1

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.
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.

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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

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:

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

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.

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, Corazon,
Anselmo, Benigno, Eligio Jesus and Luz, all surnamed Fajardo
and the PNB.

Hence the herein petition for certiorari filed by the PNB raising
the following assignments of error:

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

I
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

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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.
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 covering said
properties the mortgage loan applications of Donata were
granted 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 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:

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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 good faith 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
reimbursable to the estate of Clodualdo Vitug on his
death. 17 That must be the 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

5
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.

2 Annex 1, Answer of PNB, Record on Appeal;

par. 17, Partial Stipulation of Facts, pp. 141142, supra.
3 Par. 16, Partial Stipulation of Facts, p.
141, supra.
4 Par. 18, Partial Stipulation of Facts, p.
142, supra.
5 Pars. 12, 13, 19, 20, 21, and 22, Partial
Stipulation of Facts, pp. 139-144, supra.
6 Pars. 6 to 10 and 11, Partial Stipulation of
Facts, pp- 124, 125 and 139, Record on Appeal.

SO ORDERED.

7 Pars. 22, 23 and 24, Partial Stipulation of

facts, pp. 144-145, Record on Appeal.

Teehankee, C.J., Narvasa and Cruz, JJ., concur.

8 Pars. 5, 6, 7, 8, 15, pp. 136-140 supra.

Paras, J., concur in the result.

9 Capital Subdivision vs. Province of Negros

Occidental, L-16257, January 31, 1963, 7
SCRA 60; Fule vs. Legare L-17951, Feb. 28,
1963, 7 SCRA 351.

Footnotes
* Penned by Mr. Justice Porfirio V. Sison, and
concurred in by Messrs. Justices Juan Sison
and Elias B. Asuncion.
1 Annex 2, Answer of PNB, Record on Appeal;
par. 11, Partial Stipulation of Facts, p. 139;
Record on Appeal.

10 Legarda and Prieto vs. Salleeby, 31 Phil.

590.
11 Director of Lands vs. Court of Appeals, 122
SCRA 37, 70.
12 Maramba vs. Lozano, 20 SCRA 474,

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13 Nable Jose vs. Nable Jose, 41 Phil. 713;
Seva vs. Nolan, 340.
14 Cui and Joven vs. Henson, 51 Phil 606, 612;
Roxas vs. Dinglasan, L-27234, May 30, 1969,
28 SCRA 430.
15 91 Phil. 286.
16 93 Phil. 99.
17 91 Phil. 289.
18 Exhibit 17 PNB & 18 PNB, Pp. 210-212,
Record on Appeal.
19 Ang Lam vs. Rosillosa, L-3595, May 22,
1950; Hernandez vs. Rural Bank of Lucena, L2979, Jan. 10, 1978, 81 SCRA 84-85.
20 Fule vs. Legare, supra; Arches vs. Billanes,
L-20452, April 30, 1965, 13 SCRA 715.
21 Vitug vs. Montemayor, 91 Phil. 286, 288; see
also Exhibits 3 Mendiola, 3-A Mendiola, 3-B
Mendiola, pp. 238-240, Record on Appeal.
22 Exhibits 1, 1-A, and 1-B Mendiola, 2 and 2-A
Mendiola, pp. 236-238, Record on Appeal.
23 Tijam vs. Sibonghanoy, L-21450, April 15,
1968, 32 SCRA 29.
24 Section 3 (b), Rule 131, Rules of Court.

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THIRD DIVISION
G.R. No. 72321 December 8, 1988
DIOSDIDIT, BALDOMERO, FILOMENO, ELPIDIO, AIDA, all
surnamed CUENCA, petitioners,
vs.
RESTITUTO CUENCA, MELADORA CUENCA and COURT
OF APPEALS, respondents.
De Castro & Cagampang Law Offices for petitioners.
Cipriano C. Alvizo, Sr. for respondents.

GUTIERREZ, JR., J.:

This petition for review on certiorari seeks the reversal of the
resolutions of the then Intermediate Appellate Court, now
Court of Appeals, denying the petitioners' motion for new trial
on the ground of newly discovered evidence.
Private respondents Restituto Cuenca and Meladora Cuenca
filed a complaint for recovery of real property and damages
against the petitioners before the then Court of First Instance
of Davao del Norte. The case was docketed as Civil Case No.
1240.
After trial, the lower court rendered a decision in favor of the
petitioners. The lower court dismissed the complaint.
The private respondents appealed the decision to the then
Intermediate Appellate Court.

On November 26, 1984, the appellate court reversed and set

aside the decision of the lower court. It rendered a decision in
favor of the private respondents the dispositive portion of
which reads:
WHEREFORE, the decision appealed from is hereby
set aside and another one entered declaring plaintiff
Restituto Cuenca the absolute and exclusive owner of
that parcel of land known as Lot 3063 Pls-22 of the
Cadastral Survey of the Municipality of Butuan,
Province of Agusan located at Bo. Pinamangculan
containing an area of six (6) hectares, more or less,
declared in the name of Restituto Cuenca; ordering the
defendants to restore to said plaintiff Restituto Cuenca
the possession of said parcel of land; declaring the
parcel of land described as Lot 3060 Pls-22 of the
Cadastral Survey of the Municipality of Butuan,
Province of Agusan, located at Barrio Pinamangculan
Butuan, Agusan, containing an area of 17 hectares,
732 centares, more or less, declared in the name of
Restituto Cuenca as conjugal partnership property of
deceased spouses Agripino Cuenca and Maria
Bangahon in effect declaring one half portion of said
parcel of conjugal partnership property the share of the
deceased Maria Bangahon to be divided exclusively
share and share alike between the plaintiffs Restituto
Cuenca and Meladora Cuenca as the heirs of Maria
Bangahon; declaring the other half portion of said
parcel as the share of the late Agripino Cuenca also
with plaintiffs as the only surviving heirs of the said
Agripino Cuenca entitled to divide exclusively between
themselves share and share alike the said one half
portion of Agripino Cuenca, and the other one half of
the share of Agripino Cuenca to be divided among the
plaintiffs Restituto Cuenca and Meladora Cuenca and
defendant Engracia Basadre in equal shares under

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Article 892 of the New Civil Code. The other claim of
the plaintiffs for damages and accounting of the value
of the produce corresponding to their shares is not
granted for lack of evidence. The counterclaim of
defendants is likewise dismissed for lack of merit.
(Rollo, pp. 37-38)
On December 3, 1984, the petitioners received a copy of the
appellate court's decision.
On December 14, 1984, the petitioners filed a motion for
reconsideration of the decision.
On February 22, 1985, the petitioners filed a Supplemental
Motion for Reconsideration and/or Motion for New Trial on the
ground of newly discovered evidence.

The sole issue raised in the instant petition pertains to the

period when a party may file a motion for new trial before the
appellate court.
The Rules of Court under Rule 37 and Rule 53 provide two (2)
instances when a party may file a motion for new trial on the
ground of newly discovered evidence. Rule 37, Section 1
states:
SECTION 1. Grounds of and period for filing motion for
new trial within the period for perfecting appeal, the
aggrieved party may move the trial court to set aside
the judgment and giant a new trial for one or more of
the following causes materially affecting the substantial
rights of said party.
xxx xxx xxx

In a Resolution dated August 6, 1985, the appellate court

denied the motion for reconsideration for lack of merit and the
supplemental motion for reconsideration and/or new trial for
having been filed out of time. The court ruled that under
section 1, Rule 37 of the Revised Rules of Court, a motion for
new trial on the ground of newly discovered evidence must be
filed only within thirty (30) days after notice of the decision is
received.
The petitioners filed a motion for reconsideration of the August
6, 1985 resolution insofar as the same held that the motion for
new trial was filed out of time. The motion was denied for lack
of merit and legal basis.
Hence, this petition.
In a resolution dated September 14, 1987, we gave due
course to the petition.

b) Newly discovered evidence, which he could not, with

reasonable diligence have discovered, and produced at
the trial and which if presented would probably alter the
result; (emphasis supplied)
xxx xxx xxx
while section 1, Rule 53 states:
SECTION 1. Petition before a final order or judgment
rendered by the Court of Appeals becomes executory,
a motion for new trial may be filed on the ground of
newly discovered evidence which could not have been
discovered prior to the trial in the court below by the
exercise of due diligence and which is of such a
character as would probably change the result. The
motion shall be accompanied by affidavits showing the

9
facts constituting the grounds therefor and the newly
discovered evidence. (Emphasis supplied)
The rules are clear and leave no room for interpretation, Rule
37 speaks of a trial court while Rule 53 speaks of the Court of
Appeals. Undoubtedly, the appellate court erred in denying the
petitioners' motion for new trial on the ground that it was filed
out of time pursuant to Rule 37. The applicable law is Rule 53
and since the motion for new trial was filed before the
appellate court's judgment could become final and executory,
the motion was filed within the reglementary period.
With these findings, the usual procedure would be to remand
the case to the appellate court. Nevertheless, since all the
relevant facts needed to resolve the issue as to whether or not
the petitioners' motion for new trial is meritorious are before
us, we find no need to refer the case back to the appellate
court. (See Tejones v. Gironella, et al., G.R. No. L-35506
March 21, 1988; Alger Electric, Inc. v. Court of Appeals (135
SCRA 37 [1985]), and Beautifont, Inc., et al. v. Court of
Appeals, et al. (G.R. No. 50141, January 29, 1988).
Civil Case No. 1240 had for its subject matter parcels of land
which were claimed by- two sets of families. Private
respondents Restituto Cuenca and Meladora Cuenca claimed
ownership over the subject parcels of land on the ground that
they are the legitimate children of Agripino Cuenca and Maria
Bangahon, both deceased, owners of the subject parcels of
land. They alleged that some of the parcels are paraphernal
property of Maria while all the others are conjugal properties of
Maria and Agripino They also alleged that Agripino Cuenca
and Engracia Basadre were not legally married because at the
time they lived together Agripino was married to a certain
Jesusa Pagar.

On the other hand, the petitioners (defendants below)

Diosdidit, Baldomero, Filomeno Elpidio, Aida, Anita and
Engracia Vda. de Cuenca denied the legitimacy of the
marriage between Agripino Cuenca and Maria Bangahon as
well as the legitimacy of the plaintiffs as children of the couple.
They claimed that Agripino Cuenca and their mother Engracia
Basadre were legally married and that they are the legitimate
children of the couple. They contend that the subject parcels of
lands are conjugal properties of Agripino and Engracia.
The appellate court stated its findings as follows:
The records show that defendant Bartolome
Sanchez upon manifestation of his counsel is
no longer a necessary party as Engracia
Basadre-Cuenca has repurchased that portion
of the land in question sold to Bartolome
Sanchez making plaintiffs' claim against
defendant Bartolome Sanchez moot and
academic.
Our review of the evidence shows that Agripino
Cuenca in his lifetime expressed in the
extrajudicial settlement of the estate of Maria
Bangahon executed on June 13, 1950 before
Notary Public Francisco Ro. Cupin (Exh. "C")
that:
Parcel of agricultural land situated in
Pinamangculan Butuan, Agusan, planted to
coconut, under the present possession of the
heirs of Maria Bangahon, bounded on the
North, Lot No. 3062, Lucio Plaza, Lot No. 4319,
A. Cuenca, portion of Lot No. 3063, in the
possession of A. Cuenca, on the south Road,
on the West by Lot No. 3057, S. Dumanon

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3058, B. Adormio, 3059, A. Cuenca and east
portion of Lot No. 3063, containing an area of
six (6) hectares, more or less (This is a portion
of Lot No. 3063, Pls-22 of Cad. of Municipality
of Butuan which parcel of land belongs
exclusively to Maria Bangahon during her
lifetime and which property is separate from the
conjugal property of the marriage of said Maria
Bangahon and Agripino Cuenca.
That parcel of land situated in Rendon, Butuan, Agusan,
planted to rice with irrigation under the present possession of
the heirs, bounded on the North by Mariano Agagdang on the
East by Clerencia Tagonsod on the South by Suatan River and
on the West by Mariano Agagdang containing an area of
1.2500 hectares, more or less, under Tax Dec. 3055, assessed
at P250.00 by the property records of Agusan.
That parcel of land situated in Rendon, Butuan, Agusan,
planted to coconut, under the present possession of the heirs,
bounded on the North by Maximo Bangahon, on the East, by
Sergio Pagar, on the South, by Macaria Agagdang on the
West, by Folgencio Buyan, containing an area of 1.1722
hectares, more or less, assessed at P670.00 by Tax Dec. No.
4026 of Agusan."
belong to Maria Bangahon as her inheritance from her
parents. This declaration against interest is further reiterated
by Agripino Cuenca in that judicial settlement and sale
executed by him on October 19, 1950. These two documents,
as rightly contended by the plaintiffs, are ample proofs that the
properties in question described in par. 2 of the complaint,
belong exclusively to Maria Bangahon as her paraphernal
property, a fact declared by no less than the husband himself
in a declaration against his interest. It was error for the trial
court to unceremoniously brush aside the importance of the

declaration of Agripino Cuenca in the extrajudicial settlement

of the estate of Maria Bangahon. These public documents
carry sufficient evidentiary weight to prove the origin of the
properties in question and the nature of their ownership as
properties brought into the marriage by Maria Bangahon to
Agripino Cuenca as against the bare testimony of the
defendants and their witnesses, More importantly, Juan Buyan
and former Judge Francisco Ro. Cupin parties who
participated in the execution of the two documents the first as
an instrumental witness to the documents and the other the
intervening Notary Public testified to the due execution of the
said documents. These witnesses likewise proved the
genuineness of Exhibits C and D.
The ownership of Maria Bangahon of the three parcels of land
was testified to further by Adel Ras who declared unrebutted
that Maria Bangahon was the daughter of Isidro Bangahon,
the at cousin of his father; that the three parcels of land in
question were inherited by Maria Bangahon from her parents;
that Maria Bangahon later married Agripino Cuenca bringing
into their marriage the properties which she inherited from her
father, Isidro Bangahon. These pieces of evidence established
the fact that the plaintiffs are the forced heirs of Maria
Bangahon and Agripino Cuenca, who by law should succeed
to the possession and ownership of the properties in question.
On the other hand, defendants' evidence consist only of the
oral testimonies of Marta Legaspi, Engracia Basadre-Cuenca,
Baldomero Cuenca and Diosdidit Cuenca which proved
nothing concrete as they merely are inferences and
deductions conveniently tailored to support their claim that
Agripino Cuenca married Engracia Basadre-Cuenca; that the
properties in question were acquired during their marriage
without, however, presenting any document to prop up their
pretense; that they are the legitimate children of Agripino
Cuenca and Engracia Basadre-Cuenca who succeeded to the
properties in litigation. We find no evidentiary value in the

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extrajudicial settlement of the estate of Agripino Cuenca
executed by the defendants of Engracia Basadre-Cuenca and
her children. It is self-serving and proves nothing.
In passing, We note that the defendants presented tax
declaration (Exhibits 3-17-A), pieces of evidence which have
been ruled in a long line of decisions by our Supreme Court to
be not real evidence at all sufficient to prove ownership or
possession.
After considering the evidence of both parties, in sum, We find
convincing evidence to show that Agripino Cuenca and Maria
Bangahon were legally married with Restituto Cuenca and
Meladora Cuenca as their issues; that Maria Bangahon
brought properties into her marriage; that the couple acquired
properties during the marriage; that by virtue of the
extrajudicial settlement executed by Agripino Cuenca and his
children, Restituto is the absolute owner of the parcels of land
described in paragraph 2(a) (b) and (c) of the complaint; that
one half of the land described in par. 6 of the complaint
belongs to Agripino Cuenca and the other half to Maria
Bangahon the same having been acquired by Agripino Cuenca
and Maria Bangahon during their marriage-conjugal
partnership property. Therefore, upon the dissolution of the
conjugal relationship by the death of spouses Agripino Cuenca
and Maria Bangahon, one half goes to Agripino Cuenca which
portion after the death of Agripino Cuenca goes to his alleged
third wife, Engracia Basadre-Cuenca together with the
plaintiffs as forced heirs of Agripino Cuenca (Arts. 185 & 189,
New Civil Code).
From the evidence of the plaintiffs, We find the present appeal
impressed with merit." (Rollo, pp. 33-37)
In their motion for new trial the petitioners alleged:

1. There are newly discovered evidence consisting of

ancient, authentic records which establish beyond
reasonable doubt, the status of defendants-appellees
as legitimate children of the deceased Agripino Cuenca
whose estate is the subject matter of this case.
2. There is documentary proof beyond doubt that
Agripino Cuenca was never married to Jesusa Pagar.
3. The totality of defendants-appellees' evidence prove
that Engracia A. Basadre was married legally to
Agripino Cuenca in 1920 and that defendant-appellees
are legitimate children of Agripino Cuenca and
legitimate half-brother/half-sisters of plaintiffsappellants who are entitled to equal shares of their
father's estate.
4. There is sufficient documentary evidence to prove
that the lands in question were conjugal properties of
Agripino Cuenca and Engracia A. Basadre acquired
during their marriage. (Rollo, p. 60)
The petitioners wanted to prove that Engracia Basadre was
legally married to their father Agripino Cuenca and that all the
other petitioners were the legitimate children of the couple. In
this connection, the petitioners attached to their motion an
alleged newly discovered evidence consisting of a certified
true copy of the Register of Birth of petitioner Diosdidit
Cuenca, first child of Agripino Cuenca and petitioner Engracia
Basadre issued by the National Archives or Bureau of Records
Management which discloses that Diosdidit is a legitimate
child of the couple and a notarized public document dated
August 13,1948 which discloses that Jesusa Pagar was
married to Santiago Barkowel disproving the respondents'
evidence that Jesusa Pagar was married to Agripino Cuenca

12
The issue as to whether or not petitioner Engracia Basadre
was legally married to Agripino Cuenca was settled by the
appellate court in this wise:
After considering the evidence of both parties, in sum,
We find convincing evidence to show that Agripino
Cuenca and Maria Bangahon were legally married with
Restituto Cuenca and Meladora Cuenca as their
issues; that Maria Bangahon brought properties into
her marriage; that the couple acquired properties
during the marriage; that by virtue of the extrajudicial
settlement executed by Agripino Cuenca and his
children, Restituto is the absolute owner of the parcels
of land described in paragraph 2(a) (b) and (c) of the
complaint; that one half of the land described in par. 6
of the complaint belongs to Agripino Cuenca and the
other half to Maria Bangahon the same having been
acquired by Agripino Cuenca and Maria Bangahon
during their marriage-conjugal partnership property.
Therefore, upon the dissolution of the conjugal
relationship by the death of spouses Agripino Cuenca
and Maria Bangahon, one half goes to Agripino Cuenca
which portion after the death of Agripino Cuenca goes
to his alleged third wife, Engracia Basadre-Cuenca
together with the plaintiffs as forced heirs of agripino
Cuenca (Arts. 185 & 189, New Civil Code). (Rollo, pp.
36-37) (Emphasis supplied)
The dispositive portion of the decision states that petitioner
Engracia Basadre was entitled to inherit from Agripino Cuenca
together with the latter's legitimate children by Maria
Bangahon, the private respondents herein in accordance with
Article 892 of the New Civil Code.
Accordingly, the appellate court declared Engracia Basadre as
surviving spouse. There was, therefore no need to prove the

legality of marriage between petitioners Engracia Basadre and

Agripino Cuenca much less to prove the legitimacy of the other
petitioners who are undoubtedly the children of Agripino and
Engracia.
The petitioners also alleged the finding of newly discovered
evidence to prove that the subject parcels of land were
conjugal properties of Agripino Cuenca and petitioner Engracia
Basadre. These consist of eight (8) sketch maps obtained on
December 27, 1984 from the Regional Office of the Bureau of
Lands in Cagayan de Oro City "after extensive research." The
petitioners alleged that these parcels were surveyed for
Agripino Cuenca and approved when Agripino Cuenca was
already married to Engracia as indicated in the documents,
hence, there is the presumption that these are conjugal
properties and therefore petitioners have hereditary rights over
these properties.
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," In the cases of Philippine National
Bank v. Court of Appeals, (153 SCRA 435 [August 31,
1987); Magallon v. Montejo (146 SCRA 282 [December 16,
1986]) and Maramba v. Lozano (20 SCRA 474 [June 29,
1967]) this Court ruled that the presumption refers only to the
property acquired during marriage and does not operate when
there is no showing as to when property alleged to be conjugal
was acquired.
In the case at bar, the documents sought to be presented as
newly discovered evidence do not show that the claims to the
subject parcels consisting of homestead lands were perfected
during the marriage of Agripino Cuenca and petitioner
Engracia Basadre. The perfection of the homestead claims is
considered the time of acquisition of the properties. (See

13
Magallon v. Montejo, supra) The fact that these parcels were
surveyed for Agripino Cuenca and approved during the
marriage of Agripino Cuenca and petitioner Engracia Basadre
is not determinative of the issue as to whether or not the
parcels were the conjugal properties of Agripino and Engracia.
Moreover, the documents show that 5 of the 8 parcels covered
by the documents are titled in the name of either respondent
Meladora Cuenca or respondent Restituto Cuenca. The
presumption cannot prevail "when the title is in the name of
only one spouse and the rights of innocent third parties are
involved. (Philippine National Bank v. Court of Appeals, supra
citing Nable Jose v. Nable Jose, 41 Phil. 713) Under the
circumstances of this case, the non-applicablility of the
presumption should also be upheld.
In the light of these findings a new trial would only be an
unnecessary exercise and ineffective. The documents sought
to be presented during a new trial would not in any way
change the result. The motion for new trial was correctly
denied although not for the reason given by the respondent
court.
WHEREFORE, the instant petition is DISMISSED. The
questioned resolutions of the appellate court are AFFIRMED.
For non-compliance with this Court's Resolution dated March
2, 1988, ordering him to show cause for his failure to file a
memorandum within the period given to him, Atty. Cipriano C.
Alvizo, Sr. is fined Five Hundred (P500.00) Pesos. If he fails to
pay the fine within ten (10) days from notice of this decision,
he shall be imprisoned for five (5) days.
SO ORDERED.
Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.

14
EN BANC

G.R. No. L-28589 January 8, 1973

RAFAEL ZULUETA, ET AL., plaintiffs-appellees,
vs.
PAN AMERICAN WORLD AIRWAYS, INC., defendantappellant.
Alfredo L. Benipayo for plaintiffs-appellee Rafael Zulueta and
Carolina Zulueta.
Justo L. Albert for plaintiff-appellee Telly Albert Zulueta.
V.E. del Rosario and Associates and Salcedo, Del Rosario,
Bito, Misa and Lozada for defendant-appellant.
RESOLUTION

CONCEPCION, C.J.:
Both parties in this case have moved for the reconsideration of
the decision of this Court promulgated on February 29, 1972.
Plaintiffs maintain that the decision appealed from should be
affirmed in toto. The defendant, in turn, prays that the decision
of this Court be "set aside ... with or without a new trial, ... and
that the complaint be dismissed, with costs; or, in the
alternative, that the amount of the award embodied therein be
considerably reduced." .

Subsequently to the filing of its motion for reconsideration, the

defendant filed a "petition to annul proceedings and/or to order
the dismissal of plaintiffs-appellees' complaint" upon the
ground that "appellees' complaint actually seeks the recovery
of only P5,502.85 as actual damages, because, for the
purpose of determining the jurisdiction of the lower court, the
unspecified sums representing items of alleged damages, may
not be considered, under the settled doctrines of this
Honorable Court," and "the jurisdiction of courts of first
instance when the complaint in the present case was filed on
Sept. 30, 1965" was limited to cases "in which the demand,
exclusive of interest, or the value of the property in controversy
amounts to more than ten thousand pesos" and "the mere fact
that the complaint also prays for unspecified moral damages
and attorney's fees, does not bring the action within the
jurisdiction of the lower court."
We find no merit in this contention. To begin with, it is not true
that "the unspecified sums representing items or other alleged
damages, may not be considered" for the purpose of
determining the jurisdiction of the court "under the settled
doctrines of this Honorable Court." In fact, not a single case
has been cited in support of this allegation.
Secondly, it has been held that a clam for moral damages is
one not susceptible of pecuniary estimation. 1 In fact, Article
2217 of the Civil Code of the Philippines explicitly provides that
"(t)hough incapable of pecuniary computation, moral damages
may be recovered if they are the proximate result of the
defendant's wrongful act or omission." Hence, "(n)o proof
pecuniary loss necessary" pursuant to Article 2216 of the
same Code "in order that moral ... damages may be
adjudicated." And "(t)he assessment of such damages ... is left
to the discretion of the court" - said article adds - "according to
the circumstances of each case." Appellees' complaint is,
therefore, within the original jurisdiction of courts of first

15
instance, which includes "all civil actions in which the subject
of the litigation is not capable of pecuniary estimation." 2
Thirdly, in its answer to plaintiffs' original and amended
complainants, defendant had set up a counterclaim in the
aggregate sum of P12,000, which is, also, within the original
jurisdiction of said courts, thereby curing the alleged defect if
any, in plaintiffs' complaint. 3
We need not consider the jurisdictional controversy as
to the amount the appellant sues to recover because
the counterclaim interposed establishes the jurisdiction
of the District Court. Merchants' Heat & Light Co. v.
James B. Clow & Sons, 204 U.S. 286, 27 S. Ct. 285,
51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner,
176 F. 343 (C.C.A. 2), certiorari denied 216 U.S. 620,
30 S Ct. 575, 54 L. Ed. 641. ... . 4
... courts have said that "when the jurisdictional amount
is in question, the tendering of a counterclaim in an
amount which in itself, or added to the amount claimed
in the petition, makes up a sum equal to the amount
necessary to the jurisdiction of this court, jurisdiction is
established, whatever may be the state of the plaintiff's
complaint." American Sheet & Tin Plate Co. v. Winzeler
(D.C.) 227 F. 321, 324. 5
Thus, in Ago v. Buslon, 6 We held:
... . Then, too, petitioner's counterclaim for P37,000.00
was, also, within the exclusive original jurisdiction of
the latter courts, and there are ample precedents to the
effect that "although the original claim involves less
than the jurisdictional amount, ... jurisdiction can be
sustained if the counterclaim (of the compulsory type)"
such as the one set up by petitioner herein, based

upon the damages allegedly suffered by him in

consequence of the filing of said complaint
"exceeds the jurisdictional amount." (Moore Federal
Practice, 2nd ed. [1948], Vol. 3, p. 41; Ginsburg vs.
Pacific Mutual Life Ins. Co. of California, 69 Fed. [2d]
97; Home Life Ins. Co. vs. Sipp., 11 Fed. [2d]474;
American Sheet & Tin Plate Co. vs. Winzeler [D.C.],
227 Fed. 321, 324; Brix vs. People's Mutual Life Ins.
Co., 41 P. 2d. 537, 2 Cal. 2d. 446; Emery vs. Pacific
Employees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663).
Needless to say, having not only failed to question the
jurisdiction of the trial court either in that court or in this
Court, before the rendition of the latter's decision, and even
subsequently thereto, by filing the aforementioned motion for
reconsideration and seeking the reliefs therein prayed for
but, also, urged both courts to exercise jurisdiction over the
merits of the case, defendant is now estopped from impugning
said jurisdiction. 7
Before taking up the specific questions raised in defendant's
motion for reconsideration, it should be noted that the same is
mainly predicated upon the premise that plaintiffs' version is
inherently incredible, and that this Court should accept the
theory of the defense to the effect that petitioner was offloaded because of a bomb-scare allegedly arising from his
delay in boarding the aircraft and subsequent refusal to open
his bags for inspection. We need not repeat here the reasons
given in Our decision for rejecting defendant's contention and
not disturbing the findings of fact of His Honor, the Trial Judge,
who had the decided advantage denied to Us of
observing the behaviour of the witnesses in the course of the
trial and found those of the plaintiffs worthy of credence, not
the evidence for the defense.

