ocampo, when he was given lands in
Caanawan by Pedro Salvador (t.s.n., p. 493, June 7, 1963). However, he
placed the acquisition sometime during the founding of Barrio Sto. Tomas, San
Jose, Nueva Ecija (Id., p. 492) which took place some four years after the
Spanish-Filipino revolution of 1896 (t.s.n., pp. 548-549, June 21, 1963), or
approximately 1900. Therefore, it could not be Dorotea de Ocampo, but Rosa
Villasfer, who was admittedly still alive and the wife of Nicolas Delizo at the
time of the acquisition.
Ranged against these unreliable testimonies for the defendants, is the
testimony of Lorenzo Delizo, who being a brother of deceased Nicolas Delizo,
stands in equal relationship to the plaintiffs, who were Nicolas' children by the
first marriage, and the defendants, who were children of Nicolas in his second
marriage. His testimony therefore carries great weight. This witness averred
that 16 hectares were acquired as homestead by his deceased brother,
Nicolas Delizo, from Pedro Salvador and Mauricio Salvador who were then
'cabecillas' distributing lands to homesteaders in 1905 (t.s.n., p. 12, January 20,
1961); that Nicolas acquired by sale the 16-hectare homestead of Nicolas
Dacquel in 1906, another 16- hectare homestead of Mariano Antolin in 1907
and the 16-hectare homestead of Francisco Pascua in 1908 (id., pp. 14-15).
Lorenzo's declarations are supported by the testimonies of (1) Urbana Delizo, a
daughter of Nicolas by his first marriage and who was already 17 when her
mother, Rosa Villasfer, died in 1909 (id., p. 19); (2) Sabiniano Villanueva, a son
of one of Nicolas' tenants on the controverted Caanawan lands (id., pp. 93-
168) and (3) Raymundo Eugenio, a former clerk in the municipal treasurer's
office who u to collect taxes on the land belonging to Nicolas and later
became municipal "president of San Jose, Nueva Ecija (t.s.n., pp. 367-368,
Jan. 31, 1964), although these Caanawan lands cannot be traced back to TD
431, Exhibit P-9 issued in 1906, cited by appellants (see notations at bottom of
reverse side of alleged succeeding TDs) aside from the fact that the notations
on the reverse side thereof are suspicious (see years when tax commenced
and when issued) and the discrepancy between areas (8 Ha. in Exhibit P-9
and 57 Ha. for lots 210 and 211).
Accordingly, we find with the trial court that the Caanawan lands, comprising
lots Nos. 210, 211, 388, 390, 398 and 407.1-under Original Certificate of Title No.
6176 (Exh. F or 11) were acquired during the existence of the first marriage of
Nicolas Delizo to Rosa Villasfer and there being no affirmative showing that
they belonged exclusively to said Nicolas Delizo, should therefore correspond
to the first conjugal partnership of Nicolas Delizo and Rosa Villasfer. So with the
lot and house at 562 P. Campa St., Sampaloc, Manila, known as Lot 47, Block
83 covered by TCT No. 9616-Manila which was ceded during the second
marriage in payment of, or substitution for, the Caanawan property, because
the Asiatic Petroleum Company to which it had been mortgaged as bond for
Juan Par as agent foreclosed the mortgage, when the agent defaulted in his
obligation to the company, Exhibits 6, 7 & 19 (Art. 153 [formerly, 140], par. 1,
new Civil Code).
However, with regard to the other properties in question, like lot No. 498 of the
San Jose Cadastre, under Original certificate of Title No. 5622, likewise issued in
the name of Nicolas Delizo, married to Dorotea de Ocampo'; a parcel of land
in San Jose, Nueva Ecija under TCT No. 2985 (Exh. I or 13)' and agricultural land
of about 17.4753 hectares in Sitio Rangayan, Muoz Nueva Ecija under TCT
No. 5162 (Exh. J or 14); another parcel of land in Caanawan, San Jose, with an
area of about 14.0354 hectares under TCT No. 11910 (Exh. K or 10); a coin land
in barrio Rangayan, Muoz, Nueva Ecija, of about 1,500 square me ' quarters
under Tax Declaration No. 5476; a riceland in barrio San Andres, Muoz Nueva
Ecija, of about 5,083 square meters under Tax Dec. 7083; another riceland in
Rangayan, Muoz, of about 17.4755 hectares under Tax Dec. No. 812; a
riceland, lot No. 847, of about 13.0902 hectares covered by TCT No. 3585
issued on April 29, 1929 in the name of 'Nicolas Delizo, married to Dorotea de
Ocampo'(Exh. L or 1.5)-, a camarin of strong materials with galvanized iron
roofing in San Jose, Nueva Ecija, about 8 meters by 12 meters; a residential lot
at Sanches Street, San Jose, Nueva Ecija; lot No. 1790 of the San Jose
Cadastre consisting of 2,840 square meters, more or less, under Original
Certificate of Title No. 8131 in another name but claimed by the heirs under
deed of sale, Exhibit N1 a sugar cane mill in San Jose, Nueva Ecija and several
heads of carabaos (Exh. 0); Lots Nos. 495 and 496 of the San Jose Cadastre,
possessed by defendants although adjudicated in the name of Marcelo
Tomas and Guillermo Cabiso, respectively; lot No. 494-A, of the San Jose
Cadastre, adjudicated in the name of Nicolas Delizo and Dorotea de
Ocampo (RA, pp. 96-97),-there is no controversy that these were all acquired
during the existence of the second marriage of Nicolas Delizo.
On the basis of the foregoing facts, the Court of Appeals rendered judgment
as follows:
But the trial court held that because there was no liquidation of the conjugal
partnership property of the first marriage, upon the death of the first wife, 'the
conjugal partnership was converted into one of co-ownership between
Nicolas Delizo and his children of the first marriage .... Hence, all the fruits or
increase of the properties acquired thereafter shall belong to such co-
ownership.' We cannot agree with this legal conclusion. One-half of the
conjugal properties of the first marriage constituted the separate property of
the husband at the formation of the second conjugal partnership upon his
remarriage in October 1911 (Art. 145, NCC). Moreover, the fruits of the
Caanawan property were acquired through the labor and industry of Nicolas
Delizo and Dorotea Ocampo; and indeed, two witnesses for the plaintiffs
admitted that at the time of the death of Rosa Villasfer, only about 20
hectares of the Caanawan property had been cleared and cultivated (pp.
22-23; 113, 117, 383-4, t.s.n.). This property was practically virgin land, and the
rest thereof or about 47 hectares were therefore cleared and cultivated only
during the marriage of Nicolas Delizo and Dorotea Ocampo. This is impliedly
admitted in plaintiffs' complaint that 'from the time of death of the said Rosa
Villasfer, the defendants ... have WORKED upon, TILLED and CULTIVATED, or
otherwise offered in tenancy the whole of the agricultural lands described'
(par. 2). The Caanawan property left to itself could not produce any fruits for
they did not have any permanent improvements thereon. What was
produced according to the evidence was palay, and the production of palay
requires tilling, cultivation, seedlings, gathering, preservation and marketing. It
was thru the labor and industry of Nicolas Delizo and Dorotea de Ocampo
that the Caanawan property was able to produce fruits. Whatever it
produced thru the labor and industry of the spouses belongs to their conjugal
partnership. While it is true that to the owner of the land belongs the fruits,
whether natural, industrial or civil (Art. 441, NCC formerly Art. 354, Spanish Civil
Code), this does not mean that all that is produced belongs to the owner of
the land. The owner, according to Art. 443, NCC (formerly Art. 356, Spanish
Civil Code) who receives the fruits, has the obligation to pay the expenses
made by a person in their production, gathering and preservation. When
Dorotea Ocampo admitted that the Muoz property was purchased partly
with the fruits of the Caanawan property, she was referring to the gross
production, not deducting therefrom what could have pertained to the
person who produced the fruits. So it seems "that if we are to determine with
mathematical certainty what portion of the Muoz property and other
properties acquired during the second marriage should pertain to the first
marriage as corn spending to the value of its share in the fruits of the
Caanawan property, and what should belong to the second marriage as
corresponding to the value of the labor and industry of the spouses Delizo and
Ocampo, we have to find how much was produced during the second
marriage and determine what will be the share of the owner of the land what
will correspond to the one who produced the fruits. The burden of proof lies
upon the plaintiffs under the rules of evidence. But, of course, this is an
impossibility. For no records have been kept and it is not in accordance with
the Filipino customs for the surviving spouse-whether he remarries or not-to
keep the record of the produce of the properties left by the deceased
spouse. tradition thereto, according to Dorotea Ocampo, part of the price
used in the purchase of Muoz property was the proceeds of a loan which,
together with the properties purchased with it, belongs to the conjugal
partnership of Nicolas Delizo and Dorotea Ocampo. Under these
circumstances, it would be impossible to determine with mathematical
precision what portion of the properties acquired during the second marriage
of Nicolas Delizo should belong to the second conjugal partnership and what
portion should belong to the heirs of the first conjugal partnership, one half of
which pertains to the husband. However, considering that
1. At the time of the dissolution of the first marriage or about five years
after acquisition, according to plaintiffs' evidence, only about 20 hectares of
the Caanawan property had been cultivated, the remaining 47 hectares
were therefore cleared and improved during the second marriage thru the
labor and industry of the spouses Nicolas Delizo and Dorotea Ocampo for 46
years (1911-1967). These improvements were made in good faith considering
that Nicolas Delizo administered the properties of the first marriage. The
second marriage is entitled to reimbursement for the increase in value of
these 47 hectares (Art. 516, NCC Even the Muoz property acquired during
the second marriage had to be improved by the spouses Nicolas Delizo and
Dorotea Ocampo.
2. The one-half of the fruits of the Caanawan property which should
pertain to the heirs of Rosa Villasfer refers only to one-half o f the net after
deducting the expenses of clearing the land, cultivating, gathering and
preservation. Forty-seven hectares of the Caanawan property were cleared
and cultivated only during the second marriage. Even under a liberal
apportionment of the produce, the heirs of the second marriage could not be
entitled to more than 30% of the produce.
3. Part of the price used in the purchase of the properties acquired
during the second marriage were the proceeds of a loan. This is conjugal
property of the "second marriage (Palanca vs. Smith, Bell and Co., 9 Phil.
131,133; Castillo Jr. vs. Pasco, 11 SCRA 102, 106-7).
4. The improvements on 47 hectares of the Caanawan property and on
the Muoz property were made at the expense of the second conjugal
partnership of Nicolas Delizo and Dorotea Ocampo, and thru their labor and
industry which lasted for 46 years, whereas the first conjugal partnership had
the Caanawan property for less than 6 years.
Taking into account all the foregoing circumstances and equities of the case,
an adjudication of 20% of all the properties acquired during the second
marriage, including the Muoz property, to the children of the first marriage,
and 80% to the conjugal partnership of Nicolas Delizo and Dorotea Ocampo is
fair and equitable. So the properties of the estate should be partitioned thus:
One-half of the Caanawan property and the house and lot at 562 P. Campa
Street, Manila, covered by TCT No. 9616 as the share of Rosa Villasfer in the first
conjugal partnership of Nicolas Delizo and Rosa Villasfer or 1/6 thereof for
each child of the first marriage; and 20% of all the other properties or 1/15
thereof for each such child. To Nicolas Delizo should be adjudicated one-half
of the Caanawan property and the house and lot on P. Campa, but in view of
the death of Nicolas Delizo his share descends to all the children, both of the
first and second marriages and the surviving spouse, Dorotea Ocampo, and
should therefore be divided by the number of children plus one or 1/26
thereof for each heir. tightly per cent of all the properties acquired during the
marriage of Nicolas Delizo and Dorotea Ocampo constitute the conjugal
partnership of Nicolas Delizo and Dorotea Ocampo; one-half thereof is the
share of Nicolas Delizo, to be divided among his heirs in accordance with the
preceding statement, or 2/65 thereof for each heir; the other half constitutes
the share of Dorotea Ocampo in the conjugal partnership, or 2/5 thereof.
WHEREFORE, paragraph 1 of the judgment appealed from is hereby modified
as follows:
1. Declaring that (a) of the Caanawan property and the house and lot
at 562 P. Campa Street, Manila covered by TCT No. 9616-8139 (1/6 + 1/26)
thereof pro indiviso shall pertain to each of the children of Nicolas Delizo "of
the first marriage, namely: Urbana, Severino and the late Francisco Delizo (the
last represented by his children Rancivillano Soltrifilo Josefina, Eufrocina,
Aurea, Edita and Fe and 1/26 thereof pro indiviso shall pertain to each of the
children of the second marriage and their mother Dorotea Ocampo; (a) of all
other properties required during the second marriage-19/195 thereof pro
indiviso shall pertain to each of the three children by the first marriage, 2/65
thereof pro indiviso shall pertain to each of the nine children of the second
marriage, while 28/65 thereof pro indiviso shall pertain to the widow Dorotea
Ocampo. The rest of the judgment particularly paragraphs 2 and 3 are
affirmed; without pronouncement as to costs in both instances.
From this adverse judgment, petitioners-appellants interposed the present
petition for review. The thrust of petitioners- appellants' petition is that the
Appellate Court acted under a misapprehension of the facts or decided the
legal issues in a way which is not in consonance with law and with the
applicable decisions of this Court, (a) since, the 67-hectare Caanawan
properties could not have been properties of the first marriage because they
were then public lands being homesteads, and while the first conjugal
partnership may have had possessory rights over said properties, it was only
during the second marriage that the requirements of the public land law were
complied with, resulting in the confirmation, registration and issuance of the
Torrens Title over said properties to Nicolas Delizo and his second wife, Dorotea
de Ocampo; (b) apart from the fact that the legal presumption that all
properties of the marriage belong to the conjugal partnership of Nicolas
Delizo and Dorotea de Ocampo were not sufficiently rebutted, these
properties were actually. In the adverse possession under claim of title of
petitioners-appellants continuously for a period of 47 years (1911 to 1957), and
consequently, the claim of respondents-appellees for partition should have
been considered barred by acquisitive and extinctive prescription, laches and
estoppel; d (c) in any event, there being serious doubts as to whether. said
properties belong to the first marriage, it would have been more equitable if
the said partnership properties were divided between the different
partnerships in proportion to the duration of each and the capital of the
spouses,-pursuant to Article 189 of the Civil Code.
From the findings of the Appellate Court that sixty-six (66) hectares of the
Caanawan properties w ere acquired by Nicolas Delizo as homesteads during
the period of the first marriage, thus: sixteen (16) hectares as a homestead
from the Government in 1905; and the 16-hectare homestead of Nicolas
Dacquel, the 16-hectare homestead of Mariano Antolin, and the 16-hectare
homestead of Francisco Pascua by purchase in 1%6, .1907 and 1908,
respectively, it does not necessarily follow that they should be considered as
properties of the first marriage, considering that being homesteads they were
part of the public domain, and it was not shown that all the requirements of
the Homestead Law to warrant the grant of a patent to the homesteader
have been complied with prior to the death in 1909 of Delizo's first wife, Rosa
Villasfer.
Under Act 926, 1 which was then the applicable law, the right of the
homesteader to the patent does not become absolute until after he has
complied with all the requirements of the law. One of the most important
requirements is that the "person filing the application shall prove by two
credible witnesses that he has resided upon and cultivated the land for the
term of five years immediately succeeding the time of filing the application
aforesaid, and shall make affidavit that no part of said land has been
alienated or encumbered ... (Section 3 of Act 926, italics supplied). Prior to the
fulfillment of such requirement, the- applicant has no complete equitable
estate over the homestead which he can sell and convey, mortgage for
lease. 2 Until a homestead right is established and registered under Section 3
of Act 926, there is only an inchoate right to the property and it has not
ceased to be a part of the public domain and, therefore, not susceptible to
alienation as such. 3 Conversely, when a "homesteader has complied with all
the terms and conditions which entitled him to a patent for a particular tract
of public land, he acquires a vested interest therein and has to be regarded
an equitable owner thereof." 4 The decisive factor, therefore, in the
determination of whether a parcel of land acquired by way of homestead is
conjugal property of the first or the second marriage, is not necessarily the
time of the issuance of the homestead patent but the time of the fulfillment of
the requirements of the public land law for the acquisition of such right to the
patent. 5
As testified to by Lorenzo Delizo, his brother, Nicolas Delizo, and the latter's
wife, Rosa Villasfer, arrived in Barrio Caanawan, San Jose, Nueva Ecija, from
Barrio Ungag, Cuyapo, Nueva Ecija, during the year 1905. It was during that
same year that Pedro Salvador and Mauricio Salvador, who were then the
cabecillas were distributing lands to homesteaders in Barrio Caanawan.
Nicolas Dacquel, Mariano Antolin and Francisco Pascua must have received
their respective homesteads from the same officers of the government that
same year, considering that their respective homesteads are all adjacent to
the homestead of Nicolas Delizo and according to the evidence, this was the
time when the homesteads in that barrio were parceled out to the new
settlers. Indeed, the Homestead Act was then of recent vintage, having been
enacted by the Philippine Commission by authority of the United States
Government, only on October 7, 1903.
Considering that Nicolas Dacquel must have been in possession of his
homestead for barely a year when he transferred his rights in 1906, Mariano
Antolin for about two years with respect to his homestead in 1907, and
Francisco Pascua for about three years in 1908 as regards to his homestead,
at the time of their respective conveyances to Nicolas Delizo, it is, therefore,
obvious that not one of them could have complied with the requirements of
Act No. 926 to entitle any one of them to the issuance of a homestead patent
before they sold or assigned their rights to Nicolas Delizo. The law was quite
specific, that "No certificate shall be given or patent issued for the land
applied for until the motion of five year. From the date of the filing of the
application and if, at the expiration of such time or at any time within three
years thereafter, the person filing such application shall prove by two credible
witnesses that he has resided upon and cultivate the land for the term of five
years immediately succeeding the time of filing the application aforesaid, and
shall make affidavit that no part of said land has been I alienated or
encumbered, and that he has borne true allegiance to the Government of
the United States and that of the Philippine Islands, then, upon payment of a
fee of ten pesos, Philippine currency to such officer as may be designated by
law as local land officer, or in case there be no such officer then to the Chief
of the Bureau of Lands, he shall be entitled to a patent." (Section 3, Act No.
926, italics supplied). Having neither legal nor equitable title thereon, what was
transferred by them to Nicolas Delizo were, therefore, not rights of ownership,
but inchoate rights as applicants for homesteads over portions of the public
domain. Similarly, having received the homestead only in 1905, Nicolas Delizo
could not have perfected his rights thereon by the completion of the five-year
occupancy and cultivation requirement of the law, in 1909. Buttressing the
conclusion that Nicolas Delizo could not have perfected his rights to the four
homesteads before 1909 is the specific limitation imposed by section 3 of Act
No. 926 which provides that "No person who is the owner of more than sixteen
hectares of land in said Islands or who has had the benefits of any gratuitous
allotment of sixteen hectares of land since the acquisition of the Islands by the
United States, shall be entitled to the benefits of this chapter."
The foregoing sufficiently show that the Appellate Court erred in, holding that
the entire Caanawan properties belong to the conjugal partnership of Nicolas
Delizo and Rosa Villasfer. Considering, however, that about twenty (20)
hectares were cultivated and rendered productive during the period from
1905 to 1909, judgment and equity demand that the rights to said properties
be apportioned to the parties in proportion to the extent to which the
requirements of the public land laws had been complied with during the
existence of each conjugal partnership.
II
In connection with the other properties, such as Lot No. 498 of the San Jose
Cadastre, under Original Certificate of Title No. 5622; a parcel of land in San
Jose, Nueva Ecija, under Transfer Certificate of Title No. 2985 (Exh. I or 13), and
agricultural land of about 17.4753 hectares in Sitio Rangayan, Muoz Nueva
Ecija, under Transfer Certificate of Title No. 5162 (Exh. J or 14); a parcel of land
in Caanawan, San Jose, with an area of about 14.0354 hectares, under
Transfer Certificate of Title No. 11910 (Exh. K or 10); a cornland in Barrio
Rangayan, Muoz, Nueva Ecija, of about 1,500 square meters under Tax
Declaration No. 5476; a riceland in Rangayan, Muoz of about 17.4755
hectares, under Tax Declaration No. 812; a riceland, Lot No. 847, of about
13.0902 hectares covered by Transfer Certificate of Title No. 3585, issued on
April 29, 1929 in the name of "Nicolas Delizo, married to Dorotea de Ocampo"
(Exh. L or 15); a camarin of strong materials with galvanized iron roofing in San
Jose, Nueva Ecija; a residential lot at Sanchez Street, San Jose, Nueva Ecija;
Lot No. 1790 of the San Jose Cadastre, consisting of about 2,840 square
meters, more or less, under Original Certificate of Title No. 8131 "in another
name but claimed by the heirs under deed of sale, Exhibit N1 a sugar mill in
San Jose, Nueva Ecija and several heads of carabaos (Exh. 0); Lots Nos. 495
and 496 of the San Jose Cadastre, possessed by defendants although
adjudicated in the name of Marcelo Tomas and Guillermo Cabiso
respectively; and another lot, Lot No. 494A of the San Jose Cadastre
adjudicated in the ' C, name of Nicolas Delizo, married to Dorotea de
Ocampo, the Appellate Court decision penned by Justice Arsenio Solidum
held that "there is no controversy that these were all acquired during the
existence of the second marriage of Nicolas Delizo"
The same opinion, however, held that since these properties were acquired
from the produce of the Caanawan properties although such produce is the
result of the labor and industry of the spouses Nicolas Delizo and Dorotea de
Ocampo, only eighty per cent (80%) of said properties acquired during the
second marriage should appertain to the second conjugal partnership, while
twenty per cent (20%) thereof adjudicated to the children of the first
marriage. The two concurring Appellate Justices, although of the view that
the legal presumption that those properties acquired during the regime of the
second conjugal partnership belong to said partnership has not been
rebutted by respondents-appellees and, therefore, would hold that such
after-acquired properties should belong to the second conjugal partnership,
concurred nevertheless in the result aforesaid, in order to reach a judgment in
the case. It would have been facile to hold that those after-acquired
properties belong to the second conjugal partnership in view of the statutory
presumption enunciated in Article 1407 of the old Civil Code (now Article 160,
New Civil Code). 6 There are, however, important considerations which
preclude Us from doing so. There is the established fact that the produce of
the Caanawan lands contributed considerably to the acquisition of these
properties, and We have held that the children of the first marriage, as a
matter of equity, should share in the Caanawan properties. To deny the
respondents-appellees a share in such properties would have exacerbated
discord instead of enhancing family solidarity and understanding.
Considering these circumstances and since the capital of either marriage or
the contribution of each spouse cannot be determined with mathematical
precision, the total mass of these properties should be divided between the
two conjugal partnerships in proportion to the duration of each partnership. 7
Under this criterion, the second conjugal partnership should be entitled to
46/64 or 23/32 of the total mass of properties, and the first conjugal
partnership. to 18/64 or 9/32 thereof pro indivision. The share of the estate of
Nicolas Delizo is one-half (1/2) pro indiviso of the net remainder 8 of the
conjugal partnership of gains of the first and second marriages, which would
amount to 32/64 or 1/2 of the whole estate. This should be distributed in equal
shares to his children of both marriages, 9 with the widow having the same
share as that of legitimate child. 10 The widow. Dorotea de Ocampo, is
entitled to one-half () of the net remainder of the second conjugal
partnership and to her share as heir of her deceased husband which amounts
to 23/64 of said properties, plus 1/13 of 32/64 pro indivision. The share of the
heirs of Rosa Villasfer would be 9/64 thereof. The foregoing is recapitulated as
follows:
Share of Rosa Villasfer, lst wife 9/64 of whole estate to be
divided among three (3)
children
Share of Dorotea de Ocampo, 23/64 of whole estate plus her
2nd wife share in Nicolas
Delizo s estate.
Share of Nicolas Delizo, husband 32/64 of whole estate to be
divided into thirteen
(13) equal parts.
Whole Estate 64/64
Computation of Sharing
3/64 + 1/26 = 142/1664]
3/64 + 1/26 = 142/1664] - Share of each child of

