Persons and Fam. Relations Ass. No.
FIRST DIVISION
[G.R. No. 102330. November 25, 1998]
TERESITA C. FRANCISCO, petitioner, vs. HON. COURT OF APPEALS; and
CONCHITA EVANGELISTA and Her Husband SIMEON EVANGELISTA;
ARACELI F. MARILLA and Her Husband FREDDY MARILLA; ANTONIO V.
FRANCISCO; and EUSEBIO FRANCISCO, respondents.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse respondent appellate
courts decision[1] promulgated on October 7, 1991, affirming in toto the judgment
of the Regional Trial Court which ruled,[2] thus:
WHEREFORE, premises considered, this Court renders judgment in
favor of the defendants and against the plaintiff, as follows:
1) Ordering the dismissal of the Complaint with costs against the plaintiff;
2) Declaring the defendant Eusebio Francisco the administrator of the properties
described in paragraph eight (8) of the Complaint; and
3) Sentencing the plaintiff to pay the defendants the sum of P10,000.00 as and for
attorneys fees.
SO ORDERED.
Petitioner is the legal wife of private respondent Eusebio Francisco (Eusebio)
by his second marriage. Private respondents Conchita Evangelista, Araceli F.
Marilla and Antonio Francisco are children of Eusebio by his first marriage.
Petitioner alleges that since their marriage on February 10, 1962, she and
Eusebio have acquired the following: (1) a sari-sari store, a residential house and
lot, and an apartment house, all situated at Col. S. Cruz St., Barangay Balite,
Rodriguez (formerly Montalban), Rizal, and; (2) a house and lot at Barrio San Isidro,
Rodriguez, Rizal. Petitioner further avers that these properties were administered
by Eusebio until he was invalidated on account of tuberculosis, heart disease and
cancer, thereby, rendering him unfit to administer them. Petitioner also claims
that private respondents succeeded in convincing their father to sign a general
power of attorney which authorized Conchita Evangelista to administer the house
and lot together with the apartments situated in Rodriguez, Rizal.
On August 31, 1988, petitioner filed a suit for damages and for annulment of
said general power of attorney, and thereby enjoining its enforcement. Petitioner
also sought to be declared as the administratrix of the properties in dispute. In
due course, the trial court rendered judgment in favor of private respondents. It
held that the petitioner failed to adduce proof that said properties were acquired
during the existence of the second conjugal partnership, or that they pertained
exclusively to the petitioner. Hence, the court ruled that those properties belong
exclusively to Eusebio, and that he has the capacity to administer them.
On appeal, the Court of Appeals affirmed in toto the decision of the trial
court. Hence, this petition.
Petitioner raised the following errors allegedly committed by the appellate
court:
FIRST ASSIGNMENT OF ERROR
RESPONDENT COURT ERRED IN APPLYING ARTICLES 160 AND 158,
UNDER TITLE VI OF THE (NEW) CIVIL CODE BECAUSE SAID TITLE,
TOGETHER WITH THE OTHERS, HAVE (SIC) ALREADY BEEN REPEALED BY
ARTICLE 253 OF THE FAMILY CODE.
SECOND ASSIGNMENT OF ERROR
RESPONDENT COURT FURTHER ERRED IN NOT APPLYING ARTICLE 124
OF THE FAMILY CODE.[3]
But in her reply, petitioner posed the sole issue whether or not Article 116
of the Family Code applies to this case because Article 253 of the same Code
[which] expressly repeals Arts. 158 and 160 of the Civil Code.[4]
To our mind, the crucial issue in this petition is whether or not the appellate
court committed reversible error in affirming the trial courts ruling that the
properties, subject matter of controversy, are not conjugal but the capital
properties of Eusebio exclusively.
Indeed, Articles 158[5] and 160[6] of the New Civil Code have been repealed
by the Family Code of the Philippines which took effect on August 3, 1988. The
aforecited articles fall under Title VI, Book I of the New Civil Code which was
expressly repealed by Article 254[7] (not Article 253 as alleged by petitioner in her
petition and reply) of the Family Code. Nonetheless, we cannot invoke the new
law in this case without impairing prior vested rights pursuant to Article 256 [8] in
relation to Article 105[9] (second paragraph) of the Family Code. Accordingly, the
Page | 1

repeal of Articles 158 and 160 of the New Civil Code does not operate to prejudice
or otherwise affect rights which have become vested or accrued while the said
provisions were in force.[10] Hence, the rights accrued and vested while the cited
articles were in effect survive their repeal.[11] We shall therefore resolve the issue
of the nature of the contested properties based on the provisions of the New Civil
Code.
Petitioner contends that the subject properties are conjugal, thus, she should
administer these on account of the incapacity of her husband. On the other hand,
private respondents maintain that the assets in controversy claimed by petitioner
as conjugal are capital properties of Eusebio exclusively as these were acquired by
the latter either through inheritance or through his industry prior to his second
marriage. Moreover, they stress that Eusebio is not incapacitated contrary to
petitioners allegation.
We find petitioners contention lacks merit, as hereafter elucidated.
Article 160 of the New Civil Code provides that all property of the marriage
is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife. However, the party who
invokes this presumption must first prove that the property in controversy was
acquired during the marriage.[12] Proof of acquisition during the coverture is a
condition sine qua non for the operation of the presumption in favor of the
conjugal partnership.[13] The party who asserts this presumption must first prove
said time element. Needless to say, the presumption refers only to the property
acquired during the marriage and does not operate when there is no showing as
to when property alleged to be conjugal was acquired.[14]Moreover, this
presumption in favor of conjugality is rebuttable, but only with strong, clear and
convincing evidence; there must be a strict proof of exclusive ownership of one of
the spouses.[15]
In this case, petitioner failed to adduce ample evidence to show that the
properties which she claimed to be conjugal were acquired during her marriage
with Eusebio.
With respect to the land at Col. Cruz St., Balite, Rodriguez, Rizal, petitioner
failed to refute the testimony of Eusebio that he inherited the same from his
parents. Interestingly, petitioner even admitted that Eusebio brought into their
marriage the said land, albeit in the concept of a possessor only as it was not yet
registered in his name.
Whether Eusebio succeeded to the property prior or subsequent to his
second marriage is inconsequential. The property should be regarded as his own
exclusively, as a matter of law, pursuant to Article 148[16] of the New Civil Code.
Persons and Fam. Relations Ass. No. 9
Essentially, property already owned by a spouse prior to the marriage, and
brought to the marriage, is considered his or her separate
property.[17] Acquisitions by lucrative title refers to properties acquired
gratuitously and include those acquired by either spouse during the marriage by
inheritance, devise, legacy, or donation.[18] Hence, even if it be assumed that
Eusebios acquisition by succession of the land took place during his second
marriage, the land would still be his exclusive property because it was acquired by
him, during the marriage, by lucrative title.[19]
As regards the house, apartment and sari-sari store, private respondents
aver that these properties were either constructed or established by their father
during his first marriage. On the other hand, petitioner insists that the said assets
belong to conjugal partnership. In support of her claim, petitioner relied on the
building permits for the house and the apartment, with her as the applicant
although in the name of Eusebio. She also invoked the business license for the
sari-sari store issued in her name alone.
It must be emphasized that the aforementioned documents in no way prove
that the improvements were acquired during the second marriage. And the fact
that one is the applicant or licensee is not determinative of the issue as to whether
or not the property is conjugal or not. As the appellate court aptly noted:
x x x. And the mere fact that plaintiff-appellant [petitioner herein] is the
licensee of the sari-sari store (Exhibit F-3; Exhibit G, pp. 44-47, Record)
or is the supposed applicant for a building permit does not establish
that these improvements were acquired during her marriage with
Eusebio Francisco, especially so when her exhibits (D-1, E, E-1, T, T-1, T-
2, U, U-1 and U-2; pp. 38-40; 285-290, Record; TSN, January 17, 1989,
page 6-7) are diametrically opposed to her pretense as they all
described Eusebio Francisco as the owner of the structures (Article
1431, New Civil Code; Section 4, Rule 129, Revised Rules on Evidence).
Neither is it plausible to argue that the sari-sari store constructed on
the land of Eusebio Francisco has thereby become conjugal for want of
evidence to sustain the proposition that it was constructed at the
expense of their partnership (second paragraph, Article 158, New Civil
Code). Normally, this absence of evidence on the source of funding will
call for the application of the presumption under Article 160 of the New
Civil Code that the store is really conjugal but it cannot be so in this
particular case again, by reason of the dearth in proof that it was
erected during the alleged second marriage (5 Sanchez Roman 840-
841; 9 Manresa; cited in Civil Code of the Philippines by Tolentino,
Volume 1, 1983 Edition, page 421).[20]
Page | 2
 Persons and Fam. Relations Ass. No. 9

Regarding the property at San Isidro, Rodriguez, Rizal, private respondents

assert that their father purchased it during the lifetime of their mother. In
contrast, petitioner claims ownership over said property inasmuch as the title
thereto is registered in the name of Eusebio Francisco, married to Teresita
Francisco.
It must be stressed that the certificate of title upon which petitioner anchors
her claim is inadequate. The fact that the land was registered in the name of
Eusebio Francisco, married to Teresita Francisco, is no proof that the property was
acquired during the spouses coverture. Acquisition of title and registration thereof
are two different acts.[21] It is well settled that registration does not confer title
but merely confirms one already existing.[22] The phrase married to preceding
Teresita Francisco is merely descriptive of the civil status of Eusebio Francisco.[23]
In the light of the foregoing circumstances, the appellate court cannot be
said to have been without valid basis in affirming the lower courts ruling that the
properties in controversy belong exclusively to Eusebio.
Now, insofar as the administration of the subject properties is concerned, it
follows that Eusebio shall retain control thereof considering that the assets are
exclusively his capital.[24] Even assuming for the sake of argument that the
properties are conjugal, petitioner cannot administer them inasmuch as Eusebio
is not incapacitated. Contrary to the allegation of petitioner, Eusebio, as found by
the lower court, is not suffering from serious illness so as to impair his fitness to
administer his properties. That he is handicapped due to a leg injury sustained in
a bicycle accident, allegedly aggravated when petitioner pushed him to the ground
in one of their occasional quarrels, did not render him, in the Courts view,
incapacitated to perform acts of administration over his own properties.
WHEREFORE, petition is hereby DENIED. The Decision of the Court of
Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Davide, Jr. (Chairman), Bellosillo, Vitug, and Panganiban, JJ., concur.

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SECOND DIVISION
[G.R. No. 124642. February 23, 2004]
ALFREDO CHING and ENCARNACION CHING, petitioners, vs. THE HON. COURT OF
APPEALS and ALLIED BANKING CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of Court, assails
the Decision[1] of the Court of Appeals (CA) dated November 27, 1995 in CA-G.R.
SP No. 33585, as well as the Resolution[2] on April 2, 1996 denying the petitioners
motion for reconsideration. The impugned decision granted the private
respondents petition for certiorari and set aside the Orders of the trial court dated
December 15, 1993[3] and February 17, 1994[4] nullifying the attachment of
100,000 shares of stocks of the Citycorp Investment Philippines under the name
of petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills Company, Inc.
(PBMCI) obtained a loan of P9,000,000.00 from the Allied Banking Corporation
(ABC). By virtue of this loan, the PBMCI, through its Executive Vice-President
Alfredo Ching, executed a promissory note for the said amount promising to pay
on December 22, 1978 at an interest rate of 14% per annum.[5] As added security
for the said loan, on September 28, 1978, Alfredo Ching, together with Emilio
Taedo and Chung Kiat Hua, executed a continuing guaranty with the ABC binding
themselves to jointly and severally guarantee the payment of all the PBMCI
obligations owing the ABC to the extent of P38,000,000.00.[6] The loan was
subsequently renewed on various dates, the last renewal having been made on
December 4, 1980.[7]
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI
in the amount of P13,000,000.00 payable in eighteen months at 16% interest per
annum. As in the previous loan, the PBMCI, through Alfredo Ching, executed a
promissory note to evidence the loan maturing on June 29, 1981. [8] This was
renewed once for a period of one month.[9]
Persons and Fam. Relations Ass. No. 9
The PBMCI defaulted in the payment of all its loans. Hence, on August 21,
1981, the ABC filed a complaint for sum of money with prayer for a writ of
preliminary attachment against the PBMCI to collect the P12,612,972.88 exclusive
of interests, penalties and other bank charges. Impleaded as co-defendants in the
complaint were Alfredo Ching, Emilio Taedo and Chung Kiat Hua in their capacity
as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court
of Manila, Branch XVIII.[10] In its application for a writ of preliminary attachment,
the ABC averred that the defendants are guilty of fraud in incurring the obligations
upon which the present action is brought[11] in that they falsely represented
themselves to be in a financial position to pay their obligation upon maturity
thereof.[12] Its supporting affidavit stated, inter alia, that the [d]efendants have
removed or disposed of their properties, or [are] ABOUT to do so, with intent to
defraud their creditors.[13]
On August 26, 1981, after an ex-parte hearing, the trial court issued an Order
denying the ABCs application for a writ of preliminary attachment. The trial court
decreed that the grounds alleged in the application and that of its supporting
affidavit are all conclusions of fact and of law which do not warrant the issuance
of the writ prayed for.[14] On motion for reconsideration, however, the trial court,
in an Order dated September 14, 1981, reconsidered its previous order and
granted the ABCs application for a writ of preliminary attachment on a bond
of P12,700,000. The order, in relevant part, stated:
With respect to the second ground relied upon for the grant of the writ of
preliminary attachment ex-parte, which is the alleged disposal of properties by
the defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule 57
of the Rules of Court, the affidavits can only barely justify the issuance of said writ
as against the defendant Alfredo Ching who has allegedly bound himself jointly
and severally to pay plaintiff the defendant corporations obligation to the plaintiff
as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the defendant
Alfredo Ching requiring the sheriff of this Court to attach all the properties of said
Alfredo Ching not exceeding P12,612,972.82 in value, which are within the
jurisdiction of this Court and not exempt from execution upon, the filing by
plaintiff of a bond duly approved by this Court in the sum of Twelve Million Seven
Hundred Thousand Pesos (P12,700,000.00) executed in favor of the defendant
Alfredo Ching to secure the payment by plaintiff to him of all the costs which may
be adjudged in his favor and all damages he may sustain by reason of the
attachment if the court shall finally adjudge that the plaintiff was not entitled
thereto.
Page | 4

