Castillo v. Pasco (1964) Facts: Marcelo Castillo Sr.

., a widower, married Macaria Pasco, a widow who had survived 2 previous husbands. In 1932, The Gonzales couple, as co-owners of the litigated fishpond, executed a deed of sale conveying said property to spouses Marcelo and Macaria for P6,000 which was payable in 3 installments: P1,000 upon execution of the deed, P1,000 within 1 month without interest and P3,000 after 1 year with 11% interest. In 1933, Marcelo died and Macaria got married to her 4th husband in June 1934. The petitioners, children and grandchildren of Marcelo by his previous marriage, filed a complaint for partition and accounting of the fishpond in CFI of Bulacan. Installments were paid in the ff manner: 1) paid by Macaria with her exclusive money 2) paid with proceeds from a loan from Dr. Jacinto, to whom the fishpond was mortgaged by both spouses 3) paid from a loan secured by a mortgage on 2 parcels of land assessed in the name of Macaria Issue: WON the 2nd and 3rd installments were paid with conjugal funds. -Yes Ratio: Under the Spanish Civil Code, the law applicable to the case at bar, the property acquired for onerous consideration during the marriage was deemed conjugal or separate property depending on the source of the funds employed for its acquisition, irrespective of in whose name the property was acquired. Property acquired during the effectivity of the old Civil Code partly with paraphernal funds of the wife and partly with conjugal funds is held to belong to both patrimonies in common, in proportion to the

contributions of each to the total purchase price. The initial P1000 payment was paid exclusively with money belonging to Macaria. But the 2 other payments were paid by conjugal funds. The deeds show that the loans used to pay both installments were made out to both spouses as joint borrowers. Loans thus become obligations of CPG and money loaned is conjugal property. Since the fishpond was purchased partly with conjugal and partly with separate funds, justice requires that the property be held to belong to both patrimonies in common, in proportion to the contributions of each to the total purchase price. An undivided 1/6 is paraphernal and the remaining 5/6 is conjugal. Payment by the widow of the mortgage debt after the husbands death does not result in an increase in her share in the property but merely creates a lien in her favor. Since the fishpond is undivided property of Macaria and the conjugal partnership with Marcelo, his heirs are entitled to ask for its partition and liquidation. The ultimate interest of each party must be resolved after due hearing, taking into account: 1) Macarias 1/6 direct share 2) Her half of the community property 3) Her successional rights to a part of the husbands share pursuant to the governing law of succession when he died 4) Her right to reimbursement for any amount advance by her in paying the mortgage debt.