16
It may not be amiss however, to stress the fact that, in his
written report, made in transit from Wake to Manila or
immediately after the occurrence and before the legal
implications or consequences thereof could have been the
object of mature deliberation, so that it could, in a way, be
considered as part of the res gestae Capt. Zentner stated
that Zulueta had been off-loaded "due to drinking" and
"belligerent attitude," thereby belying the story of the defense
about said alleged bomb-scare, and confirming the view that
said agent of the defendant had acted out of resentment
because his ego had been hurt by Mr. Zulueta's adamant
refusal to be bullied by him. Indeed, had there been an iota of
truth in said story of the defense, Capt. Zentner would have
caused every one of the passengers to be frisked or searched
and the luggage of all of them examined as it is done now
before resuming the flight from Wake Island. His failure to
do so merely makes the artificious nature of defendant's
version more manifest. Indeed, the fact that Mrs. Zulueta and
Miss Zulueta were on board the plane shows beyond doubt
that Mr. Zulueta could not possibly have intended to blow it up.
The defense tries to explain its failure to introduce any
evidence to contradict the testimony of Mr. Zulueta as to why
he had gone to the beach and what he did there, alleging that,
in the very nature of things, nobody else could have witnessed
it. Moreover, the defense insists, inter alia, that the testimony
of Mr. Zulueta is inherently incredible because he had no idea
as to how many toilets the plane had; it could not have taken
him an hour to relieve himself in the beach; there were eight
(8) commodes at the terminal toilet for men ; if he felt the need
of relieving himself, he would have seen to it that the soldiers
did not beat him to the terminal toilets; he did not tell anybody
about the reason for going to the beach, until after the plane
had taken off from Wake.

We find this pretense devoid of merit. Although Mr. Zulueta

had to look for a secluded place in the beach to relieve
himself, beyond the view of others, defendant's airport
manager, whom Mr. Zulueta informed about it, soon after the
departure of the plane, could have forthwith checked the
veracity of Mr. Zulueta's statement by asking him to indicate
the specific place where he had been in the beach and then
proceeding thereto for purposes of verification.
Then, again, the passenger of a plane seldom knows how
many toilets it has. As a general rule, his knowledge is limited
to the toilets for the class first class or tourist class in
which he is. Then, too, it takes several minutes for the
passengers of big aircrafts, like those flying from the U.S. to
the Philippines, to deplane. Besides, the speed with which a
given passenger may do so depends, largely, upon the
location of his seat in relation to the exit door. He cannot go
over the heads of those nearer than he thereto. Again, Mr.
Zulueta may have stayed in the toilet terminal for some time,
expecting one of the commodes therein to be vacated soon
enough, before deciding to go elsewhere to look for a place
suitable to his purpose. But he had to walk, first, from the
plane to the terminal building and, then, after vainly waiting
therein for a while, cover a distance of about 400 yards
therefrom to the beach, and seek there a place not visible by
the people in the plane and in the terminal, inasmuch as the
terrain at Wake Island is flat. What is more, he must have had
to takeoff part, at least, of his clothing, because, without the
facilities of a toilet, he had to wash himself and, then, dry
himself up before he could be properly attired and walk back
the 400 yards that separated him from the terminal building
and/or the plane. Considering, in addition to the foregoing, the
fact that he was not feeling well, at that time, We are not
prepared to hold that it could not have taken him around an
hour to perform the acts narrated by him.

17
But, why asks the defendant did he not reveal the same
before the plane took off? The record shows that, even before
Mr. Zulueta had reached the ramp leading to the plane, Capt.
Zentner was already demonstrating at him in an intemperate
and arrogant tone and attitude ("What do you think you are?),
thereby impelling Mr. Zulueta to answer back in the same vein.
As a consequence, there immediately ensued an altercation in
the course of which each apparently tried to show that he
could not be cowed by the other. Then came the order of Capt.
Zentner to off-load all of the Zuluetas, including Mrs. Zulueta
and the minor Miss Zulueta, as well as their luggage, their
overcoats and other effects handcarried by them; but, Mr.
Zulueta requested that the ladies be allowed to continue the
trip. Meanwhile, it had taken time to locate his four (4) pieces
of luggage. As a matter of fact, only three (3) of them were
found, and the fourth eventually remained in the plane. In
short, the issue between Capt. Zentner and Mr. Zulueta had
been limited to determining whether the latter would allow
himself to be browbeaten by the former. In the heat of the
altercation, nobody had inquired about the cause of Mr.
Zulueta's delay in returning to the plane, apart from the fact
that it was rather embarrassing for him to explain, in the
presence and within the hearing of the passengers and the
crew, then assembled around them, why he had gone to the
beach and why it had taken him some time to answer there a
call of nature, instead of doing so in the terminal building.
Defendant's motion for reconsideration assails: (1) the amount
of damages awarded as excessive; (2) the propriety of
accepting as credible plaintiffs' theory; (3) plaintiffs' right to
recover either moral or exemplary damages; (4) plaintiffs' right
to recover attorney's fees; and (5) the non-enforcement of the
compromise agreement between the defendant and plaintiff's
wife, Mrs. Zulueta. Upon the other hand, plaintiffs' motion for
reconsideration contests the decision of this Court reducing
the amount of damages awarded by the trial court to

approximately one-half thereof, upon the ground, not only that,

contrary to the findings of this Court, in said decision, plaintiff
had not contributed to the aggravation of his altercation or
incident with Capt. Zentner by reacting to his provocation with
extreme belligerency thereby allowing himself to be dragged
down to the level on which said agent of the defendant had
placed himself, but, also, because the purchasing power of our
local currency is now much lower than when the trial court
rendered its appealed decision, over five (5) years ago, on
July 5, 1967, which is an undeniable and undisputed fact.
Precisely, for this reason, defendant's characterization as
exorbitant of the aggregate award of over P700,000 by way of
damages, apart from attorney's fees in the sum of P75,000, is
untenable. Indeed, said award is now barely equivalent to
around 100,000 U. S. dollars.
It further support of its contention, defendant cites the
damages awarded in previous cases to passengers of
airlines, 8 as well as in several criminal cases, and some cases
for libel and slander. None of these cases is, however, in point.
Said cases against airlines referred to passengers who were
merely constrained to take a tourist class accommodation,
despite the fact that they had first class tickets, and that
although, in one of such cases, there was proof that the airline
involved had acted as it did to give preference to a "white"
passenger, this motive was not disclosed until the trial in court.
In the case at bar, plaintiff Rafael Zulueta was "off-loaded" at
Wake Island, for having dared to retort to defendant's agent in
a tone and manner matching, if not befitting his intemperate
language and arrogant attitude. As a consequence, Capt.
Zentner's attempt to humiliate Rafael Zulueta had
boomeranged against him (Zentner), in the presence of the
other passengers and the crew. It was, also, in their presence
that defendant's agent had referred to the plaintiffs as
"monkeys," a racial insult not made openly and publicly in the
abovementioned previous cases against airlines.

18
In other words, Mr. Zulueta was off-loaded, not to protect
the safety of the aircraft and its passengers, but to retaliate
and punish him for the embarrassment and loss of face thus
suffered by defendant's agent. This vindictive motive is made
more manifest by the note delivered to Mr. Zulueta by
defendant's airport manager at Wake Island, Mr. Sitton, stating
that the former's stay therein would be "for a minimum of one
week," during which he would be charged $13.30 per day. This
reference to a "minimum of one week" revealed the intention to
keep him there stranded that long, for no other plane, headed
for Manila, was expected within said period of time, although
Mr. Zulueta managed to board, days later, a plane that brought
him to Hawaii, whence he flew back to the Philippines, via
Japan.
Neither may criminal cases, nor the cases for libel and slander
cited in the defendant's motion for reconsideration, be equated
with the present case. Indeed, in ordinary criminal cases, the
award for damages is, in actual practice, of purely academic
value, for the convicts generally belong to the poorest class of
society. There is, moreover, a fundamental difference between
said cases and the one at bar. The Zuluetas had a contract of
carriage with the defendant, as a common carrier, pursuant to
which the latter was bound, for a substantial monetary
considerationpaid by the former, not merely to transport them
to Manila, but, also, to do so with "extraordinary diligence" or
"utmost diligence." 9 The responsibility of the common carrier,
under said contract, as regards the passenger's safety, is of
such a nature, affecting as it does public interest, that it
"cannot be dispensed with" or even "lessened by stipulation,
by the posting of notices, by statements on tickets, or
otherwise." 10 In the present case, the defendant did not
only fail to comply with its obligation to transport Mr. Zulueta to
Manila, but, also, acted in a manner calculated to humiliate
him, to chastise him, to make him suffer, to cause to him the
greatest possible inconvenience, by leaving him in a desolate

island, in the expectation that he would be stranded there for a

"minimum of one week" and, in addition thereto, charged
therefor $13.30 a day.
It is urged by the defendant that exemplary damages are not
recoverable in quasi-delicts, pursuant to Article 2231 of our
Civil Code, except when the defendant has acted with "gross
negligence," and that there is no specific finding that it had so
acted. It is obvious, however, that in off-loading plaintiff at
Wake Island, under the circumstances heretofore adverted to,
defendant's agents had acted with malice aforethought and
evident bad faith. If "gross negligence" warrants the award of
exemplary damages, with more reason is its imposition
justified when the act performed is deliberate, malicious and
tainted with bad faith. Thus, in Lopez v. PANAM, 11 We held:
The rationale behind exemplary or corrective damages
is, as the name implies, to provide an example or
correction for public good. Defendant having breached
its contracts in bad faith, the court, as stated earlier,
may award exemplary damages in addition to moral
damages (Articles 2229, 2232, New Civil Code.)
Similarly, in NWA v. Cuenca, 12 this Court declared that an
award for exemplary damages was justified by the fact that the
airline's "agent had acted in a wanton, reckless
and oppressive manner" in compelling Cuenca, upon arrival at
Okinawa, to transfer, over his objection, from the first class,
where he was accommodated from Manila to Okinawa, to the
tourist class, in his trip to Japan, "under threat of otherwise
leaving him in Okinawa," despite the fact that he had paid in
full the first class fare and was issued in Manila a first class
ticket.
Defendant cites Rotea v. Halili, 13 in support of the proposition
that a principal is not liable for exemplary damages owing to

19
acts of his agent unless the former has participated in said
acts or ratified the same. Said case involved, however, the
subsidiary civil liability of an employer arising from criminal
acts of his employee, and "exemplary damages ... may be
imposed when the crime was committed with one or more
aggravating circumstances." 14 Accordingly, the Rotea case is
not in point, for the case at bar involves a breach of contract,
as well as a quasi-delict.
Neither may the case of Palisoc v. Brillantes, 15 invoked by the
defendant, be equated with the case at bar. The Palisoc case
dealt with the liability of school officials for damages arising
from the death of a student (Palisoc) due to fist blows given by
another student (Daffon), in the course of a quarrel between
them, while in a laboratory room of the Manila Technical
Institute. In an action for damages, the head thereof and the
teacher in charge of said laboratory were held jointly and
severally liable with the student who caused said death, for
failure of the school to provide "adequate supervision over the
activities of the students in the school premises," to protect
them "from harm, whether at the hands of fellow students or
other parties." Such liability was predicated upon Article 2180
of our Civil Code, the pertinent part of which reads:
ART. 2180. The obligation imposed by Article 2176 is
demandable not only for one's own acts or omissions,
but also for those of persons for whom one is
responsible.
xxx xxx xxx
Lastly, teachers or heads of establishments of arts and
trades shall be liable for damages caused by their
pupils and students or apprentices, so long as they
remain in their custody.

xxx xxx xxx

Obviously, the amount of damages warded in the Palisoc case
is not and cannot serve as the measure of the damages
recoverable in the present case, the latter having been
caused directly and intentionally by an employee or agent of
the defendant, whereas the student who killed the young
Palisoc was in no wise an agent of the school. Moreover, upon
her arrival in the Philippines, Mrs. Zulueta reported her
husband's predicament to defendant's local manager and
asked him to forthwith have him (Mr. Zulueta) brought to
Manila, which defendant's aforementioned manager refused to
do, thereby impliedly ratifying the off-loading of Mr. Zulueta at
Wake Island.
It is next urged that, under the contract of carriage with the
defendant, Mr. Zulueta was bound to be present at the time
scheduled for the departure of defendant's plane and that he
had, consequently, violated said contract when he did not
show up at such time. This argument might have had some
weight had defendant's plane taken off before Mr. Zulueta had
shown up. But the fact is that he was ready, willing and able to
board the plane about two hours before it actually took off, and
that he was deliberately and maliciously off-loaded on account
of his altercation with Capt. Zentner. It should, also, be noted
that, although Mr. Zulueta was delayed some 20 to 30
minutes, the arrival or departure of planes is often delayed for
much longer periods of time. Followed to its logical conclusion,
the argument adduced by the defense suggests that airlines
should be held liable for damages due to the inconvenience
and anxiety, aside from actual damages, suffered by many
passengers either in their haste to arrive at the airport on
scheduled time just to find that their plane will not take off until
later, or by reason of the late arrival of the aircraft at its
destination.

20
PANAM impugns the award of attorney's fees upon the ground
that no penalty should be imposed upon the right to litigate;
that, by law, it may be awarded only in exceptional cases; that
the claim for attorney's fees has not been proven; and that
said defendant was justified in resisting plaintiff's claim
"because it was patently exorbitant."
Nothing, however, can be farther from the truth. Indeed apart
from plaintiff's claim for actual damages, the amount of which
is not contested, plaintiffs did not ask any specific sum by way
of exemplary and moral damages, as well as attorney's fees,
and left the amount thereof to the "sound discretion" of the
lower court. This, precisely, is the reason why PANAM, now,
alleges without justification that the lower court had no
jurisdiction over the subject matter of the present case.
Moreover, Article 2208 of our Civil Code expressly authorizes
the award of attorney's fees "when exemplary damages are
awarded," as they are in this case as well as "in any other
case where the court deems it just and equitable that
attorney's fees ... be recovered," and We so deem it just and
equitable in the present case, considering the "exceptional"
circumstances obtaining therein, particularly the bad faith with
which defendant's agent had acted, the place where and the
conditions under which Rafael Zulueta was left at Wake Island,
the absolute refusal of defendant's manager in Manila to take
any step whatsoever to alleviate Mr. Zulueta's predicament at
Wake and have him brought to Manila which, under their
contract of carriage, was defendant's obligation to discharge
with "extra-ordinary" or "utmost" diligence and, the "racial"
factor that had, likewise, tainted the decision of defendant's
agent, Capt. Zentner, to off-load him at Wake Island.
As regards the evidence necessary to justify the sum of
P75,000 awarded as attorney's fees in this case, suffice it to
say that the quantity and quality of the services rendered by

plaintiffs' counsel appearing on record, apart from the nature of

the case and the amount involved therein, as well as his
prestige as one of the most distinguished members of the legal
profession in the Philippines, of which judicial cognizance may
be taken, amply justify said award, which is a little over 10% of
the damages (P700,000) collectible by plaintiffs herein.
Indeed, the attorney's fees in this case is proportionally much
less than that adjudged in Lopez v. PANAM 16 in which the
judgment rendered for attorney's fees (P50,000) was
almost 20% of the damages (P275,000) recovered by the
plaintiffs therein.
The defense assails the last part of the decision sought to be
reconsidered, in which relying upon Article 172 of our Civil
Code, which provides that "(t)he wife cannot bind the conjugal
partnership without the husband's consent, except in cases
provided by law," and it is not claimed that this is one of such
cases We denied a motion, filed by Mrs. Zulueta, for the
dismissal of this case, insofar as she is concerned - she
having settled all her differences with the defendant, which
appears to have paid her the sum of P50,000 therefor "without prejudice to this sum being deducted from the award
made in said decision." Defendant now alleges that this is
tantamount to holding that said compromise agreement is both
effective and ineffective.
This, of course, is not true. The payment is effective, insofar as
it is deductible from the award, and, because it is due (or part
of the amount due) from the defendant, with or without its
compromise agreement with Mrs. Zulueta. What is ineffective
is the compromise agreement, insofar as the conjugal
partnership is concerned. Mrs. Zulueta's motion was for the
dismissal of the case insofar as she was concerned, and the
defense cited in support thereof Article 113 of said Code,
pursuant to which "(t)he husband must be joined in all suits by
or against the wife except: ... (2) If they have in fact been

21
separated for at least one year." This provision, We held,
however, refers to suits in which the wife is the principal or real
party in interest, not to the case at bar, "in which the husband
is the main party in interest, both as the person principally
aggrieved and as administrator of the conjugal partnership ...
he having acted in this capacity in entering into the contract of
carriage with PANAM and paid the amount due to the latter,
under the contract, with funds of the conjugal partnership," to
which the amounts recoverable for breach of said contract,
accordingly, belong. The damages suffered by Mrs. Zulueta
were mainly an in accident of the humiliation to which her
husband had been subjected. The Court ordered that said sum
of P50,00 paid by PANAM to Mrs. Zulueta be deducted from
the aggregate award in favor of the plaintiffs herein for the
simple reason that upon liquidation of the conjugal partnership,
as provided by law, said amount would have to be reckoned
with, either as part of her share in the partnership, or as part of
the support which might have been or may be due to her as
wife of Rafael Zulueta. It would surely be inane to sentence
the defendant to pay the P700,000 due to the plaintiffs and to
direct Mrs. Zulueta to return said P50,000 to the defendant.
In this connection, it is noteworthy that, for obvious reasons of
public policy, she is not allowed by law to waive her share in
the conjugal partnership, before the dissolution thereof. 17 She
cannot even acquire any property by gratuitous title, without
the husband's consent, except from her ascendants,
descendants, parents-in-law, and collateral relatives within the
fourth degree. 18
It is true that the law favors and encourages the settlement of
litigations by compromise agreement between the contending
parties, but, it certainly does not favor a settlement with one of
the spouses, both of whom are plaintiffs or defendants in a
common cause, such as the defense of the rights of the
conjugal partnership, when the effect, even if indirect, of the

compromise is to jeopardize "the solidarity of the family"

which the
law 19 seeks to protect by creating an additional cause for
the misunderstanding that had arisen between such spouses
during the litigation, and thus rendering more difficult a
reconciliation between them.
It is urged that there is no proof as to the purpose of the trip of
the plaintiffs, that neither is there any evidence that the money
used to pay the plane tickets came from the conjugal funds
and that the award to Mrs. Zulueta was for her personal
suffering or injuries. There was, however, no individual or
specific award in favor of Mrs. Zulueta or any of the plaintiffs.
The award was made in their favor collectively. Again, in the
absence of said proof, the presumption is that the purpose of
the trip was for the common benefit of the plaintiffs and that
the money had come from the conjugal funds, for, unless there
is proof to the contrary, it is presumed "(t)hat things have
happened according to the ordinary course of nature and the
ordinary habits of life." 20 In fact Manresa maintains 21 that they
are deemed conjugal, when the source of the money used
therefor is not established, even if the purchase had been
made by the wife. 22And this is the rule obtaining in the
Philippines. Even property registered, under the Torrens
system, in the name of one of the spouses, or in that of the
wife only, if acquired during the marriage, is presumed to
belong to the conjugal partnership, unless there is competent
proof to the contrary. 23
PANAM maintains that the damages involved in the case at
bar are not among those forming part of the conjugal
partnership pursuant to Article 153 of the Civil Code, reading:
ART. 153. The following are conjugal partnership
property:

22
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether
the acquisition be for the partnership, or for only one of
the spouses;
(2) That which is obtained by the industry, or work, or
as salary of the spouses, or of either of them;
(3) The fruits, rents or interests received or due during
the marriage, coming from the common property or
from the exclusive property of each spouse.
Considering that the damages in question have arisen
from, inter alia, a breach of plaintiffs' contract of carriage with
the defendant, for which plaintiffs paid their fare with funds
presumably belonging to the conjugal partnership, We hold
that said damages fall under paragraph (1) of said Article 153,
the right thereto having been "acquired byonerous title during
the marriage ... ." This conclusion is bolstered up by Article
148 of our Civil Code, according to which:
ART. 148. The following shall be the exclusive property
of each spouse:
(1) That which is brought to the marriage as his or her
own;
(2) That which each acquires, during the marriage, by
lucrative title;
(3) That which is acquired by right of redemption or by
exchange with other property belonging to only one of
the spouses;
(4) That which is purchased with exclusive money of
the wife or of the husband.

The damages involved in the case at bar do not come under

any of these provisions or of the other provisions forming part
of Chapter 3, Title VI, of Book I of the Civil Code, which
chapter is entitled "Paraphernal Property." What is more, if
"(t)hat which is acquired by right of redemption or by exchange
with other property belonging to only one of the spouses," and
"(t)hat which is purchased with exclusive money of the wife or
of the husband," 24 belong exclusively to such wife or husband,
it follows necessarily that that which is acquired with money of
the conjugal partnership belongs thereto or forms part thereof.
The rulings in Maramba v. Lozano 25 and Perez v.
Lantin, 26 cited in defendant's motion for reconsideration, are,
in effect, adverse thereto. In both cases, it was merely held
that the presumption under Article 160 of our Civil Code to
the effect that all property of the marriage belong to the
conjugal partnership does not apply unless it is shown that
it was acquired during marriage. In the present case, the
contract of carriage was concededly entered into, and the
damages claimed by the plaintiffs were
incurred, during marriage. Hence, the rights accruing from said
contract, including those resulting from breach thereof by the
defendant, are presumed to belong to the conjugal partnership
of Mr. and Mrs. Zulueta. The fact that such breach of contract
was coupled, also, with a quasi-delict constitutes an
aggravating circumstance and can not possibly have the effect
of depriving the conjugal partnership of such property rights.
Defendant insists that the use of conjugal funds to redeem
property does not make the property redeemed conjugal if the
right of redemption pertained to the wife. In the absence,
however, of proof that such right of redemption pertains to the
wife and there is no proof that the contract of carriage with
PANAM or the money paid therefor belongs to Mrs. Zulueta
the property involved, or the rights arising therefrom, must be
presumed, therefore, to form part of the conjugal partnership.

23
It is true that in Lilius v. Manila Railroad Co., 27 it was held that
the "patrimonial and moral damages" awarded to a young and
beautiful woman by reason of a scar in consequence of an
injury resulting from an automobile accident which
disfigured her face and fractured her left leg, as well as caused
a permanent deformity, are her paraphernal property.
Defendant cites, also, in support of its contention the following
passage from Colin y Capitant:
No esta resuelta expresamente en la legislacion
espaola la cuestion de si las indemnizaciones debidas
por accidentes del trabaho tienen la consideracion de
gananciales, o son bienes particulares de los
conyuges.
Inclinan a la solucion de que estas
indemnizaciones deben ser consideradas como
gananciales, el hecho de que la sociedad pierde la
capacidad de trabajocon el accidente, que a ella le
pertenece, puesto que de la sociedad son losfrutos de
ese trabajo; en cambio, la consideracion de que igual
manera que losbienes que sustituyen a los que cada
conyuge lleva al matrimonio como propiostienen el
caracter de propios, hace pensar que las
indemnizaciones que vengana suplir la capacidad de
trabajo aportada por cada conyuge a la sociedad,
debenser juridicamente reputadas como bienes
propios del conyuge que haya sufrido elaccidente. Asi
se llega a la misma solucion aportada por la
jurisprudencia francesca. 28
This opinion is, however, undecisive, to say the least. It should
be noted that Colin y Capitant were commenting on
the French Civil Code; that their comment referred to
indemnities due in consequence of "accidentes del trabajo
"resulting in physical injuries sustained by one of the spouses

(which Mrs. Zulueta has not suffered); and that said

commentators admit that the question whether or not said
damages are paraphernal property or belong to the conjugal
partnership is not settled under the Spanish law. 29 Besides,
the French law and jurisprudence to which the comments of
Planiol and Ripert, likewise, refer are inapposite to the
question under consideration, because they differ
basically from the Spanish law in the treatment of the property
relations between husband and wife. Indeed, our Civil Code,
like the Spanish Civil Code, favors the system of conjugal
partnership of gains. Accordingly, the former provides that,
"(i)n the absence of marriage settlements, or when the same
are void, the system of relative community or conjugal
partnership of gains ... shall govern the property relations
between" the spouses. 30 Hence, "(a)ll 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." 31
No similar rules are found in the French Civil Code. What is
more, under the provisions thereof, the conjugal partnership
exists only when so stipulated in the "capitulaciones
matrimoniales" or by way of exception. In the language of
Manresa
Prescindimos de los preceptos de los Condigos de
Francia, Italia, Holanda, Portugal, Alemania y Suiza,
porsue solo excepcionalmente, o cuando asi se
pacta en las capitulaciones, admiten el sistema de
gananciales. 32
Again, Colin y Capitant, as well as the Lilius case, refer to
damages recovered for physical injuries suffered by the wife.
In the case at bar, the party mainly injured, although not
physically, is the husband.

24
Accordingly, the other Philippine cases 33 and those from
Louisiana whose civil law is based upon the French Civil
Code cited by the defendant, which similarly refer to moral
damages due to physical injuries suffered by the wife, are,
likewise, inapplicable to the case at bar.
We find, therefore, no plausible reason to disturb the views
expressed in Our decision promulgated on February 29, 1972.
WHEREFORE, the motions for reconsideration above-referred
to should be, as they are hereby denied.
Makalintal, Zaldivar, Fernando, Makasiar, Antonio and
Esguerra, JJ., concur.
Castro and Teehankee, JJ., took no part.
Barredo, J., voted to modify the judgment by reducing the
amount of the awarded damages and individualizing the same,
and now reserves the filing of a separate concurring and
dissenting opinion in support of his vote.
Footnotes
1 Layda v. Court of Appeals, L-4487, Jan. 29,
1952; Yutuk v. Manila Electric Co., L-13016,
May 31, 1961.
2 See. 44 (a), Rep. Act No. 296.
3 See 38 Harvard Law Review, 744-751; 45
Yale Law Journal, 416.
4 Ginsburg v. Pacific Mutual Life Ins. Co., 69 F.
(2d) 97, 98.

5 Home Life Ins. Co. v. Sipp., 11 F. (2d) 474,

476.
6 L-19631, Jan. 31, 1964. Emphasis ours.
7 People v. Casiano, L-15309, Feb. 16, 1961;
People v. Roberts, L-15632, Feb. 28, 1961;
People v. Fajardo, L-18257, June 30, 1966;
Tijam v. Manila Surety & Fidelity Co., L-21450,
April 15, 1968; Carillo v. Allied Workers'
Association of the Philippines, L-23689, July 31,
1968; Rizal Light & Ice Co. v. Municipality of
Morong, L-20993 and L-21221, Sept. 28, 1968;
Tolentino v. Escalona, et al., L-26556 Jan. 24,
1969; Surigao Consolidated Mining Co., Inc. v.
Philippine Land-Air-Sea Labor Union (PLASLU),
L-22970, June 9, 1969; Rodriguez v. Court of
Appeals, et al., L-29264, Aug. 29, 1969;
Calderon, Jr. v. Public Service Commission and
Milo, L-29228, April 30, 1971.
8 Northwest Airlines, Inc. v. Cuenca, et al., L22425, Aug. 31, 1965; Lopez, et al. v. Pan
American World Airways, L-22415, March 30,
1966; Air France v. Carrascoso, et al., L-21438,
Sept. 28, 1966.
9 Articles 1733 and 1755, Civil Code of the
Philippines.
10 Article 1757, Civil Code of the Philippines.
11 Supra.
12 Supra.

25
13 109 Phil. 495.

26 L-22320, May 22, 1968.

14 Article 2230, New Civil Code.

27 62 Phil. 56, 64-65.

15 L-29025; October 4, 1971.

28 Emphasis ours.

16 Supra.

29 Although Colin y Capitant actually said that

the question has not been "expressly" settled
under the Spanish law, they did not say that it
has been "impliedly" settled and in what way.