SO ORDERED.[15]
Upon the ABCs posting of the requisite bond, the trial court issued a writ of
preliminary attachment. Subsequently, summonses were served on the
defendants,[16] save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a
petition for suspension of payments with the Securities and Exchange Commission
(SEC), docketed as SEC Case No. 2250, at the same time seeking the PBMCIs
rehabilitation.[17]
On July 9, 1982, the SEC issued an Order placing the PBMCIs business,
including its assets and liabilities, under rehabilitation receivership, and ordered
that all actions for claims listed in Schedule A of the petition pending before any
court or tribunal are hereby suspended in whatever stage the same may be until
further orders from the Commission.[18] The ABC was among the PBMCIs creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed
a Motion to Dismiss and/or motion to suspend the proceedings in Civil Case No.
142729 invoking the PBMCIs pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already assumed
jurisdiction.[19] On February 4, 1983, the ABC filed its Opposition thereto.[20]
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied
on attachment the 100,000 common shares of Citycorp stocks in the name of
Alfredo Ching.[21]
Thereafter, in an Order dated September 16, 1983, the trial court partially
granted the aforementioned motion by suspending the proceedings only with
respect to the PBMCI. It denied Chings motion to dismiss the complaint/or
suspend the proceedings and pointed out that P.D. No. 1758 only concerns the
activities of corporations, partnerships and associations and was never intended
to regulate and/or control activities of individuals. Thus, it directed the individual
defendants to file their answers.[22]
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to
Suspend Proceedings on the same ground of the pendency of SEC Case No.
2250. This motion met the opposition from the ABC.[23]
On January 20, 1984, Taedo filed his Answer with counterclaim and cross-
claim.[24] Ching eventually filed his Answer on July 12, 1984. [25]
On October 25, 1984, long after submitting their answers, Ching filed an
Omnibus Motion,[26] again praying for the dismissal of the complaint or suspension
of the proceedings on the ground of the July 9, 1982 Injunctive Order issued in SEC
Persons and Fam. Relations Ass. No. 9
Case No. 2250. He averred that as a surety of the PBMCI, he must also necessarily
benefit from the defenses of his principal. The ABC opposed Chings omnibus
motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus Motion[27] praying for the
dismissal of the complaint, arguing that the ABC had abandoned and waived its
right to proceed against the continuing guaranty by its act of resorting to
preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his
preliminary attachment bond from P12,700,000 to P6,350,000.[28] Alfredo Ching
opposed the motion,[29] but on April 2, 1987, the court issued an Order setting the
incident for further hearing on May 28, 1987 at 8:30 a.m. for the parties to adduce
evidence on the actual value of the properties of Alfredo Ching levied on by the
sheriff.[30]
On March 2, 1988, the trial court issued an Order granting the motion of the
ABC and rendered the attachment bond of P6,350,000.[31]
On November 16, 1993, Encarnacion T. Ching, assisted by her husband
Alfredo Ching, filed a Motion to Set Aside the levy on attachment. She
alleged inter alia that the 100,000 shares of stocks levied on by the sheriff were
acquired by her and her husband during their marriage out of conjugal funds after
the Citycorp Investment Philippines was established in 1974. Furthermore, the
indebtedness covered by the continuing guaranty/comprehensive suretyship
contract executed by petitioner Alfredo Ching for the account of PBMCI did not
redound to the benefit of the conjugal partnership. She, likewise, alleged that
being the wife of Alfredo Ching, she was a third-party claimant entitled to file a
motion for the release of the properties.[32] She attached therewith a copy of her
marriage contract with Alfredo Ching.[33]
The ABC filed a comment on the motion to quash preliminary attachment
and/or motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present case;
thus, she has no personality to file any motion before this Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention pursuant to
Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-Party
Claim conformably with Sec. 14, Rule 57 of the Rules of Court.
Page | 5

3. Furthermore, assuming in gracia argumenti that the supposed movant has the
required personality, her Motion cannot be acted upon by this Honorable Court
as the above-entitled case is still in the archives and the proceedings thereon still
remains suspended. And there is no previous Motion to revive the same.[34]
The ABC also alleged that the motion was barred by prescription or by laches
because the shares of stocks were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence
her marriage contract to Alfredo Ching to prove that they were married on January
8, 1960;[35]the articles of incorporation of Citycorp Investment Philippines dated
May 14, 1979;[36] and, the General Information Sheet of the corporation showing
that petitioner Alfredo Ching was a member of the Board of Directors of the said
corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to
the motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December
15, 1993 an Order[37] lifting the writ of preliminary attachment on the shares of
stocks and ordering the sheriff to return the said stocks to the petitioners. The
dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated
November 9, 1993, is hereby granted. Let the writ of preliminary attachment
subject matter of said motion, be quashed and lifted with respect to the attached
100,000 common shares of stock of Citycorp Investment Philippines in the name
of the defendant Alfredo Ching, the said shares of stock to be returned to him and
his movant-spouse by Deputy Sheriff Apolonio A. Golfo who effected the levy
thereon on July 26, 1983, or by whoever may be presently in possession thereof.
SO ORDERED.[38]
The plaintiff Allied Banking Corporation filed a motion for the
reconsideration of the order but denied the same on February 17, 1994. The
petitioner bank forthwith filed a petition for certiorari with the CA, docketed as
CA-G.R. SP No. 33585, for the nullification of the said order of the court,
contending that:
1. The respondent Judge exceeded his authority thereby acted without
jurisdiction in taking cognizance of, and granting a Motion filed
by a complete stranger to the case.
Persons and Fam. Relations Ass. No. 9
2. The respondent Judge committed a grave abuse of discretion in
lifting the writ of preliminary attachment without any basis in
fact and in law, and contrary to established jurisprudence on the
matter.[39]
On November 27, 1995, the CA rendered judgment granting the petition and
setting aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting aside
the questioned orders (dated December 15, 1993 and February 17, 1994) for being
null and void.
SO ORDERED.[40]
The CA sustained the contention of the private respondent and set aside the
assailed orders. According to the CA, the RTC deprived the private respondent of
its right to file a bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial court; hence, she had
no right of action to have the levy annulled with a motion for that purpose. Her
remedy in such case was to file a separate action against the private respondent
to nullify the levy on the 100,000 Citycorp shares of stocks. The court stated that
even assuming that Encarnacion T. Ching had the right to file the said motion, the
same was barred by laches.
Citing Wong v. Intermediate Appellate Court,[41] the CA ruled that the
presumption in Article 160 of the New Civil Code shall not apply where, as in this
case, the petitioner-spouses failed to prove the source of the money used to
acquire the shares of stock. It held that the levied shares of stocks belonged to
Alfredo Ching, as evidenced by the fact that the said shares were registered in the
corporate books of Citycorp solely under his name. Thus, according to the
appellate court, the RTC committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders. The petitioners motion
for reconsideration was denied by the CA in a Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for review on certiorari,
asserting that the RTC did not commit any grave abuse of discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders in their favor; hence, the
CA erred in reversing the same. They aver that the source of funds in the
acquisition of the levied shares of stocks is not the controlling factor when
invoking the presumption of the conjugal nature of stocks under Art. 160, [42] and
that such presumption subsists even if the property is registered only in the name
of one of the spouses, in this case, petitioner Alfredo Ching. [43] According to the
petitioners, the suretyship obligation was not contracted in the pursuit of the
Page | 6

petitioner-husbands profession or business.[44] And, contrary to the ruling of the
CA, where conjugal assets are attached in a collection suit on an obligation
contracted by the husband, the wife should exhaust her motion to quash in the
main case and not file a separate suit.[45] Furthermore, the petitioners contend
that under Art. 125 of the Family Code, the petitioner-husbands gratuitous
suretyship is null and void ab initio,[46] and that the share of one of the spouses in
the conjugal partnership remains inchoate until the dissolution and liquidation of
the partnership.[47]
In its comment on the petition, the private respondent asserts that the CA
correctly granted its petition for certiorari nullifying the assailed order. It contends
that the CA correctly relied on the ruling of this Court in Wong v. Intermediate
Appellate Court. Citing Cobb-Perez v. Lantin and G-Tractors, Inc. v. Court of
Appeals, the private respondent alleges that the continuing guaranty and
suretyship executed by petitioner Alfredo Ching in pursuit of his profession or
business. Furthermore, according to the private respondent, the right of the
petitioner-wife to a share in the conjugal partnership property is merely inchoate
before the dissolution of the partnership; as such, she had no right to file the said
motion to quash the levy on attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has
the right to file the motion to quash the levy on attachment on the 100,000 shares
of stocks in the Citycorp Investment Philippines; (b) whether or not the RTC
committed a grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had
the right to file the said motion, although she was not a party in Civil Case No.
142729.[48]
In Ong v. Tating,[49] we held that the sheriff may attach only those properties
of the defendant against whom a writ of attachment has been issued by the
court. When the sheriff erroneously levies on attachment and seizes the property
of a third person in which the said defendant holds no right or interest, the
superior authority of the court which has authorized the execution may be
invoked by the aggrieved third person in the same case. Upon application of the
third person, the court shall order a summary hearing for the purpose of
determining whether the sheriff has acted rightly or wrongly in the performance
of his duties in the execution of the writ of attachment, more specifically if he has
indeed levied on attachment and taken hold of property not belonging to the
plaintiff. If so, the court may then order the sheriff to release the property from
the erroneous levy and to return the same to the third person. In resolving the
motion of the third party, the court does not and cannot pass upon the question
of the title to the property with any character of finality. It can treat the matter
Persons and Fam. Relations Ass. No. 9
only insofar as may be necessary to decide if the sheriff has acted correctly or
not. If the claimants proof does not persuade the court of the validity of the title,
or right of possession thereto, the claim will be denied by the court. The aggrieved
third party may also avail himself of the remedy of terceria by executing an
affidavit of his title or right of possession over the property levied on attachment
and serving the same to the office making the levy and the adverse party. Such
party may also file an action to nullify the levy with damages resulting from the
unlawful levy and seizure, which should be a totally separate and distinct action
from the former case. The above-mentioned remedies are cumulative and any
one of them may be resorted to by one third-party claimant without availing of
the other remedies.[50]
In this case, the petitioner-wife filed her motion to set aside the levy on
attachment of the 100,000 shares of stocks in the name of petitioner-husband
claiming that the said shares of stocks were conjugal in nature; hence, not liable
for the account of her husband under his continuing guaranty and suretyship
agreement with the PBMCI. The petitioner-wife had the right to file the motion
for said relief.
On the second issue, we find and so hold that the CA erred in setting aside
and reversing the orders of the RTC. The private respondent, the petitioner in the
CA, was burdened to prove that the RTC committed a grave abuse of its discretion
amounting to excess or lack of jurisdiction. The tribunal acts without jurisdiction
if it does not have the legal purpose to determine the case; there is excess of
jurisdiction where the tribunal, being clothed with the power to determine the
case, oversteps its authority as determined by law. There is grave abuse of
discretion where the tribunal acts in a capricious, whimsical, arbitrary or despotic
manner in the exercise of its judgment and is equivalent to lack of jurisdiction. [51]
It was incumbent upon the private respondent to adduce a sufficiently strong
demonstration that the RTC acted whimsically in total disregard of evidence
material to, and even decide of, the controversy before certiorari will lie. A special
civil action for certiorari is a remedy designed for the correction of errors of
jurisdiction and not errors of judgment. When a court exercises its jurisdiction, an
error committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.[52]
After a comprehensive review of the records of the RTC and of the CA, we
find and so hold that the RTC did not commit any grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired
during the marriage are presumed to belong to the conjugal partnership, unless it
be proved that it pertains exclusively to the husband, or to the wife. In Tan v. Court
of Appeals,[53] we held that it is not even necessary to prove that the properties
Page | 7

were acquired with funds of the partnership. As long as the properties were
acquired by the parties during the marriage, they are presumed to be conjugal in
nature. In fact, even when the manner in which the properties were acquired does
not appear, the presumption will still apply, and the properties will still be
considered conjugal. The presumption of the conjugal nature of the properties
acquired during the marriage subsists in the absence of clear, satisfactory and
convincing evidence to overcome the same.[54]
In this case, the evidence adduced by the petitioners in the RTC is that the
100,000 shares of stocks in the Citycorp Investment Philippines were issued to and
registered in its corporate books in the name of the petitioner-husband when the
said corporation was incorporated on May 14, 1979. This was done during the
subsistence of the marriage of the petitioner-spouses. The shares of stocks are,
thus, presumed to be the conjugal partnership property of the petitioners. The
private respondent failed to adduce evidence that the petitioner-husband
acquired the stocks with his exclusive money.[55] The barefaced fact that the
shares of stocks were registered in the corporate books of Citycorp Investment
Philippines solely in the name of the petitioner-husband does not constitute proof
that the petitioner-husband, not the conjugal partnership, owned the
same.[56] The private respondents reliance on the rulings of this Court in Maramba
v. Lozano[57] and Associated Insurance & Surety Co., Inc. v. Banzon [58] is
misplaced. In the Maramba case, we held that where there is no showing as to
when the property was acquired, the fact that the title is in the wifes name alone
is determinative of the ownership of the property.The principle was reiterated in
the Associated Insurance case where the uncontroverted evidence showed that
the shares of stocks were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this
Court in Wong v. Intermediate Appellate Court[59] buttresses the case for the
petitioners. In that case, we ruled that he who claims that property acquired by
the spouses during their marriage is not conjugal partnership property but belongs
to one of them as his personal property is burdened to prove the source of the
money utilized to purchase the same. In this case, the private respondent claimed
that the petitioner-husband acquired the shares of stocks from the Citycorp
Investment Philippines in his own name as the owner thereof. It was, thus, the
burden of the private respondent to prove that the source of the money utilized
in the acquisition of the shares of stocks was that of the petitioner-husband
alone. As held by the trial court, the private respondent failed to adduce evidence
to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty
and suretyship agreement with the private respondent for the payment of the
PBMCI loans, the petitioner-husband was in the exercise of his profession,
pursuing a legitimate business. The appellate court erred in concluding that the
Persons and Fam. Relations Ass. No. 9
conjugal partnership is liable for the said account of PBMCI under Article 161(1) of
the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3][60] of the Family
Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same purpose,
in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship
agreement as security for the payment of the loan obtained by the PBMCI from
the private respondent in the amount of P38,000,000. In Ayala Investment and
Development Corp. v. Court of Appeals,[61] this Court ruled that the signing as
surety is certainly not an exercise of an industry or profession. It is not embarking
in a business. No matter how often an executive acted on or was persuaded to act
as surety for his own employer, this should not be taken to mean that he thereby
embarked in the business of suretyship or guaranty.
For the conjugal partnership to be liable for a liability that should appertain
to the husband alone, there must be a showing that some advantages accrued to
the spouses.Certainly, to make a conjugal partnership responsible for a liability
that should appertain alone to one of the spouses is to frustrate the objective of
the New Civil Code to show the utmost concern for the solidarity and well being
of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal
partnership.[62]
In this case, the private respondent failed to prove that the conjugal
partnership of the petitioners was benefited by the petitioner-husbands act of
executing a continuing guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of loan was between the
private respondent and the PBMCI, solely for the benefit of the latter. No
presumption can be inferred from the fact that when the petitioner-husband
entered into an accommodation agreement or a contract of surety, the conjugal
partnership would thereby be benefited. The private respondent was burdened
to establish that such benefit redounded to the conjugal partnership. [63]
It could be argued that the petitioner-husband was a member of the Board
of Directors of PBMCI and was one of its top twenty stockholders, and that the
shares of stocks of the petitioner-husband and his family would appreciate if the
PBMCI could be rehabilitated through the loans obtained; that the petitioner-
Page | 8
 Persons and Fam. Relations Ass. No. 9