3/64 + 1/26 = 142/1664] lst marriage

1/26 = 64/1664]

1/26 = 64/1664]

1/26 = 64/1664]

1/26 = 64/1664] - Share of each child of

1/26 = 64/1664] 2nd marriage

1/26 = 64/1664]

1/26 = 64/1664]

1/26 = 64/1664]

1/26 = 64/1664]

23/64 + 1/26 = 662/1664 - Share of Dorotea Ocampo.

32/64 + 13/26= 1664/1664 - Whole Estate

In the partition of the properties, the probate court should take into account
the fact that the respondents-appellees are in possession of the Muoz lands,
while the petitioners-appellants have been in possession of the Caanawan
properties as well as the house and lot at 562 P. Campa Street. Sampaloc,
Manila, as directed in the trial court's order of April 23, 1958 record on Appeal,
pp. 76-77). Should it be convenient for the parties, their respective shares
should be taken from the properties presently under their custody.

Having reached the foregoing conclusions. it is unnecessary to resolve the

other legal questions raised in the appeal.

WHEREFORE, the appealed decision of the Court of Appeals is hereby

modified as herein indicated. The records of these cases should be, as they
are hereby, remanded to the trial court for further proceedings in
accordance with this judgment. No costs.

Fernando, Barredo and Concepcion, Jr., JJ., concur.

Castro, J., concurs in the result.

Aquino, J., took no part.


Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No 176556 July 4, 2012
BRIGIDO B. QUIAO, Petitioner,
vs.
RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO,
represented by their mother RITA QUIAO, Respondents.
DECISION
REYES, J.:
The family is the basic and the most important institution of society. It is in the
family where children are born and molded either to become useful citizens of
the country or troublemakers in the community. Thus, we are saddened when
parents have to separate and fight over properties, without regard to the
message they send to their children. Notwithstanding this, we must not shirk
from our obligation to rule on this case involving legal separation escalating to
questions on dissolution and partition of properties.
The Case
This case comes before us via Petition for Review on Certiorari1 under Rule 45
of the Rules of Court. The petitioner seeks that we vacate and set aside the
Order2 dated January 8, 2007 of the Regional Trial Court (RTC), Branch 1,
Butuan City. In lieu of the said order, we are asked to issue a Resolution
defining the net profits subject of the forfeiture as a result of the decree of
legal separation in accordance with the provision of Article 102(4) of the
Family Code, or alternatively, in accordance with the provisions of Article 176
of the Civil Code.
Antecedent Facts
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint
for legal separation against herein petitioner Brigido B. Quiao (Brigido).3
Subsequently, the RTC rendered a Decision4 dated October 10, 2005, the
dispositive portion of which provides:
WHEREFORE, viewed from the foregoing considerations, judgment is hereby
rendered declaring the legal separation of plaintiff Rita C. Quiao and
defendant-respondent Brigido B. Quiao pursuant to Article 55.
As such, the herein parties shall be entitled to live separately from each other,
but the marriage bond shall not be severed.
Except for Letecia C. Quiao who is of legal age, the three minor children,
namely, Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the
custody of the plaintiff who is the innocent spouse.
Further, except for the personal and real properties already foreclosed by the
RCBC, all the remaining properties, namely:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located in Tungao,
Butuan City;
6. a parcel of agricultural land with an area of 5 hectares located in Manila
de Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in Tungao,
Butuan City;
8. Bashier Bon Factory located in Tungao, Butuan City;
shall be divided equally between herein [respondents] and [petitioner]
subject to the respective legitimes of the children and the payment of the
unpaid conjugal liabilities of [P]45,740.00.
[Petitioners] share, however, of the net profits earned by the conjugal
partnership is forfeited in favor of the common children.
He is further ordered to reimburse [respondents] the sum of [P]19,000.00 as
attorney's fees and litigation expenses of [P]5,000.00[.]
SO ORDERED.5
Neither party filed a motion for reconsideration and appeal within the period
provided for under Section 17(a) and (b) of the Rule on Legal Separation.6
On December 12, 2005, the respondents filed a motion for execution7 which
the trial court granted in its Order dated December 16, 2005, the dispositive
portion of which reads:
"Wherefore, finding the motion to be well taken, the same is hereby granted.
Let a writ of execution be issued for the immediate enforcement of the
Judgment.
SO ORDERED."8
Subsequently, on February 10, 2006, the RTC issued a Writ of Execution9 which
reads as follows:
NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B.
QUIAO you cause to be made the sums stated in the afore-quoted DECISION
[sic], together with your lawful fees in the service of this Writ, all in the
Philippine Currency.
But if sufficient personal property cannot be found whereof to satisfy this
execution and your lawful fees, then we command you that of the lands and
buildings of the said [petitioner], you make the said sums in the manner
required by law. You are enjoined to strictly observed Section 9, Rule 39, Rule
[sic] of the 1997 Rules of Civil Procedure.
You are hereby ordered to make a return of the said proceedings
immediately after the judgment has been satisfied in part or in full in
consonance with Section 14, Rule 39 of the 1997 Rules of Civil Procedure, as
amended.10
On July 6, 2006, the writ was partially executed with the petitioner paying the
respondents the amount of P46,870.00, representing the following payments:
(a) P22,870.00 as petitioner's share of the payment of the conjugal share;
(b) P19,000.00 as attorney's fees; and
(c) P5,000.00 as litigation expenses.11
On July 7, 2006, or after more than nine months from the promulgation of the
Decision, the petitioner filed before the RTC a Motion for Clarification,12
asking the RTC to define the term "Net Profits Earned."
To resolve the petitioner's Motion for Clarification, the RTC issued an Order13
dated August 31, 2006, which held that the phrase "NET PROFIT EARNED"
denotes "the remainder of the properties of the parties after deducting the
separate properties of each [of the] spouse and the debts."14 The Order
further held that after determining the remainder of the properties, it shall be
forfeited in favor of the common children because the offending spouse does
not have any right to any share of the net profits earned, pursuant to Articles
63, No. (2) and 43, No. (2) of the Family Code.15 The dispositive portion of the
Order states:
WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all
the remaining properties after deducting the payments of the debts for only
separate properties of the defendant-respondent shall be delivered to him
which he has none.
The Sheriff is herein directed to proceed with the execution of the Decision.
IT IS SO ORDERED.16
Not satisfied with the trial court's Order, the petitioner filed a Motion for
Reconsideration17 on September 8, 2006. Consequently, the RTC issued
another Order18 dated November 8, 2006, holding that although the Decision
dated October 10, 2005 has become final and executory, it may still consider
the Motion for Clarification because the petitioner simply wanted to clarify the
meaning of "net profit earned."19 Furthermore, the same Order held:
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside.
NET PROFIT EARNED, which is subject of forfeiture in favor of [the] parties'
common children, is ordered to be computed in accordance [with] par. 4 of
Article 102 of the Family Code.20
On November 21, 2006, the respondents filed a Motion for Reconsideration,21
praying for the correction and reversal of the Order dated November 8, 2006.
Thereafter, on January 8, 2007,22 the trial court had changed its ruling again
and granted the respondents' Motion for Reconsideration whereby the Order
dated November 8, 2006 was set aside to reinstate the Order dated August
31, 2006.
Not satisfied with the trial court's Order, the petitioner filed on February 27,
2007 this instant Petition for Review under Rule 45 of the Rules of Court, raising
the following:
Issues
I
IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE COMMON
PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE DECREE OF LEGAL
SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE?
II
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE CONJUGAL
PARTNERSHIP FOR PURPOSES OF EFFECTING THE FORFEITURE AUTHORIZED
UNDER ARTICLE 63 OF THE FAMILY CODE?
III
WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE HUSBAND AND
WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY CODE OF THE PHILIPPINES
BE GIVEN RETROACTIVE EFFECT FOR PURPOSES OF DETERMINING THE NET
PROFITS SUBJECT OF FORFEITURE AS A RESULT OF THE DECREE OF LEGAL
SEPARATION WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER
THE CIVIL CODE?
IV
WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE SHARE OF THE
GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP AS A RESULT OF THE
ISSUANCE OF THE DECREE OF LEGAL SEPARATION?23
Our Ruling
While the petitioner has raised a number of issues on the applicability of
certain laws, we are well-aware that the respondents have called our
attention to the fact that the Decision dated October 10, 2005 has attained
finality when the Motion for Clarification was filed.24 Thus, we are constrained
to resolve first the issue of the finality of the Decision dated October 10, 2005
and subsequently discuss the matters that we can clarify.
The Decision dated October 10, 2005 has become final and executory at the
time the Motion for Clarification was filed on July 7, 2006.
Section 3, Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. - The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a
record on appeal is required, the appellant shall file a notice of appeal and a
record on appeal within thirty (30) days from notice of the judgment or final
order.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed.
In Neypes v. Court of Appeals,25 we clarified that to standardize the appeal
periods provided in the Rules and to afford litigants fair opportunity to appeal
their cases, we held that "it would be practical to allow a fresh period of 15
days within which to file the notice of appeal in the RTC, counted from receipt
of the order dismissing a motion for a new trial or motion for
reconsideration."26
In Neypes, we explained that the "fresh period rule" shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the RTCs; Rule 42 on
petitions for review from the RTCs to the Court of Appeals (CA); Rule 43 on
appeals from quasi-judicial agencies to the CA and Rule 45 governing
appeals by certiorari to the Supreme Court. We also said, "The new rule aims
to regiment or make the appeal period uniform, to be counted from receipt
of the order denying the motion for new trial, motion for reconsideration
(whether full or partial) or any final order or resolution."27 In other words, a
party litigant may file his notice of appeal within a fresh 15-day period from his
receipt of the trial court's decision or final order denying his motion for new
trial or motion for reconsideration. Failure to avail of the fresh 15-day period
from the denial of the motion for reconsideration makes the decision or final
order in question final and executory.
In the case at bar, the trial court rendered its Decision on October 10, 2005.
The petitioner neither filed a motion for reconsideration nor a notice of
appeal. On December 16, 2005, or after 67 days had lapsed, the trial court
issued an order granting the respondent's motion for execution; and on
February 10, 2006, or after 123 days had lapsed, the trial court issued a writ of
execution. Finally, when the writ had already been partially executed, the
petitioner, on July 7, 2006 or after 270 days had lapsed, filed his Motion for
Clarification on the definition of the "net profits earned." From the foregoing,
the petitioner had clearly slept on his right to question the RTCs Decision
dated October 10, 2005. For 270 days, the petitioner never raised a single issue
until the decision had already been partially executed. Thus at the time the
petitioner filed his motion for clarification, the trial courts decision has
become final and executory. A judgment becomes final and executory when
the reglementary period to appeal lapses and no appeal is perfected within
such period. Consequently, no court, not even this Court, can arrogate unto
itself appellate jurisdiction to review a case or modify a judgment that
became final.28
The petitioner argues that the decision he is questioning is a void judgment.
Being such, the petitioner's thesis is that it can still be disturbed even after 270
days had lapsed from the issuance of the decision to the filing of the motion
for clarification. He said that "a void judgment is no judgment at all. It never
attains finality and cannot be a source of any right nor any obligation."29 But
what precisely is a void judgment in our jurisdiction? When does a judgment
becomes void?
"A judgment is null and void when the court which rendered it had no power
to grant the relief or no jurisdiction over the subject matter or over the parties
or both."30 In other words, a court, which does not have the power to decide
a case or that has no jurisdiction over the subject matter or the parties, will
issue a void judgment or a coram non judice.31
The questioned judgment does not fall within the purview of a void judgment.
For sure, the trial court has jurisdiction over a case involving legal separation.
Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the Family
Court of a city, the exclusive original jurisdiction to hear and decide, among
others, complaints or petitions relating to marital status and property relations
of the husband and wife or those living together.32 The Rule on Legal
Separation33 provides that "the petition [for legal separation] shall be filed in
the Family Court of the province or city where the petitioner or the respondent
has been residing for at least six months prior to the date of filing or in the case
of a non-resident respondent, where he may be found in the Philippines, at
the election of the petitioner."34 In the instant case, herein respondent Rita is
found to reside in Tungao, Butuan City for more than six months prior to the
date of filing of the petition; thus, the RTC, clearly has jurisdiction over the
respondent's petition below. Furthermore, the RTC also acquired jurisdiction
over the persons of both parties, considering that summons and a copy of the
complaint with its annexes were served upon the herein petitioner on
December 14, 2000 and that the herein petitioner filed his Answer to the
Complaint on January 9, 2001.35 Thus, without doubt, the RTC, which has
rendered the questioned judgment, has jurisdiction over the complaint and
the persons of the parties.
From the aforecited facts, the questioned October 10, 2005 judgment of the
trial court is clearly not void ab initio, since it was rendered within the ambit of
the court's jurisdiction. Being such, the same cannot anymore be disturbed,
even if the modification is meant to correct what may be considered an
erroneous conclusion of fact or law.36 In fact, we have ruled that for "[as] long
as the public respondent acted with jurisdiction, any error committed by him
or it in the exercise thereof will amount to nothing more than an error of
judgment which may be reviewed or corrected only by appeal."37 Granting
without admitting that the RTC's judgment dated October 10, 2005 was
erroneous, the petitioner's remedy should be an appeal filed within the
reglementary period. Unfortunately, the petitioner failed to do this. He has
already lost the chance to question the trial court's decision, which has
become immutable and unalterable. What we can only do is to clarify the
very question raised below and nothing more.
For our convenience, the following matters cannot anymore be disturbed
since the October 10, 2005 judgment has already become immutable and
unalterable, to wit:
(a) The finding that the petitioner is the offending spouse since he cohabited
with a woman who is not his wife;38
(b) The trial court's grant of the petition for legal separation of respondent
Rita;39
(c) The dissolution and liquidation of the conjugal partnership;40
(d) The forfeiture of the petitioner's right to any share of the net profits earned
by the conjugal partnership;41
(e) The award to the innocent spouse of the minor children's custody;42
(f) The disqualification of the offending spouse from inheriting from the
innocent spouse by intestate succession;43
(g) The revocation of provisions in favor of the offending spouse made in the
will of the innocent spouse;44
(h) The holding that the property relation of the parties is conjugal partnership
of gains and pursuant to Article 116 of the Family Code, all properties
acquired during the marriage, whether acquired by one or both spouses, is
presumed to be conjugal unless the contrary is proved;45
(i) The finding that the spouses acquired their real and personal properties
while they were living together;46
(j) The list of properties which Rizal Commercial Banking Corporation (RCBC)
foreclosed;47
(k) The list of the remaining properties of the couple which must be dissolved
and liquidated and the fact that respondent Rita was the one who took
charge of the administration of these properties;48
(l) The holding that the conjugal partnership shall be liable to matters included
under Article 121 of the Family Code and the conjugal liabilities totaling
P503,862.10 shall be charged to the income generated by these properties;49
(m) The fact that the trial court had no way of knowing whether the petitioner
had separate properties which can satisfy his share for the support of the
family;50
(n) The holding that the applicable law in this case is Article 129(7);51
(o) The ruling that the remaining properties not subject to any encumbrance
shall therefore be divided equally between the petitioner and the respondent
without prejudice to the children's legitime;52
(p) The holding that the petitioner's share of the net profits earned by the
conjugal partnership is forfeited in favor of the common children;53 and
(q) The order to the petitioner to reimburse the respondents the sum of
P19,000.00 as attorney's fees and litigation expenses of P5,000.00.54
After discussing lengthily the immutability of the Decision dated October 10,
2005, we will discuss the following issues for the enlightenment of the parties
and the public at large.
Article 129 of the Family Code applies to the present case since the parties'
property relation is governed by the system of relative community or conjugal
partnership of gains.