17 Civil Code of the Philippines, Article 179.

18 Ibid., Article 114.
19 Id., Article 220.
20 Paragraph (z) of Sec. 5, Rule 131 of the
Rules of Court.
21 Codigo Civil Espanol, by Manresa (1950
ed.), Vol. 9, pp. 548-549.
22 In support of this view, Manresa cites the
resolutions of the Supreme Court of Spain of
March 30 ad May 6, 1904 as well as those of
September 2, 1896, March 6, 1897, April 23,
1898, November 30, 1903 and September 20,
1907.
23 Flores v. Flores, 48 Phil. 288; Guinguing v.
Abuton, Phil. 144; Bucoy v. Paulino, G.R. No.
L-25775, April 26, 1968.
24 Pursuant to Article 148.
25 L-21533, June 29, 1967.

30 Art. 119, Civil Code of the Philippines.

31 Art. 160, Civil Code of the Philippines, and
Art. 1407 of the Civil Code of Spain.
32 9 Manresa, p. 552. Emphasis ours.
33 Strebel v. Figueras, 96 Phil. 321; Araneta v.
Arreglado, 104 Phil. 529; Soberano v. Manila
Railroad Co., L-19407, Nov. 23, 1966.

26
FIRST DIVISION
G.R. No. L-31618 August 17, 1983
EFREN R. MENDOZA and INOCENCIA R. DE
MENDOZA, petitioner,
vs.
PONCIANO S. REYES and THE COURT OF
APPEALS, respondents.
G.R. No. L-31625 August 17, 1983
JULIA R. DE REYES, petitioner,
vs.
PONCIANO S. REYES and COURT OF
APPEALS, respondents.
Conrado B. Enriquez and Elpidio G. Navarro for petitioners.
Pacifico M. Castro for respondents.

GUTIERREZ, JR., J.:

Questioned in these consolidated petitions for review on
certiorari is the decision of the Court of Appeals, now
Intermediate Appellate Court, reversing the decision of the
Court of First Instance of Rizal, Quezon City Branch. The
dispositive portion of the appellate decision reads:
WHEREFORE, (a) the judgment appealed from is
hereby reversed; (b) the deed of sale executed by
appellee Julia de Reyes on March 3, 1961 in favor of
appellees Efren V. Mendoza and Inocencia R.

Mendoza, covering lots 5 and 6, Block No. 132 of

Subdivision Plan Psd. 14841, situated at Retiro Street,
Quezon City, is hereby declared null and void with
respect to one- half share of appellant therein; (c) the
Register of Deeds of Quezon City is hereby directed to
cancel TCT Nos. 5611 0 and 56111, now covering said
lots, and to issue, in lieu thereof, certificates of title in
favor of appellant Ponciano S. Reyes for one-half (1/2)
pro-indiviso and the spouses Efren V. Mendoza and
Inocencia Mendoza for one-half (1/2) also pro-indiviso;
(d) the appellees Mendozas are hereby ordered to pay
unto the appellant the accrued rentals of style
properties in litigation due to the share corresponding
to said appellant, at the rate of P350.00 a month from
March 3, 1961 until the finality of this decision, with
legal interest thereon; and (e) said appellees are
likewise ordered to pay unto the appellant the amount
of THREE THOUSAND (P3,000.00) PESOS as
attorney's fees, plus the costs in both instances.
This case originated with the filing of a complaint by Ponciano
S. Reyes with the Court of First Instance of Rizal docketed as
Civil Case No. Q-6905, for the annulment of a deed of sale of
two parcels of land with their improvements, executed by his
wife, Julia R. De Reyes as vendor and the spouses Efren V.
Mendoza and Inocencia R. De Mendoza, as vendees.
Ponciano S. Reyes averred that said properties were conjugal
properties of himself and his wife and that she had sold them
to petitioners "all by herself" and without his knowledge or
consent.
Petitioners Efren V. Mendoza and Inocencia R. De Mendoza
alleged in their answer that the properties were paraphernal
properties of Julia R. de Reyes and that they had purchased
the same in good faith and for adequate consideration. In a

27
separate answer, petitioner Julia R. De Reyes, supported the
spouses Mendozas' contentions.

AGAINST ABUNDANT, POSITIVE AND UNCONTRADICTED

PROOF OF GOOD FAITH.

In its decision, the Court of First Instance of Rizal dismissed

the complaint and declared the properties in question
exclusive and paraphernal properties of petitioner Julia R. De
Reyes. It ruled that she could validly dispose of the same
without the consent of her husband and that the Mendozas are
innocent purchasers.

III

As earlier stated, the Court of Appeals reversed the decision of

the court a quo.

On the other hand, Julia R. De Reyes made the following

assignments of errors in her petition for review.

The petitioners filed separate petitions for review on certiorari.

Efren V. Mendoza and Inocencia R. De Mendoza raised the
following assignments of errors:
I
THE COURT OF APPEALS ERRED NOT MERELY IN GIVING
CREDENCE, BUT IN FACT IN CONSIDERING AT ALL,
PROOF OF THE ALLEGED CONJUGAL CHARACTER OF
THE PROPERTIES l-, QUESTION, AND IN NOT INVOKING
THE DOCTRINE -E OF ESTOPPEL TO RULE OUT ANY AND
ALL SUCH PROOF ALTOGETHER.
II
THE COURT OF APPEALS ERRED IN FINDING
PETITIONERS GUILTY OF BAD FAITH IN PURCHASING
THE PROPERTIES LITIGATED FOR WITHOUT EVIDENCE
OF SUCH FACT BEING PRESENTED AND, ON THE
STRENGTH MERELY OF A SIMPLE PRESUMPTION
UNWARRANTEDLY DRAWN FROM ONE OF ITS OWN
OBSCURE AND HARDLY AUTHORITATIVE RULINGS, AND

THE COURT OF APPEALS ERRED UPON EQUITABLE

GROUNDS IN, IN EFFECT, GIVING JUDICIAL FLAT To THE
UNJUST ENRICHMENT OR BENEFIT OF ONE PERSON AT
THE EXPENSE OF ANOTHER OR OTHERS.

THE COURT OF APPEALS ERRED IN

DECLARING THAT THE PROPERTIES IN
QUESTION ARE THE CONJUGAL
PROPERTIES OF THE RESPONDENT
PONCIANO S. REYES AND THE PETITIONER
IN SPITE OF THE CATEGORICAL JUDICIAL
DECLARATION AND ADMISSION BY SAID
RESPONDENT THAT THE SAID PROPERTIES
ARE THE EXCLUSIVE AND PARAPHERNAL
PROPERTIES OF HIS WIFE, THE
PETITIONER HEREIN.
THE COURT OF APPEALS ERRED IN
HAVING DECIDED THE CASE NOT IN
ACCORDANCE WITH LAW AND THE
APPLICABLE DECISIONS ON THE MATTER
IN THE SENSE, PARTICULARLY, THAT THE
ACT AND DECLARATION OF A PARTY
AGAINST HIS INTERESTS CAN NOT BE
CONTRADICTED BY HIM, AND IN SO DOING
THE DECISION AMOUNTED TO
SANCTIONING A PERJURED TESTIMONY.

28
On the first issue regarding the alleged paraphernal character
of the disputed properties, we find that the records sustain the
findings of the Court of Appeals
The fact are:
xxx xxx xxx
... Ponciano Reyes and Julia de Reyes-to be herein
referred to as Ponciano and Julia alone for brevity-were
married in 1915. The properties in question consisting
of Lots 5 and 6, Block No. 132, situated at Retiro
Street, Quezon City-plus the buildings erected thereon,
were bought from J. M. Tuason & Co., represented by
Gregorio Araneta, Inc. to be herein mentioned as
"Araneta"-February, 1947 on installment basis.
(Testimony of Julia, t.s.n., p. 74, February 15, 1963).
The first installment on Lot No. 5 was P69.96 and on
Lot No. 6 was P102.00 (Exh. 'H' and uncontradicted
testimony of Ponciano, t.s.n., p. 4, July 20, 1964).
The spouses were always in arrears in the payment of
the installments to Araneta due to lack of money (t.s.n.,
pp. 5-7, July 20, 1964) so they had to borrow money
from the Rehabilitation Finance Corporation-herein
after referred to as RFC for short. Thus, on November
26, 1948, they jointly obtained a loan of P12,000.00
from the RFC for the following exclusive purposes only:
'to complete the construction of one-storey residential
building on 9th Street, La Loma Quezon City; and to
pay the balance of the price of the lot offered as
security' which is Lot 5, (Deed of Mortgage, Exh. 'A') l').
Out of this loan, the amount of P5,292.00 was paid to
Araneta as price of Lot 5. The corresponding deed of
absolute sale thereof was executed by Araneta on
November 27, 1948 (Exh. 'A'). On October 2, 1952, the

spouses secured an additional loan of P8,000.00 from

the RFC 'to pay the balance of the lot herein offered
(Lot No. 6) as additional security, and to defray the
expenses incurred in the repairs of the building' as the
deed of mortgage so recites (Exh. 'B- l'). From the
amount of this loan, the sum of P7,719.60, as price of
Lot No. 6, was paid and the deed of absolute sale was
forthwith executed by Araneta (Exh. 'B'). In the deed of
sale, the vendee named is 'Julia de Reyes'. Her
signatures appear over the caption vendee and those
of Ponciano under the phrase: 'with my marital
consent.
As a result of these sales, Transfer Certificates of Title
Nos. 8550 (Exh. 'F') and 19998 (Exh. 'G') were issued
for Lots 5 and 6, respectively, by the Register of Deeds
of Quezon City, in the name of "JULIA REYES married
to PONCIANO REYES." The mortgage contracts
(Exhs. 'A-1' and 'B-1') executed by the spouses in favor
of the RFC were duly registered and annotated on the
said transfer Certificates of Title (Exhs. 'F' and 'G').
As promised to the RFC, the spouses built a house and
later a camarin on the two lots. The camarin was
leased as a school building to the Quezon City
Elementary School of La Loma for the period of two
years (1950-51) at P500.00 a month. When the school
was transferred to another place, the camarin was
leased on December 10, 1952 to Mr. and Mrs.
Mendoza, appellees, for ten years at P600.00 a month
for the first year and P700.00 for the remaining nine
years. The contract of lease was signed by Julia as
lessor, with the marital consent of Ponciano. The
camarin was converted into a movie house and used
as such by the lessees. (Exh. 'G').

29
In spite of the good rentals they had been receiving for
the building, the spouses failed to pay seasonably their
obligations to the RFC so, as late as November 28,
1958, they had to ask for an extension of 5 years from
the Development Bank of the Philippines or DBP, as
successor of the RFC, for the payment of an
outstanding balance of P7,876.13 (Exh. 'D').
On March 3, 1961, while Ponciano was absent
attending his farm in Arayat, Pampanga, Julia sold
absolutely the lots in question, together with their
improvements to appellees Mendozas for the sum of
P80,000.00 without the knowledge and consent of
Ponciano (Exh. 'I'-Mendoza). At the same time the
spouses were living separately and were not in
speaking terms. By virtue of such sale, Transfer
Certificates of Title Nos. 561 10 and 56111 were
subsequently issued in the name of the Mendozas.
The applicable provision of law is Article 153 of the Civil Code
which provides:
ART. 153. The following are conjugal partnership
property:
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether
the acquisition be for the partnership, or for only one of
the spouses;
xxx xxx xxx
The presumption found in Article 160 of the Civil Code must
also be overcome by one who contends that the disputed
property is paraphernal Article 160 provides:

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 is a strong one. As stated in Camia de Reyes
v. Reyes de Ilano (63 Phil. 629, 639), "it is sufficient to prove
that the property was acquired during the marriage in order
that the same may be deemed conjugal property." And
in Laluan v. Malpaya (65 SCRA 494, 504) we stated, "proof of
acquisition of the property in dispute during the marriage
suffices to render the statutory presumption operative."
There is no question that the disputed property was acquired
by onerous title during the marriage. But were the funds used
to buy the lot and build the improvements at the expense of
the common fund?
The records show that the funds came from loans obtained by
the spouses from the Rehabilitation Finance Corporation.
Under Article 161 of the Civil Code, all debts and obligations
contracted by the husband and the wife for the benefit of the
conjugal partnership are liabilities of the partnership.
As stated in Castillo, Jr. vs. Pasco (11 SCRA 102, 107):
... The position thus taken by appellants is meritorous,
for the reason that the deeds show the loans to have
been made by Dr. Nicanor Jacinto and by Gabriel and
Purificacion Gonzales, to both spouses Marcelo
Castillo and Macaria Pasco, as joint borrowers. The
loans thus became obligations of the conjugal
partnership of both debtor spouses and the money
loaned is logically conjugal property.

30
Citing Palanca v. Smith Bell & Co. (9 Phil. 13 1) interpreting
Par. 3, Article 1401 of the old Civil Code, the Court in Castillo
v. Pasco stated:
If money borrowed by the husband alone on the
security of his wife's property is conjugal in character, a
fortiori should it be conjugal when borrowed by both
spouses. The reason obviously is that the loan
becomes an obligation of the conjugal partnership
which is the one primarily bound for its repayment.
To rebut the presumption and the evidence of the conjugal
character of the property, the petitioners have only the
testimony of Julia de Reyes to offer.
Mrs. Reyes testified that she bought the two parcels of land on
installment basis and that the first payment of a little less than
P2,000.00 came from her personal funds: The receipt issued
by Araneta, however, shows that the first installment on one lot
was only P69.96 and on the other lot, P102.00. Mrs. Reyes
also testified that she paid the entire purchase price and the
construction of the buildings from her personal funds and
money borrowed from the Philippine National Bank. The
mortgage contracts, however, show that the properties were
paid out of the loan from RFC.
As a matter of fact, Mrs. Reyes' testimony about a loan from
Mrs. Rosa Borja, the sale of a lot in Cabiao, Nueva Ecija given
by her mother, and the loan from PNB only emphasize the
conjugal nature of the disputed properties because she stated
that these sums were also used to put up their gravel and
sand business, a poultry farm, and a banana plantation plus a
jeepney transportation line although according to her, every
business venture handled by her husband failed. The two were
establishing businesses and buying properties together as
husband and wife, in happier times.

The Court of Appeals ruled upon the testimony of Julia De

Reyes as follows:
Julia's testimony that she had sold her Cabiao property
to Rosa Borja is not supported by the deed of sale
(Exh. 'I') which shows that the property was sold to
Encarnacion Goco and Mariano Robles. Again, her
claim that said Cabiao property was donated to her by
her mother is negated by the deeds of sale (Exhs. 'J'
and 'K') which show that said property was donated to
her and her two brothers, Pablo and Jose del Rosario,
who afterwards sold their participation thereof to the
spouses, Ponciano and Julia.
Her claim of exclusive ownership is further belied by
the Income Tax Returns (Exhs. 'N' to 'N'- 3') which she
herself prepared and filed in behalf of the conjugal
partnership wherein she made the statement that the
rentals paid by her co-appellees were income of the
conjugal partnership; and by the Income Tax Returns
(Exhs. 'O' to '0-4') also filed by her for the conjugal
partnership, were she made to appear the properties in
question as capital assets of the conjugal partnership.
It should be noted that Julia did not care to deny the
truth of said statements. Neither did she endeavor to
offer any explanation for such damaging averments.
Petitioners also raised the issue of estoppel in their
assignments of errors. They alleged:
Even so, petitioners would have small legal cause to
dispute the respondent Court's giving credence to the
husband's pretensions did there not also exist in the
record plain and indisputable evidence that he had on a
former occasion both solemnly confirmed the
paraphernal character of the very properties now in

31
question and disclaimed the existence of any conjugal
partnership funds or properties of himself and his wife.
(Petitioner's Brief, L-31616, p. 7).
It turns out that in 1948, Ponciano Reyes was sued in the then
Municipal Court of Manila for ejectment from a leased hotel
that he was then operating. Judgment was rendered against
Reyes in favor of the lessors, the brothers named Gocheco
Having failed in a bid to garnish the rentals of the disputed
buildings because the municipal court stated that it had no
jurisdiction to decide the paraphernal or conjugal nature of the
properties, the Gocheco brothers filed Civil Case No. 24772
for revival of judgment with the Court of First Instance of
Manila.
It was in this latter case where Mr. Reyes stated in his special
defenses that he and his wife never had any kind of fund
which could be called conjugal partnership funds, that they
acted independently from one another whenever either one
engaged in any business, andThat the herein plaintiff has not limited his action in the
present case against defendant Ponciano S. Reyes as
he did in the original case above-mentioned, that is,
Civil Case No. 7524 of the Manila Municipal Court
which the instant case derived from, but has included
the defendant's wife Julia Reyes, with the only intended
purpose and design of going over and against the
paraphernal properties of said Julia Reyes. (par. 4,
Special Defenses, Answer, Exh. II; Petitioner's Brief, L31618, pp. 9-10).
Article 1437 of the Civil Code on estoppel involving immovable
property provides:

Art. 1437. When in a contract between third persons

concerning immovable property, one of them is misled
by a person with respect to the ownership or real right
over the real estate, the latter is precluded from
asserting his legal title or interest therein, provided all
these requisites are present:
(1) There must be fraudulent representation or wrongful
concealment of facts known to the party estopped;
(2) The party precluded must intend that the other
should act upon the facts as misrepresented;
(3) The party misled must have been unaware of the
true facts; and
(4) The party defrauded must have acted in
accordance with the representation.
The principle of estoppel rests on the rule that whenever a
party has, by his declaration, act or omission, intentionally and
deliberately led the other to believe a particular thing true and
to act, upon such belief he cannot, in any litigation arising out
of such declaration, act or omission, be permitted to falsify it.
(Sotto v. Teves, 86 SCRA 154.)
Estoppel can only be invoked between the person making the
misrepresentation and the person to whom it was addressed.
It is essential that the latter shag have relied upon the
misrepresentation and had been influenced and misled
thereby.
There is no showing that the respondent had intentionally and
deliberately led the petitioners Mendozas to believe what was
contained in the pleading, "Exh. 11", and to make them act
upon it. As observed by the respondent, they were not even a

32
party in the case where the said pleadin was filed. Neither is
there any assertion by the Mendozas that the said pleading
was shown to them or that they happened to see it or to have
any knowledge about it before they purchased the properties
in question. The alleged representation was never addressed
to the petitioners, much less made with the intention that they
would act upon it. Moreover, there is no specific and clear
reference to the disputed lots as paraphernal in the cited
answer. The petitioners cannot invoke estoppel in these
petitions.
May the Mendoza spouses be considered buyers in good
faith?
The proof that the petitioners in L-31618 are purchasers in
good faith comes from the testimony of Mrs. Inocencia
Mendoza herself. Mrs. Mendoza testified that Mrs. Julia R. De
Reyes assured her that the properties were paraphernal that
her lawyer verified the titles being in the name of Mrs. Julia R.
De Reyes, and that she never dealt with Mr. Ponciano Reyes
when she and her husband were still renting the properties
they later purchased. On cross-examination, Mrs. Mendoza
admitted that she learned of the RFC mortgage when the lots
were about to be purchased.
Property acquired during a marriage is presumed to be
conjugal and the fact that the land is later registered in the
name of only one of the spouses does not destroy its conjugal
nature. (Bucoy v. Paulino, 23 SCRA 249). Section 46 of P.D.
1529, the Property Registration Decree, reiterates the proviso
in Section 70 of the former Land Registration Act that
registration cannot be construed to relieve registered land or
the owners thereof from any rights incident to the relation of
husband and wife. (See also: Marigsa v. Macabuntoc 17 Phil.
107, 109; Romero de Pratts v. Menzi & Co., Inc., 53 Phil. 51,
54; Padilla v. Padilla, 74 Phil. 377, 382-384; Vitug v.

Montemayor, 91 Phil. 286, 290, 291, citing Guinguing v.

Abuton, 48 Phil. 144; Sideco v. Aznar, 92 Phil. 952, 961-962,
citing Flores v. Flores, 48 Phil. 288; Guinoo v. Court of
Appeals, 97 Phil. 235, 238; Silos v. Ramos, 97 Phil. 263,
270, citing Commonwealth v. Sandiko 72 Phil. 258, 260; and
Alvarez v. Espiritu, 14 SCRA 893).
If the fact that property acquired during marriage was
registered in the name of the husband alone does not affect its
conjugal nature, neither does registration in the name of the
wife. Any person who buys land registered in the married
name of the wife is put on notice about its conjugal nature.
The mortgage contracts (Exhs. "A-1 " and "B-1 ") executed by
the spouses Ponciano S. Reyes and Julia Reyes in favor of
RFC were duly registered in the Registry of Deeds of Quezon
City and seasonably annotated on transfer certificates of title
Nos. 8550 (Exh. "F") and 19998 (Exh. "G"), which were issued
in the name of Julia Reyes "married to Ponciano Reyes". Their
dates of inscription were November 29, 1948 and October 11,
1952, respectively. On December 10, 1952, the lots and the
building were leased by Julia, with the marital consent of
Ponciano to the petitioners Mendozas The contract of lease
was registered in the Registry of Deeds and was annotated in
the transfer certificates of title on May 5, 1952. At that time, the
RFC mortgages were already noted at the back of the transfer
certificates of title. The petitioners, therefore, are
unquestionably charged with notice of the existence and
contents of said mortgages, their joint execution by the
spouses Ponciano Reyes and Julia Reyes and the application
of the loans to the payment to Araneta of the purchase price of
the lots in question.
Furthermore, the consent of the Ponciano Reyes to the mere
lease of the properties was demanded by the Mendozas
allegedly for their own protection, yet when it came to the deed

33
of sale which entailed a greater transfer of rights such consent
was not required.
The final argument refers to the alleged unjust enrichment by
Ponciano Reyes if the deed of sale is nullified This petitioners
admit that the benefit including that represented by one-half of
the purchase price, accrued not to the respondent but to his
wife. Since Mr. Reyes did not receive any part of the proceeds
of the sale and his wife has been aligning herself with the
Mendoza couple, there could be no unjust enrichment as
alleged. The assignments of errors have no merit.
WHEREFORE, the petitions for review on certiorari are hereby
DENIED for lack of merit. The judgment of the Court of
Appeals is affirmed.
SO ORDERED.
Teehankee, Actg. C.J., Melencio-Herrera, Plana, Vasquez and
Relova, JJ., concur.

34
THIRD DIVISION

G.R. No. 89667 October 20, 1993

JOSEPHINE B. BELCODERO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, et
al., respondents.
Jaime I. Infante and Joanes G. Caacbay for petitioners.
Lamberto C. Nanquil & Associates Law Office for private
respondents.

Teresita, and Gaido. In 1946, he left the conjugal home, and

he forthwith started to live instead with Josefa Rivera with
whom he later begot one child, named Josephine Bosing, now
Josephine Balcobero.
On 23 August 1949, Alayo purchased a parcel of land on
installment basis from the Magdalena Estate, Inc. In the deed,
he indicated his civil status as, "married to Josefa R. Bosing,"
the common-law wife. In a letter, dated 06 October 1959,
which he addressed to Magdalena Estate, Inc., he authorized
the latter to transfer the lot in the name of his "wife Josefa R.
Bosing." The final deed of sale was executed by Magdalena
Estate, Inc., on 24 October 1959. A few days later, or on 09
November 1959, Transfer Certificate of Title No. 48790 was
issued in the name of "Josefa R. Bosing, . . . married to Alayo
Bosing, . . ."

Let us begin by paraphrasing the factual findings of the

appellate court below.

On 06 June 1958, Alayo married Josefa even while his prior

marriage with Juliana was still subsisting. Alayo died on 11
march 1967. About three years later, or on 17 September
1970, Josefa and Josephine executed a document of
extrajudicial partition and sale of the lot in question, which was
there described as "conjugal property" of Josefa and deceased
Alayo. In this deed, Josefa's supposed one-half (1/2) interest
as surviving spouse of Alayo, as well as her one-fourth (1/4)
interest as heir, was conveyed to Josephine for a P10,000.00
consideration, thereby completing for herself, along with her
one-fourth (1/4) interest as the surviving child of Alayo, a full
"ownership" of the property. The notice of extrajudicial partition
was published on 04, 05 and 06 November 1970 in the
Evening Post; the inheritance and estate taxes were paid; and
a new Transfer Certificate of Title No. 198840 was issued on
06 June 1974 in the name of Josephine.

The husband, Alayo D. Bosing, married Juliana Oday on 27

July 1927, with whom he had three children, namely, Flora,

On 30 October 1980, Juliana (deceased Alayo's real widow)

and her three legitimate children filed with the court a quo an

VITUG, J.:
This case involves the question of ownership over a piece of
land acquired by a husband while living with a paramour
and after having deserted his lawful wife and children. The
property had been bought by the husband on installment basis
prior to the effectivity of the Civil Code of 1950 but the final
deed, as well as the questioned conveyance by him to his
common law spouse, has ensued during the latter Code's
regime. Now, of course, we have to likewise take note of the
new Family Code which took effect on 03 August 1988.

35
action for reconveyance of the property. On the basis of he
above facts, the trial court ruled in favor of the plaintiffs, and it
ordered that
. . . Josephine Bosing executed a deed of
reconveyance of the property in question to the legal
heirs of the deceased Alayo D. Bosing, and that both
defendants pay, jointly and severally, actual damages
by way of attorney's fees and expenses in litigation,
TEN THOUSAND (P10,000.00) PESOS as moral
damages, pus TEN THOUSAND (P10,000.00) PESOS
exemplary damages to prevent future frauds.
The defendants went to the Court of Appeals which affirmed
the trial court's order for reconveyance but reversed the
decision on the award for damages, thus
WHEREFORE, the judgment appealed from is hereby
AFFIRMED insofar as defendant Josephine Bosing is
ordered to execute a deed of reconveyance of the
property granting the same to the legal heirs of the
deceased Alayo D. Bosing, and REVERSED insofar as
it awards actual, moral and exemplary damages. 1
Hence, the instant petition for review 2 submitting that
1. THE RESPONDENT COURT ERRED IN NOT
HOLDING THAT THE ACTION FOR RECONVEYANCE
HAD LONG PRESCRIBED.
2. THE RESPONDENT COURT ERRED IN FINDING
THAT, THE ACTION FOR RECONVEYANCE IS
BASED UPON AN IMPLIED OR CONSTRUCTIVE
TRUST.

3. THE RESPONDENT COURT ERRED IN NOT

HOLDING THAT, THE PROPERTY IN QUESTION
BELONGS EXCLUSIVELY TO THE PETITIONERS.
4. THE RESPONDENT COURT ERRED IN NOT
GRANTING PETITIONER'S MOTION FOR NEW
TRIAL BASED ON NEWLY DISCOVERED EVIDENCE,
AND LIKEWISE ERRED IN HOLDING THAT EVEN IF
A NEW TRIAL IS GRANTED THE SAME WOULD NOT
SERVE A USEFUL PURPOSE.
We rule for affirmance.
The first three issues are interrelated, and the same will thus
be jointly discussed.
Whether the property in question was acquired by Alayo in
1949 when an agreement for its purchase on installment basis
was entered into between him and Magdalena Estate, Inc., or
in 1959 when a deed of sale was finally executed by
Magdalena Estate, Inc., the legal results would be the same.
The property remained as belonging to the conjugal
partnership of Alayo and his legitimate wife Juliana. Under
both the new Civil Code (Article 160) and the old Civil Code
(Article 1407), "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." This
presumption has not been convincingly rebutted.
It cannot be seriously contended that, simply because the
property was titled in the name of Josefa at Alayo's request,
she should thereby be deemed to be its owner. The property
unquestionably was acquired by Alayo. Alayo's letter, dated 06
October 1959, to Magdalena Estate, Inc., merely authorized
the latter to have title to the property transferred to her name.
More importantly, she implicitly recognized Alayo's ownership

36
when, three years after the death of Alayo, she and Josephine
executed the deed of extrajudicial partition and sale in which
she asserted a one-half (1/2) interest in the property in what
may be described as her share in the "conjugal partnership"
with Alayo, plus another one-fourth (1/4) interest as "surviving
widow," the last one-fourth (1/4) going to Josephine as the
issue of the deceased. Observe that the above adjudication
would have exactly conformed with a partition in intestacy had
they been the sole and legitimate heirs of the decedent.
The appellate court below, given the above circumstances,
certainly cannot be said to have been without valid basis in
concluding that the property really belonged to the lawful
conjugal partnership between Alayo and his true spouse
Juliana.
As regards the property relation between common-law
spouses, Article 144 of the Civil Code merely codified the law
established through judicial precedents under the old code
(Margaret Maxey vs. Court of Appeals, G.R. No. L-45870, 11
May 1984). In both regimes, the co-ownership rule had more
than once been repudiated when either or both spouses
suffered from an impediment to marry (Jeroniza vs. Jose, 89
SCRA 306). The present provisions under Article 147 and
Article 148 of the Family Code did not much deviate from the
old rules; in any case, its provisions cannot apply to this case
without interdicting prior vested rights (Article 256, Family
Code).
It was at the time that 'the adjudication of ownership was made
following Alayo's demise (not when Alayo merely allowed the
property to be titled in Josefa's name which clearly was not
intended to be adversarial to Alayo's interest), that a
constructive trust was deemed to have been created by
operation of law under the provisions of Article 1456 of the
Civil Code.