husbands career would be enhanced should PBMCI survive because of the infusion
of fresh capital. However, these are not the benefits contemplated by Article 161
of the New Civil Code. The benefits must be those directly resulting from the
loan. They cannot merely be a by-product or a spin-off of the loan itself.[64]
This is different from the situation where the husband borrows money or
receives services to be used for his own business or profession. In the Ayala case,
we ruled that it is such a contract that is one within the term obligation for the
benefit of the conjugal partnership. Thus:

(A) If the husband himself is the principal obligor in the contract, i.e., he directly
received the money and services to be used in or for his own business or his own
profession, that contract falls within the term obligations for the benefit of the
conjugal partnership. Here, no actual benefit may be proved. It is enough that the
benefit to the family is apparent at the time of the signing of the contract. From
the very nature of the contract of loan or services, the family stands to benefit
from the loan facility or services to be rendered to the business or profession of
the husband. It is immaterial, if in the end, his business or profession fails or does
not succeed. Simply stated, where the husband contracts obligations on behalf of
the family business, the law presumes, and rightly so, that such obligation will
redound to the benefit of the conjugal partnership. [65]

The Court held in the same case that the rulings of the Court in Cobb-
Perez and G-Tractors, Inc. are not controlling because the husband, in those cases,
contracted the obligation for his own business. In this case, the petitioner-
husband acted merely as a surety for the loan contracted by the PBMCI from the
private respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision
and Resolution of the Court of Appeals are SET ASIDE AND REVERSED. The assailed
orders of the RTC are AFFIRMED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

Page | 9

FIRST DIVISION
G.R. No. L-55322 February 16, 1989
MOISES JOCSON, petitioner,
vs.
HON. COURT OF APPEALS, AGUSTINA JOCSON-VASQUEZ, ERNESTO
VASQUEZ, respondents.
Dolorfino and Dominguez Law Officers for petitioner.
Gabriel G. Mascardo for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court of the
decision of the Court of Appeals in CA- G.R. No. 63474, promulgated on April 30,
1980, entitled "MOISES JOCSON, plaintiff-appellee, versus AGUSTINA JOCSON-
VASQUEZ and ERNESTO VASQUEZ, defendant-appellants," upholding the validity
of three (3) documents questioned by Moises Jocson, in total reversal of the
decision of the then Court of First Instance of Cavite, Branch I, which declared
them as null and void; and of its resolution, dated September 30, 1980, denying
therein appellee's motion for reconsideration.
Petitioner Moises Jocson and respondent Agustina Jocson-Vasquez are the only
surviving offsprings of the spouses Emilio Jocson and Alejandra Poblete, while
respondent Ernesto Vasquez is the husband of Agustina. Alejandra Poblete
predeceased her husband without her intestate estate being settled.
Subsequently, Emilio Jocson also died intestate on April 1, 1972.
As adverted to above, the present controversy concerns the validity of three (3)
documents executed by Emilio Jocson during his lifetime. These documents
purportedly conveyed, by sale, to Agustina Jocson-Vasquez what apparently
covers almost all of his properties, including his one-third (1/3) share in the estate
of his wife. Petitioner Moises Jocson assails these documents and prays that they
be declared null and void and the properties subject matter therein be partitioned
between him and Agustina as the only heirs of their deceased parents.
The documents, which were presented as evidence not by Moises Jocson, as the
party assailing its validity, but rather by herein respondents, are the following:
Persons and Fam. Relations Ass. No. 9
1) "Kasulatan ng Bilihan ng Lupa," marked as Exhibit 3 (pp. 12-
13, Records) for the defendant in the court a quo, dated July 27,
1968. By this document Emilio Jocson sold to Agustina Jocson-
Vasquez six (6) parcels of land, all located at Naic, Cavite, for the
sum of ten thousand P10,000.00 pesos. On the same document
Emilio Jocson acknowledged receipt of the purchase price, thus:
Na ngayon, alang-alang sa halagang SAMPUNG LIBONG PISO
(P10,000) salaping Pilipino na aking tinanggap ng buong
kasiyahan loob at ang pagkakatanggap ay aking hayagang
inaamin sa pamamagitan ng kasulatang ito, sa aking anak na si
Agustina Jocson, na may sapat na gulang, mamamayang
Pilipino, asawa ni Ernesto Vasquez, at naninirahan sa Poblacion,
Naic, Cavite, ay aking ipinagbile ng lubusan at kagyat at walang
ano mang pasubali ang nabanggit na anim na pirasong lupa na
nasa unang dahon ng dokumentong ito, sa nabanggit na
Agustina Jocson, at sa kaniyang tagapagmana o makakahalili at
gayon din nais kong banggitin na kahit na may kamurahan ang
ginawa kong pagbibile ay dahilan sa ang nakabile ay aking anak
na sa akin at mapaglingkod, madamayin at ma-alalahanin, na
tulad din ng isa ko pang anak na lalaki. Ang kuartang tinanggap
ko na P10,000.00, ay gagamitin ko sa aking katandaan at mga
huling araw at sa aking mga ibang mahahalagang
pangangailangan. [Emphasis supplied]
Na nais ko ring banggitin na ang ginawa kong ito ay hindi labag
sa ano mang batas o kautusan, sapagkat ang aking pinagbile ay
akin at nasa aking pangalan. Ang mga lupang nasa pangalan ng
aking nasirang asawa ay hindi ko ginagalaw ni pinakikialaman at
iyon ay dapat na hatiin ng dalawa kong anak alinsunod sa umiiral
na batas (p. 13, Records.)
2) "Kasulatan ng Ganap na Bilihan,"dated July 27,1968, marked
as Exhibit 4 (p. 14, Records). On the face of this document, Emilio
Jocson purportedly sold to Agustina Jocson-Vasquez, for the
sum of FIVE THOUSAND (P5,000.00) PESOS, two rice mills and a
camarin (camalig) located at Naic, Cavite. As in the first
document, Moises Jocson acknowledged receipt of the
purchase price:
'Na alang-alang sa halagang LIMANG LIBONG PISO (P5,000.00)
salaping Pilipino na aking tinanggap ng buong kasiyahan loob sa
Page | 10

aking anak na Agustina Jocson .... Na ang halagang ibinayad sa
akin ay may kamurahan ng kaunti ngunit dahil sa malaking
pagtingin ko sa kaniya ... kaya at pinagbile ko sa kaniya ang mga
nabanggit na pagaari kahit na hindi malaking halaga ... (p. 14,
Records).
3) Lastly, the "Deed of Extrajudicial Partition and Adjudication
with Sale, "dated March 9, 1969, marked as Exhibit 2 (p. 10-11,
Records), whereby Emilio Jocson and Agustina Jocson-Vasquez,
without the participation and intervention of Moises Jocson,
extrajudicially partitioned the unsettled estate of Alejandra
Poblete, dividing the same into three parts, one-third (1/3) each
for the heirs of Alejandra Poblete, namely: Emilio Jocson,
Agustina Jocson-Vasquez and Moises Jocson. By the same
instrument, Emilio sold his one- third (1/3) share to Agustin for
the sum of EIGHT THOUSAND (P8,000.00) PESOS. As in the
preceding documents, Emilio Jocson acknowledged receipt of
the purchase price:
Now for and in consideration of the sum of only eight thousand
(P8,000.00) pesos, which I, the herein Emilio Jocson had
received from my daughter Agustina Jocson, do hereby sell,
cede, convey and transfer, unto the said Agustina Jocson, her
heirs and assigns, administrators and successors in interests, in
the nature of absolute and irrevocable sale, all my rights,
interest, shares and participation, which is equivalent to one
third (1/3) share in the properties herein mentioned and
described the one third being adjudicated unto Agustina Jocson
and the other third (1/3) portion being the share of Moises
Jocson. (p. 11, Records).
These documents were executed before a notary public. Exhibits 3 and 4 were
registered with the Office of the Register of Deeds of Cavite on July 29, 1968 and
the transfer certificates of title covering the properties therein in the name of
Emilio Jocson, married to Alejandra Poblete," were cancelled and new certificates
of title were issued in the name of Agustina Jocson-Vasquez. Exhibit 2 was not
registered with the Office of the Register of Deeds.
Herein petitioner filed his original complaint (Record on Appeal, p. 27, Rollo) on
June 20,1973 with the then Court of First Instance of Naic, Cavite (docketed as
Civil Case No. TM- 531), and which was twice amended. In his Second Amended
Persons and Fam. Relations Ass. No. 9
Complaint (pp. 47-58, Record on Appeal), herein petitioner assailed the above
documents, as aforementioned, for being null and void.
It is necessary to partly quote the allegation of petitioner in his complaint for the
reason that the nature of his causes of action is at issue, thus:
8. [With regard the first document, that] the defendants,
through fraud, deceit, undue pressure and influence and other
illegal machinations, were able to induce, led, and procured
their father ... to sign [the] contract of sale ..., for the simulated
price of P10,000.00, which is a consideration that is shocking to
the conscience of ordinary man and despite the fact that said
defendants have no work or livelihood of their own ...; that the
sale is null and void, also, because it is fictitious, simulated and
fabricated contract x x x (pp. 52-53, Record on Appeal).
[Emphasis supplied]
xxx xxx xxx
12. [With regards the second and third document, that they] are
null and void because the consent of the father, Emilio Jocson,
was obtained with fraud, deceit, undue pressure,
misrepresentation and unlawful machinations and trickeries
committed by the defendant on him; and that the said contracts
are simulated, fabricated and fictitious, having been made
deliberately to exclude the plaintiff from participating and with
the dishonest and selfish motive on the part of the defendants
to defraud him of his legitimate share on said properties [subject
matter thereof]; and that without any other business or
employment or any other source of income, defendants who
were just employed in the management and administration of
the business of their parents, would not have the sufficient and
ample means to purchase the said properties except by getting
the earnings of the business or by simulated consideration ...
(pp. 54-55, Record on Appeal). [Emphasis supplied]
Petitioner explained that there could be no real sale between a father and
daughter who are living under the same roof, especially so when the father has no
need of money as the properties supposedly sold were all income-producing.
Further, petitioner claimed that the properties mentioned in Exhibits 3 and 4 are
the unliquidated conjugal properties of Emilio Jocson and Alejandra Poblete which
the former, therefore, cannot validly sell (pp. 53, 57, Record on Appeal). As far as
Page | 11

Exhibit 2 is concerned, petitioner questions not the extrajudicial partition but only
the sale by his father to Agustina of the former's 1/3 share (p. 13, Rollo).
The trial court sustained the foregoing contentions of petitioner (pp. 59-81,
Record on Appeal). It declared that the considerations mentioned in the
documents were merely simulated and fictitious because: 1) there was no
showing that Agustina Jocson-Vasquez paid for the properties; 2) the prices were
grossly inadequate which is tantamount to lack of consideration at all; and 3) the
improbability of the sale between Emilio Jocson and Agustina Jocson-Vasquez,
taking into consideration the circumstances obtaining between the parties; and
that the real intention of the parties were donations designed to exclude Moises
Jocson from participating in the estate of his parents. It further declared the
properties mentioned in Exhibits 3 and 4 as conjugal properties of Emilio Jocson
and Alejandra Poblete, because they were registered in the name of "Emilio
Jocson, married to Alejandra Poblete" and ordered that the properties subject
matter of all the documents be registered in the name of herein petitioners and
private respondents.
On appeal, the Court of Appeals in CA-G.R. No. 63474-R rendered a decision (pp.
29-42, Rollo) and reversed that of the trial court's and ruled that:
1. That insofar as Exhibits 3 and 4 are concerned the appellee's
complaint for annulment, which is indisputably based on fraud,
and undue influence, is now barred by prescription, pursuant to
the settled rule that an action for annulment of a contract based
on fraud must be filed within four (4) years, from the discovery
of the fraud, ... which in legal contemplation is deemed to be the
date of the registration of said document with the Register of
Deeds ... and the records admittedly show that both Exhibits 3
and 4, were all registered on July 29, 1968, while on the other
hand, the appellee's complaint was filed on June 20, 1973,
clearly beyond the aforesaid four-year prescriptive period
provided by law;
2. That the aforesaid contracts, Exhibits 2, 3, and 4, are
decisively not simulated or fictitious contracts, since Emilio
Jocson actually and really intended them to be effective and
binding against him, as to divest him of the full dominion and
ownership over the properties subject of said assailed contracts,
as in fact all his titles over the same were all cancelled and new
ones issued to appellant Agustina Jocson-Vasquez ...;
Persons and Fam. Relations Ass. No. 9
3. That in regard to Exhibit 2, the same is valid and subsisting,
and the partition with sale therein made by and between Emilio
Jocson and Agustina Jocson-Vasquez, affecting the 2/3 portion
of the subject properties described therein have all been made
in accordance with Article 996 of the New Civil Code on intestate
succession, and the appellee's (herein petitioner) remaining 1/3
has not been prejudiced (pp. 41-42, Rollo).
In this petition for review, Moises Jocson raised the following assignments of
errors:
1. HAS THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE SUIT FOR THE ANNULMENT OF
CONTRACTS FILED BY PETITIONERS WITH THE TRIAL COURT IS
"BASED ON FRAUD" AND NOT ON ITS INEXISTENCE AND NULLITY
BECAUSE OF IT'S BEING SIMULATED OR FICTITIOUS OR WHOSE
CAUSE IS CONTRARY TO LAW, MORALS AND GOOD CUSTOMS?
II. HAS THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE COMPLAINT FILED BY PETITIONER IN
THE TRIAL COURT IS BARRED BY PRESCRIPTION?
III. HAS THE RESPONDENT COURT OF APPEALS ERRED IN NOT
DECLARING AS INEXISTENT AND NULL AND VOID THE
CONTRACTS IN QUESTION AND IN REVERSING THE DECLARING
DECISION OF THE TRIAL COURT? (p. 2, Rollo)
I.
The first and second assignments of errors are related and shall be jointly
discussed.
According to the Court of Appeals, herein petitioner's causes of action were based
on fraud. Under Article 1330 of the Civil Code, a contract tainted by vitiated
consent, as when consent was obtained through fraud, is voidable; and the action
for annulment must be brought within four years from the time of the discovery
of the fraud (Article 1391, par. 4, Civil Code), otherwise the contract may no longer
be contested. Under present jurisprudence, discovery of fraud is deemed to have
taken place at the time the convenant was registered with the Register of Deeds
(Gerona vs. De Guzman, No. L-19060, May 29,1964, 11 SCRA 153). Since Exhibits
3 and 4 were registered on July 29, 1968 but Moises Jocson filed his complaint
Page | 12