The petitioner claims that the court a quo is wrong when it applied Article 129
of the Family Code, instead of Article 102. He confusingly argues that Article
102 applies because there is no other provision under the Family Code which
defines net profits earned subject of forfeiture as a result of legal separation.
Offhand, the trial court's Decision dated October 10, 2005 held that Article
129(7) of the Family Code applies in this case. We agree with the trial court's
holding.
First, let us determine what governs the couple's property relation. From the
record, we can deduce that the petitioner and the respondent tied the
marital knot on January 6, 1977. Since at the time of the exchange of marital
vows, the operative law was the Civil Code of the Philippines (R.A. No. 386)
and since they did not agree on a marriage settlement, the property relations
between the petitioner and the respondent is the system of relative
community or conjugal partnership of gains.55 Article 119 of the Civil Code
provides:
Art. 119. The future spouses may in the marriage settlements agree upon
absolute or relative community of property, or upon complete separation of
property, or upon any other regime. In the absence of marriage settlements,
or when the same are void, the system of relative community or conjugal
partnership of gains as established in this Code, shall govern the property
relations between husband and wife.
Thus, from the foregoing facts and law, it is clear that what governs the
property relations of the petitioner and of the respondent is conjugal
partnership of gains. And under this property relation, "the husband and the
wife place in a common fund the fruits of their separate property and the
income from their work or industry."56 The husband and wife also own in
common all the property of the conjugal partnership of gains.57
Second, since at the time of the dissolution of the petitioner and the
respondent's marriage the operative law is already the Family Code, the same
applies in the instant case and the applicable law in so far as the liquidation
of the conjugal partnership assets and liabilities is concerned is Article 129 of
the Family Code in relation to Article 63(2) of the Family Code. The latter
provision is applicable because according to Article 256 of the Family Code
"[t]his Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other
law."58
Now, the petitioner asks: Was his vested right over half of the common
properties of the conjugal partnership violated when the trial court forfeited
them in favor of his children pursuant to Articles 63(2) and 129 of the Family
Code?
We respond in the negative.
Indeed, the petitioner claims that his vested rights have been impaired,
arguing: "As earlier adverted to, the petitioner acquired vested rights over half
of the conjugal properties, the same being owned in common by the spouses.
If the provisions of the Family Code are to be given retroactive application to
the point of authorizing the forfeiture of the petitioner's share in the net
remainder of the conjugal partnership properties, the same impairs his rights
acquired prior to the effectivity of the Family Code."59 In other words, the
petitioner is saying that since the property relations between the spouses is
governed by the regime of Conjugal Partnership of Gains under the Civil
Code, the petitioner acquired vested rights over half of the properties of the
Conjugal Partnership of Gains, pursuant to Article 143 of the Civil Code, which
provides: "All property of the conjugal partnership of gains is owned in
common by the husband and wife."60 Thus, since he is one of the owners of
the properties covered by the conjugal partnership of gains, he has a vested
right over half of the said properties, even after the promulgation of the Family
Code; and he insisted that no provision under the Family Code may deprive
him of this vested right by virtue of Article 256 of the Family Code which
prohibits retroactive application of the Family Code when it will prejudice a
person's vested right.
However, the petitioner's claim of vested right is not one which is written on
stone. In Go, Jr. v. Court of Appeals,61 we define and explained "vested right"
in the following manner:
A vested right is one whose existence, effectivity and extent do not depend
upon events foreign to the will of the holder, or to the exercise of which no
obstacle exists, and which is immediate and perfect in itself and not
dependent upon a contingency. The term "vested right" expresses the
concept of present fixed interest which, in right reason and natural justice,
should be protected against arbitrary State action, or an innately just and
imperative right which enlightened free society, sensitive to inherent and
irrefragable individual rights, cannot deny.
To be vested, a right must have become a titlelegal or equitableto the
present or future enjoyment of property.62 (Citations omitted)
In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party List
Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R.
Ermita,63 we also explained:
The concept of "vested right" is a consequence of the constitutional guaranty
of due process that expresses a present fixed interest which in right reason and
natural justice is protected against arbitrary state action; it includes not only
legal or equitable title to the enforcement of a demand but also exemptions
from new obligations created after the right has become vested. Rights are
considered vested when the right to enjoyment is a present interest, absolute,
unconditional, and perfect or fixed and irrefutable.64 (Emphasis and
underscoring supplied)
From the foregoing, it is clear that while one may not be deprived of his
"vested right," he may lose the same if there is due process and such
deprivation is founded in law and jurisprudence.
In the present case, the petitioner was accorded his right to due process. First,
he was well-aware that the respondent prayed in her complaint that all of the
conjugal properties be awarded to her.65 In fact, in his Answer, the petitioner
prayed that the trial court divide the community assets between the petitioner
and the respondent as circumstances and evidence warrant after the
accounting and inventory of all the community properties of the parties.66
Second, when the Decision dated October 10, 2005 was promulgated, the
petitioner never questioned the trial court's ruling forfeiting what the trial court
termed as "net profits," pursuant to Article 129(7) of the Family Code.67 Thus,
the petitioner cannot claim being deprived of his right to due process.
Furthermore, we take note that the alleged deprivation of the petitioner's
"vested right" is one founded, not only in the provisions of the Family Code, but
in Article 176 of the Civil Code. This provision is like Articles 63 and 129 of the
Family Code on the forfeiture of the guilty spouse's share in the conjugal
partnership profits. The said provision says:
Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her
share of the conjugal partnership profits, which shall be awarded to the
children of both, and the children of the guilty spouse had by a prior
marriage. However, if the conjugal partnership property came mostly or
entirely from the work or industry, or from the wages and salaries, or from the
fruits of the separate property of the guilty spouse, this forfeiture shall not
apply.
In case there are no children, the innocent spouse shall be entitled to all the
net profits.
From the foregoing, the petitioner's claim of a vested right has no basis
considering that even under Article 176 of the Civil Code, his share of the
conjugal partnership profits may be forfeited if he is the guilty party in a legal
separation case. Thus, after trial and after the petitioner was given the chance
to present his evidence, the petitioner's vested right claim may in fact be set
aside under the Civil Code since the trial court found him the guilty party.
More, in Abalos v. Dr. Macatangay, Jr.,68 we reiterated our long-standing
ruling that:
[P]rior to the liquidation of the conjugal partnership, the interest of each
spouse in the conjugal assets is inchoate, a mere expectancy, which
constitutes neither a legal nor an equitable estate, and does not ripen into
title until it appears that there are assets in the community as a result of the
liquidation and settlement. The interest of each spouse is limited to the net
remainder or "remanente liquido" (haber ganancial) resulting from the
liquidation of the affairs of the partnership after its dissolution. Thus, the right of
the husband or wife to one-half of the conjugal assets does not vest until the
dissolution and liquidation of the conjugal partnership, or after dissolution of
the marriage, when it is finally determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the
spouses or their respective heirs.69 (Citations omitted)
Finally, as earlier discussed, the trial court has already decided in its Decision
dated October 10, 2005 that the applicable law in this case is Article 129(7) of
the Family Code.70 The petitioner did not file a motion for reconsideration nor
a notice of appeal. Thus, the petitioner is now precluded from questioning the
trial court's decision since it has become final and executory. The doctrine of
immutability and unalterability of a final judgment prevents us from disturbing
the Decision dated October 10, 2005 because final and executory decisions
can no longer be reviewed nor reversed by this Court.71
From the above discussions, Article 129 of the Family Code clearly applies to
the present case since the parties' property relation is governed by the system
of relative community or conjugal partnership of gains and since the trial
court's Decision has attained finality and immutability.
The net profits of the conjugal partnership of gains are all the fruits of the
separate properties of the spouses and the products of their labor and
industry.
The petitioner inquires from us the meaning of "net profits" earned by the
conjugal partnership for purposes of effecting the forfeiture authorized under
Article 63 of the Family Code. He insists that since there is no other provision
under the Family Code, which defines "net profits" earned subject of forfeiture
as a result of legal separation, then Article 102 of the Family Code applies.
What does Article 102 of the Family Code say? Is the computation of "net
profits" earned in the conjugal partnership of gains the same with the
computation of "net profits" earned in the absolute community?
Now, we clarify.
First and foremost, we must distinguish between the applicable law as to the
property relations between the parties and the applicable law as to the
definition of "net profits." As earlier discussed, Article 129 of the Family Code
applies as to the property relations of the parties. In other words, the
computation and the succession of events will follow the provisions under
Article 129 of the said Code. Moreover, as to the definition of "net profits," we
cannot but refer to Article 102(4) of the Family Code, since it expressly
provides that for purposes of computing the net profits subject to forfeiture
under Article 43, No. (2) and Article 63, No. (2), Article 102(4) applies. In this
provision, net profits "shall be the increase in value between the market value
of the community property at the time of the celebration of the marriage and
the market value at the time of its dissolution."72 Thus, without any iota of
doubt, Article 102(4) applies to both the dissolution of the absolute community
regime under Article 102 of the Family Code, and to the dissolution of the
conjugal partnership regime under Article 129 of the Family Code. Where lies
the difference? As earlier shown, the difference lies in the processes used
under the dissolution of the absolute community regime under Article 102 of
the Family Code, and in the processes used under the dissolution of the
conjugal partnership regime under Article 129 of the Family Code.
Let us now discuss the difference in the processes between the absolute
community regime and the conjugal partnership regime.
On Absolute Community Regime:
When a couple enters into a regime of absolute community, the husband and
the wife becomes joint owners of all the properties of the marriage. Whatever
property each spouse brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the Family Code) form
the common mass of the couple's properties. And when the couple's marriage
or community is dissolved, that common mass is divided between the spouses,
or their respective heirs, equally or in the proportion the parties have
established, irrespective of the value each one may have originally owned.73
Under Article 102 of the Family Code, upon dissolution of marriage, an
inventory is prepared, listing separately all the properties of the absolute
community and the exclusive properties of each; then the debts and
obligations of the absolute community are paid out of the absolute
community's assets and if the community's properties are insufficient, the
separate properties of each of the couple will be solidarily liable for the
unpaid balance. Whatever is left of the separate properties will be delivered
to each of them. The net remainder of the absolute community is its net
assets, which shall be divided between the husband and the wife; and for
purposes of computing the net profits subject to forfeiture, said profits shall be
the increase in value between the market value of the community property at
the time of the celebration of the marriage and the market value at the time
of its dissolution.74
Applying Article 102 of the Family Code, the "net profits" requires that we first
find the market value of the properties at the time of the community's
dissolution. From the totality of the market value of all the properties, we
subtract the debts and obligations of the absolute community and this result
to the net assets or net remainder of the properties of the absolute
community, from which we deduct the market value of the properties at the
time of marriage, which then results to the net profits.75
Granting without admitting that Article 102 applies to the instant case, let us
see what will happen if we apply Article 102:
(a) According to the trial court's finding of facts, both husband and wife have
no separate properties, thus, the remaining properties in the list above are all
part of the absolute community. And its market value at the time of the
dissolution of the absolute community constitutes the "market value at
dissolution."
(b) Thus, when the petitioner and the respondent finally were legally
separated, all the properties which remained will be liable for the debts and
obligations of the community. Such debts and obligations will be subtracted
from the "market value at dissolution."
(c) What remains after the debts and obligations have been paid from the
total assets of the absolute community constitutes the net remainder or net
asset. And from such net asset/remainder of the petitioner and respondent's
remaining properties, the market value at the time of marriage will be
subtracted and the resulting totality constitutes the "net profits."
(d) Since both husband and wife have no separate properties, and nothing
would be returned to each of them, what will be divided equally between
them is simply the "net profits." However, in the Decision dated October 10,
2005, the trial court forfeited the half-share of the petitioner in favor of his
children. Thus, if we use Article 102 in the instant case (which should not be the
case), nothing is left to the petitioner since both parties entered into their
marriage without bringing with them any property.
On Conjugal Partnership Regime:
Before we go into our disquisition on the Conjugal Partnership Regime, we
make it clear that Article 102(4) of the Family Code applies in the instant case
for purposes only of defining "net profit." As earlier explained, the definition of
"net profits" in Article 102(4) of the Family Code applies to both the absolute
community regime and conjugal partnership regime as provided for under
Article 63, No. (2) of the Family Code, relative to the provisions on Legal
Separation.
Now, when a couple enters into a regime of conjugal partnership of gains
under Article 142 of the Civil Code, "the husband and the wife place in
common fund the fruits of their separate property and income from their work
or industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either
spouse during the marriage."76 From the foregoing provision, each of the
couple has his and her own property and debts. The law does not intend to
effect a mixture or merger of those debts or properties between the spouses.
Rather, it establishes a complete separation of capitals.77
Considering that the couple's marriage has been dissolved under the Family
Code, Article 129 of the same Code applies in the liquidation of the couple's
properties in the event that the conjugal partnership of gains is dissolved, to
wit:
Art. 129. Upon the dissolution of the conjugal partnership regime, the following
procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the
conjugal partnership and the exclusive properties of each spouse.
(2) Amounts advanced by the conjugal partnership in payment of personal
debts and obligations of either spouse shall be credited to the conjugal
partnership as an asset thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in
the acquisition of property or for the value of his or her exclusive property, the
ownership of which has been vested by law in the conjugal partnership.
(4) The debts and obligations of the conjugal partnership shall be paid out of
the conjugal assets. In case of insufficiency of said assets, the spouses shall be
solidarily liable for the unpaid balance with their separate properties, in
accordance with the provisions of paragraph (2) of Article 121.
(5) Whatever remains of the exclusive properties of the spouses shall thereafter
be delivered to each of them.
(6) Unless the owner had been indemnified from whatever source, the loss or
deterioration of movables used for the benefit of the family, belonging to
either spouse, even due to fortuitous event, shall be paid to said spouse from
the conjugal funds, if any.
(7) The net remainder of the conjugal partnership properties shall constitute
the profits, which shall be divided equally between husband and wife, unless
a different proportion or division was agreed upon in the marriage settlements
or unless there has been a voluntary waiver or forfeiture of such share as
provided in this Code.
(8) The presumptive legitimes of the common children shall be delivered upon
the partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot on
which it is situated shall, unless otherwise agreed upon by the parties, be
adjudicated to the spouse with whom the majority of the common children
choose to remain. Children below the age of seven years are deemed to
have chosen the mother, unless the court has decided otherwise. In case
there is no such majority, the court shall decide, taking into consideration the
best interests of said children.
In the normal course of events, the following are the steps in the liquidation of
the properties of the spouses:
(a) An inventory of all the actual properties shall be made, separately listing
the couple's conjugal properties and their separate properties.78 In the instant
case, the trial court found that the couple has no separate properties when
they married.79 Rather, the trial court identified the following conjugal
properties, to wit:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located in Tungao,
Butuan City;
6. a parcel of agricultural land with an area of 5 hectares located in Manila
de Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in Tungao,
Butuan City;
8. Bashier Bon Factory located in Tungao, Butuan City.80
(b) Ordinarily, the benefit received by a spouse from the conjugal partnership
during the marriage is returned in equal amount to the assets of the conjugal
partnership;81 and if the community is enriched at the expense of the
separate properties of either spouse, a restitution of the value of such
properties to their respective owners shall be made.82
(c) Subsequently, the couple's conjugal partnership shall pay the debts of the
conjugal partnership; while the debts and obligation of each of the spouses
shall be paid from their respective separate properties. But if the conjugal
partnership is not sufficient to pay all its debts and obligations, the spouses
with their separate properties shall be solidarily liable.83
(d) Now, what remains of the separate or exclusive properties of the husband
and of the wife shall be returned to each of them.84 In the instant case, since it
was already established by the trial court that the spouses have no separate
properties,85 there is nothing to return to any of them. The listed properties
above are considered part of the conjugal partnership. Thus, ordinarily, what
remains in the above-listed properties should be divided equally between the
spouses and/or their respective heirs.86 However, since the trial court found
the petitioner the guilty party, his share from the net profits of the conjugal
partnership is forfeited in favor of the common children, pursuant to Article
63(2) of the Family Code. Again, lest we be confused, like in the absolute
community regime, nothing will be returned to the guilty party in the conjugal
partnership regime, because there is no separate property which may be
accounted for in the guilty party's favor.

In the discussions above, we have seen that in both instances, the petitioner is
not entitled to any property at all. Thus, we cannot but uphold the Decision
dated October 10, 2005 of the trial court. However, we must clarify, as we
already did above, the Order dated January 8, 2007.

WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court,
Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for Clarification
dated July 7, 2006 in the Regional Trial Court, the Order dated January 8, 2007
of the Regional Trial Court is hereby CLARIFIED in accordance with the above
discussions.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 122134 October 3, 2003
ROMANA LOCQUIAO VALENCIA and CONSTANCIA L. VALENCIA, petitioners,
vs.
BENITO A. LOCQUIAO, now deceased and substituted by JIMMY LOCQUIAO,
TOMASA MARA and the REGISTRAR OF DEEDS OF PANGASINAN, respondents.
x----------------------------x
CONSTANCIA L. VALENCIA, petitioner,
vs.
BENITO A. LOCQUIAO, now deceased and substituted by JIMMY LOCQUIAO,
respondent.
DECISION
TINGA, J.:
The Old Civil Code1 and the Old Code of Civil Procedure,2 repealed laws that
they both are notwithstanding, have not abruptly become mere quiescent
items of legal history since their relevance do not wear off for a long time.
Verily, the old statutes proved to be decisive in the adjudication of the case
at bar.
Before us is a petition for review seeking to annul and set aside the joint
Decision3 dated November 24, 1994, as well as the Resolution4 dated
September 8, 1995, of the former Tenth Division5 of the Court of Appeals in two
consolidated cases involving an action for annulment of title6 and an action
for ejectment.7
Both cases involve a parcel of land consisting of 4,876 square meters situated
in Urdaneta, Pangasinan. This land was originally owned by the spouses
Herminigildo and Raymunda Locquiao, as evidenced by Original Certificate
of Title No. 183838 issued on October 3, 1917 by the Register of Deeds of
Pangasinan.
On May 22, 1944, Herminigildo and Raymunda Locquiao executed a deed of
donation propter nuptias which was written in the Ilocano dialect,
denominated as Inventario Ti Sagut9 in favor of their son, respondent Benito
Locquiao (hereafter, respondent Benito) and his prospective bride,
respondent Tomasa Mara (hereafter, respondent Tomasa). By the terms of the
deed, the donees were gifted with four (4) parcels of land, including the land
in question, as well as a male cow and one-third (1/3) portion of the conjugal
house of the donor parents, in consideration of the impending marriage of the
donees.
The donees took their marriage vows on June 4, 1944 and the fact of their
marriage was inscribed at the back of O.C.T. No. 18383.10
Herminigildo and Raymunda died on December 15, 1962 and January 9, 1968,
respectively, leaving as heirs their six (6) children, namely: respondent Benito,
Marciano, Lucio, Emeteria, Anastacia, and petitioner Romana, all surnamed
Locquiao11. With the permission of respondents Benito and Tomasa, petitioner
Romana Valencia (hereinafter, Romana) took possession and cultivated the
subject land.12 When respondent Romanas husband got sick sometime in
1977, her daughter petitioner Constancia Valencia (hereafter, petitioner
Constancia) took over, and since then, has been in possession of the land.13
Meanwhile, respondents Benito and Tomasa registered the Inventario Ti Sagut
with the Office of the Register of Deeds of Pangasinan on May 15, 1970.14 In
due course, the original title was cancelled and in lieu thereof Transfer
Certificate of Title No. 8489715 was issued in the name of the respondents
Benito and Tomasa.
On March 18, 1973, the heirs of the Locquiao spouses, including respondent
Benito and petitioner Romana, executed a Deed of Partition with Recognition
of Rights,16 wherein they distributed among only three (3) of them, the twelve
(12) parcels of land left by their common progenitors, excluding the land in
question and other lots disposed of by the Locquiao spouses earlier.
Contained in the deed is a statement that respondent Benito and Marciano
Locquiao, along with the heirs of Lucio Locquiao, "have already received our
shares in the estates of our parents, by virtue of previous donations and
conveyances," and that for that reason the heirs of Lucio Locquaio were not
made parties to the deed. All the living children of the Locquaio spouses at
the time, including petitioner Romana, confirmed the previous dispositions
and waived their rights to whomsoever the properties covered by the deed of
partition were adjudicated.17
Later on, disagreements among five (5) heirs or groups of heirs, including
petitioner Romana, concerning the distribution of two (2) of the lots covered
by the deed of partition which are Lots No. 2467 and 5567 of the Urdaneta
Cadastral Survey surfaced. As their differences were settled, the heirs
concerned executed a Deed of Compromise Agreement18 on June 12, 1976,
which provided for the re-distribution of the two (2) lots. Although not directly
involved in the discord, Benito signed the compromise agreement together
with his feuding siblings, nephews and nieces. Significantly, all the signatories
to the compromise agreement, including petitioner Romana, confirmed all
the other stipulations and provisions of the deed of partition.19
Sometime in 1983, the apparent calm pervading among the heirs was
disturbed when petitioner Constancia filed an action for annulment of title
against the respondents before the Regional Trial Court of Pangasinan.20 The
record shows that the case was dismissed by the trial court but it does not
indicate the reason for the dismissal.21
On December 13, 1983, respondent Benito filed with the Municipal Trial Court
of Urdaneta, Pangasinan a Complaint22 seeking the ejectment of petitioner
Constancia from the subject property.
On November 25, 1985, the Municipal Trial Court rendered a Decision,23
ordering the defendant in the case, petitioner Constancia, to vacate the land
in question.
Petitioners Romana and Constancia countered with a Complaint24 for the
annulment of Transfer Certificate of Title No. 84897 against respondents Benito
and Tomasa 25 which they filed with the Regional Trial Court of Pangasinan on
December 23, 1985. Petitioners alleged that the issuance of the transfer
certificate of title was fraudulent; that the Inventario Ti Sagut is spurious; that
the notary public who notarized the document had no authority to do so,
and; that the donation did not observe the form required by law as there was
no written acceptance on the document itself or in a separate public
instrument.1a\^/phi1.net
Meanwhile, the decision in the ejectment case was appealed to the same
RTC where the case for annulment of title was also pending. Finding that the
question of ownership was the central issue in both cases, the court issued an
Order26 suspending the proceedings in the ejectment case until it shall have
decided the ownership issue in the title annulment case.
After trial, the RTC rendered a Decision27 dated January 30, 1989 dismissing
the complaint for annulment of title on the grounds of prescription and laches.
It likewise ruled that the Inventario Ti Sagut is a valid public document which
transmitted ownership over the subject land to the respondents. With the
dismissal of the complaint and the confirmation of the respondents title over
the subject property, the RTC affirmed in toto the decision of the MTC in the
ejectment case28.
Dissatisfied, petitioners elevated the two (2) decisions to the respondent Court
of Appeals. Since they involve the same parties and the same property, the
appealed cases were consolidated by the appellate court.
On November 24, 1994, the Court of Appeals rendered the assailed Decision
affirming the appealed RTC decisions. The appellate court upheld the RTCs
conclusion that the petitioners cause of action had already prescribed,
considering that the complaint for annulment of title was filed more than
fifteen (15) years after the issuance of the title, or beyond the ten (10) - year
prescriptive period for actions for reconveyance. It likewise rejected the
petitioners assertion that the donation propter nuptias is null and void for
want of acceptance by the donee, positing that the implied acceptance
flowing from the very fact of marriage between the respondents, coupled
with the registration of the fact of marriage at the back of OCT No. 18383,
constitutes substantial compliance with the requirements of the law.
The petitioners filed a Motion for Reconsideration29 but it was denied by the
appellate court in its Resolution30 dated September 8, 1995. Hence, this
petition.
We find the petition entirely devoid of merit.
Concerning the annulment case, the issues to be threshed out are: (1)
whether the donation propter nuptias is authentic; (2) whether acceptance of
the donation by the donees is required; (3) if so, in what form should the
acceptance appear, and; (4) whether the action is barred by prescription
and laches.
The Inventario Ti Sagut which contains the donation propter nuptias was
executed and notarized on May 22, 1944. It was presented to the Register of
Deeds of Pangasinan for registration on May 15, 1970. The photocopy of the
document presented in evidence as Exhibit "8" was reproduced from the
original kept in the Registry of Deeds of Pangasinan.31
The petitioners have launched a two-pronged attack against the validity of
the donation propter nuptias, to wit: first, the Inventario Ti Sagut is not
authentic; and second, even assuming that it is authentic, it is void for the
donees failure to accept the donation in a public instrument.
To buttress their claim that the document was falsified, the petitioners rely
mainly on the Certification32 dated July 9, 1984 of the Records Management
and Archives Office that there was no notarial record for the year 1944 of
Cipriano V. Abenojar who notarized the document on May 22, 1944 and that
therefore a copy of the document was not available.
The certification is not sufficient to prove the alleged inexistence or
spuriousness of the challenged document. The appellate court is correct in
pointing out that the mere absence of the notarial record does not prove that
the notary public does not have a valid notarial commission and neither does
the absence of a file copy of the document with the archives effect evidence
of the falsification of the document.33 This Court ruled that the failure of the
notary public to furnish a copy of the deed to the appropriate office is a
ground for disciplining him, but certainly not for invalidating the document or
for setting aside the transaction therein involved.34
Moreover, the heirs of the Locquaio spouses, including petitioner Romana,
made reference in the deed of partition and the compromise agreement to
the previous donations made by the spouses in favor of some of the heirs. As
pointed out by the RTC,35 respondent Benito was not allotted any share in the
deed of partition precisely because he received his share by virtue of previous
donations. His name was mentioned in the deed of partition only with respect
to the middle portion of Lot No. 2638 which is the eleventh (11th) parcel in the
deed but that is the same one-third (1/3) portion of Lot No. 2638 covered by
O.C.T. No. 18259 included in the donation propter nuptias.1awphi1.nt
Similarly, Marciano Locquiao and the heirs of Lucio Locquiao were not
allocated any more share in the deed of partition since they received theirs
by virtue of prior donations or conveyances.
The pertinent provisions of the deed of partition read:
That the heirs of Lucio Locquiao are not included in this Partition by reason of
the fact that in the same manner as we, BENITO and MARCIANO LOCQUIAO
are concerned, we have already received our shares in the estate of our
parents by virtue of previous donations and conveyances, and that we hereby
confirm said dispositions, waiving our rights to whomsoever will these
properties will now be adjudicated;
That we, the Parties herein, do hereby waive and renounce as against each
other any claim or claims that we may have against one or some of us, and
that we recognize the rights of ownership of our co-heirs with respect to those
parcels already distributed and adjudicated and that in the event that one of
us is cultivating or in possession of any one of the parcels of land already
adjudicated in favor of another heir or has been conveyed, donated or
disposed of previously, in favor of another heir, we do hereby renounce and
waive our right of possession in favor of the heir in whose favor the donation or
conveyance was made previously.36 (Emphasis supplied)
The exclusion of the subject property in the deed of partition dispels any
doubt as to the authenticity of the earlier Inventario Ti Sagut.
This brings us to the admissibility of the Deed of Partition with Recognition of
Rights, marked as Exhibit "2", and the Deed of Compromise Agreement,
marked as Exhibit "3".
The petitioners fault the RTC for admitting in evidence the deed of partition
and the compromise agreement on the pretext that the documents "were not
properly submitted in evidence", pointing out that "when presented to
respondent Tomasa Mara for identification, she simply stated that she knew
about the documents but she did not actually identify them."37
The argument is not tenable. Firstly, objection to the documentary evidence
must be made at the time it is formally offered.38 Since the petitioners did not
even bother to object to the documents at the time they were offered in
evidence,39 it is now too late in the day for them to question their admissibility.
Secondly, the documents were identified during the Pre-Trial, marked as
Exhibits "2" and "3" and testified on by respondent Tomasa.40 Thirdly, the
questioned deeds, being public documents as they were duly notarized, are
admissible in evidence without further proof of their due execution and are
conclusive as to the truthfulness of their contents, in the absence of clear and
convincing evidence to the contrary.41 A public document executed and
attested through the intervention of the notary public is evidence of the facts
therein expressed in clear, unequivocal manner.42
Concerning the issue of form, petitioners insist that based on a provision43 of
the Civil Code of Spain (Old Civil Code), the acceptance by the donees
should be made in a public instrument. This argument was rejected by the RTC
and the appellate court on the theory that the implied acceptance of the
donation had flowed from the celebration of the marriage between the
respondents, followed by the registration of the fact of marriage at the back
of OCT No. 18383.
The petitioners, the appellate court and the trial court all erred in applying the
requirements on ordinary donations to the present case instead of the rules on
donation propter nuptias. Underlying the blunder is their failure to take into
account the fundamental dichotomy between the two kinds of donations.
Unlike ordinary donations, donations propter nuptias or donations by reason of
marriage are those "made before its celebration, in consideration of the same
and in favor of one or both of the future spouses."44 The distinction is crucial
because the two classes of donations are not governed by exactly the same
rules, especially as regards the formal essential requisites.
Under the Old Civil Code, donations propter nuptias must be made in a public
instrument in which the property donated must be specifically described.45
However, Article 1330 of the same Code provides that "acceptance is not
necessary to the validity of such gifts". In other words, the celebration of the
marriage between the beneficiary couple, in tandem with compliance with
the prescribed form, was enough to effectuate the donation propter nuptias
under the Old Civil Code.
Under the New Civil Code, the rules are different. Article 127 thereof provides
that the form of donations propter nuptias are regulated by the Statute of
Frauds. Article 1403, paragraph 2, which contains the Statute of Frauds
requires that the contracts mentioned thereunder need be in writing only to
be enforceable. However, as provided in Article 129, express acceptance "is
not necessary for the validity of these donations." Thus, implied acceptance is
sufficient.
The pivotal question, therefore, is which formal requirements should be
applied with respect to the donation propter nuptias at hand. Those under the
Old Civil Code or the New Civil Code?
It is settled that only laws existing at the time of the execution of a contract
are applicable thereto and not later statutes, unless the latter are specifically
intended to have retroactive effect.46 Consequently, it is the Old Civil Code
which applies in this case since the donation propter nuptias was executed in
1944 and the New Civil Code took effect only on August 30, 1950.47 The fact
that in 1944 the Philippines was still under Japanese occupation is of no
consequence. It is a well-known rule of the Law of Nations that municipal laws,
as contra-distinguished from laws of political nature, are not abrogated by a
change of sovereignty.48 This Court specifically held that during the Japanese
occupation period, the Old Civil Code was in force.49 As a consequence,
applying Article 1330 of the Old Civil Code in the determination of the validity
of the questioned donation, it does not matter whether or not the donees had
accepted the donation. The validity of the donation is unaffected in either
case.
Even the petitioners agree that the Old Civil Code should be applied.
However, they invoked the wrong provisions50 thereof.
Even if the provisions of the New Civil Code were to be applied, the case of
the petitioners would collapse just the same. As earlier shown, even implied
acceptance of a donation propter nuptias suffices under the New Civil
Code.51
With the genuineness of the donation propter nuptias and compliance with
the applicable mandatory form requirements fully established, petitioners
hypothesis that their action is imprescriptible cannot take off.
Viewing petitioners action for reconveyance from whatever feasible legal
angle, it is definitely barred by prescription. Petitioners right to file an action
for the reconveyance of the land accrued in 1944, when the Inventario Ti
Sagut was executed. It must be remembered that before the effectivity of the
New Civil Code in 1950, the Old Code of Civil Procedure (Act No. 190)
governed prescription.52 Under the Old Code of Civil Procedure, an action for
recovery of the title to, or possession of, real property, or an interest therein,
can only be brought within ten years after the cause of such action
accrues.53 Thus, petitioners action, which was filed on December 23, 1985, or
more than forty (40) years from the execution of the deed of donation on May
22, 1944, was clearly time-barred.
Even following petitioners theory that the prescriptive period should
commence from the time of discovery of the alleged fraud, the conclusion
would still be the same. As early as May 15, 1970, when the deed of donation
was registered and the transfer certificate of title was issued, petitioners were
considered to have constructive knowledge of the alleged fraud, following
the jurisprudential rule that registration of a deed in the public real estate
registry is constructive notice to the whole world of its contents, as well as all
interests, legal and equitable, included therein.54 As it is now settled that the
prescriptive period for the reconveyance of property allegedly registered
through fraud is ten (10) years, reckoned from the date of the issuance of the
certificate of title,55 the action filed on December 23, 1985 has clearly
prescribed.
In any event, independent of prescription, petitioners action is dismissible on
the ground of laches. The elements of laches are present in this case, viz:
(1) conduct on the part of the defendant, or one under whom he claims,
giving rise to the situation that led to the complaint and for which the
complainant seeks a remedy;
(2) delay in asserting the complainants rights, having had knowledge or
notice of defendants conduct and having been afforded an opportunity to
institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit, and
(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held barred.56
Of the facts which support the finding of laches, stress should be made of the
following: (a) the petitioners Romana unquestionably gained actual
knowledge of the donation propter nuptias when the deed of partition was
executed in 1973 and the information must have surfaced again when the
compromise agreement was forged in 1976, and; (b) as petitioner Romana
was a party-signatory to the two documents, she definitely had the
opportunity to question the donation propter nuptias on both occasions, and
she should have done so if she were of the mindset, given the fact that she
was still in possession of the land in dispute at the time. But she did not make
any move. She tarried for eleven (11) more years from the execution of the
deed of partition until she, together with petitioner Constancia, filed the
annulment case in 1985.
Anent the ejectment case, we find the issues raised by the petitioners to be
factual and, therefore, beyond this Courts power of review. Not being a trier
of facts, the Court is not tasked to go over the proofs presented by the parties
and analyze, assess, and weigh them to ascertain if the trial court and the
appellate court were correct in according them superior credit in this or that
piece of evidence of one party or the other.57 In any event, implicit in the
affirmance of the Court of Appeals is the existence of substantial evidence
supporting the decisions of the courts below.
WHEREFORE, finding no reversible error in the assailed decision, the same is
hereby AFFIRMED.