Article 1456. If the property is acquired through

mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied
trust for the benefit of the person from whom
the property comes.
The applicable prescriptive period for an action seeking a
reconveyance of the property by the beneficiaries thereof is
ten (10) years (Article 1144, Civil Code). Ordinarily, that period
starts from the establishment of the implied trust being the day
when the cause of action would be considered to have
accrued (Article 1150, Civil Code). Unfortunately for Josefa
and Josephine, however, the property involved in this case is a
realty titled under the Torrens System. The prescriptive period
is thus to be counted from the time the transaction affecting
the property is registered with the corresponding issuance of a
new certificate of title. 3 Between the time Transfer of
Certificate of Title No. 198840 was issued on 06 June 1974,
and the filing of the action for the reconveyance of the property
with the court a quo on 30 October 1980, barely a period of six
(6) years and four (4) months had elapsed. The case has
accordingly been initiated seasonably.
The four-year prescriptive period, mentioned in passing by the
petitioners, would have had some value and relevance had the
private respondents or their predecessor in interest been
parties to the extrajudicial partition and sale. In that event, the
latter's action could only then be predicated on a vitiation of
consent 4 where the applicable statutory limitation would be
four years. 5
The last issue raises the supposed error in the rejection of a
new trial on the basis of newly discovered evidence. We
concur with the resolution of the appellate court below (on
appellants' [petitioners herein] motion for reconsideration
thereat), thus

37
Appellants' prayer for a new trial based upon what they
claim is newly discovered evidence deserves scant
consideration.
Appellant proposes to prove (1) that Josefa Bosing sold
certain property for P8,000.00 in 1948 and was
therefore in a financial position to make the payments
to Magdalena Estate Inc. and (2) that appellee Juliana
Bosing got married in 1961 to one Burayos Ballit, and
thus, "forfeited" her right to the conjugal partnership.
The first ground is not meritorious. It is not newly
discovered evidence. As described in appellants'
Motion the documents were "not discovered or
considered as necessary evidence during the trial of
the case below" by the former counsel; it is therefore
more properly considered as forgotten evidence, which
the appellant knew or should have known during the
trial (Tesoro vs. Court of Appeals, 54 SCRA 296;
Republic vs. Vda. de Castelvi, 58 SCRA 336).
Moreover, assuming the sale is proven, it does not
follow that the proceeds were used to pay the lot in
question; the payments were made in installments, not
in one lump sum.
Neither is the second ground deserving of merit.
Assuming that the marriage to Ballit in 1961 is duly
proven, and that this provided a cause for legal
separation and consequent disqualification of the guilty
spouse to succeed to the husband's intestate estate
under Article 1002 of the Civil Code, the fact remains
that no action for legal separation was brought by the
husband during his lifetime and within the period
provided by law. It is too late to raise the issue at this
time.

Accordingly, assuming that the Motion for New Trial

complies with the formal requisites for such motion
(See Minister of Natural Resources vs. Heirs of Orval
Hughes, et al., G.R. No. 62662, prom. November 12,
1987), a question We don't find necessary to decide, a
new trial would not serve a useful purpose in altering
the result of the questioned decision.
WHEREFORE, the decision appealed from in the instant
petition for review on certiorari is AFFIRMED.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.

# Footnotes
1 Penned by Justice Minerva Gonzaga-Reyes,
concurred in by Justices Santiago Kapunan and
Ricardo Francisco.
2 Ably presented by Atty. Jaime Infante.
3 See Articles 708-709, 711, Civil Code; Amerol
vs. Bagumbaran, 154 SCRA 396.
4 Article 1390, Civil Code.
5 Article 1391, Ibid.

38
FIRST DIVISION

G.R. No. 51457 June 27, 1994

LUCIA EMBRADO and ORESTE TORREGIANI, petitioners,
vs.
COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS
SALIMBAGAT, EDA JIMENEZ and SANTIAGO
JIMENEZ, respondents.
Alerio P. Acosta for petitioner.
Roseller L. Barinaga & Venancio M. Carpio for respondents
Santiago and Eda Jimenez.
Pacifico Cimafranca for and in his own behalf.

BELLOSILLO, J.:
LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed
this petition for review on certiorari from the decision of
respondent Court of Appeals 1 upholding the validity of the
Deed of Sale over Lot No. 564 executed by petitioner Lucia
Embrado in favor of private respondent Eda Jimenez.
Lot No. 564 is a 366-square meter lot situated in Dipolog City
originally owned by Juan, Pastor and Matias Carpitanos. On 2
July 1946, a Venta Definitiva, a notarized document written
entirely in Spanish, was executed by the Carpitanos whereby
they sold Lot No. 564 to "Srta. LUCIA C. EMBRADO . . .
soltera, con residencia y direccion postal Municipio de

Dipolog, Provincia de Zamboanga." 2 The document provided

that even though the deed was prepared and signed on 2 July
1946, the effects of the document would retroact to the 15th
day of April 1941, the date the lot and its improvements were
actually sold to Lucia C. Embrado.
The sale was registered and Transfer Certificate of Title No. T99 3 was issued on 13 February 1948 in the name of Lucia
Embrado alone, who was by then already married to petitioner
Oreste Torregiani since 1943. However, by virtue of a court
order in Misc. Sp. Proc. No. 2330 of the then Court of First
Instance of Zamboanga del Norte, the word "single" appearing
in TCT No. T-99 was canceled and replaced on 19 October
1970 by the phrase "married to Oreste Torregiani." The
Torregianis then made their conjugal abode on the lot and in
1958 constructed a residential/commercial building thereon.4
As appearing from a document entitled Absolute Deed of
Sale dated 1 May 1971 5, Lucia Embrado Torregiani sold Lot
No. 564, described as her "own paraphernal property," to her
adopted daughter, herein private respondent Eda Jimenez, for
the sum of P1,000.00. Transfer Certificate of Title No. T-99
was canceled to give way to TCT No. T-17103 6 in the name of
Eda Jimenez, married to Santiago Jimenez.
On 6 March 1972, Eda Jimenez sold sixty-five (65) square
meters of Lot 564 to Marcos Salimbagat for P6,500.00, and on
1 August 1972, conveyed 301 square meters of the same lot to
Pacifico Cimafranca 8 for P30,000. Both sales were duly
annotated on TCT No. T-17103.
On 25 September 1972, the Torregianis instituted in the Court
of First Instance, now Regional Trial Court, of Zamboanga del
Norte an action for declaration of nullity of contract, annulment
of sales, reconveyance and damages 9 against the spouses
Santiago and Eda Jimenez, Marcos Salimbagat and Pacifico

39
Cimafranca alleging that the sale of Lot 564 by Lucia Embrado
to Eda Jimenez was void not only for lack of consideration but
also because Oreste Torregiani did not consent to the sale,
which consent was necessary because Lot 564 was conjugal
property. In addition, the petitioners claim that Lucia was
misled into signing the deed of sale marked as Exh. "D" on the
belief that Lot 564 was merely intended as security for a loan
that the Jimenez spouses were then negotiating with the First
Insular Bank of Cebu. Since the Jimenez spouses did not
acquire valid title to the land, the subsequent sales in favor of
Salimbagat and Cimafranca were without legal effect.
The Torregianis were sustained by the CFI of Zamboanga del
Norte 10 which held that the sale of Lot 564 to Eda Jimenez
and its subsequent transfers to Marcos Salimbagat and
Pacifico Cimafranca, who were declared buyers in bad faith,
were void and of no effect. More specifically, the judgment (a)
declared Exhs. "D," "G" and "H" as well as TCT No. 17103 null
and void and of no force and effect; (b) ordered defendants
jointly and severally to pay plaintiffs the sum of P2,000.00 as
actual damages and P1,500.00 for attorneys fees; (c) ordered
the Register of Deeds of Dipolog City to cancel TCT No. 17103
in the name of Eda Jimenez and issue another one in favor of
plaintiff Lucia Embrado, married to Oreste Torregiani, and to
cancel all the annotations thereon emanating from the void
transfers in favor of Marcos Salimbagat and Pacifico
Cimafranca; (d) ordered defendants Eda and Santiago
Jimenez to return to defendant Pacifico Cimafranca the sum of
P30,000.00 paid by him for the 301 square meters and the
house in question, and to defendant Marcos Salimbagat the
P6,500.00 paid by him for the 65 square meters occupied by
Comendador Clinic with legal interest of six percent (6%) until
fully paid; and, (e) ordered defendant Cimafranca to pay
plaintiffs all the rents he has been collecting from the lessees
of the first floor of the house with legal interest thereon from

the time he started collecting them until fully paid, with costs
against defendants. 11
The foregoing judgment was reversed by the Court of Appeals
which held that since Lucia Embrado actually agreed with
Juan, Pastor and Matias Carpitanos, the original owners, to
the purchase of Lot 564 on 15 April 1941 12 when she was not
yet married, then the lot was her paraphernal property since a
sale is considered perfected the moment the parties agree on
the object and cause of the contract. In addition, the
respondent court declared Salimbagat and Cimafranca buyers
in good faith since the contrary was not proved. Consequently,
the complaint in the trial court was ordered dismissed by
respondent Court of Appeals.
Three (3) issues are herein involved: (a) whether Lot 564 was
paraphernal property of Lucia Embrado or conjugal with her
husband Oreste Torregiani; (b) whether the sale in favor of
Eda Jimenez was valid; and, (c) whether vendees Marcos
Salimbagat and Pacifico Cimafranca were buyers in good faith
so that the sale to them was valid, hence, would bar
reconveyance.
We sustain petitioners. While we agree with respondent court
that Lot 564 was originally the paraphernal property of Lucia,
we cannot adopt its conclusion that because Lucia and the
original owners agreed in 1941 for its purchase and sale,
ownership was already acquired by Lucia at that moment.
Under Art. 1496 of the Civil Code, "ownership of the thing sold
is acquired by the vendee from the moment it is delivered to
him in any of the ways specified in articles 1497 to 1501, or in
any other manner signifying an agreement that the possession
is transferred from the vendor to the vendee," and under Art.
1498, "(w)hen the sale is made through a public instrument,
the execution thereof shall be equivalent to the delivery of the

40
thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred."
In the case at bar, the Venta Definitiva over Lot 564 in favor of
Lucia Embrado was executed by the Carpitanoses on 2 July
1946 when her marriage to petitioner Oreste Torregiani was
already subsisting. Although ownership was acquired during
the marriage and hence presumed conjugal, the presumption
of conjugality 13 was successfully overcome by the terms of
the Venta Definitiva which contains a positive assertion of
exclusive ownership, which was duly supported by the
testimony of Matias Carpitanos, one of the original sellers of
the lot. 14
However, a decisive fact appears which prevents us from
ultimately affirming the validity of her sale of Lot 564 to private
respondent Eda Jimenez. The trial court found as a fact the
construction in 1958 of a residential/commercial building 15 on
said lot a part of which was leased to third persons and
another part serving as the Torregianis conjugal dwelling.
Although no evidence was presented on the source of funds
used in the construction to determine whether the same was
conjugal or paraphernal, other than the testimony of
Torregiani, 16 petitioners nevertheless enjoy in their favor the
presumption that the funds used were conjugal. 17
The second paragraph of Art. 158 of the Civil Code provides
that "[b]uildings constructed, at the expense of the partnership,
during the marriage on land belonging to one of the spouses,
also pertain to the partnership, but the value of the land shall
be reimbursed to the spouse who owns the same." Under this
article, the land becomes conjugal upon the construction of the
building without awaiting reimbursement before or at the
liquidation of the partnership upon the concurrence of two
conditions, to wit: (a) the construction of the building at the

expense of the partnership; and, (b) the ownership of the land

by one of the spouses. 18 The conditions have been fully met in
the case at bench. Thus, even if Lot 564 was originally the
paraphernal property of Lucia as evident from the "Venta
Definitiva", the same became conjugal upon the construction
of the residential/commercial building in 1958.
Lucia claims that she was misled by her daughter and son-inlaw into signing a deed of absolute sale in their favor thinking
that she would be helping them obtain a loan from a bank if
they could mortgage the property as security for their loan; that
although she signed the deed of sale, she did not consent to
the sale nor did she intend to convey or transfer her title to
Eda Jimenez; and, that she never received the alleged amount
of P1,000.00 as consideration for the sale of the property.
While it is true that a notarized document is admissible in
evidence without proof of its due execution and is conclusive
as to the truthfulness of its contents, this rule is not absolute
and may be rebutted by evidence to the contrary. 19 In this
case, it was clearly shown that Eda and Santiago Jimenez had
no sufficient means of livelihood and that they were totally
dependent on their mother Lucia for the support of their family.
This fact strengthens the claim of Lucia that the price of the
property was fictitious and that Eda Jimenez could not have
paid the price of the property as she was financially incapable
to do so. In fact, Eda Jimenez did not prove as to how she
obtained the money to pay for the property she supposedly
bought from Lucia. When the source of the purchase price is
"intriguing" and is not convincingly shown to have been given
by the "buyer" to the "seller," the claim of the latter that she
signed the deed of sale without her consent may be upheld. 20
Even assuming in gratia argumenti that Lucia signed the
document knowing that it was a deed of sale of the property,
the sale thereof by Lucia to Eda Jimenez without her

41
husbands conformity should be considered void ab initio being
contrary to law. 21 Since "(t)he wife cannot bind the conjugal
partnership without the husbands consent, except in cases
provided by law," 22 it follows that Lucia Embrado Torregiani
could not, by herself, validly dispose of Lot 564 without her
husbands consent. Consequently, Eda Jimenez likewise could
not have acquired ownership over the land. The issuance of a
certificate of title in favor of Eda Jimenez did not vest upon her
ownership over the property. Neither did it validate the alleged
purchase thereof which is null and void. Registration does not
vest title. It is merely evidence of such title. Our land
registration laws do not give the holder any better title than
what he actually has. 23 Being null and void, the sale to Eda
Jimenez and the transfer of the property she made to
Salimbagat and Cimafranca produced no legal effects
whatsoever.Quod nullum est, nullum producit effectum. There
being no valid title to the land that Eda Jimenez acquired from
Lucia, it follows that no title to the same land could be
conveyed by the former to Salimbagat and
Cimafranca. 24

might be necessary to acquaint them with the defects in the

title of their vendor. A purchaser cannot close his eyes to facts
which should put a reasonable man on his guard and then
claim that he acted in good faith under the belief that there
was no defect in the title of the vendor. His mere refusal to
believe that such defect exists, or his willful closing of his eyes
to the possibility of the existence of a defect in the vendors
title will not make him an innocent purchaser for value if
afterwards it develops that the title is in fact defective, and it
appears that he had such notice of the defect as would have
led to its discovery had he acted with the measure of
precaution which may reasonably be required of a prudent
man in like situation. 26

It is worthy to note that Salimbagat and Cimafranca, as buyers

of Eda Jimenez, have not proved their status as purchasers in
good faith and for value of the land which, in the first place,
Eda Jimenez had no right to sell. The burden of proving the
status of a purchaser in good faith and for value lies upon him
who asserts that status. In discharging the burden, it is not
enough to invoke the ordinary presumption of good faith, i.e.,
that everyone is presumed to act in good faith. The good faith
that is here essential is integral with the very status which
must be proved. 25

Cimafranca is a close relative of Santiago Jimenez and at the

same time godfather to one of his children. As such, there can
be no doubt that Cimafranca was aware of the personal
circumstances and financial standing of the Jimenez spouses,
including their financial ability to acquire any property. It would
be impossible for Cimafranca not to know that Santiago
Jimenez was only twenty-two years old, a working student
earning six pesos per day 27 with a wife and three children to
support. 28 With these facts, there is every reason for him to
inquire further as to how Eda Jimenez came up with the sum
of P1,000.00 to buy the property. When there is a clear
showing that Eda Jimenez, being the transferee of a registered
property, is not gainfully employed or did not have an
independent source of income or is financially incapable of
paying the price of the property she bought, this is sufficient to
engender doubt as to whether Eda validly bought the property
from Lucia. 29

We agree with the trial court when it found that Salimbagat and
Cimafranca purchased the disputed lot from Eda and Santiago
Jimenez with knowledge of facts and circumstances which
should have put them upon such inquiry and investigation as

On the part of Salimbagat, he has been a resident of Dipolog

for about thirty (30) years. He has a daughter renting a portion
of the building with her husband for more than a year prior to
the sale by Eda Jimenez to Salimbagat on 6 March

42
1972. 30 This means that the lease of the building by
Salimbagats daughter already commenced while Lucia
Torregiani was still the registered owner and this was prior to
the alleged sale by Lucia Torregiani of the property to Eda
Jimenez on 1 May 1971. There can be no doubt that
Salimbagats daughter was aware of the factual background of
the property and the personal circumstances of the owners
thereof especially that they are all occupying the same
building. During the time that Salimbagat was already
interested in buying the property, it would have been usual and
part of ordinary human nature for him to inquire about the
property from his daughter who was living very near the
supposed owners. Considering that the Torregiani and
Jimenez families are not total strangers to Salimbagat, it is
safe to conclude that Salimbagat had some knowledge of the
financial status of the supposed vendors which should have
put him on guard before buying the property. Moreover, the
records show that this would not have escaped the notice of
Salimbagat and Cimafranca that at the time of the sale to them
petitioners were in actual possession of the property with
Salimbagats daughter renting a portion thereof. For that
matter, at the time of the sale to Salimbagat and Cimafranca,
petitioners had already been in continuous possession of the
property for fourteen (14) years, or since 1958. Santiago
Jimenez admitted that after his marriage he and his wife Eda
lived and stayed with her parents, herein petitioners, and
dependent on them for support. 31
Before buying the property, Salimbagat and Cimafranca
allegedly inquired from the office of the Register of Deeds
concerning the genuineness of the certificate of title of Eda
Jimenez, and from the Clerk of Court of the Court of First
Instance of Dipolog City as to whether the property was
involved in any litigation. 32 However, they failed to inquire from
petitioners as to why they were the ones in actual possession
of the property.

The rule is settled that a buyer of real property which is in the

possession of persons other than the seller must be wary and
should investigate the rights of those in possession.
Otherwise, without such inquiry, the buyer can hardly be
regarded as a buyer in good faith. 33 When a man proposes to
buy or deal with realty, his first duty is to read the public
manuscript, i.e., to look and see who is there upon it, and what
are his rights. A want of caution and diligence which an honest
man of ordinary prudence is accustomed to exercise in making
purchases is, in contemplation of law, a want of good faith. The
buyer who has failed to know or discover that the land sold to
him is in the adverse possession of another, is a buyer in bad
faith. 34
The fact that Lucia Embrado resides in the premises, coupled
with the relatively young age and meager financial standing of
the Jimenez spouses, should have been sufficient for
Cimafranca to hesitate accepting Edas transfer certificate of
title at its face value. Cimafranca, after deliberately closing his
eyes to such a vital information, is now claiming good faith. For
obvious reasons, we cannot accept his contention. We thus
declare him, together with Marcos Salimbagat, to be
purchasers in bad faith hence not entitled to protection under
the Torrens system of registration.
Lot 564 is now registered in the name of Eda Jimenez
"married to Santiago Jimenez" under Transfer Certificate of
Title No. T-17103 which was issued pursuant to the "Absolute
Deed of Sale" executed in her favor by petitioner Lucia
Embrado. We have already declared said deed of sale as null
and void since its object, Lot 564, is conjugal property which
was sold by Lucia Embrado without her husbands conformity.
The present vendees, Marcos Salimbagat and Pacifico
Cimafranca, who bought the property from Eda Jimenez have
failed to persuade us that they acquired the property in good
faith.

43
WHEREFORE, the decision of respondent Court of Appeals
dated 26 April 1979 is REVERSED and SET ASIDE and the
Decision of the then Court of First Instance (now Regional Trial
Court) of Zamboanga del Norte dated 14 June 1976 is
REINSTATED and ADOPTED herein as the decision in this
case.

10 Decision penned by Presiding Judge

Dimalanes B. Buissan of the then Court of First
Instance of Zamboanga del Norte dated 14
June 1976, Rollo, pp. 22-36.

SO ORDERED.

12 Testimony of Matias Carpitanos, TSN, 9

October 1975, pp. 38-40.

11 Id., pp. 35-36.

Cruz, Davide, Jr., Quiason and Kapunan, JJ., concur.

#Footnotes
1 Decision penned by then Presiding Justice
Andres Reyes, concurred in by Associate
Justices Samuel F. Reyes and Carlos L.
Sundiam, promulgated 26 April 1979, Rollo, pp.
37-45.

13 Art. 160. All property of the marriage is

presumed to belong to the conjugal partnership,
unless it is proved that it pertains exclusively to
the husband or to the wife.
14 TSN, 10 July 1975, pp. 38-39; 58-59.
15 Rollo, p. 23.

2 Exh. "1," Folder of Exhibits, p. 33.

16 TSN, 8 August 1974, p. 16.

3 Id., p. 3.

17 Vitug v. Montemayor, et al., 91 Phil. 286,

290-291 (1952).

4 TSN, 27 June 1973, p. 24.

5 Folder of Exhibits, p. 7.
6 Id., p. 23.
7 See Exh. "G," Folder of Exhibits, p. 10.
8 See Exh. "H," Folder of Exhibits, p. 11.
9 Docketed as Civil Case No. 2314.

18 Vda. de Padilla v. Paterno, No. L-8748, 26

December 1961, 3 SCRA 678, 691; see also
Vitug, J. C., Compendium of Civil Law and
Jurisprudence, 1993 ed., p. 67; Tolentino, A.,
Commentaries and Jurisprudence on the Civil
Code of the Philippines, Vol. I, 1983 ed., pp.
423-424.
19 Mendezona v. Phil. Sugar Estate Dev. Co.,
41 Phil. 475 (1921).

44
20 Baranda v. Baranda, G.R. No. 73275, 20
May 1987, 150 SCRA 59.

SCRA 572, 576; Leung Yee v. Strong Machinery

Company, 37 Phil. 645, 651 (1918).

21 Tolentino, Civil Code of the Philippines, Vol.

I, 1983 ed., p. 453; see also La Urbana v.
Villasor, 59 Phil. 644 (1934); Paras, Civil Code
of the Philippines, Vol. I, 1984 ed. p. 545.

27 TSN, 9 October 1975, p. 81.

22 Art. 172, Civil Code of the Philippines; see

also Tinitigan v. Tinitigan, Sr., No.
L-45418, 30 October 1980, 100 SCRA 619,
636.
23 De Guzman v. Court of Appeals, No. L46935, 21 December 1987, 156 SCRA 701;
Cruz v. Cabana, G.R. No. 56232, 22 June 1984,
129 SCRA 656.
24 Solid State Multi-Products Corporations v.
Court of Appeals, G.R. No. 83383, 6 May 1991,
196 SCRA 631.
25 Baltazar v. Court of Appeals, G.R. No.
78728, 8 December 1988, 168 SCRA 354.
26 Francisco v. Court of Appeals, G.R. 30162,
31 August 1987, 156 SCRA 330; Cardente v.
Intermediate Appellate Court, G.R. No. 73651,
27 November 1987, 155 SCRA 685, 690-691;
J.M. Tuason & Co., Inc., v. Court of Appeals,
No. L-41233, 21 November 1979, 94 SCRA
413, 422-423; Barrios v. Court of Appeals, No.
L-32531, 31 August 1977, 78 SCRA 427, 435;
Paylago v. Jarabe, No. L-20046, 27 March
1968, 22 SCRA 1247, 1252; Manacop, Jr. v.
Cansino, No. L-13971, 27 February 1961, 1

28 TSN, 27 June 1973, p. 21.

29 See Note 21.
30 TSN, 7 August 1975, p. 8.
31 TSN, 9 October 1975, pp. 78-79.
32 TSN, 10 July 1975 p. 21; 7 August 1975, pp.
11-12.
33 Cardente v. Intermediate Appellate Court,
G.R. No. 73651, 27 November 1987, 155 SCRA
685, 690-691; J.M. Tuason & Co., Inc. v. Court
of Appeals, No. L-41233, 21 November 1979,
94 SCRA 413, 422-423; Barrios v. Court of
Appeals, No. L-32531, 31 August 197, 78
SCRA 427, 435; Paylago v. Jarabe, No. L20046, 27 March 1968, 22 SCRA 1247, 1252;
Manacop, Jr. v. Cansino, No. L-13971, 27
February 1961, 1 SCRA 572, 576; Leung Yee v.
Strong Machinery Company, 37 Phil. 645, 651
(1918).
34 J.M. Tuason & Co., Inc. v. Court of Appeals,
No. L-41233, 21 November 1979, 94 SCRA
413, 422-423; see also Angelo v. Pacheco, 56
Phil. 70 (1931); Andaya v. Manansala, 107 Phil.
1151 (1960).

45
FIRST DIVISION
G.R. No. L-57499 June 22, 1984
MERCEDES CALIMLIM- CANULLAS, petitioner,
vs.
HON. WILLELMO FORTUN, Judge, Court of First instance
of Pangasinan, Branch I, and CORAZON
DAGUINES, respondents.
Fernandez Law Offices for petitioner.
Francisco Pulido for respondents.

MELENCIO-HERRERA, J.:
Petition for Review on certiorari assailing the Decision, dated
October 6, 1980, and the Resolution on the Motion for
Reconsideration, dated November 27, 1980, of the then Court
of First Instance of Pangasinan, Branch I, in Civil Case No.
15620 entitled "Corazon DAGUINES vs. MERCEDES
Calimlim-Canullas," upholding the sale of a parcel of land in
favor of DAGUINES but not of the conjugal house thereon'
The background facts may be summarized as follows:
Petitioner MERCEDES Calimlim-Canullas and FERNANDO
Canullas were married on December 19, 1962. They begot five
children. They lived in a small house on the residential land in
question with an area of approximately 891 square meters,
located at Bacabac, Bugallon, Pangasinan. After
FERNANDO's father died in 1965, FERNANDO inherited the
land.