only on June 20, 1973, the Court of Appeals ruled that insofar as these documents
were concerned, petitioner's "annulment suit" had prescribed.
If fraud were the only ground relied upon by Moises Jocson in assailing the
questioned documents, We would have sustained the above pronouncement. But
it is not so. As pointed out by petitioner, he further assailed the deeds of
conveyance on the ground that they were without consideration since the
amounts appearing thereon as paid were in fact merely simulated.
According to Article 1352 of the Civil Code, contracts without cause produce no
effect whatsoever. A contract of sale with a simulated price is void (Article 1471;
also Article 1409 [3]]), and an action for the declaration of its nullity does not
prescribe (Article 1410, Civil Code; See also, Castillo v. Galvan, No. L-27841,
October 20, l978, 85 SCRA 526). Moises Jocsons saction, therefore, being for the
judicial declaration of nullity of Exhibits 3 and 4 on the ground of simulated price,
is imprescriptible.
II.
For petitioner, however, the above discussion may be purely academic. The
burden of proof in showing that contracts lack consideration rests on he who
alleged it. The degree of proof becomes more stringent where the documents
themselves show that the vendor acknowledged receipt of the price, and more so
where the documents were notarized, as in the case at bar. Upon consideration
of the records of this case, We are of the opinion that petitioner has not
sufficiently proven that the questioned documents are without consideration.
Firstly, Moises Jocson's claim that Agustina Jocson-Vasquez had no other source
of income other than what she derives from helping in the management of the
family business (ricefields and ricemills), and which was insufficient to pay for the
purchase price, was contradicted by his own witness, Isaac Bagnas, who testified
that Agustina and her husband were engaged in the buy and sell of palay and rice
(p. 10, t.s.n., January 14, 1975). Amazingly, petitioner himself and his wife testified
that they did not know whether or not Agustina was involved in some other
business (p. 40, t.s.n., July 30, 1974; p. 36, t.s.n., May 24, 1974).
On the other hand, Agustina testified that she was engaged in the business of
buying and selling palay and rice even before her marriage to Ernesto Vasquez
sometime in 1948 and continued doing so thereafter (p. 4, t.s.n., March 15, 1976).
Considering the foregoing and the presumption that a contract is with a
consideration (Article 1354, Civil Code), it is clear that petitioner miserably failed
to prove his allegation.
Persons and Fam. Relations Ass. No. 9
Secondly, neither may the contract be declared void because of alleged
inadequacy of price. To begin with, there was no showing that the prices were
grossly inadequate. In fact, the total purchase price paid by Agustina Jocson-
Vasquez is above the total assessed value of the properties alleged by petitioner.
In his Second Amended Complaint, petitioner alleged that the total assessed value
of the properties mentioned in Exhibit 3 was P8,920; Exhibit 4, P3,500; and Exhibit
2, P 24,840, while the purchase price paid was P10,000, P5,000, and P8,000,
respectively, the latter for the 1/3 share of Emilio Jocson from the paraphernal
properties of his wife, Alejandra Poblete. And any difference between the market
value and the purchase price, which as admitted by Emilio Jocson was only slight,
may not be so shocking considering that the sales were effected by a father to her
daughter in which case filial love must be taken into consideration (Alsua-Betts vs.
Court of Appeals, No. L-46430-31, April 30, 1979, 92 SCRA 332).
Further, gross inadequacy of price alone does not affect a contract of sale, except
that it may indicate a defect in the consent, or that the parties really intended a
donation or some other act or contract (Article 1470, Civil Code) and there is
nothing in the records at all to indicate any defect in Emilio Jocson's consent.
Thirdly, any discussion as to the improbability of a sale between a father and his
daughter is purely speculative which has no relevance to a contract where all the
essential requisites of consent, object and cause are clearly present.
There is another ground relied upon by petitioner in assailing Exhibits 3 and 4, that
the properties subject matter therein are conjugal properties of Emilio Jocson and
Alejandra Poblete. It is the position of petitioner that since the properties sold to
Agustina Jocson-Vasquez under Exhibit 3 were registered in the name of "Emilio
Jocson, married to Alejandra Poblete," the certificates of title he presented as
evidence (Exhibits "E', to "J', pp. 4-9, Records) were enough proof to show that the
properties covered therein were acquired during the marriage of their parents,
and, therefore, under Article 160 of the Civil Code, presumed to be conjugal
properties.
Article 160 of the Civil Code provides that:
All property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife.
In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May 22, 1968, 23 SCRA 637,
644, We held that:
Page | 13

Anent their claim that the shares in question are conjugal assets,
the spouses Perez adduced not a modicum of evidence,
although they repeatedly invoked article 160 of the New Civil
Code which provides that ... . As interpreted by this Court, the
party who invokes this presumption must first prove that the
property in controversy was acquired during the marriage. In
other words, proof of acquisition during the coverture is a
condition sine qua non for the operation of the presumption in
favor of conjugal ownership. Thus in Camia de Reyes vs. Reyes
de Ilano [62 Phil. 629, 639], it was held that "according to law
and jurisprudence, it is sufficient to prove that the Property was
acquired during the marriage in order that the same may be
deemed conjugal property." In the recent case of Maramba vs.
Lozano, et. al. [L-21533, June 29, 1967, 20 SCRA 474], this Court,
thru Mr. Justice Makalintal, reiterated that "the presumption
under Article 160 of the Civil Code refers to property acquired
during the marriage," and then concluded that since "there is no
showing as to when the property in question was acquired...the
fact that the title is in the wife's name alone is determinative."
Similarly, in the case at bar, since there is no evidence as to
when the shares of stock were acquired, the fact that they are
registered in the name of the husband alone is an indication that
the shares belong exclusively to said spouse.'
This pronouncement was reiterated in the case of Ponce de Leon vs. Rehabilitation
Finance Corporation, No. L-24571, December 18, 1970, 36 SCRA 289, and later in
Torela vs. Torela, No. 1,27843, October 11, 1979, 93 SCRA 391.
It is thus clear that before Moises Jocson may validly invoke the presumption
under Article 160 he must first present proof that the disputed properties were
acquired during the marriage of Emilio Jocson and Alejandra Poblete. The
certificates of title, however, upon which petitioner rests his claim is insufficient.
The fact that the properties were registered in the name of "Emilio Jocson,
married to Alejandra Poblete" is no proof that the properties were acquired during
the spouses' coverture. Acquisition of title and registration thereof are two
different acts. It is well settled that registration does not confer title but merely
confirms one already existing (See Torela vs. Torela, supra). It may be that the
properties under dispute were acquired by Emilio Jocson when he was still a
bachelor but were registered only after his marriage to Alejandra Poblete, which
explains why he was described in the certificates of title as married to the latter.
Persons and Fam. Relations Ass. No. 9
Contrary to petitioner's position, the certificates of title show, on their face, that
the properties were exclusively Emilio Jocson's, the registered owner. This is so
because the words "married to' preceding "Alejandra Poblete' are merely
descriptive of the civil status of Emilio Jocson Litam v. Rivera, 100 Phil. 354; Stuart
v. Yatco, No. L-16467, April 27, 1962, 4 SCRA 1143; Magallon v. Montejo, G.R. No.
L-73733, December 16, 1986, 146 SCRA 282). In other words, the import from the
certificates of title is that Emilio Jocson is the owner of the properties, the same
having been registered in his name alone, and that he is married to Alejandra
Poblete.
We are not unmindful that in numerous cases We consistently held that
registration of the property in the name of only one spouse does not negate the
possibility of it being conjugal (See Bucoy vs. Paulino, No. L-25775, April 26, 1968,
23 SCRA 248). But this ruling is not inconsistent with the above pronouncement
for in those cases there was proof that the properties, though registered in the
name of only one spouse, were indeed conjugal properties, or that they have been
acquired during the marriage of the spouses, and therefore, presumed conjugal,
without the adverse party having presented proof to rebut the presumption (See
Mendoza vs- Reyes, No. L-31618, August 17, 1983, 124 SCRA 154).
In the instant case, had petitioner, Moises Jocson, presented sufficient proof to
show that the disputed properties were acquired during his parents' coverture.
We would have ruled that the properties, though registered in the name of Emilio
Jocson alone, are conjugal properties in view of the presumption under Article
160. There being no such proof, the condition sine qua non for the application of
the presumption does not exist. Necessarily, We rule that the properties under
Exhibit 3 are the exclusive properties of Emilio Jocson.
There being no showing also that the camarin and the two ricemills, which are the
subject of Exhibit 4, were conjugal properties of the spouses Emilio Jocson and
Alejandra Poblete, they should be considered, likewise, as the exclusive properties
of Emilio Jocson, the burden of proof being on petitioner.
ACCORDINGLY, the petition is DISMISSED and the decision of the Court of Appeals
is AFFIRMED.
SO ORDERED.
Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.
Page | 14

FIRST DIVISION
G.R. No. L-57757 August 31, 1987
PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PRAGMACIO VITUG AND MAXIMO
VITUG, respondents.
GANCAYCO, J.:
Does the presumption of conjugality of properties acquired by the spouses during
coverture provided for in Article 160 of the Civil Code apply to property covered
by a Torrens certificate of title in the name of the widow? This is the issue posed
in this petition to review on certiorari of the decision of the Court of Appeals in
CA-G.R. No. 60903 which is an action for reconveyance and damages. *
On November 28, 1952, Donata Montemayor, through her son, Salvador M. Vitug,
mortgaged to the Philippine National Bank (PNB) several parcels of land covered
by Transfer Certificate of Title (TCT) No. 2289 — Pampanga to guarantee the loan
granted by the PNB to Salvador Jaramilla and Pedro Bacani in the amount of
P40,900.00 which was duly registered in the Office of the Register of Deeds of
Pampanga. 1
On December 1, 1963, Donata Montemayor also mortgaged in favor of PNB
certain properties covered by TCT Nos. 2887 and 2888-Pampanga to guarantee
the payment of the loan account of her son Salvador Vitug in the amount of
P35,200.00, which mortgage was duly registered in the Register of Deeds of
Pampanga. 2
The above-mentioned Transfer Certificates of Titles covering said properties were
all in the name of Donata Montemayor, of legal age, Filipino, widow and a resident
of Lubao, Pampanga at the time they were mortgaged to PNB 3 and were free from
all hens and encumbrances. 4
Salvador Vitug failed to pay his account so the bank foreclosed the mortgaged
properties covered by TCT Nos. 2887 and 2888. They were sold at public auction
on May 20, 1968 in which the PNB was the highest bidder. The titles thereto were
thereafter consolidated in the name of PNB.
Persons and Fam. Relations Ass. No. 9
Likewise, Salvador Jaramilla and Pedro Bacani failed to settle their accounts with
the PNB so the latter foreclosed the properties covered by TCT No. 2889 which
were sold at public auction and likewise PNB was the buyer thereof. On August
30, 1968, a certificate of sale was issued by the Register of Deeds covering said
properties in favor of the PNB. When the title of the PNB was consolidated a new
title was issued in its name. 5
On September 2, 1969, the PNB sold the properties covered by TCT Nos. 2887 and
2888 — Pampanga to Jesus M. Vitug, Anunciacion V. de Guzman, Prudencia V.
Fajardo, Salvador Vitug and Aurora V. Gutierrez in those names the corresponding
titles were issued. 6
During the lifetime of Clodualdo Vitug he married two times. His first wife was
Gervacia Flores with whom he had 3 children, namely, Victor, Lucina and Julio all
surnamed Vitug. Victor now dead is survived by his 5 children: Leonardo, Juan,
Candida Francisco and Donaciano, an surnamed Vitug. Juan Vitug is also dead and
is survived by his only daughter Florencia Vitug.
The second wife of Clodualdo Vitug was Donata Montemayor with whom he had
8 children, namely, Pragmacio, Maximo, Jesus, Salvador, Prudencio and
Anunciacion, all surnamed Vitug, the late Enrique Vitug represented by his wife
Natalia Laquian, and the late Francisco Vitug who is survived by 11 children,
namely, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno,
Eligio Jesus and Luz.
Clodualdo Vitug died intestate on May 20, 1929 so his estate was settled and
distributed in Special Proceeding No. 422 in the Court of First Instance of
Pampanga wherein Donata Montemayor was the Administratrix. 7
Meanwhile, on May 12,1958, Donata Montemayor executed a contract of lease of
Lot No. 24, which is covered by TCT No. 2887-R in favor of her children Pragmacio
and Maximo both surnamed Vitug. This lease was extended on August 31, 1963.
By virtue of a general power of attorney executed by Donata Montemayor on
Sept. 19, 1966 in favor of Pragmacio Vitug, the latter executed a contract of lease
on Sept. 19, 1967 of the said lot in favor of Maximo Vitug. 8
On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an action for partition
and reconveyance with damages in the Court of First Instance of Pampanga
against Marcelo Mendiola, special administrator of the intestate estate of Donata
Montemayor who died earlier, Jesus Vitug, Sr., Salvador, Natalia, Prudencia,
Anunciacion, all surnamed Vitug, Antonio, Francisco, Aurora, Pedro, Honorio,
Page | 15