Costs against petitioners.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 122749 July 31, 1996
ANTONIO A. S. VALDEZ, petitioner,
vs.
REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and CONSUELO M.
GOMEZ-VALDEZ, respondents.
VITUG, J.:p
The petition for new bewails, purely on the question of law, an alleged error
committed by the Regional Trial Court in Civil Case No. Q-92-12539. Petitioner
avers that the court a quo has failed to apply the correct law that should
govern the disposition of a family dwelling in a situation where a marriage is
declared void ab initio because of psychological incapacity on the part of
either or both parties in the contract.
The pertinent facts giving rise to this incident are, by large, not in dispute.
Antonio Valdez and Consuelo Gomez were married on 05 January 1971.
Begotten during the marriage were five children. In a petition, dated 22 June
1992, Valdez sought the declaration of nullity of the marriage pursuant to
Article 36 of the Family code (docketed Civil Case No. Q-92-12539, Regional
Trial Court of Quezon City, Branch 102). After the hearing the parties following
the joinder of issues, the trial court, 1 in its decision of 29 July 1994, granted the
petition, viz:
WHEREFORE, judgment is hereby rendered as follows:
(1) The marriage of petitioner Antonio Valdez and respondent Consuelo
Gomez-Valdez is hereby declared null and void under Article 36 of the Family
Code on the ground of their mutual psychological incapacity to comply with
their essential marital obligations;
(2) The three older children, Carlos Enrique III, Antonio Quintin and
Angela Rosario shall choose which parent they would want to stay with.
Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother,
herein respondent Consuelo Gomez-Valdes.
The petitioner and respondent shall have visitation rights over the children who
are in the custody of the other.
(3) The petitioner and the respondent are directed to start proceedings
on the liquidation of their common properties as defined by Article 147 of the
Family Code, and to comply with the provisions of Articles 50, 51, and 52 of the
same code, within thirty (30) days from notice of this decision.
Let a copy of this decision be furnished the Local Civil Registrar of
Mandaluyong, Metro Manila, for proper recording in the registry of marriages.
2 (Emphasis ours.)
Consuelo Gomez sought a clarification of that portion of the decision
directing compliance with Articles 50, 51 and 52 of the Family Code. She
asserted that the Family Code contained no provisions on the procedure for
the liquidation of common property in "unions without marriage."
Parenthetically, during the hearing of the motion, the children filed a joint
affidavit expressing their desire to remain with their father, Antonio Valdez,
herein petitioner.
In an order, dated 05 May 1995, the trial court made the following
clarification:
Consequently, considering that Article 147 of the Family Code explicitly
provides that the property acquired by both parties during their union, in the
absence of proof to the contrary, are presumed to have been obtained
through the joint efforts of the parties and will be owned by them in equal
shares, plaintiff and defendant will own their "family home" and all their
properties for that matter in equal shares.
In the liquidation and partition of properties owned in common by the plaintiff
and defendant, the provisions on ownership found in the Civil Code shall
apply. 3 (Emphasis supplied.)
In addressing specifically the issue regarding 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 ownership.
The provisions of Articles 102 and 129 of the Family Code finds no application
since Article 102 refers to the procedure for the liquidation of the conjugal
partnership property and Article 129 refers to the procedure for the liquidation
of the absolute community of property. 4
Petitioner moved for a reconsideration of the order. The motion was denied
on 30 October 1995.
In his recourse to this Court, petitioner submits that Articles 50, 51 and 52 of the
Family Code should be held controlling: he argues that:
I the party in bad faith in the ownership shall be forfeited in favor of their
Article 147 of the Family Code does not apply to cases where the parties are
psychologically incapacitated.
II
Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code
govern the disposition of the family dwelling in cases where a marriage is
declared void ab initio, including a marriage declared void by reason of the
psychological incapacity of the spouses.
III
Assuming arguendo that Article 147 applies to marriages declared void ab
initio on the ground of the psychological incapacity of a spouse, the same
may be read consistently with Article 129.
IV
It is necessary to determine the parent with whom majority of the children wish
to stay. 5
The trial court correctly applied the law. In a void marriage, regardless of the
cause thereof, the property relations of the parties during the period of
cohabitation is governed by the provisions of Article 147 or Article 148, such as
the case may be, of the Family Code. Article 147 is a remake of Article 144 of
the Civil Code as interpreted and so applied in previous cases; 6 it provides:
Art. 147. When a man and a woman who are capacitated to marry each
other, live exclusively with each other as husband and wife without the benefit
of marriage or under a void marriage, their wages and salaries shall be owned
by them in equal shares and the property acquired by both of them through
their work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work
or industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of
any property shall be deemed to have contributed jointly in the acquisition
thereof in the former's efforts consisted in the care and maintenance of the
family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in
the property acquired during cohabitation and owned in common, without
the consent of the other, until after the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of
common children. In case of default of or waiver by any or all of the common
children or their descendants, each vacant share shall belong to the innocent
party. In all cases, the forfeiture shall take place upon the termination of the
cohabitation.
This particular kind of co-ownership applies when a man and a woman,
suffering no illegal impediment to marry each other, so exclusively live
together as husband and wife under a void marriage or without the benefit of
marriage. The term "capacitated" in the provision (in the first paragraph of the
law) refers to the legal capacity of a party to contract marriage, i.e., any
"male or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38" 7 of the Code.
Under this property regime, property acquired by both spouses through their
work and industry shall be governed by the rules on equal co-ownership. Any
property acquired during the union is prima facie presumed to have been
obtained through their joint efforts. A party who did not participate in the
acquisition of the property shall be considered as having contributed thereto
jointly if said party's "efforts consisted in the care and maintenance of the
family household." 8 Unlike the conjugal partnership of gains, the fruits of the
couple's separate property are not included in the co-ownership.
Article 147 of the Family Code, in the substance and to the above extent, has
clarified Article 144 of the Civil Code; in addition, the law now expressly
provides that
(a) Neither party can dispose or encumber by act intervivos his or her
share in co-ownership property, without consent of the other, during the
period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or
her share in the co-ownership in favor of their common children; in default
thereof or waiver by any or all of the common children, each vacant share
shall belong to the respective surviving descendants, or still in default thereof,
to the innocent party. The forfeiture shall take place upon the termination of
the cohabitation 9 or declaration of nullity of the marriage. 10
When the common-law spouses suffer from a legal impediment to marry or
when they do not live exclusively with each other (as husband and wife), only
the property acquired by both of them through their actual joint contribution
of money, property or industry shall be owned in common and in proportion to
their respective contributions. Such contributions and corresponding shares,
however, are prima facie presumed to be equal. The share of any party who
is married to another shall accrue to the absolute community or conjugal
partnership, as the case may be, if so existing under a valid marriage. If the
party who has acted in bad faith is not validly married to another, his or her
share shall be forfeited in the manner already heretofore expressed. 11
WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995,
of the trial court are AFFIRMED. No costs.
Padilla, Kapunan and Hermosisima, Jr., JJ., concur.
Bellosillo, J., is on leave.
Footnotes
1 Hon. Perlita Tria Tirona, presiding.

In deciding to take further cognizance of the issue on the settlement of the 2 Rollo, p. 22.
parties' common property, the trial court acted neither imprudently nor
precipitately; a court which has jurisdiction to declare the marriage a nullity 3 Rollo, p. 42.
must be deemed likewise clothed in authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in ruling that 4 Rollo, pp. 38-39.
petitioner and private respondent own the "family home" and all their
common property in equal shares, as well as in concluding that, in the 5 Rollo, pp. 24-25.
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 6 See Margaret Maxey vs Court of Appeals, 129 SCRA 187; Aznar, et
relation to Articles 102 and 129, 12 of the Family Code, should aptly prevail. al.vs. Garcia, et al., 102 Phil. 1055.
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 7 Art. 5. Any male or female of the age of eighteen years or upwards
and voidable marriages (in the latter case until the contract is annulled), are not under any of the impediments mentioned in Articles 37 and 38, may
irrelevant to the liquidation of the co-ownership that exists between common- contract marriage.
law spouses. The first paragraph of Articles 50 of the Family Code, applying
paragraphs (2), (3), (4) and 95) of Article 43, 13 relates only, by its explicit Art. 37. Marriages between the following are Incestuous and void from the
terms, to voidable marriages and, exceptionally, to void marriages under beginning, whether the relationship between the parties be legitimate or
Article 40 14 of the Code, i.e., the declaration of nullity of a subsequent illegitimate:
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 (1) Between ascendants and descendants of any degree; and
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 (2) Between brothers and sisters, whether of the full-or half-blood.
now requiring for purposes of remarriage, the declaration of nullity by final
judgment of the previously contracted void marriage, the present law aims to Art. 38. The following marriages shall be void from the beginning for reasons
do away with any continuing uncertainty on the status of the second of public policy:
marriage. It is not then illogical for the provisions of Article 43, in relation to
Articles 41 15 and 42, 16 of the Family Code, on the effects of the termination (1) Between collateral blood relatives; whether legitimate or illegitimate,
of a subsequent marriage contracted during the subsistence of a previous up to the fourth civil degree;
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, (2) Between step-parents and stepchildren;
on the one hand, between spouses in valid and voidable marriages (before
annulment) and, on the other, between common-law spouses or spouses of (3) Between parents-in-law and children-in-law;
void marriages, leaving to ordain, on the latter case, the ordinary rules on co-
ownership subject to the provisions of the Family Code on the "family home," (4) Between adopting parent and the adopted child;
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. (5) Between the surviving spouse of the adopting parent and the
adopted child;

(6) Between the surviving spouse of the adopted child and the adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other,
killed that other person's spouse or his or her own spouse.
8 Article 147, Family Code.
9 Article 147, Family Code.
10 Articles 43, 50 and 51, Family Code.
11 Article 148, Family Code.
12 Art. 50. The effects provided for in paragraphs (2), (3), (4) and (5) of
Article 43 and in Article 44 shall also apply in proper cases to marriages which
are declared void ab initio or annulled by final judgment under Articles 40 and
45.
The final judgment in such cases shall provide for the liquidation, partition and
distribution of the propitious of the spouses, the custody and support of the
common children. and the delivery of their presumptive legitimes, unless such
matters had been adjudicated in the previous 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 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 of their guardian, or the trustee of their property, may ask for the
enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed shall in no way
prejudice the ultimate successional rights of the children accruing upon the
death of either or both of the parents; but the value of the properties already
received under the decree of annulment or absolute nullity shall be
considered as advances on their legitime.
Art. 52. The judgment of annulment or of absolute nullity of the marriage, the
partition and distribution of the properties of the spouses, and the delivery of
the children's presumptive legitimes shall be recorded in the appropriate civil
registry and registries of property; otherwise, the same shall not affect the third
persons.
Art. 102. Upon dissolution of the absolute community regime, the following
procedure shall apply:
(1) An inventory shall be prepared; listing separately all the properties of
the absolute community and the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid
out of its assets. In case of insufficiency of the 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) Whatever remains of the exclusive properties of the spouses shall be
thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute community shall
constitute its net assets, which shall be divided equally between husband and
wife, unless a different proportion or division was agreed upon in the marriage
settlements, or unless there has been a voluntary waiver of such shares
provided in this Code. For purposes of computing the net profits subject to
forfeiture in accordance with Articles 43, No. (2) and 63, No. (2), the said
profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the
market value at the time of its dissolution.
(5) The Presumptive legitimes of the common children shall be delivered
upon partition, in accordance with Article 51.
(6) Unless otherwise agreed upon the parties, in the partition of the
properties, the conjugal dwelling and the lot on which it is situated shall be
adjudicated the 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 the said children.
Art. 129. Upon the dissolution of the conjugal partnership regime, the following
procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of
the conjugal partnership and the exclusive properties of each spouse.
(2) Amounts advanced by the conjugal partnership in payment of
personal debts and obligations of either spouse shall be credited to the
conjugal partnership as an asset thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her exclusive
property, the ownership of which has been vested by law in the conjugal
partnership.
(4) The debts and obligations of the conjugal partnership shall be paid
out of the conjugal assets. In the case of insufficiency of the said assets, the
spouses shall be solidarily liable for the unpaid balance with their separate
properties , in accordance with the provisions of paragraph (2) of Article 121.
(5) Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
(6) Unless the owner has been indemnified from whatever source, the loss
or deterioration of movables used for the benefit of the family, belonging to
either spouse, even due to fortuitous event, shall be paid to said spouse from
the conjugal funds, if any.
(7) The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between husband and
wife, unless a different proportion or division was agreed upon in the marriage
settlements or unless there has been a voluntary waiver or forfeiture of such
share as provided in this Code.
(8) The presumptive legitimes of the common children shall be delivered
upon partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot on
which it is situated shall, unless otherwise agreed 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 the said children.
13 Art 43. The termination of the subsequent marriage referred to in the
preceding Article shall produce the following effects:
(1) The children of subsequent marriage concieved prior to its termination
shall be considered legitimate, and their custody and support in case of
dispute shall be decided by the court in a proper proceeding;
(2) The absolute community of property or the conjugal partnership, as
the case may be, shall be dissolved and liquidated, but if either spouse
contracted said marriage in bad faith, his or her share of the net profits of the
community property or conjugal partnership property shall be forfeited in
favor of the common children or, if there are none, the children of the guilty
spouse by a previous marriage or, in default of children, the incorrect spouse.
(3) Donations by reasons of marriage shall remain valid, except that if the
donee contracted the marriage in bad faith, such donations made to said
donee are revoked by operation of law;
(4) The innocent spouse my revoke the designation of the other spouse
who acted as a beneficiary in any insurance policy, even if such designation
be stipulated as irrevocable; and
(5) The spouse who contracted the subsequent marriage in bad faith
shall be disqualified in inherit from the innocent spouse by testate and
intestate succession.
14 Art. 40. The absolute nullity of a previous marriage may be invoked
for purposes of remarriage on the basis solely of a final judgment declaring
such previous marriage void.
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-rounded 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 or reappearance of the absent
spouse.
16 Art. 42. The subsequent marriage referred to in the preceding Article
shall be automatically terminated by the recording of the affidavit of
reappearance of the absent spouse, unless there is 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 parties to the subsequent
marriage at the instance of any interested person, with the due notice to the
spouses of the subsequent marriage and without prejudice to the fact of
reappearance being judicially determined in such case such fact is disputed