In 1978, FERNANDO abandoned his family and was living with

private respondent Corazon DAGUINES. During the pendency
of this appeal, they were convicted of concubinage in a
judgment rendered on October 27, 1981 by the then Court of
First Instance of Pangasinan, Branch II, which judgment has
become final.
On April 15, 1980, FERNANDO sold the subject property with
the house thereon to DAGUINES for the sum of P2,000.00. In
the document of sale, FERNANDO described the house as
"also inherited by me from my deceased parents."
Unable to take possession of the lot and house, DAGUINES
initiated a complaint on June 19, 1980 for quieting of title and
damages against MERCEDES. The latter resisted and claimed
that the house in dispute where she and her children were
residing, including the coconut trees on the land, were built
and planted with conjugal funds and through her industry; that
the sale of the land together with the house and improvements
to DAGUINES was null and void because they are conjugal
properties and she had not given her consent to the sale,
In its original judgment, respondent Court principally declared
DAGUINES "as the lawful owner of the land in question as well
as the one-half () of the house erected on said land." Upon
reconsideration prayed for by MERCEDES, however,
respondent Court resolved:
WHEREFORE, the dispositive portion of the Decision
of this Court, promulgated on October 6, 1980, is
hereby amended to read as follows:
(1) Declaring plaintiff as the true and lawful owner of
the land in question and the 10 coconut trees;

46
(2) Declaring as null and void the sale of the conjugal
house to plaintiff on April 15, 1980 (Exhibit A) including
the 3 coconut trees and other crops planted during the
conjugal relation between Fernando Canullas (vendor)
and his legitimate wife, herein defendant Mercedes
Calimlim- Canullas;

In his commentary on the corresponding provision in the

Spanish Civil Code (Art. 1404), Manresa stated:
El articulo cambia la doctrine; los edificios construidos
durante el matrimonio en suelo propio de uno de los
conjuges son gananciales, abonandose el valor del
suelo al conj uge a quien pertenezca.

xxx xxx xxx

The issues posed for resolution are (1) whether or not the
construction of a conjugal house on the exclusive property of
the husband ipso facto gave the land the character of conjugal
property; and (2) whether or not the sale of the lot together
with the house and improvements thereon was valid under the
circumstances surrounding the transaction.
The determination of the first issue revolves around the
interpretation to be given to the second paragraph of Article
158 of the Civil Code, which reads:
xxx xxx xxx
Buildings constructed at the expense of the partnership
during the marriage on land belonging to one of the
spouses also pertain to the partnership, but the value
of the land shall be reimbursed to the spouse who
owns the same.
We hold that pursuant to the foregoing provision both the land
and the building belong to the conjugal partnership but the
conjugal partnership is indebted to the husband for the value
of the land. The spouse owning the lot becomes a creditor of
the conjugal partnership for the value of the lot, 1 which value
would be reimbursed at the liquidation of the conjugal
partnership. 2

It is true that in the case of Maramba vs. Lozano, 3 relied upon

by respondent Judge, it was held that the land belonging to
one of the spouses, upon which the spouses have built a
house, becomes conjugal property only when the conjugal
partnership is liquidated and indemnity paid to the owner of the
land. We believe that the better rule is that enunciated by Mr.
Justice J.B.L. Reyes in Padilla vs. Paterno, 3 SCRA 678, 691
(1961), where the following was explained:
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) ...

47
The foregoing premises considered, it follows that
FERNANDO could not have alienated the house and lot to
DAGUINES since MERCEDES had not given her consent to
said sale. 4
Anent the second issue, we find that the contract of sale was
null and void for being contrary to morals and public policy.
The sale was made by a husband in favor of a concubine after
he had abandoned his family and left the conjugal home where
his wife and children lived and from whence they derived their
support. That sale was subversive of the stability of the family,
a basic social institution which public policy cherishes and
protects. 5
Article 1409 of the Civil Code states inter alia that: contracts
whose cause, object, or purpose is contrary to law, morals,
good customs, public order, or public policy are void and
inexistent from the very beginning.
Article 1352 also provides that: "Contracts without cause, or
with unlawful cause, produce no effect whatsoever. The cause
is unlawful if it is contrary to law, morals, good customs, public
order, or public policy."
Additionally, the law emphatically prohibits the spouses from
selling property to each other subject to certain
exceptions. 6 Similarly, donations between spouses during
marriage are prohibited. 7 And this is so because if transfers or
con conveyances between spouses were allowed during
marriage, that would destroy the system of conjugal
partnership, a basic policy in civil law. It was also designed to
prevent the exercise of undue influence by one spouse over
the other, 8 as well as to protect the institution of marriage,
which is the cornerstone of family law. The prohibitions apply
to a couple living as husband and wife without benefit of
marriage, otherwise, "the condition of those who incurred guilt

would turn out to be better than those in legal union." Those

provisions are dictated by public interest and their criterion
must be imposed upon the wig of the parties. That was the
ruling in Buenaventura vs. Bautista, also penned by Justice
JBL Reyes (CA) 50 O.G. 3679, and cited in Matabuena vs.
Cervantes. 9 We quote hereunder the pertinent dissertation on
this point:
We reach a different conclusion. While Art. 133
of the Civil Code considers as void a donation
between the spouses during the marriage,
policy considerations of the most exigent
character as wen as the dictates
of morality require that the same prohibition
should apply to a common-law relationship.
As announced in the outset of this opinion, a
1954 Court of Appeals decision, Buenaventura
vs. Bautista, 50 OG 3679, interpreting a similar
provision of the old Civil Code speaks
unequivocally. If the policy of the law is, in the
language of the opinion of the then Justice
J.B.L. Reyes of that Court, 'to prohibit donations
in favor of the other consort and his
descendants because of fear of undue influence
and improper pressure upon the donor, a
prejudice deeply rooted in our ancient law, ...,
then there is every reason to apply the same
prohibitive policy to persons living together as
husband and wife without benefit of nuptials.
For it is not to be doubted that assent to such
irregular connection for thirty years bespeaks
greater influence of one party over the other, so
that the danger that the law seeks to avoid is
correspondingly increased'. Moreover, as
pointed out by Ulpian (in his lib 32 ad Sabinum,

48
fr. 1), "It would not be just that such donations
should subsist, lest the conditions of those
who incurred guilt should turn out to be better."
So long as marriage remains the cornerstone of
our family law, reason and morality alike
demand that the disabilities attached to
marriage should likewise attach
toconcubinage (Emphasis supplied),
WHEREFORE, the Decision of respondent Judge, dated
October 6, 1980, and his Resolution of November 27, 1980 on
petitioner's Motion for Reconsideration, are hereby set aside
and the sale of the lot, house and improvements in question, is
hereby declared null and void. No costs.
SO ORDERED.
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., and De
la Fuente, JJ., concur.

Footnotes
1 Tabotabo vs. Molero, 22 Phil. 418 (1912).
2 Vda. de Padilla vs. Paterno, 3 SCRA 678, 691
(1961).
3 20 SCRA 474 (1967).
4 Article 166, Civil Code.
5 Article 216, Civil Code.

6 Article 1490, Ibid.

7 Article 133, Ibid.
8 Article 1337, Ibid.
9 38 SCRA 284 (1971).

49
SECOND DIVISION
G.R. No. L-63025 November 29, 1991
RAMON C. ONG, petitioner,
vs.
COURT OF APPEALS, FRANCISCO BOIX and ARSENIO
CAMINO AS DEPUTY SHERIFF OF CAMARINES
NORTE, respondents.
Jose L. Lapak for petitioner.
Jose M. Abola for private respondent.

PARAS, J.:p
The instant petitioner for certiorari seeks are reversal of the
decision ** of herein public respondent Court of Appeals dated
October 24, 1977 in CA-G.R. No. 47063-R and its resolution
dated January 14, 1983 denying herein petitioner's Motion for
Reconsideration.
The Court of Appeals narrates the facts thus:
The record shows that on November 16, 1961, Ramon
C. Ong filed a complaint against defendants Arsenio
Camino as Deputy Sheriff of Camarines Norte and
Francisco Boix, to annul the auction sale of a parcel of
land, allegedly owners conjugally by plaintiff and his
former wife Teodora B. Ong, awarded in favor of Boix,
as highest bidder, in an auction sale conducted on
October 10, 1958 by the Deputy Sheriff of Camarines
Norte, herein defendant Camino, pursuant to a writ of
execution dated August 8, 1958 (Exhibits "C", "2-A")

issued by the Court of First Instance of Manila, Branch

IV, to enforce its decision in Civil Case No. 33396,
entitled, "Francisco Boix, Plaintiff vs. Teodora B. Ong
and Ramon C. Ong, Defendants" wherein judgment
was rendered to wit:
WHEREFORE, judgment is hereby rendered in
favor of plaintiff, ordering the defendant Teodora
B. Ong to pay to the plaintiff the sum P2,827.83,
with interest of 8% per annumon the sum of
P1,000.00 from September 5, 1955, on the sum
of P827.83 from December 30, 1955 plus 15%
on the total amount of P2,827.83 as attorney's
fees; and the further amount of P2,503 with
interest at 6% per annum from date of the filing
of the complaint, and the costs of the suit.
(Exhibit "1")
The title to the property, in favor of the executioncreditor Boix was duly registered in the Office of the
Register of Deeds of Camarines Norte (Exhibit "4").
It is not disputed that plaintiff's wife, Teodora B. Ong
conducted her own logging business in Camarines Sur.
In furtherance of her business operation, on August 18,
1955, she secured from Francisco Boix a loan in the
amount of P2,827.83. Unfortunately, because of
mismanagement, Teodora defaulted in her obligation.
This prompted Boix to file a complaint, based on the
promissory notes executed by Teodora, to collect the
sum legally due plus interest against Teodora and
Ramon Ong, the latter being joined as husband of the
former. Defendant-spouses were declared in default
and judgment was rendered, as aforesaid, in favor of
Boix.

50
After the aforementioned decision became final and
executory, Boix moved to execute the judgment. The
motion was granted and a corresponding writ of
execution, dated August 8, 1958 (Exhibits "C", "2-A"),
was issued. Accordingly, the Sheriff of Camarines
Norte levied and attached a parcel of land situated at
Diego Linan St., Daet, Camarines Norte, declared
under Tax No. 05378 in the sole name of Teodora B.
Ong, subject-parcel of herein suit. In a notice of levy on
Execution dated August 22, 1958 (Exhibit "2-B"), and
notice of Public Auction sale dated September 10, 1958
(Exhibit "2-C"), auction sales was held on October 10,
1958 and as already mentioned, defendant Boix was
adjudged highest bidder. A writ of possession was
issued to place the execution-creditor in possession of
the property levied upon and sold on execution. A
corresponding Certificate of Sale (Exhibit "H") was also
issued in favor of Boix.
Subsequently, thereafter, Ramon C. Ong filed an
Omnibus motion dated October 2, 1961 (Exhibit "D")
with the same Court of First Instance of Manila asking
to quash the writ of possession, which was denied in
an order dated December 6, 1961. A motion for
reconsideration dated December 29, 1961 (Exhibit "F")
was likewise denied in an order dated February 10,
1962 (Exhibit "G"). (Pp. 1-4, Decision; pp. 11-14 Rollo)
Consequently, petitioner brought the case to the Court of
Appeals to annul the auction sale allegedly irregularly
executed on the following grounds, namely, that the property
was conjugal and thus could not be held liable for personal
debts contracted by the wife, and that the there was no valid
publication thus making the auction sale void.

The Court of Appeals affirmed the decision of the trial court,

prompting petitioner to file a motion for reconsideration
thereof. Said motion was denied on January 15, 1983; hence,
the present petition.
Petitioner contends that the auction sale of the property in
dispute is null and void, having been made on a date different
from that reflected in the advertisement thereof, aside from
having been published in a newspaper which is not of general
circulation in the province where the property is situated.
According to the petitioner, respondent court's failure to touch
on such a jurisdictional issue constitutes grave abuse of
discretion which justifies a reversal of its decision affirming the
finding of the trial court which in itself constitutes a
misappreciation of facts.
The other argument advanced by the petitioner is that the
subject property is really conjugal which the wife in the case at
bar could not legally bind, and considering that the
indebtedness was contracted by the wife only, the levy of the
subject property not owned exclusively by the wife owned
jointly with the husband is improper.
Against petitioner's argument that the auction sale is null and
void is the trial court's assessment of the validity thereof, that
is, that the notice of public auction sale was published in
accordance with law. Such a factual finding of the trial court is
entitled to great weight and should not be disturbed on appeal.
"Factual questions should be resolved by the lower courts and
the Supreme Court has no jurisdiction as a rule to reverse the
findings of the lower courts except in a clear showing of a
grave abuse of discretion" (Korean Air Lines vs. Court of
Appeals, 154 SCRA 211). In the instant case, petitioner failed
to show any grave abuse of discretion committed, by the lower
court in appreciating private respondent's allegation that
petitioner was previously notified of the supposed transfer of

51
the date of public auction from September 25, 1958 to October
10, 1958.
Petitioner's other argument is also based on factual
considerations. Against the Court of Appeals' finding that the
subject property is paraphernal property, in view of the fact that
it was "declared, under Tax No. 05378, in the name of Teodora
B. Ong while the house erected thereon was declared under
Tax No. 06022 in the name of Ramon C. Ong and Teodora B.
Ong (Exhibits "B", "2-B", "2-C, "4") (Decision, p. 4) is
petitioner's claim that the subject property is conjugal.
Petitioner stresses heavily on the fact that since the surname
"Ong" (which is the surname of the husband Ramon C. Ong)
was carried by Teodora in the aforesaid declaration, that
indicates that the subject property was acquired during the
marriage. By reason thereof, the property in dispute is
presumed to be owned jointly by both spouses.
We disagree. The mere use of the surname of the husband in
the tax declaration of the subject property is not sufficient proof
that said property was acquired during the marriage and is
therefore conjugal. It is undisputed that the subject parcel was
declared solely in the wife's name, but the house built thereon
was declared in the name of the spouses. Under such
circumstances, coupled with a careful scrutiny of the records
of the present case, We hold that the lot in question is
paraphernal, and is therefore, liable for the personal debts of
the wife.
Thus, it was held in the case of Maramba vs. Lozano, 20
SCRA 474, that
The presumption that property is conjugal (Art. 160,
New Civil Code) refers to property acquired during the
marriage. When there is no showing as to when the
property was acquired by a spouse, the fact that the

title is in the spouse's name is an indication that the

property belongs exclusively to said spouse.
As correctly pointed out by the respondent Court, the party
who invokes the presumption that all property of the marriage
belongs to the conjugal partnership (Art. 160, New Civil Code)
must first prove that the property was acquired during the
marriage. Proof of acquisition during the marriage is a
condition sine qua non for the operation of the presumption in
favor of the conjugal partnership. (Cobb-Perez, et al. vs.
Lantin, et al., 23 SCRA 637; Jose Ponce de Leon vs.
Rehabilitation Finance Corp., 36 SCRA 289). In the same
manner, the recent case of PNB vs.Court of Appeals, 153
SCRA 435 affirms that:
When the property is registered in the name of the 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. And this presumption under Art. 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.
Furthermore, even assuming for the sake of argument that the
property in dispute is conjugal, the same may still be held
liable for the debts of the wife in this case. Under Art. 117 of
the Civil Code, the wife may engage in business although the
husband may object (but subject to certain conditions). It is
clear from the records that the wife was engaged in the
logging business with the husband's knowledge and
apparently without any objection on his part. The acts of the
husband show that he gave his implied consent to the wife's
engagement in business. According to Justice AmeurfinaHerrera (then Associate Justice of the Court of Appeals) in her
concurring opinion, the rule that should govern in that case is

52
that the wife's paraphernal properties, as well as those of their
conjugal partnership, shall be liable for the obligations incurred
by the wife in the course of her business (Arts. 117, 140, 172,
203, and 236, Civil Code; Art. 10, Code of Commerce, cited in
Commentaries on Phil. Commercial Laws, Martin, T.C. Vol. 1,
1970 Revised Edition, pp. 14-15). After all, whatever profits are
earned by the wife from her business go to the conjugal
partnership. It would only be just and equitable that the
obligations contracted by the wife in connection with her
business may also be chargeable not only against her
paraphernal property but also against the conjugal property of
the spouses.
Let it be noted that due to the length of time that this case has
remained pending, private respondents Francisco Boix and
Arsenio Camino have allegedly already died in the process.
No proper substitution of parties have apparently been made.
Nevertheless, despite such supervening events, for failure on
the part of petitioner to show any grave abuse of discretion or
reversible error committed by respondent appellate court, We
deem it wise to affirm the said court's decision. Besides, the
decision of the trial court is in accordance with law and the
evidence presented.
WHEREFORE, the petition is hereby DISMISSED for lack of
merit without pronouncement as to costs.
SO ORDERED.
Padilla and Regalado, JJ., concur.
Melencio-Herrera, J., took no part.

# Footnotes

** Penned by the then Associate Justice (now

deceased) Simeon M. Gopengco and concurred
in by Associate Justices Ameurfina A. MelencioHerrera and Vicente G. Ericta.

53
EN BANC

SYLLABUS

[G.R. No. 57257. March 5, 1984.]

ILUMINADA PONCE BERCILES, ILONA BERCILES
ALVAREZ, ELLERY P. BERCILES, ENGLAND P. BERCILES
and IONE P. BERCILES, Petitioners, v. GOVERNMENT
SERVICE INSURANCE SYSTEM, PASCUAL VOLTAIRE
BERCILES, MARIA LUISA BERCILES VILLAREAL, MERCY
BERCILES PATACSIL and RHODA
BERCILES, Respondents.
[Adm. Matter No. 1337-Ret. March 5, 1984.]
RE: CLAIM OF THE HEIRS OF THE LATE PASCUAL G.
BERCILES, Former District Judge of the Court of First
Instance of Cebu, Cebu City, FOR THE UNPAID SALARY,
MONEY VALUE OF TERMINAL LEAVE and
REPRESENTATION AND TRANSPORTATION
ALLOWANCES OF THE DECEASED JUDGE.
[Adm. Matter No. 10468-CFI. March 5, 1984.]
RE: TERMINAL LEAVE PAY, UNPAID SALARY AND
ALLOWANCE OF THE LATE CFI JUDGE PASCUAL G.
BERCILES: FLOR FUENTEBELLA AND HER FOUR
CHILDREN, ALL SURNAMED BERCILES, Petitioners, v.
ILUMINADA PONCE AND HER FOUR CHILDREN, ALL
SURNAMED BERCILES, Respondents.
Ramon M. Durano & Associates, for Petitioners.
Luzel D. Demasu-ay and Nicolas Sonalan for Pascual
Voltaire, Et. Al. private respondents in 57257.

1. CIVIL LAW; PERSONS; PATERNITY AND FILIATION;

PROOF OF FILIATION; BIRTH CERTIFICATE, MUST BE
SIGNED BY THE FATHER. The evidence considered by the
Committee on Claims Settlement as basis of its finding that
Pascual Voltaire Berciles is an acknowledged natural child of
the late Judge Pascual Berciles is the birth certificate of said
Pascual Voltaire Berciles marked Exh. "6." We have examined
carefully this birth certificate and We find that the same is not
signed by either the father or the mother; We find no
participation or intervention whatsoever therein by the alleged
father, Judge Pascual Berciles. Under our jurisprudence, if the
alleged father did not intervene in the birth certificate, the
putting of his name by the mother or doctor or registrar is null
and void. Such registration would not be evidence of paternity.
(Joaquin P. Roces Et. Al. v. Local Civil Registrar of Manila, 102
Phil. 1050). The mere certificate by the registrar without the
signature of the father is not proof of voluntary
acknowledgment on his part (Dayrit v. Piccio, 92 Phil. 729). A
birth certificate does not constitute recognition in a public
instrument. (Pareja v. Pareja, Et Al., 95 Phil. 167). A birth
certificate, to evidence acknowledgment, must, under Section
5 of Act 3753, bear the signature under oath of the
acknowledging parent or parents. (Vidaurrazaga v. Court of
Appeals and Francisco Ruiz, 91 Phil. 492).
2. ID.; ID.; ID.; ID.; BAPTISMAL CERTIFICATE, NOT PROOF
OF PATERNITY. As to the baptismal certificate, Exh. "7-A",
the rule is that although the baptismal record of a natural child
describes her as a child of the decedent, yet, if in the
preparation of the record the decedent had no intervention, the
baptismal record cannot be held to be a voluntary recognition
of parentage. (Canales v. Arrogante, Et Al., 91 Phil. 6). The
reason for this rule that canonical records do not constitute the

54
authentic document prescribed by Arts. 115 and 117 to prove
the legitimate filiation of a child is that such canonical record is
simply proof of the only act to which the priest may certify by
reason of his personal knowledge, an act done by himself or in
his presence, like the administration of the sacrament upon a
day stated; it is no proof of the declarations in the record with
respect to the parentage of the child baptized, or of prior and
distinct facts which require separate and concrete evidence.
(Adriano v. De Jesus, 23 Phil. 350).
3. ID.; ID.; ID.; ID.; TYPEWRITTEN LETTER OF THE
DECEDENT FATHER DISCLAIMING THE EXISTENCE OF
HIS OTHER FAMILY, NOT AN AUTHENTIC WRITING. We
also agree with the finding of the Committee that" (t)he letters
written by Judge Berciles to her daughters with Flor
Fuentebella especially the one sent to daughter Mercy
Berciles (Exh. "22") wherein he vigorously affirmed that its
only her mother, Flor Fuentebella, and no other woman who
was recognized as his wife and loved by her parents deserve
scant consideration. Pascual Berciles could not be expected to
admit the existence of his other family. This would be
disastrous to his efforts at preventing one family from knowing
the other." Not only do they deserve scant consideration but
also, there is jurisprudence that a typewritten letter signed by
the father is not an authentic writing. (Decision of the Supreme
Court of Spain of Feb. 27, 1923 and Dec. 7, 1927 cited in 3
Castan, 6th ed., 25; see Caguioa, Comments and Cases on
Civil Law, Vol. I, p. 379).
4. ID.; ID.; ID.; ILLEGITIMATE CHILD; RIGHT TO SUPPORT
REQUIRES RECOGNITION. Under the law, Article 287,
New Civil Code, illegitimate children other than natural in
accordance with Art. 269 are entitled to support and such
successional rights as are granted in the Code, but for this
Article to be applicable, there must be admission or
recognition of the paternity of the illegitimate child (Paterno, Et.

Al. v. Paterno, 20 SCRA 585, citing Noble v. Noble, G.R. No. L17742, Dec. 17, 1966, 18 SCRA 1104; Paulino v. Paulino, G.R.
No. L-15091, Dec. 28, 1961, 113 Phil. 697). Article 887,
N.C.C., defining who are compulsory heirs, is clear and
specific that" (i)n all cases of illegitimate children, their filiation
must be duly proved." library
5. CIVIL LAW; SUCCESSION; INTESTATE SUCCESSION;
SHARE OF THE SURVIVING SPOUSE IS EQUAL TO THE
SHARE OF EACH OF THE CHILDREN. According to Article
996 of the New Civil Code which provides that "If a widow or
widower and legitimate children or descendants are left, the
surviving spouse has in the succession the same share as that
of each of the children," and Article 980 which provides that
"The children of the deceased shall always inherit from him in
their own right, dividing the inheritance in equal shares," the
retirement benefits shall be distributed equally to the five (5)
heirs: Iluminada Ponce Berciles, Ilona Berciles Alvarez, Ellery
P. Berciles, England P. Berciles and Ione P. Berciles.
6. ID.; PERSONS AND FAMILY RELATIONS; PROPERTY
RELATIONS BETWEEN HUSBAND AND WIFE; CONJUGAL
PARTNERSHIP OF GAINS; RETIREMENT PREMIUMS
PRESUMED CONJUGAL. As to the retirement premiums
totaling P9,700.00, the same is presumed conjugal property,
there being no proof that the premiums were paid from the
exclusive funds of the deceased Judge (Article 160, New Civil
Code). Such being the case, one-half of the amount belongs to
the wife as her property in the conjugal partnership and the
other half shall go to the estate of the deceased Judge which
shall in turn be distributed to his legal heirs.
7. REMEDIAL LAW; CIVIL ACTIONS; APPEAL FROM A
DECISION OF THE GSIS; P.D. 1146 (REVISED
GOVERNMENT SERVICE INSURANCE ACT OF 1977)
APPLICABLE TO DISPUTES ARISING UNDER THE

55
JUDICIARY RETIREMENT ACT; CASE AT BAR Section 25
of P.D. 1146 specifically laying down the procedure whereby
the party aggrieved by the decision of the GSIS may appeal
the same to the Court of Appeals, now the Intermediate
Appellate Court, on questions of law and facts following the
procedures for appeals from the Court of First Instance (now
Regional Trial Court) to the I.A.C. and if the appeal is only on
questions of law, the same shall be brought directly to the
Supreme Court on certiorari, which abbreviated procedure was
designed to facilitate, and not to prolong, the payment of
benefits, may be invoked by the petitioners. That P.D. 1146,
Sec. 35 is applicable to disputes arising under the Judiciary
Retirement Act and all other acts administered by the GSIS
may also be construed from Sec. 23 of the Decree which
provides that the "System shall prescribe such rules and
regulations to facilitate payment of benefits, proceeds and
claims under the Act and any other laws administered by the
System."

for the surviving spouse, Iluminada Ponce Berciles;.

134
10
each for the legitimate children, Ilona Berciles Alvarez,
134 Ellery P. Berciles, England P. Berciles and Ione P.
Berciles;.
5
for the-acknowledged natural child Pascual Voltaire
Berciles;
134
4

DECISION
each for the illegitimate children, namely, Maria Luisa
Berciles,
GUERRERO, J.:
The disposition made by respondent GSIS of the retirement
benefits under Republic Act 910, as amended, due the heirs of
the late Judge of Court of First Instance Pascual G. Berciles
whereby the GSIS considered said retirement benefits in the
total amount of P311,460.00 as partly conjugal and partly
exclusive in nature and thus divided the same in the following
proportion:chanrob1es virtual 1aw library
77

134 Mercy Berciles and Rhoda Berciles.

is erroneous in view of the rule We laid down in Re: Claims for
Benefits of the Heirs of the Late Mario V. Chanliongco, Et Al.,
79 SCRA 364; Vda. de Consuegra, Et. Al. v. GSIS, 37 SCRA
315 that retirement benefits shall accrue to his estate and will
be distributed among his legal heirs in accordance with the law
on intestate succession, as in the case of a life insurance if no
beneficiary is named in the insurance policy, and that the
money value of the unused vacation and sick leave, and
unpaid salary form part of the conjugal estate of the married
employee.