Corazon, Anselmo, Benigno, Eligio Jesus and Luz, all surnamed Fajardo and the
PNB.
The subject of the action is 30 parcels of land which they claim to be the conjugal
property of the spouses Donata Montemayor and Clodualdo Vitug of which they
claim a share of 2/11 of 1/2 thereof. They assailed the mortgage to the PNB and
the public auction of the properties as null and void. They invoked the case of
Vitug vs. Montemayor, L-5297 decided by this Court on Oct. 20, 1953 which is an
action for partition and liquidation of the said 30 parcels of land wherein the
properties were found to be conjugal in nature.
In a decision of Sept. 15, 1975, the lower court dismissed the complaint with costs
against the plaintiffs and ordered them to pay attorney's fees of P5,000.00 to the
defendant's counsel. Plaintiffs then interposed an appeal to the Court of Appeals,
wherein in due course a decision was rendered on May 20, 1981, the dispositive
part of which reads as follows:
WHEREFORE, in the light of the foregoing, the decision appealed
from is hereby reversed and set aside, and another one entered
in accordance with the tenor of the prayer of appellant's
complaint with the modification that the sale at public auction
of the 22 parcels be considered valid with respect to the 1/2
thereof. No costs.
Hence the herein petition for certiorari filed by the PNB raising the following
assignments of error:
I covering said properties the mortgage loan applications of Donata were granted
THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO
THE CASE AT BAR THE RULING OF THIS HONORABLE SUPREME
COURT IN FLORENCIA VITUG VS. DONATA MONTEMAYOR, ET
AL., 91 PHIL. 286 (1953) BECAUSE:
A. BETWEEN A PROVISION OF A SPECIAL LAW
AND THE JUDICIAL INTERPRETATION AND/OR
APPLICATION OF A PROVISION OF A GENERAL
LAW, THE FORMER PREVAILS.
B. THE DOCTRINE OF STARE DECISIS IS NOT A
MECHANICAL FORMULA OF ADHERENCE.
Persons and Fam. Relations Ass. No. 9
C. PNB WAS NOT A PARTY, AND HAD NO
KNOWLEDGE OF THE ABOVECITED CASE.
D. SIMILARLY, PRAGMACIO VITUG AND
MAXIMO VITUG WERE NOT PARTIES IN SAID
CASE.
II THE RESPONDENT COURT OF APPEALS ERRED IN NOT
RECOGNIZING THE CONCLUSIVENESS OF THE CERTIFICATE, OF
TITLE, AS PROVIDED IN ACT 496, AS AMENDED (THE LAND
REGISTRATION).
III THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING
THE CONCLUSIVENESS OF OWNERSHIP OF DONATA
MONTEMAYOR OVER THE PROPERTIES WHICH WERE
REGISTERED EXCLUSIVELY IN HER NAME WHEN PRIVATE
RESPONDENTS (PRAGMACIO VITUG AND MAXIMO VITUG), AS
LESSEES, ENTERED INTO A CONTRACT OF LEASE WITH DONATA
MONTEMAYOR AS THE OWNER-LESSOR.
IV THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT PNB WAS A MORTGAGEE IN BAD FAITH.
The petition is impressed with merit.
When the subject properties were mortgaged to the PNB they were registered in
the name of Donata Montemayor, widow. Relying on the torrens certificate of title
by the PNB and the mortgages were duly constituted and registered in the office
of the Register of Deeds.
In processing the loan applications of Donata Montemayor, the PNB had the right
to rely on what appears in the certificates of title and no more. On its face the
properties are owned by Donata Montemayor, a widow. The PNB had no reason
to doubt nor question the status of said registered owner and her ownership
thereof. Indeed, there are no liens and encumbrances covering the same.
The well-known rule in this jurisdiction is that a person dealing with a registered
land has a right to rely upon the face of the torrens certificate of title and to
dispense with the need of inquiring further, except when the party concerned has
Page | 16

actual knowledge of facts and circumstances that would impel a reasonably
cautious man make such inquiry. 9
A torrens title concludes all controversy over ownership of the land covered by a
final degree of registration. 10 Once the title is registered the owner may rest
assured without the necessity of stepping into the portals of the court or sitting in
the mirador de su casa to avoid the possibility of losing his land. 11
Article 160 of the Civil Code provides as follows:
Art. 160. All property of the marriage is presumed to belong to
the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife.
The presumption applies to property acquired during the lifetime of the husband
and wife. In this case, it appears on the face of the title that the properties were
acquired by Donata Montemayor when she was already a widow. When the
property is registered in the name of a spouse only and there is no showing as to
when the property was acquired by said spouse, this is an indication that the
property belongs exclusively to said spouse. 12 And this presumption under
Article 160 of the Civil Code cannot prevail when the title is in the name of only
one spouse and the rights of innocent third parties are involved. 13
The PNB had a reason to rely on what appears on the certificates of title of the
properties mortgaged. For all legal purposes, the PNB is a mortgagee in goodfaith
for at the time the mortgages covering said properties were constituted the PNB
was not aware to any flaw of the title of the mortgagor. 14
True it is that in the earlier cases decided by this Court, namely Vitug VS.
Montemayor decided on May 15, 1952, which is an action for recovery of
possession of a share in said parcels of land, 15 and in the subsequent action for
partition between the same parties decided on Oct. 20, 1953, 16 this court found
the 30 parcels of land in question to be conjugal in nature and awarded the
corresponding share to the property of Florencia Vitug, an heir of the late
Clodualdo Vitug from the first marriage. In said cases this Court affirmed the
decision of the lower court. In the dispositive part of the decision of the trial court
it made the observation that "but from the conduct of Clodualdo Vitug and Donata
Montemayor during the existence of their marital life, the inference is clear that
Clodualdo had the unequivocal intention of transmitting the full ownership of the
30 parcels of land to his wife Donata Montemayor, thus considering the 1/2 of the
funds of the conjugal property so advanced for the purchase of said parcels of land
as reimbursible to the estate of Clodualdo Vitug on his death. 17 That must be the
Persons and Fam. Relations Ass. No. 9
reason why the property was registered in the name of Donata Montemayor as
widow after the death of Clodualdo Vitug. 18
At any rate, although actions for recovery of real property and for partition are
real actions, however, they are actions in personam that bind only the particular
individuals who are parties thereto. 19 The PNB not being a party in said cases is
not bound by the said decisions. Nor does it appear that the PNB was aware of the
said decisions when it extended the above describe mortgage loans. Indeed, if the
PNB knew of the conjugal nature of said properties it would not have approved
the mortgage applications covering said properties of Donata Montemayor
without requiring the consent of all the other heirs or co-owners thereof.
Moreover, when said properties were sold at public auction, the PNB was a
purchaser for value in good faith. So its right thereto is beyond question. 20
Pragmacio and Maximo Vitug are now estopped from questioning the title of
Donata Montemayor to the said properties. They never raised the conjugal nature
of the property nor took issue as to the ownership of their mother, Donata
Montemayor, over the same. Indeed private respondents were among the
defendants in said two cases wherein in their answers to the complaint they
asserted that the properties in question are paraphernal properties belonging
exclusively to Donata Montemayor and are not conjugal in nature. 21 Thus they
leased the properties from their mother Donata Montemayor for many years
knowing her to be the owner. They were in possession of the property for a long
time and they knew that the same were mortgaged by their mother to the PNB
and thereafter were sold at public auction, but they did not do anything. 22 It is
only after 17 years that they remembered to assert their rights. Certainly, they are
guilty of laches. 23
Moreover, as correctly held by the lower court. Pragmacio and Maximo Vitug as
occupants and lessees of the property in question cannot now dispute the
ownership of their mother over the same who was their lessor. 24
WHEREFORE, the subject decision of the respondent Court of Appeals is hereby
REVERSED and set aside and another decision is hereby rendered DISMISSING the
complaint and ordering private respondents to pay attomey's fees and expenses
of litigation to petitioner PNB in the amount of P20,000.00 and the costs of the
suit.
SO ORDERED.
Page | 17

EN BANC
G.R. No. L-8748 December 26, 1961
TESTATE ESTATE OF NARCISO A. PADILLA, deceased. ISABEL B. VDA. DE
PADILLA, executrix-appellant,
vs.
CONCEPCION PATERNO, administratrix-appellee.
Padilla Law Office and Associates for executrix-appellant.
Claro M. Recto for administratrix-appellee.
REYES, J.B.L., J.:
This appeal from an order of the probate court in the special proceeding for the
settlement of the testate estate of the deceased Narciso A. Padilla involves the
same properties that had already been the subject-matter of two earlier appeals
also brought to this Court by the executrix-appellant Isabel B. Vda. de Padilla, G.R.
No. 48137 decided October 4, 1943, during the war, and G.R. No. L-4130, decided
September 30, 1953, after the war.
The facts of the case, up to the time the second appeal (G.R. No. L-4130) was taken
by the executrix to this Court, were summed up in our 1953 decision as follows:
Narciso A. Padilla died February 12, 1934, leaving a childless widow,
Concepcion Paterno, whom he had married in 1912. His last will, which
was probated in due course, instituted his mother, Ysabel Bibby Vda. de
Padilla, as universal heiress.
In the proceedings for the settlement of his estate in Manila (Civil Cases
46058-63), his widow moved for delivery of her paraphernal property
together with some reimbursements and indemnities, and for one-half
of the conjugal partnership property. She also asked that her
usufructuary right as surviving spouse be imposed on the corresponding
portion of her husband's assets. The heiress, who was executrix, opposed
several such claims.
After hearing evidence on both sides, the Court rendered on January 15,
1940, a decision which, as amended by its resolution of April 24, 1940,
declared as paraphernal certain personal and real properties. Other
realties, although originally paraphernal, were considered part of the
Persons and Fam. Relations Ass. No. 9
conjugal assets because of buildings erected thereon during coverture,
but reimbursement of their value was directed. The main bulk was
adjudged conjugal property. The Court ordered the appointment of
commissioners to estimate the amounts to be reimbursed, to divide the
matrimonial assets into two equal parts for the spouses, and to
determine the specific portion of the deceased's estate to be
encumbered with the widow's usufruct (¹/3). Other minor directives are
omitted for the sake of brevity.
The executrix appealed to this Supreme Court, wherein, dated October
4, 1943, a decision was promulgated upholding the judgment of the
Manila court with a slight modification as to payment of interest.
(That year Concepcion Paterno died. She is now represented by her
testate heirs and legatees.)
For compliance with the decision, the records went back to the Manila
court. Therein three commissioners were duly appointed: Vicente A.
Rufino, chosen by the widow's side, Augusto J. D. Cortes by the heiress-
executrix, and V. R. Endaya by the Court.
After hearings held before the said committee (May-November, 1947),
Vicente A. Rufino submitted his report dated July 9, 1948 which was
concurred in toto by V. R. Endaya. A few days later Augusta J. D. Cortes
filed his own report, wholly at variance with his colleague's
recommendations on many important particulars.
In December, 1948, counsel for the executrix interposed legal and factual
objections to the Rufino report. In May, 1949, Atty. Claro M. Recto, for
the Paterno relatives, replied to said objections and prayed that they be
overruled with the approval the aforesaid report.
On July 3, 1950, Judge Rafael Amparo of the Manila Court approved the
majority report except that he declared: (1) lot No. 50 on Juan Luna Street
was conjugal, and (2) the usufruct of the widow shall be constituted on
the one-third estate. (Report on Appeal, pp. 149-151).
After the return of the records to the probate court for partition in accordance
with our decision in G.R. No. L-4130, which affirmed the decision appealed from
with the exception of the modification that one piece of property (the R. Hidalgo
property) adjudicated to the widow was assigned instead to the estate of the
deceased, in exchange for another property (in Azcarraga-Reina Regente) given to
Page | 18