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22383 October 6, 1924
THE PHILIPPINE NATIONAL BANK, plaintiff-appellee,
vs.
MARGARITA QUINTOS E YPARRAGUIRRE and ANGEL A. ANSALSO, defendants-
appellants.
Angel A. Ansaldo for appellants.
Roman J. Lacson for appellee.
VILLAMOR, J.:
The appellants pray for the dismissal of the complaint with costs against the
plaintiff, alleging that the judgment appealed from is erroneous: (1) Because it
holds that the document Exhibit A does not contain anything that makes the
plaintiff agent of the defendants; (2) because it finds without any ground that
the defendant were husband and wife when they executed said document;
(3) because upon this finding, it considers unnecessary to discuss whether or
not the obligation evidence by said document is solidary between the
defendants (4) because to maintain such opinion amounts to compelling the
defendants to comply with said obligation in a manner distinct from that
stipulated in the contract; and (5) because it sanctions an arbitrary, unjust and
illegal procedure.
The Honorable Pedro Concepcion, judge, who tried this case, rendered
decision in the following terms:
The plaintiff seeks to recover of the defendants the sum of P31,785.96, the
amount of an alleged overdraft against them and in favor of the plaintiff
bank, with interest thereon at 8 per cent per annum from October 1, 1922.
It appears from the evidence that in a document dated June 20, 1918, the
Philippine National Bank granted the defendants a credit to the amount of
P31,284, and to secure the payment thereof, as well as the interest and costs,
the defendants mortgaged and pledged to the bank certain certificates of
one hundred fifty-eight shares of stock of the Bank of the Philippine Islands of
the nominal value of P200 each. Later on, a certificate of fifty shares and
another of forty were substituted by others of 10 and 30 shares, respectively.
Besides these shares, the defendants delivered to the bank, as additional
securities, fifty shares of stock of the "Compaia Naviera" of the nominal value
of P100 each; eighty shares of stock of the Davao Agriculture and
Commercial Company of P100 each, and 10 second liberty bonds. These
bonds were sold by the plaintiff bank on or before August 19, 1922, having
realized the sum of P2,360 from the sale thereof. (Exhibit 3.)
On August 21, 1920, the herein defendant, Mr. Angel Ansaldo, in his answer to
a letter of the bank addressed to him or to his wife, his codefendant Margarita
Q. de Ansaldo, stated, as may be seen in Exhibit B, that the balance in his
current account in favor of said bank in the sum of P33,558.445 on July 31,
1920, had been examined by him and found correct. This balance with the
interest due from the said date up to September 30, 1922, amounted to
P41,212.05 and after deducting the credit and deposits from August 1, 1920, to
September 30, 1922, which amount to P9,426.09, there remains a balance of
P31,785.96, payment of which is claimed in the complaint.
And the complaint was filed because between April 2, 1921, and July 22, 192,
the date of the letter Exhibit 6, the defendant Mr. Ansaldo was several times
required to pay his debt, the securities given having been found to be
insufficient to secure the payment of his obligations, but the defendants failed
to give the new additional securities demanded.
The defendants discuss in the first place the nature of the obligation sued on,
maintaining that the same is not of a solidary nature because, say they, there
is nothing in it that expressly determines said character, and therefore it binds
only those who have contacted the same to the extent of their share in said
obligation; and in connection with this point it was attempted to prove that
the defendant Margarita Q. de Ansaldo, making use of the credit granted,
has received from the bank only the sum of P10,000 (Exhibit 5). As an answer
to the question raised the attorney for the bank calls attention to Exhibit A
where it appears that the defendant Angel A. Ansaldo "and or" Margarita A.
de Ansaldo, both or either of them indiscriminately, could sign checks against
the bank in their current account.
The court is of the opinion that it is not necessary to discuss whether the
obligation in question is solidary or joint, because in either case this debt is in
the last analysis chargeable to the conjugal partnership of the defendant
spouses. According to article 1408 of the Civil Code, all the debts and
obligations contracted during the marriage by the husband, as well as those
incurred by the wife in those cases in which she may legally bind the
partnership, are chargeable to the conjugal partnership. In the instant case,
the defendant Margarita Q. de Ansaldo joined her husband in the execution
of the document, evidencing the obligation in question, on June 20, 1918,
Exhibit A. (See Joaquin vs. Avellana, 11 Phil., 249; Fulgencio vs. Gatchalian, 21
Phil., 252; Falcon vs. Manzano, 15 Phil., 441.)
Another question raised, although indirectly, by the defendants is that, this
being, as it is, a case of a loan for an indefinite period of time they were not
asked to pay in accordance with law, articles 313 and 316 of the Code of
Commerce. This contention is untenable. Under the provision of section 33 of
Act No. 2938, amending the charter of the Philippine National Bank, if, from
any cause whatsoever, any of the securities specified for the loans provided
for therein, or accepted by said bank as security for loans should decline or
depreciate in market value wholly or in part, said bank may demand
additional securities or may forthwith declare such obligation due and
payable; and it is a fact admitted by the defendants themselves that the
securities given by them have suffered a considerable depreciation and it is a
fact proven that they were required to give additional securities but failed to
do so.
If the securities were found to have depreciated in value, say the defendants,
"the plaintiff bank's remedy was the one provided in the document executed
by the defendants in its favor and in accordance with its own charter."
According to the contract, it may hold or sell the securities above mentioned
although as an agent (articles 1710, 1713, 1714, 1718, 1719, and 1796 of the
Civil Code); and in accordance with its charter (section 42, Act No. 2612), said
sale may be ordered 15 days after a demand in writing is made upon the
debtor to increase the amount thereof, if in the meantime said debtor should
have failed to comply with this requirement . . . "The plaintiff, say they, cannot
be considered authorized to be negligent, as soon as it shall have learned
that the securities had begun to depreciate, as compared with the value they
had when they were delivered; for then it neither would comply with the
agency stipulated in the document in its favor, which would render it liable,
nor could in justice claim from the debtor what by its own negligence it may
have failed to receive." As an answer to this, it may be said that:
". . . it must be borne in mind that it is a recognized doctrine in the matter of
suretyship that with respect to the surety, the creditor is under no obligation to
display any diligence in the enforcement of his rights as a creditor. His mere
inaction, indulgence, passiveness, or delay in proceeding against the
principal debtor, or the fact that he did not enforce the guaranty or apply to
the payment of such funds as were available, constitute no defense at all for
the surety, unless the contract expressly requires diligence and promptness on
the part of the creditor, which is not in the case in the present action." (Clark
vs. Sellner, 42 Phil., 384.
Furthermore, there is nothing in the document evidencing the contract which
makes the plaintiff, as the defendants believe, their agent with the obligation
to sell the securities to the document, has a right, not an obligation, to elect to
enforce the securities in the manner it now does by bringing this action.
As to the amount of the obligation, the defendants argue that the
acknowledgment of the debit balance on July 31, 1920, in the amount of
P33,548.55, (Exhibit B), is not any evidence that may legally bind the
defendant Margarita Q. de Ansaldo, who has not accepted it as correct. The
truth, however, is that the defendant Mr. Ansaldo who gave his conformity
with the aforesaid balance is the husband of the other defendant and the
legal manager of the property of the conjugal partnership which is liable for
the payment of this debt.
The interest computed was likewise discussed in this case, the defendants
claiming that the same was not fixed with their consent, nor does there exist,
say they, any proof that it was ever fixed by the Board of Directors of the
bank. It appears, however, from the evidence of the plaintiff that the National
Bank had authorized various officers thereof to fix certain rate of interest on
certain occasions; as for instance, the rate of interest for the months of August
to September, 1920, was raised from 12 to 8 per cent. At all events, we believe
that the defendants have no right to raise this question because they have
paid interest at the rate of 9 per cent per annum, as appears from the
document marked Exhibit I.
For all of the foregoing, judgment is rendered sentencing the defendants to
pay the plaintiff bank the sum of thirty-one thousand seven hundred eighty-
five pesos and ninety-six centavos (P31,785.96), with interest thereon at the
rate of 8 per cent per annum from October 1, 1922, until full payment, with the
costs; in case of failure to pay, let the certificates of shares described in Exhibit
A be sold, and if the proceeds of the sale of said shares are not sufficient to
cover the whole amount of the debt, let an execution issue against any
property of the conjugal partnership of the defendants and, in default
thereof, against the private property of each of them, sufficient to cover the
whole amount of the balance that may be remaining unpaid.
So ordered.
Manila, P. I., February 5, 1924.
(Sgd.) PEDRO CONCEPCION
Judge
As the transcript of the testimony of the witnesses was not forwarded to this
court, we cannot, according to the constant jurisprudence of this court,
review the evidence and so we have to abide by the findings of fact set forth
in the judgment of the trial court.
We agree with the appellants that, according to the contract of pledge
Exhibit A, attached to the complaint, the defendants authorized the plaintiff
to act as their agent with full power and authority to dispose of the effects
pledged in the manner stipulated in said contract; but it appears that the
plaintiff had also an option, not an obligation precisely, to enforce the
securities given.
The question whether or not appellants executed the aforesaid document
Exhibit A as husband and wife was decided by the trial court in the sense that
the defendant appellant Mr. Ansaldo is the husband of the other defendant
Doa Margarita Q. e Iparraugirre. For the reason above given we cannot alter
this finding of the trial court and consequently if the defendants are husband
and wife, it is immaterial whether the debt was contracted by one or the
other, for in either case as the debt was contracted during the marriage of
the defendants it must be paid for the account of the conjugal partnership in
accordance with article 1408 of the Civil Code. 1awph!l.net
After a thorough study of the judgment appealed from, we do not find therein
any substantial error that justifies the reversal thereof and therefore the same
must be, as is hereby, affirmed with costs against the appellants. So ordered.
Johnson, Street, Malcolm, Avancea, Ostrand and Romualdez, JJ., concur.
DECISION UPON MOTION FOR RECONSIDERATION
December 10, 1924.
VILLAMOR, J.:
In view of the juridical importance of the question raised in this motion,
wherein it is maintained that the obligation of the defendants is chargeable to
the conjugal partnership, and not to the private property of the spouses, and
much less to the private property of Margarita Quintos de Ansaldo, we deem
it well to enlarge upon our decision published October 6, 1924.
It will be remembered that the defendants signed a document of pledge in
favor of the plaintiff Philippine National Bank to secure the payment of a loan
in current account to the amount of P31,284. In said document it does not
clearly appear that the signers were husband and wife, although there is
proof in the record tending to show their civil status as husband and wife. Nor
does its appear in the said document that the signers have bound themselves
solidarily to pay the debt owing to plaintiff.
The judgment appealed from, affirmed by this court in a decision published
October 6, 1924, sentences the defendants to pay the plaintiff bank the sum
of thirty-one thousand seven hundred eighty-five pesos and ninety-six
centavos (P31,785.96) with interest thereon at 8 per cent per annum from
October 1, 1922, until full payment, with the costs; providing that, in default of
payment, the certificates of shares described in Exhibit A must be sold, and in
case the proceeds of the sale were not sufficient to cover the whole amount
of the debt, an execution shall issue against the property of the conjugal
partnership of the defendants, and, if no such property was found, then
against any private property of each of them sufficient to cover the whole
amount of the balance remaining unpaid.
There can be no doubt that the property pledged being insufficient, the
property of the conjugal partnership is liable for this obligation in accordance
with article 1408 of the Civil Code, because the same was contracted by the
spouses during the marriage; but in default of property of the conjugal
partnership (Article 1401), what is the liability of the spouses as to the private
property (article 1396) of each of them?
In this jurisdiction we do not believe that a similar question was heretofore ever
raised and decided, and so far as the research of the write hereof discloses, it
finds no precedent in the Spanish jurisprudence.
By express provision of the Civil Code, the conjugal partnership begins to exist
at the celebration of the marriage, and the separation of the properties
between the spouses shall take place (article 1432) only when it is expressly
stipulated in the marriage settlement, or is judicially decreed, or in the case
provided in article 50 of the Code. This conjugal partnership however, is
confined to the properties mentioned in article 1401 of the Civil Code, to wit:
(a) Those acquired by onerous title during the marriage at the expense of the
common property whether the acquisition is made for the community or for
only one of them; (b) those obtained by the industry, salary or labor of the
spouses or any of them; (c) the fruits, rents or interest received or accruing
during the marriage, from the common or the private property of each of the
spouses. The partnership does not produce the merger of the properties of
each spouse. Each of them, notwithstanding the existence of the partnership,
continues to be the owner of what he or she had before contracting
marriage, as well as of what he or she may have acquired later by lucrative
title, by right of redemption, or by exchange with his or her property, or by
purchase with his or her money.
The ganancial partnership, to use the expression of Mr. Manresa, is the same
conjugal partnership constituted, in its economical aspect, under the system
established by the law as suppletory. It is, therefore, formed by the husband
and the wife, each with his or her own property and with his or her own debts.
The legislator does not intend to effect a mixture or merger of those debts of
properties between the spouses. The partnership maintains the separation of
the properties brought by each spouse from those that he or she may
substitute for them, or privately acquire afterwards by lucrative title.
Under the provisions of the Code it appears evident that the conjugal
partnership does not produce the merger of properties, nor does it cause the
personality of the wife to disappear; on the contrary, the law established
absolute separation of capitals a complete independence of the capital
account from the account of benefits pertaining to the conjugal partnership,
all of which constitutes a unsurmountable obstacle to the presumption of
solidarity between spouses.
The question submitted to our consideration presupposes the insolvency of the
conjugal partnership, and as there is no presumption of solidarity of property
between the spouses, the question may be asked, What liability do the
partners have with respect to the debts of the partnership? The legal
provisions about conjugal partnership, contained in chapter 5, title 3, book 4,
of the Civil Code, do not give an adequate answer to this question; so that we
have to resort to other sources for a solution thereof. Mr. Manresa already
indicates in his commentaries on article 1395 that in view of the provisions of
the Code regarding conjugal partnership, "the cases will be rare wherein there
would be any need to resort to the suppletory rule of the contract of
partnership; but the law, which does not in any manner pretend having
provided for all the questions that may present themselves in the practice,
points out new sources of law to which resort must be made in order to solve
doubtful cases, situations or circumstances not provided in articles 1392 to
1431." The case now before us is one of them, which requires, in order to be
solved, a resort to the rule on the contract of partnership, prescribed in article
1698, which provides that the partners are not solidarily liable with respect to
the debt of the partnership, and none can bind the others by a personal act,
if they have not given him any power therefor.