56

Moreover, We find grave abuse of discretion on the part of

respondent GSIS, acting through its Board of Trustees, in
resolving under its Resolution No. 431 to approve the
recommendation of the Committee on Claims Settlement that
private respondent Pascual Voltaire Berciles is an
acknowledged natural child and that the other private
respondents Maria Luisa Berciles Villareal, Mercy Berciles
Patacsil and Rhoda Berciles are illegitimate children of the late
Judge Pascual G. Berciles in the absence of substantial
evidence through competent and admissible proof of
acknowledgment by and filiation with said deceased parent as
required under the law.
Judge Pascual G. Berciles of the Court of First Instance of
Cebu died in office on August 21, 1979 at the age of sixty-six
years, death caused by "cardiac arrest due to cerebral
vascular accident." Having served the government for more
than thirty-four (34) years, twenty-six (26) years in the
judiciary, the late Judge Berciles was eligible for retirement
under Republic Act No. 910, as amended by Republic Act No.
5095 so that his heirs were entitled to survivors benefits
amounting to P311,460.00 under Section 2 of said Act. Other
benefits accruing to the heirs of the deceased consist of the
unpaid salary, the money value of his terminal leave and
representation and transportation allowances, computed at
P60,817.52, all of which are to be paid by this Court as the
deceaseds last employer, and the return of retirement
premiums paid by the retiree in the amount of P9,700.00 to be
paid by the GSIS. Such benefits are now being claimed by two
families, both of whom claim to be the deceaseds lawful heirs.
Iluminada Ponce of Tagudin, Ilocos Sur, and her four children,
Ilona, Ellery, England and Ione, filed with Us an application for
survivors benefits under Republic Act 910, as amended by
R.A. No. 5095 effective August 21, 1979 as the legal spouse

and legitimate children of the late Judge Pascual G. Berciles,

duly supported by the required documents.
The other set of claimants are Flor Fuentebella, and her four
children, namely Pascual Voltaire, Maria Luisa, Mercy and
Rhoda, all surnamed Berciles, the latter filing her familys claim
by means of a letter dated November 10, 1979 and supporting
documents were also submitted with their claim. The matter of
these two (2) conflicting claims was first docketed before this
Court as Administrative Matter No. 1337-Ret. and in a
Resolution of the Court En Banc dated April 10, 1980, We
resolved to APPROVE the application of Ms. Iluminada P.
Berciles for survivors benefits under the above-cited law,
effective August 21, 1979, subject to (a) the proper
determination of the rightful beneficiaries and their
corresponding shares in accordance with law, it appearing that
there are two claimant families thereto, and (b) the usual
clearance requirements.
In pursuance to the foregoing resolution, the Office of the
Court Administrator recommended in a memorandum report
dated November 11, 1980 that (a) the transmittal to the GSIS
of the retirement papers of the late Judge Pascual Berciles be
held in abeyance until the payment to the rightful heirs of the
unpaid salary, money value of terminal leave and
representation and transportation allowances of the deceased
Judge, and (b) that an investigator be designated to determine
the respective claims of the supposed heirs of the late Judge.
The aforesaid recommendation was approved by the Chief
Justice on November 27, 1980 and Atty. Renato G. Quilala of
the Office of the Court Administrator was designated on
December 15, 1980 as Court Investigator to help determine
the rightful beneficiaries of the subject benefits.
Thereupon, Atty. Quilala sent on December 22, 1980 to all the
alleged heirs a notice of hearing set for January 26, 1981 and

57
the following days thereafter for the reception of evidence in
support of their respective claims. None of the parties,
however, appeared. Records from the Retirement Section,
Administrative Services Office of this Court show that the claim
of Iluminada Ponce and her children was already approved by
the GSIS as of October 9, 1980 and that in fact, the five years
lump sum equivalent to P301,760.00 (gratuity less the
retirement premiums paid under R.A. 910, as amended, which
was to be returned to the retiree by the GSIS) under Check
No. 04824308 as retirement gratuity of the deceased had been
remitted by the Budget and Finance Office of this Court to the
GSIS for payment to the heir-beneficiaries on October 15,
1980.
On February 4, 1981, Atty. Cecilia T. Berciles, daughter-in-law
of the deceased Judge, and Mrs. Iluminada Ponce Berciles
submitted to the Court Investigator additional documents in
support of the claim of Mrs. Iluminada P. Berciles and her
children, consisting of (A) Evaluation Report, as approved by
the GSIS, under P.D No. 626 with the following
recommendations, to wit:
"1. It is recommended that the death benefits under PD 626
due to the death of the deceased of a compensable
contingency, be awarded to Iluminada Ponce having
established her marriage to the deceased and had been living
with the deceased up to the time of the latters death.
"2. In the same light, the claim of Flor Fuentebella be denied
for two reasons: (a) She has not clearly established her
legitimate relationship with the deceased and, (b) She was not
living with the deceased at the time of his death as required by
the rules and regulation of P.D. 626, as amended. (Rule XIV,
Section 1(b), No. 1 the legitimate spouse living with the
employee at the time of employees death . . .)." virtua1aw
library

and (B) Certified Xerox copies of the late Judge Berciles

Income Tax Returns for 1975, 1976 and 1979 where he listed
Mrs. Iluminada P. Berciles as his wife or spouse; also
submitted in addition to the foregoing documents, is a certified
xerox copy of the application for optional insurance filed with
the GSIS by the late Judge Berciles, dated November 19,
1956, wherein the deceased listed as his beneficiaries therein
the following persons:.
ILONA BERCILES 11 years old daughter;
ELLERY BERCILES 10 years old son;
ENGLAND BERCILES 8 years old son;
IONE BERCILES 1 year old - daughter; and
ILUMINADA P. BERCILES 33 years old wife.
The above documents were noted in the Memorandum to the
Chief Justice dated March 11, 1981 by the Deputy Court
Administrator. And notwithstanding the telegram sent to them
on February 5, 1981 requiring them to submit their evidence of
filiation with the deceased Judge Berciles, no such evidence
was submitted by the Fuentebellas. Accordingly, it was
recommended in said Memorandum that "the alleged marital
relationship between the late Judge Berciles and Ms. Flor
Fuentebella Berciles has no leg to stand on. It should be
stated in this connection that there was no marriage contract
submitted by Miss Rhoda F. Berciles in her claim-letter, dated
October 29, 1979, nor was there any certification from the
Local Civil Registrar certifying to the fact that the deceased
Judge was actually married to Miss Flor Fuentebella. It can,
therefore, be assumed that Miss Flor Fuentebella was not
legally married to the late Judge Pascual Berciles. Necessarily,

58
it follows that the innocent children that came into being out of
the alleged marital union of the deceased Judge and Ms. Flor
Fuentebella Berciles are spurious and have no established
family filiation with the said Judge. We can, therefore, rule that
the attached papers/documents in the letter of Miss Rhoda F.
Berciles, dated October 29, 1979 relative to their claim as the
surviving heirs of the late CFI Judge Pascual Berciles are
mere scrap of papers unworthy of credence, there being no
substantiating evidence to corroborate the same, especially so
in the face of the adverse claim of Mrs. Iluminada Ponce
Berciles as the rightful surviving spouse and with whom the
deceased Judge was living with at the time of his untimely
demise." library
The same memorandum, therefore, recommended that since"
(a)ll the documents presented amply corroborate and fully
substantiate what were previously submitted to the office by
Mrs. Iluminada Ponce Berciles and her children. We find,
therefore, the evidence presented and submitted in favor of
Mrs. Iluminada Ponce Berciles as sufficient to establish the
fact that she is the lawfully wedded wife of the deceased
Judge Berciles. This finding is fully supported by the
certification issued by the Local Civil Registrar of Bocaue,
Bulacan, dated August 24, 1977, attesting to the marriage
between the deceased Judge and Iluminada Ponce which took
place on January 20, 1941 before the then Justice of the
Peace of the place. This being the case, the four (4) children
(ILONA, ELLERY, ENGLAND and IONE) begotten by the said
spouses during their marital union are all legitimate, . . . that
the unpaid salary, money value of terminal leave and
representation and transportation allowances of the late
District Judge Pascual G. Berciles be awarded and
correspondingly distributed to his lawful heirs, namely, MRS.
ILUMINADA PONCE BERCILES (surviving spouse); MRS.
ILONA BERCILES ALVAREZ (daughter); ELLERY BERCILES
(son); ENGLAND P. BERCILES (son); and IONE P. BERCILES

(daughter)." virtua1aw library

As recommended in the said memorandum. We approved the
following Resolution dated March 17, 1981:
"Re: Claim of the heirs of the late Pascual G. Berciles, former
District Judge of the Court of First Instance of Cebu, Cebu
City, for the unpaid salary, money value of terminal leave and
representation and transportation allowances of the deceased
Judge. Considering the memorandum of Deputy Court
Administrator Leo D. Medialdea, recommending that the
unpaid salary, money value of terminal leave and
representation and transportation allowances of the late
District Judge Pascual G. Berciles be awarded and
correspondingly distributed to his lawful heirs, the Court
Resolved to AWARD and CORRESPONDINGLY DISTRIBUTE
aforesaid benefits to his lawful heirs, namely: Mrs. Iluminada
Ponce Berciles, surviving spouse; Mrs. Ilona Berciles Alvarez,
daughter; Ellery Berciles, son; England P. Berciles, son; and
Ione P. Berciles, daughter. virtua1aw library
Pursuant to the above Resolution, the amount of P60,817.52
was paid to Iluminada Ponce and her four children on April 2,
1981.
On April 23, 1981, Flor Fuentebella and her four children,
Pascual Voltaire, Ma. Luisa, Mercy, and Rhoda, through
counsel, filed a Motion for Reconsideration praying that the
resolution of March 17, 1981 be set aside; that they be allowed
to present their evidence; and that, after due hearing, the
benefits be awarded and distributed to them as lawful heirs. In
support of their motion, the movants alleged that they did not
receive the Resolution of March 17, 1981 nor the letter or
notice of hearing sent by Atty. Quilala on December 22, 1980,
the same having been sent to their old address at 6069-B,
Palma St., Makati; that all of the movants have left the

59
Philippines to reside in the United States of America and that
the aunts and cousins residing at the old address moved to a
new address at GSIS Village, Project 8, Quezon City; that
before they moved to the new address, these relatives left a
forwarding address at the Makati Post Office; and, that they
did not receive the aforementioned mail. The fact of nonreceipt was confirmed by one Domingo P. Raiz, letter carrier of
the Post Office of Makati, who executed an affidavit to that
effect, which affidavit We admitted in Our resolution of July 9,
1981. The matter of the Fuentebella Motion for
Reconsideration is docketed before Us as Administrative
Matter No. 10468-CFI.
Acting on the aforesaid motion for reconsideration, We
adopted the following resolution dated July 2, 1981, to wit:
"Administrative Matter No. 10468-CFI Re Terminal Leave
Pay, Unpaid Salary and Allowance of the late CFI Judge
Pascual G. Berciles: Flor Fuentebella and her four children, all
surnamed Berciles v. Iluminada Ponce and her four children,
all surnamed Berciles. - Judge Pascual G. Berciles of the
Court of First Instance of Cebu died in office on August 21,
1979 at the age of sixty-six years. He was a native of Lapuz
Norte, La Paz, Iloilo City.
Iluminada Ponce of Tagudin, Ilocos Sur, who claimed to be the
decedents widow, and her four children, Ilona, Ellery, England
and Ione, filed a claim dated May 2, 1980 for survivors
benefits. Iluminada executed an affidavit of heir ship dated
September 19, 1979.
On the other hand, Rhoda F. Berciles, 6069-B Palma Street,
Makati, Rizal in a verified statement dated November 19,
1979, claimed that the deceased judge was survived by Flor
Fuentebella, as widow, and their four children named Voltaire,
Luisa, Mercy and Rhoda. Judge Berciles allegedly married

Flor Fuentebella on March 28, 1937 in Iloilo City before City

Judge Vicente Mapa.
Rhoda, in a letter to the Judicial Administrator dated October
29, 1979, requested the Judicial Administrator to hold the
processing of the claim filed by Iluminada Ponce and her four
children pending the filing of Rhodas formal complaint.
Iluminada Ponce claimed that she was married to Judge
Berciles at Bocaue, Bulacan on January 20, 1941.
This Court in its resolution of April 10, 1980 approved the grant
of survivors benefits subject to the proper determination of the
rightful beneficiaries and their corresponding shares in
accordance with law, it appearing that there are two claimant
families. (Adm. Matter No. 1337 - Ret. re Gratuity of Judge
Berciles).
Pursuant to that resolution, the five-year lump sum gratuity
amounting to P301,760 due to the heirs of Judge Berciles was
remitted to the GSIS on October 15, 1980. The said amount up
to this time has not yet been distributed in view of the
controversy between the families of Flor Fuentebella and
Iluminada Ponce as to who are the legal heirs of Judge
Berciles.
In a letter dated October 9, 1980, Ellery P. Berciles requested
the Chief Justice for the payment to Iluminada Ponce of the
terminal leave pay of Judge Berciles, which, together with his
unpaid salary and allowance, amounted to P74,884.52, or to
P60,817.52 after deducting the withholding tax of P14,067.
Upon the recommendation of Court Administrator Lorenzo
Relova and Deputy Court Administrator Leo D. Medialdea, the
said amount of P60,817.52 was paid to Iluminada Ponce and
her four children on April 2, 1981 pursuant to this Courts

60
resolution of March 17, 1981. Payment was made to them on
the assumption that they are the only legal heirs of Judge
Berciles.
Atty. Luzel D. Demasu-ay, counsel for Flor Fuentebella and her
four children, in his motion for reconsideration dated April 21,
1981, alleged that his clients were not heard before that
payment was made. He said that the payment was being
capitalized upon by Iluminada Ponce and her children in the
GSIS as the basis for the payment to them of the retirement
gratuity of Judge Berciles.
Considering that the issue as to who are the legal heirs of
Judge Berciles is still being litigated in the Social Security
Services of the GSIS (according to Atty. Felicisimo Fernandez
of that unit), and the survivors benefits have not yet been paid
to Iluminada Ponce and her children, and considering that the
children of Flor Fuentebella, even as illegitimate children of
Judge Berciles, would be entitled to a share in his terminal
leave pay, allowance and unpaid salary (In re Chanliongco,
Adm. Matter No. 190-Ret., October 18, 1977, 79 SCRA 364),
the Court Resolved (1) to require Iluminada Ponce and her
children, c/o Ione P. Berciles, 9 Jersey Street, Toro Hills,
Project 8, Quezon City, to COMMENT on the said motion for
reconsideration within ten (10) days from notice and (2) to
direct Atty. Juan P. Enriquez, Jr., Deputy Clerk of Court and
Chief of the Administrative Division, to advise the GSIS that,
should Flor Fuentebella and her children be ultimately
adjudged as legal heirs of Judge Berciles, their share in the
sum of P60,817.50 (terminal leave pay, etc.) would be taken
from the survivors benefits amounting to P301,760, already
remitted to the GSIS and, consequently, the shares of
Iluminada Ponce and her children in the said gratuity would
answer for the portions due to Flor Fuentebella, Et. Al. in the
terminal leave pay, etc., if adjudged entitled thereto.

A copy of this resolution should be furnished the GSIS."

virtua1aw library
In a subsequent Resolution dated July 21, 1981, We noted the
Comment filed by Iluminada Ponce and in the same resolution,
clarified Our resolution of April 10, 1980 in Administrative
Matter No. 1337-Ret., to wit:
"As may be seen from this Courts resolution of April 10, 1980
in Administrative Matter No. 1337-Ret. regarding the gratuity of
Judge Berciles, this Court has not finally and conclusively
decided that the children of Flor Fuentebella are not the heirs
of the late Judge Berciles.
The question of whether the four children of Flor Fuentebella
should share in the gratuity amounting to P301,760.00 is still
being litigated in the GSIS. Should it be finally decided by the
GSIS that the children of Flor Fuentebella are entitled to share
in that gratuity or survivors benefits, then they are also entitled
to share in the terminal leave pay, unpaid salary and
allowances and their share should be deducted from the
shares in the said gratuity of Iluminada Ponce and her four
children.
This incident should, therefore, await the outcome of a final
decision of competent authority on who are the heirs of Judge
Berciles, as contemplated in this Courts resolution of April 10,
1980 in Administrative Matter No. 1337-Ret." virtua1aw library
In the meantime, pursuant to Our Resolution of April 10, 1980,
the papers were transmitted to the GSIS under the
advertisement that the approval of the application of Iluminada
Ponce was subject to the proper determination of the rightful
beneficiaries.
The records of this Court, as adverted to earlier, disclose that

61
on October 9, 1980, the GSIS approved the claim of Iluminada
Ponce and so, the five (5) years lump sum retirement gratuity
of the deceased Judge, in the net amount of P301,760.00, was
remitted by our Budget and Finance Office to the GSIS on
October 15, 1980 under Check No. 04824308 for payment to
Iluminada and her four children. The GSIS, however, in its
Memorandum dated June 25, 1982 in G.R. No. 57257 denied
having approved the claim of Iluminada Ponce Berciles and
her children saying that no such approval was made. The
records in G.R. No. 57257 disclose Annex "A" attached to the
petition on pp. 14-15 of the Rollo the following evaluation
report evaluated by Carmelo C. Garcia, Legal Evaluator;
reviewed by Lorenzo Sanchez, Legal Evaluator; approved by
Felicisimo A. Fernandez, Manager, Survivorship Benefits
Dept.; and confirmed by Juanito S. Santamaria, Vice
President, SSS-II, to wit:

alleged to have been married to the deceased.

(1.) Documents submitted by Flor Fuentebella: virtual 1aw
library
(a) Cert. from Census and Statistics of no record of marriage
of Flor Fuentebella and Pascual Berciles alleged to have been
solemnized on March 28, 1937.
(b) Affidavit of Pascual Berciles dated May 22, 1972 that he
and Flor were married by the late Judge J. Vicente Mapa.
(c) Affidavit of Coronacion Berciles, sister-in-law of Pascual
Berciles as to the marriage of Flor and Pascual.
(d) Affidavit of Judge Rafael Lavente as to his being invited in
the wedding of Flor and Pascual.

"PASCUAL G. BERCILES ANNEX "A"

Judge, CFI, Branch XV, Cebu City

(e) Birth certificate of Pascual Voltaire Berciles - Aug. 30,

1938; Maria Luisa, June 27, 1943; Mercy, July 23, 1947;
Rhoda, Feb. 7, 1949.

Died August 21, 1979, Cause: CVA.

Evaluation on compensability under PD 626, as amended.

(f) Xerox copy of Income Tax Return for 1972 of Pascual

showing Flor as the wife.

I Medical Evaluation

(2) Documents submitted by Iluminada Ponce

Medically compensable for payment of such benefits as per

Medical evaluation dated December 24, 1979.

(a) Marriage certificate from Bocaue, Bulacan, showing

marriage of Iluminada and Paquito Berciles on January 20,
1941.

II Legal Evaluation
A. Documents Submitted: virtual 1aw library

(b) Birth certificate of Ilona May 15, 1945; Ellery - Sept. 21,
1946; England Nov. 14, 1948; Ione Ainee Aug. 25, 1955.

It appears that there are two claimants - both surviving spouse

namely FLOR FUENTEBELLA and ILUMINADA PONCE, who

(c) GSIS IMI on C-20297 dated Dec. 1, 1956 of Pascual

Berciles.

62

(d) IMI on 0-26030 dated Jan. 1, 1957

(e) Affidavit of Pascual Berciles dated April 21, 1978
mentioning Ione and Iluminada as his daughter and wife
respectively.

1. It is recommended that the death benefits under PD 626

due to the death of the deceased of a compensable
contingency, be awarded to Iluminada Ponce for having
established her marriage to the deceased and had been living
with the deceased up to the time of the latters death.

(f) Affidavit of four (4) relatives of Pascual as to their personal

knowledge of the marriage of Iluminada and Pascual.

2. In the same light, the claim of Flor Fuentebella be denied for

two reasons: 1aw library

(g) Affidavit of Santiago Medina (former Fiscal), denying of

having notarized an affidavit of Pascual the latters marriage to
Flor.

(a) She has not clearly established her legitimate relationship

with the deceased and,

(3.) Clarifying documents

(a) Affidavit dated Feb. 14, 1980, of City Judge Rafael Lavente
rectifying his previous affidavit that he was not present in the
wedding of Flor and Pascual.

(b) She was not living with the deceased at the time of his
death as required by the rules and regulation of PD 626, as
amended. (Rule XIV, Section 1(b), No. 1 the legitimate spouse
living with the employee at the time of employees death . . .).
EVALUATED BY: REVIEWED BY: virtual 1aw library

(b) Certification dated Feb. 4, 1980, from Ministry of Justice

that there is no record of one J. Mapa as Municipal Judge of
Iloilo from 1935 to 1945.

S/T CARMELO C. GARCIA S/T LORENZO SANCHEZ

B. Findings

APPROVED: virtual 1aw library

After a careful study and appraisal of the documents above

enumerated we cannot find merit on the claim of Flor
Fuentebella because.

S/T FELICISIMO A. FERNANDEZ

2. Flor has been living abroad since 1972.

CONFIRMED: virtual 1aw library

3. Iluminada and the deceased were living together at the time

of the latters death (August 21, 1979).

S/T JUANITO A. SANTAMARIA

Legal Evaluator Legal Evaluator

Manager, Survivorship Benefits Dept.

Vice-President, SSS II"

Recommendation

63
In denying the above approval, the GSIS in its Memorandum
claims that the matter was elevated sometime in October 1980
to the Committee on Claims Settlement for the proper
determination of the legal heirs of the late Judge Berciles. The
two sets of claimants having failed to reach an amicable
settlement, the GSIS advised the parties to submit the
necessary documents to prove their relationship or filiation to
the deceased.

5
for the acknowledged natural child Pascual Voltaire
134 Berciles;
4

Thereafter, based on their respective documents and proofs of

filiation, the Board of Trustees approved the findings and
recommendations of the Committee on Claims Settlement
under its Resolution No. 431 adopted on June 3, 1981, the
dispositive portion of which states:

each for the illegitimate children, namely, Maria Luisa

"After due deliberation, considering the foregoing, the Board

RESOLVED TO APPROVE the recommendation of the
Committee on Claims Settlement that the retirement benefits
under R.A. 910, as amended, due the late Judge Pascual G.
Berciles in the total amount of P311,460.00 which is partly
conjugal and partly exclusive in nature, be divided in the
following proportion:chanrob1es virtual 1aw library

77
for the surviving spouse, Iluminada Ponce Berciles;
134

134 Berciles, Mercy Berciles, and Rhoda Berciles. (Arts. 148

(2), 153 (2), 895, 983, 999, New Civil Code).
x

x"

Only the above dispositive portion of the aforementioned

Resolution was communicated to Iluminada Ponce Berciles by
the GSIS in the letter signed by Felicisimo A. Fernandez,
Manager, Survivorship Benefits Department, in his letter dated
June 18, 1981 (Annex "D", Petition in G.R. No. 57257, Rollo,
p. 22). Not satisfied with the disposition of their claim,
Iluminada Ponce Berciles and her four children now come to
this Court on appeal by certiorari, citing Section 25 of
Presidential Decree No. 1146, otherwise known as the
"Revised Government Service Insurance Act of 1977" which
took effect on May 31, 1977, which appeal is docketed as G.R.
No. 57257.

10
each for the legitimate children, Ilona Berciles Alvarez,
134 Ellery P. Berciles, England P. Berciles and Ione P.
Berciles;

As prayed for in the petition, We issued a temporary

restraining order on July 13, 1981 enjoining the respondents
from enforcing or executing the GSIS Board of Trustees
Resolution No. 431 dated June 3, 1981 and also required the
respondents to file their respective Comments to the Petition.
Only the private respondents filed their Comment. Thereupon,

64
acting on the merits of the pleadings filed, We resolved to give
due course to the petition in Our Resolution of April 14, 1981.
Considering Our Resolution of July 21, 1981, the disposition of
Administrative Matter No. 1337-Ret. and Administrative Matter
No. 10468-CFI rests on Our decision in the present petition.
The primary issue raised in the herein petition for certiorari is
the validity of the GSIS decision contained in its Resolution
No. 431 finding private respondent Pascual Voltaire Berciles
as an acknowledged natural child of the late Judge Pascual G.
Berciles and the other private respondents namely Maria Luisa
Berciles Villareal, Mercy Berciles Patacsil and Rhoda Berciles
as illegitimate children of the deceased, and thus, upon this
finding, disposed the retirement benefits in the manner and
proportion set forth in said resolution after considering said
benefits as partly conjugal and partly exclusive. Petitioners
contend that on the basis of the documents and testimony
submitted by private respondents, the conclusion of
respondent GSIS is erroneous and unfounded and that
respondent GSIS erred grossly in its resolution. The
correctness of the legal conclusion drawn by the respondent
GSIS or its appreciation of the undisputed state of facts
obtaining in the present controversy is thus squarely raised by
petitioners.
We note that private respondents in their Comment dated July
27, 1981 to the petition herein, while pointing out that the
Supreme Court is not the proper forum for the original
determination of the legal heirs of a deceased judge who is
covered by R.A. 910 as amended and that the determination
of the question of heirship can be appropriately considered
only in our regular courts of justice where private respondents
actually did file a Special Civil Action No. 13966 for
"Mandamus with Prayer for a Restraining Order" in the Court
of First Instance of Iloilo, Branch III, a copy of which is
attached to the Comment as Annex "A", raised the same issue

of illegality as may be seen clearly in par. 8 of the petition as

follows:jgc:chanrobles.com.ph
"8. That clearly from the foregoing adjudication rendered by
the respondent Board of Trustees, petitioner Flor Fuentebella
Berciles and her children were unlawfully excluded from their
lawful right to the death benefit of the late Judge Pascual G.
Berciles as his only lawful heirs;"
And like the petitioners herein, private respondents contend
that the GSIS patently and gravely abused its discretion in
denying the latters claim to the death benefits of the late
Judge Pascual Berciles as the legal and lawful heirs as may
also be clearly seen in par. 10 of the Mandamus Petition in the
aforementioned Civil Case No. 13966, which reads
thus:jgc:chanrobles.com.ph
"10. That in denying petitioners claim on the death benefit of
the late Judge Pascual Berciles of whom petitioners are the
legal and lawful heirs and in neglecting and refusing to issue
forthwith a resolution adjudicating the death benefit amounting
to P311,460.00 in favor of the petitioners as legal heirs, the
respondent Board of Trustees of the GSIS patently and
gravely abused its discretion and unlawfully neglected the
performance of an act which is specifically enjoined upon it by
Sec. 5 of R.A. 910, as amended by R.A. 1057, R.A. 1797, R.A.
2614, R.A. 4627 and R.A. 5095;
In other words, both families, raising grave abuse of discretion,
question the legality of the GSIS Resolution based on the
same undisputed facts, the petitioners herein claiming they are
the legal heirs, whereas, according to private respondents,
they are the ones legally entitled to the retirement benefits.
The issue here then is one of law which the contending parties
concede in their respective pleadings and thus correctible
by certiorari.