the widow, and after delivery by the executrix on December 7, 1953 of the
properties constituting the widow's share in the partition of the conjugal estate,
the executrix, on March 3, 1954, filed a petition for the final closure of the testate
proceedings. A day before the filing of this petition, however, the trial court had
issued an order, upon motion of the administratrix of the estate of the widow
Concepcion Paterno, for a final accounting of the 1951, 1952, and 1953 credit
balances of the estate, and to determine the rentals or income of those properties
found to be paraphernal assets of the widow, so that the undelivered portions of
said rentals could be turned over to the widow's estate. Accordingly, the estate of
the widow opposed the petition for closure pending the final accounting required
of the executrix in the court's order of March 2, 1954; and also pending
determination of the share of the widow in the additional value of the R. Hidalgo
property, due to the construction of the Illusion Theater, that in 1952 would
become property of the owner of the land. The administratrix of the widow's
estate likewise sought an amendment of the court's order of March 2, 1954, so as
to require the executrix to account for the undelivered rentals or fruits of the
widow's paraphernal properties from October 5, 1938, when the executrix started
her administration, until December 7, 1953, when they were finally turned over
to the widow's estate.
On March 15, 1954, the executrix submitted an accounting of the credit balances
of the estate for the years 1951, 1952, and 1953, but in subsequent pleadings
objected to the accounting of the fruits of the properties declared to be
paraphernal on the theory that (1) said properties were actually held conjugal,
subject only to paraphernal claims; and that (2) consequently, their income
belonged to the conjugal estate and had been periodically divided equally
between the executrix as the universal heir of the deceased and the widow's
estate. As for the R. Hidalgo property, the executrix also objected to any further
determination of an additional share of the widow on the improvements thereon,
claiming that the widow's estate was bound by the value of P189,240 given to this
property by the Rufino report from which the administratrix of the widow's estate
did not appeal.
Reply and counter-reply having been filed by the parties on the above issues, the
probate court finally resolved the same in its order of July 31, 1954, the pertinent
portions of which are as follows:
The questions that should be passed upon by this Court are those raised
by the administratrix of the estate of Concepcion Paterno in her motion
for reconsideration, to wit: (1) Should the herein executrix be made to
account for the income of the paraphernal properties belonging to
Concepcion Paterno as prayed for by said administratrix? (2) Is it
Persons and Fam. Relations Ass. No. 9
necessary to determine the additional value of the R. Hidalgo property as
sought by said administratrix?
The answer to the first question is in the affirmative. The Civil Code of
1889 provided that upon dissolution of marriage the husband or his heirs
may be compelled to make immediate restitution of the paraphernal
property which has been turned over to the husband for administration
(Art. 1391 in connection with Art. 1369). The Code of Civil Procedure
provided in its Section 726 that 'where a deceased person in his lifetime
held lands in trust for another person, the court may, after notice given
as required in the preceding section, grant license to the executor or
administrator, and the person, his executor, or administrator, for whose
use and benefit they are holders; and the court may decree the execution
of such trust, whether created by deed or by law.' Upon the death of
Narciso Padilla his marriage with Concepcion Paterno was dissolved.
From the moment of his death, his heir was bound to return the
paraphernal properties of Concepcion Paterno, and from said moment
any income or fruit derived from said paraphernal properties belonged
to the owner thereof. It is contended by the executrix herein that the
properties under administration in this proceeding are conjugal subject
to the paraphernal claims of the widow, Concepcion Paterno, and that
the rentals from one or the other property cannot be excluded 'for such
exclusions cannot be justified, as the definite character of the properties
as adjudicated in favor of the wife or of the husband became absolute
and definite only after the decision of the Hon. Supreme Court late in
1953'. This contention is not well taken, because the determination made
by the Supreme Court of the character of the properties in question
retroacts to the date Narciso Padilla died.
It appears that Ysabel Bibby was appointed special administratrix in this
proceeding on August 29, 1938.
The other question refers to the R. Hidalgo property. With respect to this
property, the Supreme Court in its decision in G.R. No. L-4130 said —
This Illusion Theatre was not reckoned with in the Rufino report.
Apparently it would pass to the estate in 1952 upon the
occurrence of specified contingencies. If it has passed the
matter could undoubtedly be the subject of further deliberation
upon appropriate motions. It would only be a question of
determining the additional value of the R. Hidalgo property and
Page | 19

of requiring the herein appellant to pay the Paterno estate its
corresponding share.
The above quoted portion of the decision is clear and needs no further
elucidation.
WHEREFORE, the executrix herein is directed to submit within ten (10)
days from receipt of this order an accounting of the income of the
paraphernal properties in question covering the period from August 29,
1938 to December 7, 1953.
Regarding the R. Hidalgo property, this proceeding is hereby set for
hearing on August 19, 1954, at 8:30 a.m. for the purpose of determining
the additional value of said property in consonance with the above
indicated decision of the Supreme Court.
The executrix herein is hereby authorized and directed to deliver
immediately to the estate of Concepcion Paterno the one-half portion of
the credit balance on the 1953 annual accounting.
The consideration of the prayer to close this proceeding is hereby
deferred until the accounting herein above called for shall have been
submitted and passed upon and the additional value of the R. Hidalgo
property shall have been determined.
Let the corrections indicated by the administratrix of the estate of
Concepcion Paterno be made.
IT IS SO ORDERED.
(Record on Appeal, pp. 60-62.)
The executrix sought but failed to have the above order reconsidered; whereupon,
she filed this her third appeal before this Court. 1
The executrix-appellant assigns six errors, which may be reduced to the following
propositions:
(1) That the lower court erred in holding that some of the properties included in
the estate are paraphernal in character and that all their income belonged to the
widow Concepcion Paterno;
Persons and Fam. Relations Ass. No. 9
(2) That the widow having already raised the question of her right to all the fruits
of her alleged paraphernal properties in a petition for the liquidation of their fruits
filed before the probate court even before the war, and no fruits having been
awarded to her by the probate court in its decision of January 15, 1940, as
amended by its resolution of April 24, 1940, or by this Court in its 1954 decision in
G.R. No. 48137 or in its 1953 decision in G.R. No. L-4130, the widow or her estate
is now barred from raising again the question of her exclusive right to such fruits
either by the principle of res judicata or that of conclusiveness of judgment;
(3) As to the R. Hidalgo property of the estate, the lower court erred in sustaining
the additional claim of the widow's estate over the improvements therein.
In support of her first proposition, that the lower court erred in holding that some
of the properties in the estate are paraphernal and that all their income belonged
the widow Concepcion Paterno, the executrix-appellant claims that our decision
in G.R. No. L-4130 did not declare any properties in the estate of the deceased
Narciso A. Padilla paraphernal, but that certain properties therein were declared
"conjugal assets, subject to paraphernal claims", and that this decision is the "law
of the case" in this incident and appeal.
The above argument appears to be a mere reiteration of the claims already urged
by this same appellant in G.R. No. L-4130, where she similarly argued that the
probate court, and this Court in G.R. No. 48137, did not hold any properties in the
estate paraphernal, but the certain properties therein were declared conjugal
partnership properties, with the widow being entitled to reimbursement for the
value of her paraphernal claims (see Appellant's Brief in G.R. No. L-4130, pp. 70-
71, 103, 106). Rejecting this argument in our decision in G.R. No. L-4130, we said:
The Rufino report which is printed in full on pages 169-192 of the Record
on Appeal, states that the buildings constructed by the partnership on
the two lots were destroyed by fire during the battle of liberation of
Manila in 1945. Then it goes on to adjudicate:
As already stated, the conjugal improvements on the lots on
Arquiza and Juan Luna have been destroyed by fire, and the
Supreme Court having held that the lands on which said
improvements were erected remained paraphernal until the
value of said lands were paid to the widow Concepcion Paterno
Vda. de Padilla, said lands must be returned to the Testate
Estate of Concepcion Paterno Vda. de Padilla.
Page | 20

However, any amount due or that may be received from the War
Damage Commission for the improvements that were destroyed
on those two pieces of property shall be divided share and share
alike between the estate of Ysabel Bibby Vda. de Padilla and the
estate of Concepcion Paterno Vda. de Padilla. (Record on
Appeal, p. 177).
The executrix earnestly challenges the first paragraph contending that
the lots became conjugal properties from the time the buildings were
erected thereon, and the subsequent destruction of such buildings did
not make them paraphernal. She also argues that the indemnity to the
widow for said lots should be their value at the time of the construction
of the buildings, or at most, at the time of the dissolution of the
partnership in 1934.
These contentions may not be upheld in view of the decision of the
Manila Court and the confirmatory decision of this Tribunal in 1943.
There are, to be sure, some propositions in said decision which we may
now hesitate to ratify, especially the pronouncement that the lot
continued to be paraphernal until its value had been actually paid. But
that judgment is now the law of the case. (Record on Appeal, pp. 151-
152).
In other words, we maintained in G.R. No. L-4130, as the law of the case, our
previous decision in G.R. No. 48137 that —
The ownership of the land is retained by the wife until she is paid the
value of the lot, as a result of the liquidation of the conjugal partnership.
The mere construction of a building from common funds does not
automatically convey the ownership of the wife's land to the conjugal
partnership. (Record on Appeal, p. 138).
Considering that our decision in G.R. No. L-4130 is, in executrix-appellant's own
words, "the last and final decision of this Honorable court intended to definitely
settle and close this estate" (Appellant's Brief, p. 49), and that the "law of the case"
in this appeal are all the previous decisions herein, "including the 1953 decision
G.R. No. L-4130" (idem, p. 17), the dispositions made in our decision in G.R. No. L-
4130 should be considered as final and conclusive on the parties in this case and
its incidents.
But to what extent does the "law of the case", as expressed in the above decisions,
bear on the more important question in this appeal — namely, the alleged
Persons and Fam. Relations Ass. No. 9
exclusive right of widow Concepcion Paterno to all the fruits of the properties of
the estate declared paraphernal from the time the conjugal partnership was
terminated by the death of the husband Narciso A. Padilla up to their final delivery
to the estate of the widow Concepcion Paterno on December 7, 1953?
On this matter, we must perforce distinguish those paraphernal properties that
did not cease to be such all throughout and were, accordingly, turned over to the
widow's estate on December 7, 1953, from those that, having been paid or
indemnified in full to the widow upon the final partition and division of the
conjugal estate, had finally been converted into conjugal assets. To determine the
properties that belong to either class, we must go back to the records of these
settlement proceedings before this appeal, the proceedings taken in the court
below in the course of the execution of our final judgment in G.R. No. L-4130.
Let us recall that in its original resolution of January 15, 1940, the probate court
found the following properties to be paraphernal:
(1) the lot at 305 Arquiza Street and the demolished improvements
therein;
(2) the lot at 1393-1409 Juan Luna Street and the improvements therein
that had been torn down;
(3) the lot and improvements (except the building constructed during the
marriage) at 401-407 Camba Street;
(4) that lot at 613-631 and 634-636 Martin Ocampo Street, with the
original "accesorias" and a camarin which was destroyed in order that
new "accesorias" might be constructed, these new "accesorias" being
conjugal property;
(5) the property at 620-H, Callejon De la Fe;
(6) one-half of the property at 631 Regidor Street; and
(7) 9/29 of the property at 302-306 R. Hidalgo Street. (Record on Appeal,
pp. 133-134).
The findings of the probate court as to the nature of the above properties were
affirmed in toto by this Court in our decision in G.R. No. 48137 dated October 4,
1943.
Page | 21

After the above-mentioned decision was returned to the lower court for
execution, the battle for the liberation of Manila supervened and as a result of the
general conflagration in the city sometime in February, 1945, the conjugal
buildings on the Arquiza and Juan Luna properties were completely destroyed. As
for the property at 631 Regidor Street, the same was later expropriated by the
government.
When the commissioners appointed to execute the judgment submitted their
report, therefore, the majority of the commissioners (whose report, otherwise
known as the "Rufino Report," the lower court approved) made the following
recommendations:
(1) As to the Arquiza and Juan Luna properties, the improvements of
which were destroyed during the battle for the liberation of Manila:
As already stated, the conjugal improvements on the lots on Arquiza and
Juan Luna have been destroyed by fire, and the Supreme Court having
held that the lands in which said improvements were erected remained
paraphernal until the value of said lands were paid to the widow
Concepcion Paterno Vda. de Padilla, said lands must be returned to the
Testate Estate of Concepcion Paterno Vda. de Padilla, (Record on Appeal
in G.R. L-4130, p. 177).
(2) As to the Camba property:
According to the evidence presented, the portion of this lot located right
at the corner of San Nicolas and Camba Streets, otherwise known as Lot
No. 6-A, and the building existing thereon, are both paraphernal
properties. They should, therefore, be delivered to the Testate Estate of
Concepcion Paterno Vda. de Padilla.
The portion of said lot which is otherwise known as Lot No. 6-B likewise
originally paraphernal, but a building was erected thereon by the
conjugal partnership, so that it would become conjugal partnership
property upon the reimbursement to the wife of its present value.
According to the evidence, Lot No. 6-B has an area of 83.422 sq. ms., and
the present value thereof per square meter is P30.00. This Testate Estate,
therefore, should reimburse the Testate Estate of Concepcion Paterno
Vda. de Padilla in the sum of P2,502.66. After said reimbursement, Lot
No. 6-B and the existing improvement thereon shall become conjugal
partnership property and should be divided accordingly for purposes of
distribution. (Record on Appeal in L-4130, pp. 179-80).
Persons and Fam. Relations Ass. No. 9
(3) As to the Martin Ocampo property:
According to the evidence the portion of the lot occupied by paraphernal
building or the accesoria otherwise known as Nos. 612, 614, 616, 620,
624, 626, 628 Quezon Boulevard, has a total area of 360.5 sq. m.; while
the interior portion of said lot actually occupied by the accesoria
constructed during the marriage of the spouses contained an area of
528.1 sq. ms. This interior portion is the one which must be appraised by
the Commissioners, and its value reimbursed to the Estate of Concepcion
Paterno Vda. de Padilla, in view of the ruling of the Court that "el valor
actual del suelo ocupado por dicha accesoria construida durante el
matrimonio se determinara por los Comisionados y se adjudicara a la
Viuda en concepto de indemnizacion." The outer portion of 360.5 sq. ms.
having been declared paraphernal property, should be delivered to the
Estate of Concepcion Paterno Vda. de Padilla.
The evidence further shows that the reasonable value of said interior
portion is P125 per sq. m., so that the amount to be reimbursed is
P66,012.50. As soon as said reimbursement is made, said portion of the
lot and the buildings existing thereon as conjugal property should be
divided accordingly for purposes of distribution. (Record on Appeal, Ibid,
p. 181)
(4) As to the Callejon De la Fe property:
In view of the fact that finding of the Supreme Court was that this
property and the improvement which used to exist thereon were both
paraphernal, the lot should be delivered to the Testate Estate of
Concepcion Paterno Vda. de Padilla and whatever amount is paid by the
War Damage Commission as compensation for the destruction of said
building should also be totally paid to it. (Record on appeal, ibid, p. 182).
(5) As to the Regidor property, which was expropriated by the
government:
The compensation received for the expropriation of the Regidor
property, should be divided between the spouses in accordance with the
finding of the decision of the Supreme Court as to the character of said
property. (Ibid, p. 192)
(6) And as to R. Hidalgo property:
Page | 22