The aforecited provision negativating solidarity in the liability of the partners is

a consequence of the conclusive rule of article 1137, of general application
to all kinds of obligation, to the effect that in obligations created by the will of
the parties, solidarity will exist only when it is expressly determined in the title
thereof, giving them such a character. Therefore if solidarity exists only by
stipulation, or by law, it is evident that the partner cannot be solidarity liable
for the debts of the partnership, because, as Manresa says, there is no legal
provision imposing such burden upon him, and because the same is not only
not authorized by the contract of partnership, but is contrary to the nature
thereof, for gain being the consideration of the obligation, the latter cannot
be extended beyond the interest that the partner may have therein which is
proportional to his share.

Taking into account that the contract of pledge signed by the defendants
does not show that they have contracted a solidary obligation, it is our
opinion, and so decide, that the properties given as pledge being insufficient,
the properties of the conjugal partnership of the defendants are liable for the
debt to the plaintiff, and in default thereof, they are jointly liable for the
payment thereof.

It being understood that the judgment appealed from is modified in the sense
above stated, the motion of the appellants is denied. So ordered.

Johnson, Street, Malcolm, Avancea, Ostrand and Romualdez, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 163712 November 30, 2006
METROPOLITAN BANK AND TRUST COMPANY and ROGELIO T. UY, Petitioners,
vs.
JOSE B. TAN and ELIZA GO TAN, Respondents.
DECISION
CARPIO MORALES, J.:
On the application for extra-judicial foreclosure of mortgage filed by herein
petitioners Metropolitan Bank and Trust Company (Metrobank) and its Vice
President Rogelio T. Uy (Uy), the Office of the Provincial Sheriff of Misamis
Oriental issued a "Sheriffs Notice of Sale"1 setting on April 17, 1998 the sale at
public auction of four mortgaged parcels of land including that covered by
Transfer Certificate of Title No. T-53267 (the title in question) registered in the
name of herein respondent Jose B. Tan who was referred to in the title as
"JOSE B. TAN, of legal age, Filipino, married to Eliza Go Tan. . . ."2
A day before the scheduled public auction of the mortgaged properties or on
April 16, 1998, respondent spouses Jose B. Tan and Eliza Go Tan filed a
complaint3 against petitioners, along with Albano L. Cuarto, Sheriff IV of the
Office of the Provincial Sheriff of Misamis Oriental, for removal of cloud on the
title in question and injunction before the Regional Trial Court of Misamis
Oriental. The complaint was docketed as Civil Case No. 98-225.
Respondents cited the following grounds-bases of their complaint:
1. Respondent Eliza Go Tan never gave her consent or conformity to
encumber the title in question;
2. The real estate mortgages, annotated as Entries No. 142475, 146789, 174644,
213699, 247803, and 246959 at the back of TCT No. 52367 covering the
questioned land are null and void because respondent Jose B. Tan had
already fully paid the obligations secured by the mortgages annotated as
Entries No. 14275, 146789, and 174644; while the mortgages registered as Entry
No. 213699 (amendment of mortgage, amending a previous loan of
P15,000,000 to P25,000,000) and Entry No. 246959 (amendment of mortgage
amending a previous loan of P25,000,000 to P40,000,000), as well as any
mortgage prior to that registered as Entry No. 213699 was not executed and
signed by [respondent Jose B. Tan]. (Underscoring supplied)
As scheduled, the public auction of the foreclosed properties took place on
April 17, 1998 following which the Office of the Provincial Sheriff of Misamis
Oriental issued a Sheriffs Certificate of Sale4 in the name of petitioner
Metrobank, the highest bidder.
In their Answer5 to the Complaint, petitioners alleged that:
Plaintiffs [herein respondents], together with their two sons, Ariel and Rey John,
obtained a credit line from the defendant bank from which they made
availments from time to time. In time and always upon their plea, the line was
gradually increased until it reached P40 million. There was no separate or
distinct loan to speak of; all availments or releases were taken from one and
the same line.
In the same token, the mortgage constituted on the four lots, TCT No. T-53267
included, was for the entire credit line and not for any particular availment or
for a determinate portion of the credit. As such, the mortgage will be
discharged and the four lots released only upon the termination of the line,
which means full payment of the entire loan which plaintiffs never did.6
(Emphasis and underscoring supplied)
Petitioners further alleged that the deeds of real estate mortgage,7 promissory
notes,8 and credit line agreements9 bore the signature of respondent Jose B.
Tan either for himself or as attorney-in-fact of his son Ariel Tan and, in one of
them, his wife-co-respondent Eliza Go Tans signature appeared.
By way of Counterclaim, petitioners prayed for the award of attorneys fees,
compensatory and/or moral damages, exemplary damages, and other
reliefs.10
Crediting the testimony of respondent Jose B. Tan denying having 1) executed
and signed the two amendments of the mortgage, 2) received the amount of
P40,000,000, and 3) appeared before Notary Public Joel Pearanda who
notarized11 the mortgage for P40,000.00, and likewise crediting the testimony
of respondent Eliza Go Tan denying that the signature appearing on the real
estate mortgage dated November 5, 1992 was hers,12 and finding that
. . . the existing loans covered by real estate mortgages annotated at the
back of subject TCT No. T-53267 of the Registry of Deeds for Cagayan de Oro,
had been fully paid as of July 1, 1997, defendant Metrobank had no basis to
be paid again through the extra-judicial foreclosure proceedings13
(underscoring supplied)[,]
Branch 38 of the Misamis Oriental RTC, by Decision of March 5, 2001, rendered
judgment in favor of respondents, disposing as follows:
WHEREFORE, premises considered, this Court hereby renders judgment in favor
of the plaintiffs spouses Jose B. Tan and Eliza G. Tan and against the
defendants, as follows:
a) Declaring that, because of the fact that the plaintiff Eliza G. Tan did not
give her consent to all the real estate mortgages annotated at the back of
her title, TCT No. T-53267, of the Registry of Deeds for Cagayan de Oro, all said
mortgages are null and void ab initio;
b) Declaring that, because plaintiff Jose B. Tan did not execute the real estate
mortgages annotated at the back of his title, TCT No. T-53267, of the Registry
of Deeds for Cagayan de Oro, all said mortgages are null and void ab initio;
c) Declaring the extra-judicial foreclosure proceedings taken by the
defendant sheriff , including the sheriffs certificate of sale as null and void;
d) Making permanent the writ of preliminary injunction against the defendant
sheriff, and the Office of the Provincial Sheriff of Misamis Oriental enjoining and
restraining them, their agents, and representatives from issuing a final
certificate of sale in favor of defendant Metrobank covering the parcel of
land covered by TCT No. T-53267;
e) Ordering the removal of the cloud on the title, TCT No. T-53267, of the
Registry of Deeds for Cagayan de Oro, and the cancellation of all the entries
of the real estate mortgages and amendment of mortgages annotated at
the back of TCT No. T-53267, of the Registry of Deeds for Cagayan de Oro City;
f) Absolving the plaintiffs spouses from financial liability from the null and void
real estate mortgages;
g) Declaring the principal obligations obtained by Rey John Tan through the
annulled real estate mortgages as FULLY PAID by him;
h) Ordering defendant Metrobank to pay attorneys fee and expenses of
litigation in the amount of P100,000 and the costs.
SO ORDERED.14 (Emphasis and underscoring supplied)
Petitioners appealed the trial courts decision before the Court of Appeals.
By Decision of November 21, 2003,15 the Court of Appeals affirmed the trial
courts decision and accordingly dismissed petitioners appeal. And it denied
petitioners Motion for Reconsideration.16
Hence, the present Petition for Review on Certiorari filed on July 7, 2004.17
The petition is impressed with merit.
Petitioners assail, in the main, the appellate courts affirmance of the trial
courts decision absolving respondents from liability for the principal obligation
obtained by their son Rey John Tan which was secured by real estate
mortgages, including that covered by the title in question, and declaring such
principal obligation of Rey John Tan, who is not a party to the case, to have
been fully paid by him as of July 1, 1997, before the questioned extra-judicial
foreclosure and public auction sale conducted on April 17, 1998.18
Respondent Jose B. Tan19 insisted that he was not a party to the documents
bearing on the grant of the credit line, he pointing to the absence of his
signature above his typewritten name on the Credit Line Agreements,
promissory notes, disclosure statements, and an Amendment of Real Estate
Mortgage. Respondents presented in evidence Promissory Notes Exhibits "B-
2" and "B-4" dated July 1, 1997 and June 24, 1997, respectively; three Credit
Line Agreements Exhibits "B-6," "B-7," and "B-8,"20 dated May 2, 1997; and the
Agreement amending the real estate mortgage Exhibit "B-9,"21 all dated
May 2, 1997.
Petitioners, on the other hand, presented six Promissory Notes dated February
26, 1996, May 8, 1996, August 27, 1996, October 8, 1996, October 25, 1996, and
November 18, 1996;22 five Credit Line Agreements dated September 9, 1991,
September 24, 1992, September 2, 1993, November 3, 1994, and April 25,
1996;23 an Amendment of Real Estate Mortgage from P15,000,000 to
P25,000,000; and October 29, 199624 Amendment of Real Estate Mortgage
from P25,000,000 to P40,000,000.
All document-exhibits of petitioners which are original copies bear the
signature of respondent Jose B. Tan, however, as solidary co-debtor of his sons
Rey John Tan and Ariel Tan.25 And these documents were annotated at the
back of the title in question.26
In the absence of proof, nay allegation, that the signatures of respondent
Jose B. Tan on the abovementioned documents were forged, this Court is
constrained to uphold their genuineness.27
As for the claim that respondent Eliza Go Tan did not give her consent to the
mortgage of the title in question, the same is belied by her signature28 on
Exhibit "18"-Real Estate Mortgage which is annotated as Entry No. 174644 at
the back of the title. Her bare denial that the signature was forged, without
more, does not lie.
In any event, lack of respondent Eliza Go Tans consent to the mortgage
covering the title in question would not render the encumbrance void under
the second paragraph of Article 124 of the Family Code.29 For proof is
wanting that the property covered by the title is conjugal that it was
acquired during respondents marriage which is what would give rise to the
presumption that it is conjugal property.30 The statement in the title that the
property is "registered in accordance with the provisions of Section 103 of the
Property Registration Decree in the name of JOSE B. TAN, of legal age, married
to Eliza Go Tan"31 does not prove or indicate that the property is conjugal. So A We credit first the renewed amount and we debit the old promissory note.
Ruiz v. Court of Appeals32 instructs:
Q When you credit, there were other papers accomplished?
The property subject of the mortgage is registered in the name of "Corazon G.
Ruiz, of legal age, married to Rogelio Ruiz, Filipinos." Thus, title is registered in A Yes.
the name of Corazon alone because the phrase "married to Rogelio Ruiz" is
merely descriptive of the civil status of Corazon and should not be construed Q What are these papers called?
to mean that her husband is also a registered owner. Furthermore, registration
of the property in the name of "Corazon G. Ruiz, of legal age, married to A Credit Memos on loan release.
Rogelio Ruiz" is not proof that such property was acquired during the
marriage, and thus, is presumed to be conjugal. The property could have Q Where do you credit this?
been acquired by Corazon while she was still single, and registered only after
her marriage to Rogelio Ruiz. Acquisition of title and registration thereof are A It is credited on their accounts.
two different acts. The presumption under Article 116 of the Family Code that
properties acquired during the marriage are presumed to be conjugal cannot Q On the existing accounts?
apply in the instant case. Before such presumption can apply, it must first be
established that the property was in fact acquired during the marriage. In A Yes, deposit account.
other words, proof of acquisition during the marriage is a condition sine qua
non for the operation of the presumption in favor of conjugal ownership. No Q And what is debit memos?
such proof was offered nor presented in the case at bar.33 (Emphasis and
underscoring supplied) A Debit memos are ones that liquidate the loan so that the whole promissory
note will be distinguished [sic].39 (Emphasis and underscoring supplied),
On respondents claim of payment, they presented debit memo-Exhibits "G" to
"G-11"34 (of which only Exhibits "G-6" to "G-11"35 are relevant to the issues) and this Court is persuaded by petitioners claim that the debit memos
certifications-Exhibits "H" and "H-1"36 issued by an accountant, one Glenn represented "payment" only in the banks book entries but did not actually
Cabading. involve payment/settlement of the original obligation.1wphi1

Rebutting Exhibits "G" to "G-11" inclusive, petitioners presented credit memos37
which, to them, cancelled respondents debit memos. From a comparison of
the credit and debit memos with the bank ledgers38 and especially
considering the unquestioned explanation of petitioner Uy on the reason
behind the issuance of these memos, viz:
ATTY. DEL CASTILLO:
In fine, the extra-judicial foreclosure and subsequent sale of the mortgaged
property covered by the title in question was valid.
WHEREFORE, the petition is GRANTED. The assailed decision of the appellate
court is SET ASIDE. Civil Case No. 98-225, "Jose B. Tan and Eliza Go Tan v.
Metropolitan Bank and Trust Company, et al.," filed before and raffled to
Branch 38 of the Regional Trial Court of Misamis Oriental, is DISMISSED.

Q You said, when a loan is renewed you credit a certain amount. Can you SO ORDERED.
expound that a little bit?

A Actually, the Banco Central punish[es] if the loan cannot be renewed for
several years without payment. Just to circumvent that policy, we do the
credit first and the debit just for the renewal.

Q Why is that?

A To show that amount is fully paid and we avail.

Q How is that done?