65

But to set the records straight, We quote hereunder the

findings of the Committee on Claims Settlement which the
GSIS Board of Trustees adopted and approved under its
Resolution No. 431:chanroblesvirtualawlibrary
"A brief summary of the evidence submitted by the contending
parties appears necessary for the proper disposition of this
case. As proof of her marriage to Judge Pascual Berciles,
claimant Iluminada Ponce Berciles submitted a certificate of
marriage (Exh. "A") indicating that she was married to one
Paquito Berciles in Bocaue, Bulacan on January 20, 1941
before Judge Bonifacio Enriquez, Justice of the Peace of the
said municipality. The Committee noted that the husbands
name appearing in the certificate is Paquito Berciles and not
Pascual Berciles.
"The discrepancy was explained in the sworn statement of
Atty. Fortunato A. Padilla (Exh. "R") and in his deposition dated
February 27, 1981 taken by Atty. Hilarion Palma, Branch
Attorney of our GSIS Iloilo City Branch Office. In both
documents, Atty. Padilla, a high school classmate and college
companion of the late Judge Berciles, stated that Pascual
Gayta Berciles, Paquito Berciles or Paking Berciles all refer to
one and the same person who was the deceased Judge
Pascual G. Berciles. In the deposition of Concepcion M.
Gonzales (Exh. "31-A") who was a witness for Flor
Fuentebella, she also declared that Pascual Berciles was
called Paking or Paquito and that a brother Francisco was
called Pako.
"Submitted also to the Committee by Iluminada Ponce are the
birth certificates of her children: Ilona Berciles (Exh. "E"); Ellery
Berciles (Exh. "C"); England Joseph Berciles (Exh. "D-1");
Aiene Berciles (Exh. "B"). The other documents submitted
such as the Information for Membership Insurance (Exh. "F"

and Exh. "G"), Income Tax Returns for the years 1975 (Exh.
"U") and 1976 (Exh. "V"), individual sworn statements of
persons who knew or were related to the deceased
corroborate the filial affinity of Iluminada Ponce and her
children to the late Judge Berciles.
"Based on these documents, there is no question that
Iluminada Ponce was married to Pascual Berciles, alias
Paquito, on January 20, 1941 at Bocaue, Bulacan. From this
union, they begot the following children, namely: Ilona, Ellery,
England and Ione.
"The evidence for claimant Flor Fuentebella Berciles and her
children may also be briefly described as follows: She claims
to have been married to the late Judge Pascual Berciles on
March 28, 1937 in Iloilo City before Justice of the Peace Jose
Vicente Mapa. In other words, she professes to be the first
wife of the deceased Judge. Flor Fuentebella was, however,
not able to present her marriage contract or certificate of
marriage. Instead she submitted a certification of the Local
Civil Registrar of Iloilo City (Exh. "1") attesting to the loss or
destruction of the records of marriage for the year 1944 and
previous years and another certification issued by the Office of
Civil Registrar General of the National Census and Statistics
Office (Exh. "2") stating the non-availability of the record of
marriage between Pascual Berciles and Flor Fuentebella.
"In concrete support of her claim of marriage to the late Judge
Berciles, Flor Fuentebella presented to the Committee sworn
statements of several persons. Of the several sworn
statements, at least two or three deserve serious
consideration. The first is the one executed by Concepcion M.
Gonzales (Exh. "31") of 46 South Mapa, Philam Homes,
Quezon City, who stated that she knew for a fact that Flor
Fuentebella was married to Pascual Berciles in 1937 at Iloilo
City. It was represented to the Committee that she was present

66
as a guest in the marriage ceremony. Due to importance of her
testimony, the Committee requested her actual presence in the
hearing. However, due to her advanced age of 89 years and
her other physical infirmity, her attendance at the hearing was
dispensed with instead, the Committee directed the Manager,
Survivorship Department to secure her deposition on
questions prepared in advance by the Committee. In his report
to the Committee, the Manager stated that the old lady is
already blind, quite hard of hearing and her memory already
weak. In the Answers (Exh. "31-A") to the questions written by
the Manager, Survivorship Department, Concepcion Gonzales
declared that she was present during the marriage ceremony
of Pascual Berciles and Flor Fuentebella which was held in the
Municipal Hall of Iloilo City. She described the wedding as
attended by only the members of the family and that after the
ceremony they went to the house of Pascuals parents where a
small party was held.
"The Committee finds the testimony of Concepcion Gonzales
quite deficient in important detail. Flor Fuentebella had not
been presented in person for the proper identification of the
witness. Was the Flor Fuentebella who allegedly married
Pascual Berciles on March 28, 1937 the same Flor
Fuentebella who is cited by Concepcion Gonzales? At any
rate, assuming that a confrontation did occur, Concepcion
Gonzales would not be able to properly identify Flor
Fuentebella, by reason of her blindness.
"The other sworn statements which merit particular discussion
are those executed by Coronacion Berciles (Exhs. "10 and
31") a sister-in-law of the late Judge Berciles. Coronacion was
presented before the Committee as a witness for Flor
Fuentebella. In her testimony, she stated facts and
circumstances about the marital relations between Pascual
Berciles and Flor Fuentebella. She declared that her husband
was the younger brother of the late Judge Berciles; that even

before Pascual Berciles became a lawyer in 1938, he and Flor

Fuentebella were introduced to her by her husband; that after
she was married to her husband, they lived together with the
family of Pascual Berciles and his wife Flor Fuentebella; that
their two families had lived closely enough during the
Japanese Occupation and even after. She further stated that
the immediate members of the family with whom the spouses
Pascual Berciles and Flor Fuentebella had lived before and
during the war were his mother Evarista, his two aunts Luisa
Berciles and Eusebia Gayta and a sister Susana Berciles.
These testimonial and other declarations were latter
transcribed into a sworn statement which Coronacion
executed on December 5, 1980 and submitted to the
Committee. (Exh. "32").
"At its best, Coronacion Berciles testified on the cohabitation
as husband and wife of Pascual Berciles and Flor Fuentebella.
But cohabitation is not solid proof that a marriage had in fact
taken place, especially in this case when such marriage is
contested. Coronacion could not state positively since she was
not present in the alleged marriage ceremony.
"The third sworn statement which deserves the Committees
attention is the one executed by Judge Rafael Lavente,
Presiding Judge of Branch III, City Court of Iloilo, on February
14, 1980 (Exh. "N" for Iluminada Ponce, Exh. "35" for Flor
Fuentebella). In this document, Judge Lavente denied having
been present in the wedding of Pascual Berciles and Flor
Fuentebella; although he declared that the late Judge Berciles
was married here in Iloilo City and that after his marriage he
left Iloilo City. xxx. (Exh. "35-A"), he did not state with whom
Pascual Berciles was married.
"Of course the affidavit of Flor F. Berciles herself (Exh. "5")
was submitted wherein she stated that she was the legal wife
of the late Pascual G. Berciles and that she was married to

67
him in Iloilo City on March 28, 1937. The affidavit is nothing
more than a self-serving statement. Flor Fuentebella was not
presented to the Committee as a material witness. On the
other hand, the sworn statement of Pascual Berciles (Exh. "4")
commands no evidentiary value at all. Mr. Santiago Medina,
former Provincial Fiscal of Cebu, who appears to have
administered the oath, in a subsequent sworn statement (Exh.
"M") denied his signature on the document (Exh. "4").
"The letters written by Judge Berciles to her daughters with
Flor Fuentebella especially the one sent to daughter Mercy
Berciles (Exh. "22") wherein he vigorously affirmed that its
only her mother, Flor Fuentebella, and no other woman who
was recognized as his wife and loved by her parents deserve
scant consideration. Pascual Berciles could not be expected to
admit the existence of his other family. This would be
disastrous to his efforts at preventing one family from knowing
the other.
"Flor Fuentebella likewise submitted to the Committee the birth
or baptismal certificates of her children begotten with the late
Judge Berciles; the birth certificates of Pascual Voltaire
Berciles (Exh. "6"); baptismal certificate of Maria Luisa Berciles
(Exh. "7-A"); birth certificate of Mercy Berciles (Exh. "8"); birth
certificates of Rhoda Berciles (Exh. "9"). The other evidence
consist of family pictures (Exhs. "30 to 30-M") which have
been identified by witness Coronacion Berciles both in her oral
testimony before the Committee and in her affidavit. (Exh.
"32", par. 15). The pictures, however, do not indicate that the
marriage took place. If at all, the said pictures show the
presence of a family with or without the sanction of marriage.
"After a careful evaluation of these documents, the Committee
believes that there is no sufficient evidence that Pascual
Berciles and Flor Fuentebella were married to each other on
March 28, 1937 in Iloilo City; however, certain relationship did

exist and from such relationship were begotten the following

children, namely: Pascual Voltaire Berciles, Maria Luisa
Berciles, Mercy Berciles and Rhoda Berciles.
"Furthermore, the Committee entertains doubt on the authority
of the officer who solemnized the marriage between Pascual
Berciles and Flor Fuentebella. It is true that the Official Roster
of Officers and Employees in the Civil Service (Exhs. "3" and
"3-A") include the name Jose Vicente Mapa, Justice of the
Peace for Iloilo. The listings, however, do not indicate the
exact date of employment of any particular employee. The
year 1935 indicated in the cover of the Roster may not be
interpreted to mean that all those listed were already in the
service in 1935. It is possible that the Roster included those
appointed as early as 1935 and those appointed at much later
date. This assumption deserves some degree of validity when
considered in relation with the record of service furnished by
the Civil Service Commission (Exh. "T") indicating that Jose
Vicente Mapa was Acting Municipal Judge of Iloilo City
effective July 16, 1937. It further appears in the service record
that he was Acting Municipal Judge pursuant to a Designation
by letter of the Secretary to President, dated June 30, 1937. If
Jose Vicente Mapa was already a Municipal Judge prior to
July 16, 1937, he could have been assigned to a different
municipality other than Iloilo, in which case he did not have the
authority to solemnize marriage in Iloilo on March 28, 1937. At
any event, a serious uncertainty did exist as to whether Jose
Vicente Mapa was already the Justice of the Peace of Iloilo on
the date the alleged marriage was contracted.
"The Committee therefore concludes that Judge Pascual
Berciles was legally married to Iluminada Ponce. His alleged
marriage to Flor Fuentebella was not sufficiently proved and
therefore the children begotten with her are either natural or
illegitimate children depending on whether they have been
born before or after the marriage of Iluminada Ponce.

68
Consequently, the legal heirs of the late Judge Berciles entitled
to share in the distribution of his retirement benefits are the
following: Iluminada Ponce, surviving spouse; Ilona Berciles
Alvarez, Ellery Berciles, England P. Berciles and Ione P.
Berciles, legitimate children; Pascual Voltaire Berciles, natural
child; Maria Luisa Berciles, Mercy Berciles, and Rhoda
Berciles, illegitimate children." From the above recital, We can
readily summarize the following three (3) conclusions therein
made and arrived at by the Committee which were approved
and adopted in toto by respondent GSIS through Board of
Trustees Resolution No. 431, to wit: virtual 1aw library
1." (T)hat Iluminada Ponce was married to Pascual Berciles,
alias Paquito, on January 20, 1941 at Bocaue, Bulacan. From
this union, they begot the following children namely: Ilona,
Ellery, England and Ione." virtua1aw library
2." (T)hat there is no sufficient evidence that Pascual Berciles
and Flor Fuentebella were married to each other on March 28,
1937 in Iloilo City." virtua1aw library
3." (H)owever, certain relationship did exist and from such
relationship were begotten the following children, namely:
Pascual Voltaire Berciles, Maria Luisa Berciles, Mercy Berciles
and Rhoda Berciles.." . ." The children begotten with her are
either natural or illegitimate children depending on whether
they have been born before or after the marriage of Iluminada
Ponce." library
As pointed out earlier, petitioners assail the validity of the third
conclusion or finding that Pascual Voltaire Berciles is an
acknowledged natural child and that Maria Luisa Berciles,
Mercy Berciles and Rhoda Berciles are illegitimate children of
the late Judge Pascual Berciles, petitioners being in complete
accord and conformity with the first two conclusions
summarized above.

Petitioners contend that the evidence submitted by private

respondents with respect to the status of respondent Pascual
Voltaire Berciles show that he was not acknowledged by the
late Judge Pascual Berciles in a birth certificate, in a will, in a
statement before a court of record, or in any authentic writing,
as required under Art. 278, New Civil Code, or much less, in a
final judgment as provided in Art. 283, New Civil Code.
The evidence considered by the Committee on Claims
Settlement as basis of its finding that Pascual Voltaire Berciles
is an acknowledged natural child of the late Judge Pascual
Berciles is the birth certificate of said Pascual Voltaire Berciles
marked Exh. "6." We have examined carefully this birth
certificate and We find that the same is not signed by either
the father or the mother; We find no participation or
intervention whatsoever therein by the alleged father, Judge
Pascual Berciles. Under our jurisprudence, if the alleged father
did not intervene in the birth certificate, the putting of his name
by the mother or doctor or registrar is null and void. Such
registration would not be evidence of paternity. (Joaquin P.
Roces Et. Al. v. Local Civil Registrar of Manila, 102 Phil. 1050).
The mere certificate by the registrar without the signature of
the father is not proof of voluntary acknowledgment on his part
(Dayrit v. Piccio, 92 Phil. 729). A birth certificate does not
constitute recognition in a public instrument. (Pareja v. Pareja,
Et Al., 95 Phil. 167). A birth certificate, to evidence
acknowledgment, must, under Section 5 of Act 3753, bear the
signature under oath of the acknowledging parent or parents.
(Vidaurrazaga v. Court of Appeals and Francisco Ruiz, 91 Phil.
492). In the case of Mendoza, Et. Al. v. Mella, 17 SCRA 788,
the Supreme Court speaking through Justice Makalintal who
later became chief Justice, said:
"It should be noted, however, that a Civil Registry Law was
passed in 1930 (Act No. 3753) containing provisions for the

69
registration of births, including those of illegitimate parentage;
and the record of birth under such law, if sufficient in contents
for the purpose, would meet the requisites for voluntary
recognition even under Article 131. Since Rodolfo was born in
1935, after the registry law was enacted, the question here
really is whether or not his birth certificate (Exhibit 1), which is
merely a certified copy of the registry record, may be relied
upon as sufficient proof of his having been voluntarily
recognized. No such reliance, in our judgment, may be placed
upon it. While it contains the names of both parents, there is
no showing that they signed the original, let alone swore to its
contents as required in Section 5 of Act No. 3753
(Vidaurrazaga v. Court of Appeals, 91 Phil. 493; In re Adoption
of Lydia Duran, 92 Phil. 729). For all that might have
happened, it was not even they or either of them who
furnished the data to be entered in the civil register. Petitioners
say that in any event the birth certificate is in the nature of a
public document wherein voluntary recognition of a natural
child may also be made, according to the same Article 131.
True enough, but in such a case there must be a clear
statement in the document that the parent recognizes the child
as his or her own (Madridejo v. De Leon, 55 Phil. 1); and in
Exhibit 1 no such statement appears. The claim of voluntary
recognition is without basis." virtua1aw library
With respect to the Committees finding that the other private
respondents are illegitimate children of the deceased Judge
Berciles, We find that the evidentiary basis of such finding are
the baptismal certificate of Maria Luisa Berciles, Exh. "7-A" ;
birth certificate of Mercy Berciles, Exh. "8" ; and birth certificate
of Rhoda Berciles, Exh. "9." We have also examined the
above exhibits and We find that Exh. "7" is a mere certification
that all the Civil Registry records of birth filed in the Office of
the Local Civil Registrar for the year 1944 and previous years
were either burned, destroyed or lost during the last war and
hence, the office could not furnish the birth certificate of Maria

Luisa Berciles who claim to have been born to the spouses

Pascual Berciles and Flor Fuentebella on June 27, 1943 at
Iloilo City. The same is true with Exh. "7-B" attesting to the
non-availability of the Register of Births for Iloilo, Iloilo in the
year 1943 in the files of the National Archives. Exh. "7-A and 7B" are, therefore, of no value.
As to the baptismal certificate, Exh. "7-A", the rule is that
although the baptismal record of a natural child describes her
as a child of the decedent, yet, if in the preparation of the
record the decedent had no intervention, the baptismal record
cannot be held to be a voluntary recognition of parentage.
(Canales v. Arrogante, Et Al., 91 Phil. 6; Adriano v. De Jesus,
23 Phil. 350; Samson v. Corrales Tan, 48 Phil. 401; Madridejo
v. De Leon, 55 Phil. 1; Malonda v. Infante Vda. de Malonda, 81
Phil. 149). The reason for this rule that canonical records do
not constitute the authentic document prescribed by Arts. 115
and 117 to prove the legitimate filiation of a child is that such
canonical record is simply proof of the only act to which the
priest may certify by reason of his personal knowledge, an act
done by himself or in his presence, like the administration of
the sacrament upon a day stated; it is no proof of the
declarations in the record with respect to the parentage of the
child baptized, or of prior and distinct facts which require
separate and concrete evidence. (Adriano v. De Jesus, 23
Phil. 350).
In the recent case of Republic v. Workmens Compensation
Commission, 13 SCRA 272, the Supreme Court speaking
again through Justice Makalintal, held:
"This Court, construing the various pertinent provisions of the
Civil Code concerning illegitimate children, has held that an
illegitimate (spurious) child, to be entitled to support and
successional rights from his parents, must prove his filiation
and that this may be done by means of voluntary or

70
compulsory recognition of the relationship. For this purpose,
the provisions concerning natural children are held applicable,
thus, recognition is voluntary when made in the record of birth,
a will, a statement before a court of record, or in any authentic
writing (Article 278); and compulsory when made by means of
a court action in the cases enumerated in Articles 283 and 284
(Paulino v. Paulino, L-15091, Dec. 28, 1961).
Discrediting the above certificate (birth and baptismal) of the
illegitimate spurious children which do not constitute proof of
filiation with the deceased Judge Berciles, what remains are
the sworn statements of Coronacion Berciles, Exh. 10 and 31,
sister-in-law of the late Judge Berciles wherein she stated that
after she was married to her husband, they lived together with
the family of Pascual Berciles and his wife, Flor Fuentebella;
that their two families had lived closely enough during the
Japanese Occupation and even after. These statements,
however, does not prove the filiation of the children to the late
Judge Pascual Berciles.
Neither are the family pictures, Exhs. 30 to 30-M, which,
according to the Committee, do not indicate that the marriage
(between Judge Berciles and Flor Fuentebella) took place and
that if at all, the said pictures show the presence of a family
with or without the sanction of marriage. We agree and We
add that said pictures do not constitute proof of filiation.
We also agree with the finding of the Committee that" (t)he
letters written by Judge Berciles to her daughters with Flor
Fuentebella especially the one sent to daughter Mercy
Berciles (Exh. "22") wherein he vigorously affirmed that its
only her mother, Flor Fuentebella, and no other woman who
was recognized as his wife and loved by her parents deserve
scant consideration. Pascual Berciles could not be expected to
admit the existence of his other family. This would be
disastrous to his efforts at preventing one family from knowing

the other." Not only do they deserve scant consideration but

also, there is jurisprudence that a typewritten letter signed by
the father is not an authentic writing. (Decision of the Supreme
Court of Spain of Feb. 27, 1923 and Dec. 7, 1927 cited in 3
Castan, 6th ed., 25; see Caguioa, Comments and Cases on
Civil Law, Vol. I, p. 379).
As to the other exhibits of private respondents, We affirm the
Committees finding that the Flor Fuentebella Affidavit (Exh.
"5") is self-serving; that the testimony of Concepcion Gonzales
(Exh. "31-A"), being blind, is deficient; and that the affidavit of
Judge Rafael Lavente (Exh. "35") has been repudiated.
Indeed, the above evidence are, to Our view, very insignificant,
insufficient, and insubstantial to prove the filiation of private
respondents to the alleged father, Judge Pascual Berciles.
The records disclose that all the private respondents have left
the Philippines and are now residing in the United States. They
have not appeared at the hearing before the Committee on
Claims Settlement to testify in support of their claim of filiation
and acknowledgment. And We find no clear and competent
proof, no positive and substantial evidence presented by
private respondents that their alleged father had admitted or
recognized his paternity of the private respondents Maria
Luisa Berciles, Mercy Berciles and Rhoda Berciles.
Under the law, Article 287, New Civil Code, illegitimate children
other than natural in accordance with Art. 269 are entitled to
support and such successional rights as are granted in the
Code, but for this Article to be applicable, there must be
admission or recognition of the paternity of the illegitimate
child. (Paterno, Et. Al. v. Paterno, 20 SCRA 585, citing Noble v.
Noble, G.R. No. L-17742, Dec. 17, 1966, 18 SCRA 1104;
Paulino v. Paulino, G.R. No. L-15091, Dec. 28, 1961, 113 Phil.
697). Article 887, N.C.C., defining who are compulsory heirs, is
clear and specific that" (i)n all cases of illegitimate children,

71
their filiation must be duly proved." And in the Noble case,
supra, the Supreme Court laid down this ruling:

Iluminada Ponce Berciles, Ilona Berciles Alvarez, Ellery P.

Berciles, England P. Berciles and Ione P. Berciles.

"The filiation of illegitimate children, other than natural, must

not only be proven but it must be shown that such filiation was
acknowledged by the presumed parent. If the mere fact of
paternity is all that needs to be proven, that interpretation
would pave the way to unscrupulous individuals to take
advantage of the death of the presumed parent, who would no
longer be in a position to deny the allegation, to present even
fictitious claims and expose the life of the deceased to
inquiries affecting his character." (Emphasis supplied).

As to the retirement premiums totaling P9,700.00, the same is

presumed conjugal property, there being no proof that the
premiums were paid from the exclusive funds of the deceased
Judge (Article 160, New Civil Code). Such being the case,
one-half of the amount belongs to the wife as her property in
the conjugal partnership and the other half shall go to the
estate of the deceased Judge which shall in turn be distributed
to his legal heirs.

In fine, We hold and rule that the respondent GSIS committed

grave abuse of discretion in approving Resolution No. 431
which adopted the erroneous recommendation of the
Committee on Claims Settlement, a recommendation which
has no legal or factual basis to stand on. Accordingly, the
disposition made by respondent GSIS of the retirement
benefits due the heirs of the late Judge Pascual G. Berciles is
consequently erroneous and not in accordance with law.
Petitioners are the lawful heirs entitled to the distribution of the
benefits which shall accrue to the estate of the deceased
Judge Berciles and will be distributed among the petitioners as
his legal heirs in accordance with the law on intestate
succession. (Re: Mario v. Chanliongco, 79 SCRA 364; Vda. de
Consuegra v. GSIS, 37 SCRA 325).
According to Article 996 of the New Civil Code which provides
that "If a widow or widower and legitimate children or
descendants are left, the surviving spouse has in the
succession the same share as that of each of the children,"
and Article 980 which provides that "The children of the
deceased shall always inherit from him in their own right,
dividing the inheritance in equal shares," the retirement
benefits shall be distributed equally to the five (5) heirs:

With respect to the terminal leave pay, unpaid salary and

allowances accruing to the deceased, since petitioners are the
only lawful heirs of the deceased Judge, only they are entitled
to share thereto. There is no need to disturb Our Resolution of
March 17, 1981.
One final point, the issue raised by respondents that Section
25 of P.D. 1146, otherwise known as "The Revised
Government Service Insurance Act of 1977", cannot be
invoked by petitioners in taking the present appeal for the
reason that the dispute between the parties have arisen under
the Judiciary Retirement Law, Republic Act No. 910, as
amended and not under P.D. 1146, and that the determination
of the legal heirs of a deceased judge covered by Republic Act
910 as amended, is vested in the regular courts of justice.
Section 25 of P.D. 1146 provides:
"SECTION 25. Appeals. Within fifteen days from receipt of
notice of decision or award, the aggrieved party may appeal
the same to the Court of Appeals on questions of law and facts
following the procedures for appeals from the Court of First
Instance to the Court of Appeals as far as practicable and
consistent with the purposes of this Act. If the appeal is only on
questions of law, the same shall be brought directly to the

72
Supreme Court on certiorari. No appeal bond shall be
required. The appeal shall take precedence over all other
cases except criminal cases wherein the penalty of life
imprisonment or death has been imposed by the trial court.
Appeal shall not stay the decision of the Board unless so
ordered by the Board, by the Court of Appeals, or by the
Supreme Court." virtua1aw library
Respondents position is untenable. We hold that Sec. 25 of
P.D. 1146 quoted above may be availed of by petitioners.
Republic Act 910, as amended, is a special statute governing
and granting retirement benefits to members of the judiciary.
While Section 5 of the Act provides that the GSIS shall take
charge of the enforcement and operation of the Act, there is no
provision therein setting forth the procedure or remedy for the
final determination of the legal heirs of the deceased Judge in
case a dispute arises between the opposing claimants. Even
under the old GSIS Act, Commonwealth Act No. 186 as
amended, there is no express provision on appeal from the
award or decisions of the GSIS. In both cases, the decision or
the award made by the GSIS which affects property rights as
well as the legitimate or illegitimate status of the claimants is
brought to and assailed in the regular courts of justice under
the general power and jurisdiction of the courts to review
decisions of administrative bodies and this is where the
litigation becomes not only delayed or protracted but also
expensive and cumbersome, to the great prejudice and
detriment of the parties.
As may be gleaned from the "whereas clauses" of P.D. 1146
which, among others, recognize that "provisions of existing
laws . . . have prejudiced, rather than benefitted, the
government employee; restricted rather than broadened, his
benefits, prolonged, rather than facilitated the payment of
benefits, must now yield to his paramount welfare," P.D. 1146

is a remedial legislation, which are "those which afford a

remedy, or improve or facilitate remedies already existing for
the enforcement of rights and the redress of injuries, and
statutes intended for the correction of defects, mistakes and
omissions in the civil institutions and the administration of the
state." (Sutherland, Statutory Construction, Vol. III, p. 31). And
being remedial statutes relating to procedure as distinguished
from those relating to substantive rights, they are given a
liberal interpretation. (Sutherland, supra, p. 39).
Accordingly, We hold and rule that Section 25 of P.D. 1146
specifically laying down the procedure whereby the party
aggrieved by the decision of the GSIS may appeal the same to
the Court of Appeals, now the Intermediate Appellate Court, on
questions of law and facts following the procedures for
appeals from the Court of First Instance (now Regional Trial
Court) to the I.A.C. and if the appeal is only on questions of
law, the same shall be brought directly to the Supreme Court
on certiorari, which abbreviated procedure was designed to
facilitate, and not to prolong, the payment of benefits, may be
invoked by the petitioners.
That P.D. 1146, Sec. 35 is applicable to disputes arising under
the Judiciary Retirement Act and all other acts administered by
the GSIS may also be construed from Sec. 23 of the Decree
which provides that the "System shall prescribe such rules and
regulations to facilitate payment of benefits, proceeds and
claims under the Act and any other laws administered by the
System.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, We
AFFIRM the finding in Resolution No. 431 that petitioner
Iluminada Ponce Berciles is the surviving spouse of the late
Judge Pascual G. Berciles and that petitioners Ilona Berciles
Alvarez, Ellery P. Berciles, England P. Berciles, and Ione P.
Berciles are the legitimate children of the said deceased

73
Judge. We REVERSE and SET ASIDE its finding that Pascual
Voltaire Berciles is an acknowledged natural child and that
Maria Luisa Berciles, Mercy Berciles, and Rhoda Berciles are
illegitimate children of the deceased CFI Judge Pascual G.
Berciles. The claims of the petitioners as legal heirs are hereby
APPROVED and the GSIS is hereby ordered to pay
immediately to each and every petitioner the various sums
hereunder indicated opposite their names, as follows: 1aw
library

retirement premiums 970.00

1. ILUMINADA PONCE BERCILES.

A. His 1/15 share of retirement

A. Her 1/5 share of retirement gratuity P60,352.00

gratuity P60,352.00

B. Her share from the return of the

B. His share from return of

retirement premiums

retirement premiums 970.00

(1) as her conjugal share 4,850.00

(2) as a legal heir 970.00

Total Amount Due Him P61,322.00

=========

Total Amount Due Her P66,1172.00

4. ENGLAND P. BERCILES.

=========

A. His 1/5 share of retirement

2. ILONA BERCILES ALVAREZ.

gratuity P60,352.00

A. Her 1/5 share of retirement

B. His share from return of

gratuity P60,352.00

retirement premiums 970.00

B. Her share from the return of

Total Amount Due Her P61,322.00

========
3. ELLERY P. BERCILES.

74
Total Amount Due Him P61,322.00
========
5. IONE P. BERCILES.
A. Her 1/5 share of retirement
gratuity P60,352.00
B. Her share from return of
retirement premiums 970.00

Total Amount Due Her P61,322.00

=========
The temporary restraining order issued herein per Our
Resolution dated July 13, 1981 is hereby made permanent.
SO ORDERED.
Makasiar, Concepcion, Jr., De Castro, Melencio-Herrera,
Plana, Escolin, Relova and Gutierrez, Jr., JJ., concur.
Fernando, C.J. and Teehankee, J., are on leave.
Aquino, J., took no part.
Abad Santos, J., I reserve my vote

EN BANC
[G.R. No. 8715. October 24, 1914. ]
MARIANO VELOSO, Plaintiff-Appellant, v. LUCIA MARTINEZ,
personally and as administratrix of the estate of Domingo
Franco, deceased, Defendant-Appellee.
Martin M. Levering, for Appellant.

75

Pantaleon E. del Rosario, for Appellee.

SYLLABUS

1. HUSBAND AND WIFE; PARAPHERNAL PROPERTY;

RIGHT OF WIFE TO RECOVER WHEN SOLD BY HUSBAND
WITHOUT HER CONSENT. V claimed that he had
purchased certain jewels from F. M, the wife of F, claimed that
such jewels were her sole and separate property, acquired
from her mother; that as such paraphernal property she
exercised dominion over them; that she had the exclusive
control and management of the same; that they had not been
delivered to her husband to be administered or controlled by
him; that, inasmuch as they had not been delivered to her
husband to be administered by him, she could not be deprived
of them by any act of his, without her consent, and without a
compliance with the provisions of the Civil Code. (Arts. 1382,
1384.) Held: That M was entitled to recover from V the
possession of said jewels.
DECISION
JOHNSON, J. :
On the 1st day of July, 1911, the plaintiff commenced an action
in the Court of First Instance of the Province of Cebu to
recover of the defendant, personally and as administratrix of
the estate of Domingo Franco, deceased, the possession of a
certain parcel of land particularly described in the second
paragraph of the complaint, together with the sum of p125 per
month, from the 1st day of June, 1911.
The defendant presented a demurrer to said complaint, which
was overruled. No exception was taken to the ruling of the
court upon the demurrer. Later the defendant answered,

setting up a general denial and a special defense. The special

defense consisted
First. Of a counterclaim in the sum of P18,500 as attorneys
fees for services rendered by the deceased, Domingo Franco,
to the plaintiff; and, second, for the recovery of certain jewelry,
of the value of P6,000, particularly described in the answer of
the defendant, alleged to be in the possession of the plaintiff.
The first special defense, relating to attorneys fees, was later
withdrawn by the defendant. The only questions left for
litigation were: 1aw library
First. Whether the plaintiff was entitled to the recovery of the
parcel of land in question; and, second, whether the defendant
was entitled to recover from the plaintiff the jewelry described in
her answer.
After hearing the evidence, the Honorable Adolph Wislizenus,
judge, in a carefully prepared opinion, found that the plaintiff was
entitled to recover the possession of the land in question,
together with the sum of P100 for each month from the month of
June, 1911, until the possession of the land was returned to him.