The R. Hidalgo property is partly conjugal and partly paraphernal. Nine-
twenty-ninths thereof belong to the Testate Estate of Concepcion
Paterno Vda. de Padilla as paraphernal property, ten-twenty-ninths
thereof belong to it as share in the conjugal partnership, while the
remaining ten-twenty-ninths should belong to Dña. Isabela B. Vda. de
Padilla as her inheritance from the decedent herein. It has a total area of
1962 square meters. At the rate of P200 per square meter, it has a total
value of P189,240.00.
The lot shall become conjugal property and divided accordingly after the
Testate Estate of Concepcion Paterno Vda. de Padilla shall have been
reimbursed in the sum of P58,729,67.
Any payment made by the War Damage Commission shall be divided in the same
proportion, to wit: nine-twenty-ninths shall belong to the Testate Estate of
Concepcion Paterno Vda. de Padilla, and the remaining ten-twenty-ninths shall
belong to Dña. Isabel B. Vda. de Padilla. (Idem., pp. 182-183).
All the above recommendations were approved by the trial court, and in her
appeal from the order of approval (which is G.R. No. L-4130), wherein the
executrix-appellant specially protested against the declaration that upon the
destruction of the improvements on the Arquiza and Juan Luna properties, they
remained paraphernal and must be returned to the estate of the widow, as well
as the recommendation to subdivide the Camba and Martin Ocampo properties,
declaring those portions thereof occupied by paraphernal buildings as
paraphernal and should be returned to the widow's estate, the same
recommendations were affirmed by this Court.
Considering, then, the "law of the case" in this appeal as expressed in the Rufino
report and approved by both the probate court and this Court in G.R. No. L-4130,
we find no error in the lower court's pronouncement that as sole owner of those
properties that never became conjugal because the conjugal improvements
thereon were destroyed before they could be paid for the widow (i.e., the Arquiza
and Juan Luna properties), as well as Lot No. 6-B on Camba Street, the outer
portion of the Martin Ocampo lot, and the Callejon de la Fe property, that never
ceased to be paraphernal because there were paraphernal buildings thereon at
the time of the termination of the conjugal partnership, the widow Concepcion
Paterno is also the sole owner of all their income that accrued during their
administration by the executrix-appellant until they were finally delivered to the
estate of the deceased Concepcion Paterno on December 7, 1953; minus of
course, the administration expenses incurred by said executrix-appellant with
respect to these paraphernal properties. This is also in accordance with that
Persons and Fam. Relations Ass. No. 9
portion of the Rufino report making the following recommendation as to the
rentals of said properties during the period of settlement:
E. RENTALS AND OTHER INCOME DURING SETTLEMENT
For a complete liquidation of the estate under administration, the rentals
from real properties, and other income, such as proceeds from
expropriation, etc., should be disposed in the following manner:
The rentals of property declared paraphernal, after deducting
administration expenses, must be delivered to the estate of Concepcion
Paterno; while the rentals from conjugal property, after deducting
administration expenses, should be divided equally between the heir of
the husband and those of the wife.... (Record on Appeal in L-4130, p.
192).
Appellant claims that the above recommendation is void because the
commissioners appointed to execute our 1943 decision in G.R. No. 48137 were
vested only with the limited authority of putting said decision into effect, and said
decision made no disposition as to rentals or fruits of the paraphernal properties.
This contention is unmeritorious because the above recommendation was
approved by the trial court in its order of July 3, 1950, and by this Court in the
1953 decision in G.R. No. L-4130, and has become part of the "law of the case;" as
such it is now binding, conclusive, and irrevocable in this appeal. Indeed, it
nowhere, appears in the brief submitted by the executrix-appellant in G.R. No.
L-4130 that she then questioned the disposition, made by the Rufino report and
by the lower court, as to the rentals of the properties declared paraphernal during
the period of her administration, and it is now too late for her to raise this
objection many years after our decision in L-4130 had become final and executory.
With this result, it becomes unnecessary for us to discuss the executrix-appellant's
proposition that the lower court order of January 15, 1940, as amended by its
resolution of April 24, 1940, and this Court's decision in G.R. 48137, both of which
came ahead of our decision in G.R. No. L-4130, are res judicata by passing sub
silentio this issue of the exclusive right of the widow to the fruits of her
paraphernal properties.
The above discussion does not, however, imply that the estate of the widow
Concepcion Paterno has also the exclusive right to the fruits of those properties
which, although originally paraphernal, had finally become converted to conjugal
assets after their values were reimbursed or paid to the estate of the widow
Concepcion Paterno in the final partition and division of the estate left by the
deceased Narciso A. Padilla. These properties are the following:
Page | 23

(1) Lot No. 6-B of the Camba property;
(2) The interior portion of the Martin Ocampo property; and
(3) the 9/29 share of the widow in the R. Hidalgo property.
As to the above properties, their conversion from paraphernal to conjugal assets
should be deemed to retroact to the time the conjugal buildings were first
constructed thereon or at the very latest, to the time immediately before the
death of Narciso A. Padilla that ended the conjugal partnership. They can not be
considered to have become conjugal property only as of the time their values were
paid to the estate of the widow Concepcion Paterno because by that time the
conjugal partnership no longer existed and it could not acquire the ownership of
said properties. The acquisition by the partnership of these properties was, under
the 1943 decision, subject to the suspensive condition that their values would be
reimbursed to the widow at the liquidation of the conjugal partnership; once paid,
the effects of the fulfillment of the condition should be deemed to retroact to the
date the obligation was constituted (Art. 1187, New Civil Code). As a consequence,
all the fruits of these properties, after the dissolution of the partnership by the
death of the husband, until final partition, logically belonged to the universal heir
of said husband (his mother Isabel Bibby) and to the surviving widow in co-
ownership, share and share alike. As there has been periodical equal distribution
between these two parties of the current income of the estate, there is no need
for the executrix-appellant to make any new accounting for the fruits of these
properties.
Coming now to the third issue in this appeal, namely, the right of the widow to an
additional share in the improvements on the R. Hidalgo property that was
adjudicated to the estate of the husband Narciso A. Padilla in the 1953 decision,
G.R. No. L-4130, we find and no merit to the claim of appellant that —
When the R. Hidalgo property was appraised by the Rufino Report on July
9, 1948, at P189,240.00 and under such appraisement awarded to the
estate of the widow, we respectfully submit that the value as appraised
included not only the land but also the improvement which was then
already existing, the same having been built in 1947.
because the Rufino report states in clear and unmistakable terms that only the
land was appraised in the report and only its value included in the project of
partition:
Persons and Fam. Relations Ass. No. 9
The R. Hidalgo property is partly conjugal and partly paraphernal. Nine-
twenty-ninths thereof belongs to the Testate Estate of Concepcion
Paterno Vda. de Padilla as paraphernal property, while ten-twenty-ninths
thereof belongs to it as share in the conjugal partnership, while the
remaining ten-twenty-ninths should belong to Dña. Isabel B. Vda. de
Padilla as her inheritance from the decedent herein. It has a total area of
946.2 square meters. At the rate of P200 per square meter, it has a total
value of P189,240.00. The lot shall become conjugal property and divided
accordingly after the Testate Estate of Concepcion Paterno Vda. de
Padilla shall have been reimbursed in the sum of P58,729.67. (Record on
Appeal in L-4130, pp. 182-183)
Indeed, the Rufino report could not have included the value of the improvements
at the time the commissioners appraised this property for purposes of partition
between the parties, because the old improvements thereon were destroyed
during the war and whatever improvements were found therein by the
commissioners in 1948 still belonged to the lessee of said property. This was
admitted in the executrix-appellant's own brief in G.R. No. L-4130 (pp. 119-120),
to wit:
The increase in the valuation of the share of the widow in the R. Hidalgo
property from P45,608.26 to P58,729.59 is certainly unjustified,
considering, as above stated, that the permanent improvements on the
R. Hidalgo property were totally destroyed by fire during liberation.
Besides, if the property present has increased in value, it is due to the
executrix-appellant who, after liberation, entered into a contract of lease
with Cinema Operators, Inc., which built the Illusion Theatre and the
commercial establishments nearby. The improvements built by the
lessee will become the property of the estate of Narciso A. Padilla after
the expiration of said contract of lease.lawphil.net
Hence, the footnote in our decision in L-4130 to the following effect:
This Illusion Theatre was not reckoned with in the Rufino report.
Apparently it would pass to the estate in 1952 upon the occurrence of
certain specified contingencies. If it has passed the matter could
undoubtedly be the subject of further deliberation upon appropriate
motions. It would only be a question of determining the additional value
of the R. Hidalgo property and of requiring the herein appellant to pay
the Paterno estate its corresponding share. (Record on Appeal, p. 157)
Page | 24
 Persons and Fam. Relations Ass. No. 9

As correctly observed by the lower court in the order now appealed from, "the
above-quoted portion of the decision is clear and needs no further elucidation"
(Record on Appeal p. 62).

Considering that the improvements on the R. Hidalgo property accrued to the

owner of the land only after the expiration of the seven-year lease entered into
by the executrix-appellant with the tenant on February 2, 1946, the lower court
did not err in ordering the appraisal of said improvement with the view of
determining the additional share therein of the widow Concepcion Paterno.

WHEREFORE, with the clarification that the accounting of the income of the
paraphernal properties to be made by the executrix-appellant should refer only to
the Arquiza, Juan Luna, and Callejon de la Fe properties, to Lot No. 6-A of the
Camba property, and to the outer portion of the Martin Ocampo property, the
order appealed from is affirmed. Without special pronouncement as to costs.

Page | 25
 Persons and Fam. Relations Ass. No. 9

EN BANC sale to October 26, 1960. On October 17, 1960, she filed amended motion, dated
October 14, alleging that on November 11, 1952, during the pendency of the case,
G.R. No. L-21533 June 29, 1967 defendant Pascual Lozano died and that the property levied upon was her
paraphernal property, and praying that her liability be fixed at one-half (½) of the
HERMOGENES MARAMBA, plaintiff-appellant, amount awarded in the judgment and that pending the resolution of the issue an
vs. order be issued restraining the Sheriff from carrying out the auction sale
NIEVES DE LOZANO, ET AL., defendants-appellees. scheduled on October 26, 1960.

N. Tanopo, Jr. and Millora for plaintiff-appellant. On that date the sale proceeded anyway, and the property of Nieves de Lozano
Manuel Ancheta and Bausa, Ampil and Suarez for defendants-appellees. which has been levied upon was sold to the judgment creditor, as the highest
bidder, for the amount of P4,175.12, the balance of the judgment
debt.1äwphï1.ñët
MAKALINTAL., J.:

On October 27, 1960, plaintiff filed an opposition to the defendant's amended

Appeal from an order of the Court of First Instance of Dagupan City in its Civil Case
motion dated October 14, 1960. And on June 28, 1961, the trial court issued the
No. 10485, dated June 28, 1961. This case was originally brought to the Court of
questioned order, the dispositive part of which is as follows:
Appeals, but subsequently certified to Us on the ground that the issues raised are
purely legal.
WHEREFORE, the court hereby grants the motion of counsel for
defendant Nieves de Lozano, dated October 5, 1960, which was amended
It appears that on November 3, 1948, the plaintiff filed an action against the
on October 14, 1960, and holds that the liability of the said defendant
defendant Nieves de Lozano and her husband Pascual Lozano for the collection of
under the judgment of June 23, 1959, is only joint, or P1,750.04, which is
a sum of money. After trial, the court a quo on June 23, 1959 rendered its decision,
one-half (½) of the judgment debt of P3,500.07 awarded to the plaintiff
the dispositive part of which is as follows:
and that the writ of execution be accordingly modified in the sense that
the liability of defendant Nieves de Lozano be only P1,750.04 with legal
WHEREFORE, the court hereby renders judgment, sentencing the
interest from the date of the filing of the complaint on November 5, 1948
defendants herein, Nieves de Lozano and Pascual Lozano, to pay unto the
until fully paid, plus the amount of P21.28 which is also one-half (½) of
herein plaintiff, Hermogenes Maramba, the total sum of Three Thousand
the costs taxed by the Clerk of Court against the defendant spouses. Let
Five Hundred Pesos and Seven Centavos (P3,500.07), with legal interest
the auction sale of the above-mentioned property of defendant Nieves
thereon from date of the filing of the instant complaint until fully paid.
de Lozano proceed to satisfy her liability of P1,750.04 with legal interest
as above stated and the further sum of P21.28 representing the costs,
With costs against the said defendants. unless she voluntarily pays the same to the judgment creditor (herein
plaintiff).
Not satisfied with the judgment, the defendants interposed an appeal to the Court
of Appeals but the appeal was dismissed on March 30, 1960 for failure of the Plaintiff interposed an appeal from the above-quoted order and assigned several
defendants to file their brief on time. After the record the case was remanded to errors, which present three major issues, to wit:
the court a quo, a writ of execution was issued, and on August 18, 1960 levy was
made upon a parcel of land covered by transfer certificate title No. 8192 of
(a) whether or not the decision of the lower court dated June 23, 1959
Pangasinan in the name of Nieves de Lozano. The notice of sale at public auction
could still be questioned;
was published in accordance with law and scheduled for September 16, 1960.
(b) whether or not the judgment was joint or solidary; and
On that date, however, defendant Nieves de Lozano made a partial satisfaction of
the judgment in the amount P2,000.00, and requested for an adjournment of the

Page | 26

(c) whether or not the judgment debt could be satisfied from the
proceeds of the properties sold at public auction.
Plaintiff-appellant submits that a "nunc pro tunc" order should have been issued
by the trial court dismissing, as of November 11, 1952, the case against the late
Pascual Lozano by reason of his death, and that the lower court should have
corrected its decision of June 23, 1959, by striking out the letter "s" in the word
"defendants" and deleting the words "and Pascual Lozano."
We do not think that the action suggested would be legally justified. It would entail
a substantial amendment of the decision of June 23, 1959, which has long become
final and in fact partially executed. A decision which has become final and
executory can no longer be amended or corrected by the court except for clerical
errors or mistakes,1 and however erroneous it may be, cannot be
disobeyed;2 otherwise litigations would be endless and no questions could be
considered finally settled.3 The amendment sought by appellee involves not
merely clerical errors but the very substance of the controversy. And it cannot be
accomplished by the issuance of a "nunc pro tunc" order such as that sought in
this case. The purpose of an "nunc pro tunc" is to make a present record of an
which the court made at a previous term, but which not then recorded. It can only
be made when the ordered has previously been made, but by inadvertence not
been entered. In the instant case there was no order previously made by the court
and therefore there is no now to be recorded.
Now then, it is clear that the decision of June 23, 1959 does not specify the extent
of the liability of each defendant. The rule is that when the judgment does not
order the defendants to pay jointly and severally their liability is merely joint, and
none of them may be compelled to satisfy the judgment in full. This is in harmony
with Articles 1137 and 1138 of the Civil Code.
Plaintiff-appellant contends that in any event the entire judgment debt can be
satisfied from the proceeds the property sold at public auction in view of the
presumption that it is conjugal in character although in the of only one of the
spouses. The contention is incorrect. The presumption under Article 160 of the
Civil Code to property acquired during the marriage. But in the instant case there
is no showing as to when the property in question was acquired and hence the
fact that the title is in the wife's name alone is determinative. Furthermore,
appellant himself admits in his brief (p. 17) that the property in question is
paraphernal.
Appellant next points out that even if the land levied upon were originally
paraphernal, it became conjugal property by virtue of the construction of a house
Persons and Fam. Relations Ass. No. 9
thereon at the expense of the common fund, pursuant to Article 158 paragraph 2
of the Civil Code. However, it has been by this Court that the construction of a
house at conjugal expense on the exclusive property of one of the spouses doe
not automatically make it conjugal. It is true that meantime the conjugal
partnership may use both in the land and the building, but it does so not as owner
but in the exercise of the right of usufruct. The ownership of the land remains the
same until the value thereof is paid, and this payment can only be demanded in
the liquidation of the partnership (Coingco vs. Flores, 82 Phil. 284; Paterno vs.
Bibby Vda. de Padilla, 74 Phil. 377; Testate Estate of Narciso Padilla, G.R.No. L-
8748, Dec. 26, 1961). The record does not show that there has already been a
liquidation of the conjugal partnership between the late Pascual Lozano and
Nieves de Lozano. Consequently, the property levied upon, being the separate
property of defendant Nieves de Lozano, cannot be made to answer for the
liability of the other defendant.
On May 18, 1967 counsel for defendants-appellees filed with Us a petition
alleging, inter alia; that prior to the expiration of the redemption period and
pursuant to an order of the lower court defendants filed a surety bond in the
amount of P3,175.12 as the redemption price, which bond was duly approved by
the lower court; that sometime last September 1966, defendants filed a petition
before the lower court praying that the sheriff of Pangasinan be ordered to
execute the corresponding deed of redemption in favor of defendant Nieves de
Lozano represented by her judicial administrator or that, in the alternative, the
Register of Deeds of Dagupan City be directed to cancel Entries Nos. 19234 and
20042 at the back of TCT No. 8192; and that said petition was denied by the lower
court. The same prayer made below is reiterated in the said petition of May 18,
1967.
The foregoing petition of May 18, 1967 alleges facts which occurred after the
perfection of the present appeal and which should therefore be submitted to and
passed upon by the trial court in connection with the implementation of the order
appealed from, which is hereby affirmed, with costs.
Page | 27
 Persons and Fam. Relations Ass. No. 9

SECOND DIVISION Now, therefore, you are commanded that of the goods and chattels of the
defendant Erlinda Nicol, or from her estates or legal heirs, you cause the sum in
G.R. No. 145222 April 24, 2009 the amount of forty thousand pesos (₱40,000.00), Philippine Currency,
representing the moral damages, attorney’s fees and litigation expenses and
SPOUSES ROBERTO BUADO and VENUS BUADO, Petitioners, exemplary damages and the cost of suit of the plaintiff aside from your lawful fees
vs. on this execution and do likewise return this writ into court within sixty (60) days
THE HONORABLE COURT OF APPEALS, Former Division, and ROMULO from date, with your proceedings endorsed hereon.
NICOL, Respondents.
But if sufficient personal property cannot be found whereof to satisfy this
DECISION execution and lawful fees thereon, then you are commanded that of the lands and
buildings of said defendant you make the said sum of money in the manner
required by the Rules of Court, and make return of your proceedings with this writ
TINGA, J.:
within sixty (60) days from date.3
Before this Court is a petition for certiorari assailing the Decision 1 of the Court of
Finding Erlinda Nicol’s personal properties insufficient to satisfy the judgment, the
Appeals in CA-G.R. CV No. 47029 and its Resolution denying the motion for
Deputy Sheriff issued a notice of levy on real property on execution addressed to
reconsideration thereof.
the Register of Deeds of Cavite. The notice of levy was annotated on the Transfer
Certificate of Title No. T-125322.
The case stemmed from the following factual backdrop:
On 20 November 1992, a notice of sheriff’s sale was issued.
On 30 April 1984, Spouses Roberto and Venus Buado (petitioners) filed a
complaint for damages against Erlinda Nicol (Erlinda) with Branch 19 of the
Two (2) days before the public auction sale on 28 January 1993, an affidavit of
Regional Trial Court (RTC) of Bacoor, Cavite, docketed as Civil Case No. 84-33. Said
third-party claim from one Arnulfo F. Fulo was received by the deputy sheriff
action originated from Erlinda Nicol’s civil liability arising from the criminal offense
prompting petitioners to put up a sheriff’s indemnity bond. The auction sale
of slander filed against her by petitioners.
proceeded with petitioners as the highest bidder.
On 6 April 1987, the trial court rendered a decision ordering Erlinda to pay
On 4 February 1993, a certificate of sale was issued in favor of petitioners.
damages. The dispositive portion reads:

Wherefore, judgment is hereby rendered in favor of the plaintiff[s] and against
defendant ordering the latter to pay the former the amount of thirty thousand
(₱30,000.00) pesos as moral damages, five thousand (₱5,000.00) pesos as
attorney’s fees and litigation expenses, another five thousand (₱5,000.00) pesos
as exemplary damages and the cost of suit.2
Said decision was affirmed, successively, by the Court of Appeals and this Court. It
became final and executory on 5 March 1992.
On 14 October 1992, the trial court issued a writ of execution, a portion of which
provides:
Almost a year later on 2 February 1994, Romulo Nicol (respondent), the husband
of Erlinda Nicol, filed a complaint for annulment of certificate of sale and damages
with preliminary injunction against petitioners and the deputy sheriff.
Respondent, as plaintiff therein, alleged that the defendants, now petitioners,
connived and directly levied upon and execute his real property without
exhausting the personal properties of Erlinda Nicol. Respondent averred that
there was no proper publication and posting of the notice of sale. Furthermore,
respondent claimed that his property which was valued at ₱500,000.00 was only
sold at a "very low price" of ₱51,685.00, whereas the judgment obligation of
Erlinda Nicol was only ₱40,000.00. The case was assigned to Branch 21 of the RTC
of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the grounds of lack of
jurisdiction and that they had acted on the basis of a valid writ of execution. Citing

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De Leon v. Salvador,4 petitioners claimed that respondent should have filed the
case with Branch 19 where the judgment originated and which issued the order
of execution, writ of execution, notice of levy and notice of sheriff’s sale.
In an Order5 dated 18 April 1994, the RTC dismissed respondent’s complaint and
ruled that Branch 19 has jurisdiction over the case, thus:
As correctly pointed out by the defendants, any flaw in the implementation of the
writ of execution by the implementing sheriff must be brought before the court
issuing the writ of execution. Besides, there are two (2) remedies open to the
plaintiff, if he feels that the property being levied on belongs to him and not to the
judgment debtor. The first remedy is to file a third-party claim. If he fails to do
this, a right is reserved to him to vindicate his claim over the property by any
proper action. But certainly, this is not the proper action reserved to the plaintiff
to vindicate his claim over the property in question to be ventilated before this
court. As earlier stated, this case should have been addressed to Branch 19, RTC
Bacoor as it was that court which issued the writ of execution.6
Respondent moved for reconsideration but it was denied on 26 July 1994.
On appeal, the Court of Appeals reversed the trial court and held that Branch
21 has jurisdiction to act on the complaint filed by appellant. The dispositive
portion reads:
WHEREFORE, the Orders appealed from are hereby REVERSED and SET ASIDE. This
case is REMANDED to the Regional Trial Court of Imus, Cavite, Branch 21 for
further proceedings.
SO ORDERED.7
Petitioners’ motion for reconsideration was denied on 23 August 2000. Hence, the
instant petition attributing grave abuse of discretion on the part of the Court of
Appeals.
A petition for certiorari is an extraordinary remedy that is adopted to correct
errors of jurisdiction committed by the lower court or quasi-judicial agency, or
when there is grave abuse of discretion on the part of such court or agency
amounting to lack or excess of jurisdiction. Where the error is not one of
jurisdiction, but of law or fact which is a mistake of judgment, the proper remedy
should be appeal. In addition, an independent action for certiorari may be availed
Persons and Fam. Relations Ass. No. 9
of only when there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law.8
Nowhere in the petition was it shown that the jurisdiction of the Court of Appeals
was questioned. The issue devolves on whether the husband of the judgment
debtor may file an independent action to protect the conjugal property subject to
execution. The alleged error therefore is an error of judgment which is a proper
subject of an appeal.
Nevertheless, even if we were to treat this petition as one for review, the case
should still be dismissed on substantive grounds.
Petitioners maintain that Branch 19 retained jurisdiction over its judgment to the
exclusion of all other co-ordinate courts for its execution and all incidents thereof,
in line with De Leon v. Salvador. Petitioners insist that respondent, who is the
husband of the judgment debtor, is not the "third party" contemplated in Section
17 (now Section 16), Rule 39 of the Rules of Court, hence a separate action need
not be filed. Furthermore, petitioners assert that the obligation of the wife
redounded to the benefit of the conjugal partnership and cited authorities to the
effect that the husband is liable for the tort committed by his wife.
Respondent on the other hand merely avers that the decision of the Court of
Appeals is supported by substantial evidence and in accord with law and
jurisprudence.9
Verily, the question of jurisdiction could be resolved through a proper
interpretation of Section 16, Rule 39 of the Rules of Court, which reads:
Sec. 16. Proceedings where property claimed by third person.
If the property levied on is claimed by any person other than the judgment obligor
or his agent, and such person makes an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title, and serves the same
upon the officer making the levy and a copy thereof upon the judgment obligee,
the officer shall not be bound to keep the property, unless such judgment obligee,
on demand of the officer, files a bond approved by the court to indemnify the
third-party claimant in a sum not less than the value of the property levied on. In
case of disagreement as to such value, the same shall be determined by the court
issuing the writ of execution. No claim for damages for the taking or keeping of
the property may be enforced against the bond unless the action therefor is filed
within one hundred twenty (120) days from the date of the filing of the bond.
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The officer shall not be liable for damages for the taking or keeping of the
property, to any third-party claimant if such bond is filed. Nothing herein
contained shall prevent such claimant or any third person from vindicating his
claim to the property in a separate action, or prevent the judgment obligee from
claiming damages in the same or a separate action against a third-party claimant
who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or
any officer duly representing it, the filing of such bond shall not be required, and
in case the sheriff or levying officer is sued for damages as a result of the levy, he
shall be represented by the Solicitor General and if held liable therefor, the actual
damages adjudged by the court shall be paid by the National Treasurer out of such
funds as may be appropriated for the purpose. (Emphasis Supplied)
Apart from the remedy of terceria available to a third-party claimant or to a
stranger to the foreclosure suit against the sheriff or officer effecting the writ by
serving on him an affidavit of his title and a copy thereof upon the judgment
creditor, a third-party claimant may also resort to an independent separate action,
the object of which is the recovery of ownership or possession of the property
seized by the sheriff, as well as damages arising from wrongful seizure and
detention of the property. If a separate action is the recourse, the third-party
claimant must institute in a forum of competent jurisdiction an action, distinct and
separate from the action in which the judgment is being enforced, even before or
without need of filing a claim in the court that issued the writ. 101awphi1.zw+
A third-party claim must be filed a person other than the judgment debtor or his
agent. In other words, only a stranger to the case may file a third-party claim.
This leads us to the question: Is the husband, who was not a party to the suit but
whose conjugal property is being executed on account of the other spouse being
the judgment obligor, considered a "stranger?"
In determining whether the husband is a stranger to the suit, the character of the
property must be taken into account. In Mariano v. Court of Appeals, 11 which was
later adopted in Spouses Ching v. Court of Appeals, 12 this Court held that the
husband of the judgment debtor cannot be deemed a "stranger" to the case
prosecuted and adjudged against his wife for an obligation that has redounded to
the benefit of the conjugal partnership.13 On the other hand, in Naguit v. Court of
Appeals14 and Sy v. Discaya,15 the Court stated that a spouse is deemed a stranger
to the action wherein the writ of execution was issued and is therefore justified in
bringing an independent action to vindicate her right of ownership over his
exclusive or paraphernal property.lawphil.net
Persons and Fam. Relations Ass. No. 9
Pursuant to Mariano however, it must further be settled whether the obligation
of the judgment debtor redounded to the benefit of the conjugal partnership or
not.
Petitioners argue that the obligation of the wife arising from her criminal liability
is chargeable to the conjugal partnership. We do not agree.
There is no dispute that contested property is conjugal in nature. Article 122 of
the Family Code16 explicitly provides that payment of personal debts contracted
by the husband or the wife before or during the marriage shall not be charged to
the conjugal partnership except insofar as they redounded to the benefit of the
family.
Unlike in the system of absolute community where liabilities incurred by either
spouse by reason of a crime or quasi-delict is chargeable to the absolute
community of property, in the absence or insufficiency of the exclusive property
of the debtor-spouse, the same advantage is not accorded in the system of
conjugal partnership of gains. The conjugal partnership of gains has no duty to
make advance payments for the liability of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be concluded that the civil
obligation arising from the crime of slander committed by Erlinda redounded to
the benefit of the conjugal partnership.
To reiterate, conjugal property cannot be held liable for the personal obligation
contracted by one spouse, unless some advantage or benefit is shown to have
accrued to the conjugal partnership.17
In Guadalupe v. Tronco,18 this Court held that the car which was claimed by the
third party complainant to be conjugal property was being levied upon to enforce
"a judgment for support" filed by a third person, the third-party claim of the wife
is proper since the obligation which is personal to the husband is chargeable not
on the conjugal property but on his separate property.
Hence, the filing of a separate action by respondent is proper and jurisdiction is
thus vested on Branch 21. Petitioners failed to show that the Court of Appeals
committed grave abuse of discretion in remanding the case to Branch 21 for
further proceedings.
WHEREFORE, the petition is DISMISSED. The Decision of the Court of Appeals
is AFFIRMED. Costs against petitioners.
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