The lower court further found that the defendant was entitled
to the possession of said jewelry, and ordered the plaintiff to
return the same to her and in case of the plaintiffs failure to
return said jewelry to the defendant, then and in that case, he
shall pay to the defendant, for such failure, the sum of P6,000.
From the judgment of the lower court, each of the parties, plaintiff
and defendant, appealed to this court. Later the defendant
withdrew her appeal, thereby allowing that part of the judgment
relating to the plaintiffs right to the possession of the land in
question, together with damages, to become final. The only
question remaining, therefore, for this court to decide is as to the
ownership and right of possession of said jewels. It is admitted

76
that the jewels in question, before the possession of the same
was given to the plaintiff, belonged to the defendant personally
and that she had inherited the same from her mother. The
defendant, Lucia Martinez, is the widow of Domingo Franco, and
after the death of her husband she was appointed administratrix
of his estate. The record further shows (Exhibit C) that a short
time before the death of Domingo Franco he borrowed from the
plaintiff the sum of P4,500 and gave as security for the payment
of said sum the jewelry described in the complaint. The money
was borrowed on the 7th day of April, 1911, under promise to
repay the same, with 12 per cent interest, on the 7th day of May,
1911. It is not clear whether or not the jewelry, at the time of the
execution of said document (Exhibit C), was in fact delivered to
the plaintiff. Said exhibit states that the jewelry was contained
"dentro de una caja que queda cerrada despues de demostradas
las alhajas a D. Mariano Veloso" (in a box which remains closed
after the jewels were shown to Mariano Veloso). The document
further admits that "la llave quedara en poder de D. Domingo
Franco" (the key shall remain in possession of Domingo Franco).
After the death of Domingo Franco it appears that said jewelry
was found in the same "caja" and that the key was in the
possession of the defendant. It is very doubtful, indeed, under the
facts, whether the plaintiff ever obtained the actual possession of
the jewelry. His possession, however, seems to be admitted by
the defendant in the present action. So far as the record shows
the jewelry was in the same box where it was found at the time of
the execution and delivery of said Exhibit C and that the
defendant still has the key to said box.

in the record why the jewels were placed in said box

(presumably a money safe). In view of the fact, however, that
the record shows that the jewels were the sole and separate
property of the wife, acquired from her mother, and in the
absence of further proof, we must presume that they
constituted a part of her paraphernal property. As such
paraphernal property she exercised dominion over the same.
(Article 1382, Civil Code.) She had the exclusive control and
management of the same, until and unless she had delivered it
to her husband, before a notary public, with the intent that her
husband might administer it properly. (Article 1384, Civil
Code.) There is no proof in the record that she had ever
delivered the same to her husband, in any manner, or for any
purpose. That being true, she could not be deprived of the
same by any act of her husband, without her consent, and
without compliance with the provisions of the Civil Code above
cited.

During the trial of the cause the plaintiff attempted to show that
the jewels in question were pawned to him by Domingo
Franco, with the full knowledge and consent of the defendant.
And not only that, the plaintiff further attempts to show that
after the death of Domingo Franco, the defendant promised to
pay the amount for which the said jewels were pawned. The
defendant positively denies that she knew that her husband
had pawned her jewels or that she promised to redeem the
same by paying the amount due. No explanation is contained

EN BANC

For the foregoing reasons, we find that the defendant is

entitled to the possession of said jewels, or to their value,
amounting to P6,000.
The judgment of the lower court is therefore hereby affirmed,
with costs.
Arellano, C.J., Torres, Carson, Moreland, Trent and
Araullo, JJ., concur.

G.R. No. L-20825

December 28, 1964

AMALIA PLATA, petitioner,

vs.
HON. NICASIO YATCO, Judge, Court of First Instance of
Rizal, Branch V; BENITO MACROHON, Sheriff of Quezon

77
City and The Spouses CESAREA E. VILLANUEVA and
GREGORIO LEAO respondents.
Rosales & Montesa for petitioner.
Venida & Demonteverda Law Offices for respondents.
REYES J.B.L., J.:
Amalia Plata resorts to this Supreme Court for a writ
of certiorari against the Court of First Instance of Rizal, Branch
V, Quezon City, to annul and set aside its order of 4 January
1963, issued in its Civil Case No. Q-6250 (Cesarea Villanueva,
et al. vs. Gaudencio Begosa) finding petitioner Plata in
contempt of court for refusing to vacate certain property, and
sentencing her to pay a fine of P100, with subsidiary
imprisonment in case of insolvency, with a warning of more
drastic action should she persist in disobeying the writ issued
by said court.
At petitioner's instance, a writ of preliminary injunction was issued
to stay enforcement of the order complained of, and respondents
required to answer.

loan of P3,000, mortgaged to Cesarea Villanueva married to

Gregorio Leao, the identical property and its improvements "of
which the mortgagor declares to be hers as the absolute owner
thereof." The mortgage was also signed by Gaudencio Begosa,
as co-mortgagor (Exh. 4).
For failure to pay the mortgage, the same was extrajudicially
foreclosed under Act 3135, and sold on 12 April 1960 to the
mortgagee as the highest bidder; on 13 May 1961, the Sheriff
issued a final deed of sale on the strength of which the Register
of Deeds issued the buyer TCT, No. 55949 (Exhs. 5, 6, 7).
Subsequently, the respondent, Villanueva, sued Gaudencio
Begosa alone for illegal detainer (Annex C. Petition) in Case No.
Q-6250, and obtained judgment against him in the court of first
instance, that became final (Annex D, Petition). A writ of
execution was duly issued, but Amalia Plata resisted all efforts to
eject her from the property, and she filed a third party claim,
averring ownership of the property (Annex E). Upon motion of the
judgment creditors, the court below cited both Begosa and Plata
for contempt (Annex H), and, finding her explanation (Annex I)
unsatisfactory, found her guilty and sentenced her, as stated at
the beginning of this decision.

The pleadings and other papers on record disclose that Amalia

Plata, in 1954, had purchased a parcel of land (Lot. 23, Block 4M, of Subdivision plan PSD-59) in Caloocan, Rizal, for which the
Provincial Register of Deeds issued Torrens Certificate of Title
(Transfer) No. 25855 in the name of Amalia Plata, single, Filipino
citizen. On 13 February 1958, she sold the property to one Celso
Saldaa who obtained TCT No. 40459 therefor; but seven months
afterwards, on 24 September 1958, Saldaa resold the same
property to Amalia Plata, married to Gaudencio Begosa," (Ans.
Exh. 3) and a new certificate of Title No. 43520 was issued to the
vendee, Amalia Plata (Exh. 3a).

The issue here is whether the petitioner, Amalia Plata, is bound

by the detainer judgment against Gaudencio Begosa in Civil Case
No. Q-6250. Petitioner denies it, claiming that she was never
lawfully married to Begosa, and that she had acquired the
property while still single, and was in possession thereof when
the Sheriff of Rizal attempted to enforce the writ of ejectment.
Respondent Villanueva and her husband maintain, on the other
hand, that Plata had repeatedly acknowledged being married to
Begosa; that she had lived with him openly as his wife, and their
marriage is presumed; that, therefore, she is to be deemed as
holding under Begosa, and is bound by the judgment against the
latter.

On the same date, 24 September 1958, "Amalia Plata of legal

age, Filipino, married to Gaudencio Begosa," in consideration of a

We are constrained to uphold as meritorious the petitioner's

stand. Granting that the evidence before us against the marriage

78
of petitioner Amalia Plata to Gaudencio Begosa is weak,
considering the admissions of married status in public documents
(Answer, Exhs. 3 and 4); the well known presumption that
persons openly living together as husband and wife are legally
married to each other, and that the prior marriage of Begosa to
someone else does not necessarily exclude the possibility of a
valid subsequent marriage to herein petitioner; still the
respondents Villanueva could not ignore the paraphernal
character of the property in question, which had been
unquestionably acquired by Plata while still single, as shown by
Transfer Certificate of Title No. 25855 of Rizal (Art. 148 of the
New Civil Code). The subsequent conveyance thereof to Celso
Saldaa, and the reconveyance of her several months afterward
of the same property, did not transform it from paraphernal to
conjugal property, there being no proof that the money paid to
Saldaa came from common or conjugal funds (Civ. Code, Art
153). The deed of mortgage in favor of respondents Villanueva
actually recites that the petitioner was the owner of the tenement
in question and so does the conveyance of it by Saldaa to her
(Ans., Exhs. 3 and 4).
It is true that Gaudencio Begosa signed the mortgage (Exh. 4) as
a co-mortgagor; but by itself alone that circumstance would not
suffice to convert the land into conjugal property, considering that
it was paraphernal in origin. This is particularly the case where
the addition of Begosa as co-mortgagor was clearly an after
thought, the text of the deed showing that Plata was the sole
mortgagor.
Since the property was paraphernal, and the creditors and
purchasers were aware of it, the fact being clearly spread on the
land records, it is plain that Plata's possession, therefore, was not
derived from Gaudencio Begosa. The illegal detainer judgment
against the husband alone cannot bind nor affect the wife's
possession of her paraphernal, which by law she holds and
administers independently, and which she may even encumber or
alienate without his knowledge or consent (Civ. Code, Arts. 136.
137, 140). Hence, as she was not made party defendant in the

eviction suit, the petitioner-wife could validly ignore the judgment

of eviction against her husband, and it was no contempt of court
for her to do so, because the writ of execution was not lawful
against her (Chanco vs. Madrilejos, 9 Phil. 356; A. Jose Realty
vs. Galao, et al., 76 Phil. 201; Segarro vs. Maronilla, L-14428,
July 26, 1960; Weigall vs. Shuster, 11 Phil. 340).

We need not decide here whether the property was validly

conveyed to respondents Villanueva, since that issue is the
subject of an independent proceeding in the Court of First
Instance of Quezon City, Civil. Case No. Q6510 (Petition,
Annex F).
The writ of certiorari prayed for is granted, and the order of the
lower court, dated 4 January 1963, is annulled and set aside.
The preliminary injunction is made permanent, with costs
against private respondents Villanueva.
Bengzon, C.J., Bautista Angelo, Concepcion, Barrera,
Paredes, Dizon, Makalintal, Bengzon, J.P., and Zaldivar,
JJ.,concur.
Regala, J., took no part.

FIRST DIVISION
[G.R. No. 154645. July 13, 2004]
MILAGROS
JOAQUINO
REYES, petitioner,

a.k.a.

MILAGROS

J.

79
vs. LOURDES REYES, MERCEDES, MANUEL, MIRIAM and
RODOLFO
JR.
-all
surnamed
REYES, respondents.
DECISION
PANGANIBAN, J.:
Though registered in the paramours name, property
acquired with the salaries and earnings of a husband belongs
to his conjugal partnership with the legal spouse. The filiation
of the paramours children must be settled in a probate or
special proceeding instituted for the purpose, not in an action
for recovery of property.
The Case
Before the Court is a Petition for Review[1] under Rule 45
of the Rules of Court, seeking to nullify the February 4, 2002
Decision[2] and the August 14, 2002 Resolution[3] of the Court
of Appeals (CA) in CA-GR CV No. 45883. The CA disposed as
follows:
WHEREFORE,premisesconsidered,theappealisherebypartially
DENIEDandtheDecisiondatedMay30,1994,oftheRegional
TrialCourtofPasayCity,Branch111inCivilCaseNo.9722P
isMODIFIEDtoread,asfollows:
WHEREFORE,judgmentisherebyrenderedinfavorofplaintiffs
andagainstthedefendantasfollows:
a.DeclaringthehouseandlotregisteredunderTransferCertificate
ofTitleNo.90293(26627A)oftheRegistryofDeedsofMetro
Manila,DistrictIVasconjugalpartnershippropertyofthelate
SpousesRodolfoandLourdesReyes;

b.Orderingthe[petitioner]tosurrenderpossessionofsaidsubject
property,pursuanttotheapplicablelawonsuccession,tothe
respectiveestatesofthelateRodolfoReyesandLourdesReyesand
topayareasonablerentalofP10,000.00amonth,tothesame
juridicalentities,upontheirfailuretodosountilpossessionofthe
propertyisdelivered;and
c.Topay[respondents]attorneysfeesinthesumofP20,000.00and
topaythecosts.[4]
The questioned Resolution, on the other hand, denied
petitioners Motion for Reconsideration.
The Facts
The CA narrated the facts as follows:
[Respondents]filedaComplaintforreconveyanceanddamages,
datedJanuary23,1982,beforetheCourtofFirstInstanceofRizal,
containingthefollowingallegations:
xxxThecomplaintallegesthat[respondent]LourdesP.Reyesisthe
widowofRodolfoA.ReyeswhodiedonSeptember12,1981;that
[respondents]Mercedes,Manuel,MiriamandRodolfo,Jr.arethe
legitimatechildrenof[respondent]LourdesP.Reyesandthe
deceasedRodolfoA.Reyes;thatforyearsbeforehisdeath,Rodolfo
A.Reyeshadillicitrelationswith[petitioner]MilagrosB.Joaquino;
thatbeforehisdeath,xxxRodolfoA.ReyeswasVicePresidentand
ComptrollerofWarnerBarnesandCompanywithanincome
ofP15,000.00amonthand,afterretirementonSeptember30,1980,
receivedfromsaidcompanybenefitsandemolumentsintheamount
ofP315,0[1]1.79;that[respondent]wifewasnottherecipientofany
portionofthesaidamount.

80
ThecomplaintfurtherallegesthatonJuly12,1979,a[D]eedof
[S]aleofapropertyconsistingofahouseandlotatBFHomes,
Paraaque,MetroManilawasexecutedbythespousesRamiroGolez
andCorazonGolezinfavorof[petitioner]MilagrosB.Joaquinofor
whichTransferCertificateofTitleNo.90293oftheRegisterof
DeedsofMetroManila,DistrictIVwasissuedinthenameof
[petitioner]MilagrosB.Joaquino;thatthefundsusedtopurchase
thispropertywereconjugalfundsandearningsofthedeceased
RodolfoA.ReyesasexecutiveofWarnerBarnesandCompanyas
[petitioner]Joaquinowaswithoutthemeanstopayforthesame;that
[petitioner]executedaSpecialPowerofAttorneyinfavorof
RodolfoA.ReyestomortgagethepropertytoCommonwealth
InsuranceCorporationinordertopaythebalanceofthepurchase
price;thatsaidRodolfoA.Reyesexecutedamortgageinfavorof
CommonwealthInsuranceCorporationforP140,000.00andto
guarantypaymentthereof,hesecuredalifeinsurance[policy]with
PhilamLifeInsuranceCorporationforthesaidamount,assigningthe
proceedsthereoftoCommonwealthInsuranceCorporation;thatthe
monthlyamortizationsofthemortgagewerepaidbysaidRodolfoA.
Reyesbeforehisdeathandatthetimeofhisdeath,theoutstanding
balanceofP110,000.00wastobepaidoutofhisPhilamLife
Insurance[p]olicy.
Thecomplaintfinallyallegesthatthedeceasedhadtwocarsin
[petitioners]possessionandthattherealandpersonalpropertiesin
[petitioners]possessionareconjugalpartnershippropert[ies]ofthe
spousesLourdesP.ReyesandRodolfoA.Reyesandonehalf
belongsexclusivelyto[respondent]LourdesP.Reyesandtheother
halftotheestateofRodolfoA.Reyestobeapportionedamongthe
[otherrespondents]ashisforcedheirs.[Respondents]therefore,pray
thatthepropertycoveredbyT.C.T.No.90293bedeclaredconjugal
propertyofthespousesLourdesP.ReyesandRodolfoA.Reyesand
that[petitioner]beorderedtoreconveythepropertyin[respondents]
favor;thatthetwocarsin[petitioners]possessionbedeliveredto
[respondents]andthat[petitioner]bemadetopayactual,

compensatoryandmoraldamagesto[respondents]aswellas
attorneysfees.
xxxxxxxxx
[Petitioner]eventuallyfiledherAnswer,datedAugust1,1982,the
allegationsofwhichhavebeensummarizedbythetrialcourtinthe
followingmanner:
InherAnswer,[petitioner]MilagrosB.Joaquinoallegesthatshe
purchasedtherealpropertyinquestionwithherownexclusivefunds
anditwasonlyforconveniencethatthelateRodolfoReyes
facilitatedthemortgageoverthesame;thatalthoughthelateRodolfo
Reyespaidthemonthlyamortizationofthemortgageasattorneyin
factof[petitioner],themoneycameexclusivelyfrom[her].
[Petitioner]furtherallegesinheranswer,bywayofspecialand
affirmativedefenses,thatduringallthenineteen(19)yearsthat[she]
livedwithRodolfoReyesfrom1962continuouslyuptoSeptember
12,1981whenthelatterdied,[petitioner]neverhadknowledge
whatsoeverthathewasmarriedtosomeoneelse,muchlessto
[respondent]LourdesP.Reyes;that[petitioner]wasneverthe
beneficiaryoftheemolumentsorotherpecuniarybenefitsofthelate
RodolfoReyesduringhislifetimeorafterhisdeathbecause[she]
hadthefinancialcapacitytosupportherselfandherchildren
begottenwiththelateRodolfoReyes.[Petitioner]praysfora
judgmentdismissing[respondents]complaintandforthelatterto
payunto[petitioner]moralandexemplarydamagesinsuchamounts
asmaybedeterminedduringthetrial,includingatto[r]neysfeesand
thecostsofthesuit.xxx.
xxxxxxxxx
OnFebruary2,1993,[respondent]LourdesReyesdied.

81
Subsequently,thetrialcourtgrantedthecomplaintbasedonthe
followingfactualfindings:
LourdesReyeswaslegallymarriedtoRodolfoReyesonJanuary3,
1947inManila.Theyhavefourchildren,namely:Mercedes,
Manuel,MiriamandRodolfoJr.,allsurnamedReyesandco
[respondents]inthiscase.RodolfoReyesdiedonSeptember12,
1981.Atthetimeofhisdeath,RodolfoReyeswaslivingwithhis
commonlawwife,MilagrosJoaquino,xxxwithwhomshebegot
three(3)childrennamely:JoseRomillo,ImeldaMayandCharina,
allsurnamedReyes.
Duringhislifetime,RodolfoReyesworkedwithMarsmanand
CompanyandlatertransferredtoWarnerBarnes&Co.,wherehe
assumedthepositionofVicePresident[Comptroller]untilheretired
onSeptember30,1980.HismonthlysalaryatWarnerBarnes&Co.
wasP15,000.00xxxanduponhisseparationorretirementfromsaid
company,RodolfoReyesreceivedalumpsumofP315,011.79infull
paymentandsettlementofhisseparationandretirementbenefits.
DuringthecommonlawrelationshipofRodolfoReyesand
[petitioner]MilagrosJoaquinoandwhilelivingtogether,they
decidedtobuythehouseandlotsituatedatNo.12BaghdadStreet,
Phase3,BFHomes,Paraaque,MetroManila.ADeedofAbsolute
SaledatedJuly12,1979wasexecutedinfavorof[petitioner]
MilagrosJoaquinoandTransferCertificateofTitleNo.S90293
coveringthesaidpropertywasissuedinthenameof[petitioneronly]
onJuly20,1979.
Tosecurethefinanceswithwhichtopaythepurchasepriceofthe
propertyintheamountofP140,000.00,[petitioner]executedonJuly
20,1979,aSpecialPowerofAttorneyinfavorofRodolfoA.Reyes
forthelatter,asattorneyinfact,tosecurealoanfromthe
CommonwealthInsuranceCompany.Anapplicationformortgage
loanwasfiledbyRodolfoReyeswiththeCommonwealthInsurance

CompanyandaRealEstateMortgageContractwasexecutedas
collateraltothemortgageloan.Theloanwaspayableinten(10)
yearswithamonthlyamortizationofP1,166.67.Themonthly
amortizationswerepaidbyRodolfoReyesandafterhisdeath,the
balanceofP109,797.64waspaidinfulltotheCommonwealth
InsurancebythePhilamLifeInsuranceCo.asinsurerofthe
deceasedRodolfoA.Reyes.[5]
On appeal to the CA, petitioner questioned the following
findings of the trial court: 1) that the house and lot had been
paid in full from the proceeds of the loan that Rodolfo Reyes
obtained from the Commonwealth Insurance Company; 2) that
his salaries and earnings, which were his and Lourdes
conjugal funds, paid for the loan and, hence, the disputed
property was conjugal; and 3) that petitioners illegitimate
children, not having been recognized or acknowledged by him
in any of the ways provided by law, acquired no successional
rights to his estate.
Ruling of the Court of Appeals
Affirming the RTC, the CA held that the property had been
paid out of the conjugal funds of Rodolfo and Lourdes because
the monthly amortizations for the loan, as well as the
premiums for the life insurance policy that paid for the balance
thereof, came from his salaries and earnings. Like the trial
court, it found no sufficient proof that petitioner was financially
capable of buying the disputed property, or that she had
actually contributed her own exclusive funds to pay for
it. Hence, it ordered her to surrender possession of the
property to the respective estates of the spouses.
The appellate court, however, held that the trial court
should not have resolved the issue of the filiation and the
successional rights of petitioners children. Such issues, it said,
were not properly cognizable in an ordinary civil action for

82
reconveyance and damages and were better ventilated in a
probate or special proceeding instituted for the purpose.
Hence, this Petition.[6]
Issues
Petitioner submits the following issues for the Courts
consideration:
I.
Whetherornotithasbeenindubitablyestablishedinacourtoflaw
andtrieroffacts,theRegionalTrialCourt,thatpetitionersthree[3]
illegitimatechildrenarexxxindeedthechildrenofthelateRodolfo
Reyes.

IV.
WhetherornottheSupremeCourtshouldenforcetherulethatthe
partiestoalawsuitshouldonlytellthetruthatthetrialandin[their]
pleadingsxxx.
V.
WhetherornotthelegitimatechildrenofthelateRodolfoReyes
shouldrespecttheirfathersdesirethathisillegitimatechildren
shouldhaveahomeoraroofovertheirheadsinconsonancewithhis
dutytolove,careandprovideforhischildrenevenafterhisdeath. [7]
The issues boil down to the following: 1) the nature of the
house and lot on Baghdad Street (BF Homes Paraaque, Metro
Manila); and 2) the propriety of ruling on the filiation and the
successional rights of petitioners children.

II.
The Courts Ruling
Whetherornotitislegallypermissiblefor[respondents]tomakea
mockeryofthelawbydenying[the]filiationsoftheir[two]2
illegitimatesistersandone[1]illegitimatebrotherwheninfactthe
verycomplaintfiledbytheirmother,thelawfulwife,Lourdes[,]
showsthatherhusbandRodolfohadillicitrelationswiththe
petitionerMilagrosandhadlivedwithherinahouseandlotat
BaghdadStreet.
III.
WhetherornotthefactthattheCourtofAppealsmadeafindingthat
thehouseandlotatBaghdadStreetareconjugalpropertyoflawfully
weddedRodolfoandLourdesincludingtheinsuranceproceeds
whichwasusedtopaythefinalbillforthehouseandlot,thiswill
prevailoverArticles19and21oftheCivilCode.

The Petition is devoid of merit.

First Issue:
The Conjugal Nature of the Disputed Property
Before tackling the merits, we must first point out some
undisputed facts and guiding principles.

83
As to the facts, it is undisputed that the deceased Rodolfo
Reyes was legally married to Respondent Lourdes Reyes
on January 3, 1947.[8] It is also admitted that for 19 years or so,
and while their marriage was subsisting, he was actually living
with petitioner. It was during this time, in 1979, that the
disputed house and lot was purchased and registered in
petitioners name.
Plainly, therefore, the applicable law is the Civil Code of
the Philippines. Under Article 145 thereof, a conjugal
partnership of gains (CPG) is created upon marriage [9] and
lasts until the legal union is dissolved by death, annulment,
legal separation or judicial separation of property.[10] Conjugal
properties are by law owned in common by the husband and
wife.[11] As to what constitutes such properties are laid out in
Article 153 of the Code, which we quote:
(1)Thatwhichisacquiredbyoneroustitleduringthemarriageatthe
expenseofthecommonfund,whethertheacquisitionbeforthe
partnership,orforonlyoneofthespouses;
(2)Thatwhichisobtainedbytheindustry,orwork,orassalaryof
thespouses,orofeitherofthem;
(3)Thefruits,rentsorinterestsreceivedordueduringthemarriage,
comingfromthecommonpropertyorfromtheexclusivepropertyof
eachspouse.
Moreover, under Article 160 of the Code, all properties of
the marriage, unless proven to pertain to the husband or the
wife exclusively, are presumed to belong to the CPG.For the
rebuttable presumption to arise, however, the properties must
first be proven to have been acquired during the existence of
the marriage.[12]

The law places the burden of proof [13] on the plaintiffs

(respondents herein) to establish their claim by a
preponderance of evidence[14] -- evidence that has greater
weight or is more convincing than that which is offered to
oppose it.[15]
On the other hand, Article 144[16] of the Civil Code
mandates a co-ownership between a man and a woman who
are living together but are not legally married. Prevailing
jurisprudence holds, though, that for Article 144 to apply, the
couple must not be incapacitated to contract marriage. [17] It has
been held that the Article is inapplicable to common-law
relations amounting to adultery or concubinage, as in this
case. The reason therefor is the absurdity of creating a coownership in cases in which there exists a prior conjugal
partnership between the man and his lawful wife.[18]
In default of Article 144 of the Civil Code, Article 148 of the
Family Code has been applied.[19] The latter Article provides:
Art.148.Incasesofcohabitationnotfallingunderthepreceding
Article,onlythepropertiesacquiredbybothofthepartiesthrough
theiractualjointcontributionofmoney,property,orindustryshallbe
ownedbythemincommoninproportiontotheirrespective
contributions.Intheabsenceofprooftothecontrary,their
contributionsandcorrespondingsharesarepresumedtobeequal.The
sameruleandpresumptionshallapplytojointdepositsofmoneyand
evidenceofcredit.
Ifoneofthepartiesisvalidlymarriedtoanother,hisorhersharein
thecoownershipshallaccruetotheabsolutecommunityorconjugal
partnershipexistinginsuchvalidmarriage.Ifthepartywhichacted
inbadfaithisnotvalidlymarriedtoanother,hisorhershareshallbe
forfeitedinthemannerprovidedinthelastparagraphofthe
precedingArticle.

84
Theforegoingrulesonforfeitureshalllikewiseapplyevenifboth
partiesareinbadfaith.
Thus, when a common-law couple have a legal
impediment to marriage, only the property acquired by them -through their actual joint contribution of money, property or
industry -- shall be owned by them in common and in
proportion to their respective contributions.
With these facts and principles firmly settled, we now
proceed to the merits of the first issue.
The present controversy hinges on the source of the funds
paid for the house and lot in question. Upon the resolution of
this issue depends the determination of whether the property
is conjugal (owned by Rodolfo and Lourdes) or exclusive
(owned by Milagros) or co-owned by Rodolfo and Milagros.
The above issue, which is clearly factual, has been
passed upon by both the trial and the appellate courts, with
similar results in favor of respondents. Such finding is
generally conclusive; it is not the function of this Court to
review questions of fact. [20]
Moreover, it is well-settled that only errors of law and not
of facts are reviewable by this Court in cases brought to it from
the Court of Appeals or under Rule 45 of the Rules of Court.
[21]
This principle applies with greater force herein, because the
CA came up with the same factual findings as those of the
RTC.
Even then, heeding petitioners plea, we have gone
through the pleadings and the evidence presented by the
parties to find out if there is any circumstance that might
warrant a reversal of the factual findings. Unfortunately for
petitioner, we have found none.

Indeed, a preponderance of evidence has duly

established that the disputed house and lot was paid by
Rodolfo Reyes, using his salaries and earnings. By substantial
evidence, respondents showed the following facts: 1) that
Rodolfo was gainfully employed as comptroller at Warner,
Barnes and Co., Inc. until his retirement on September 30,
1980, upon which he received a sizeable retirement package;
[22]
2) that at exactly the same time the property was allegedly
purchased,[23] he applied for a mortgage loan[24] -- intended for
housing[25] -- from the Commonwealth Insurance Company; 3)
that he secured the loan with a real estate mortgage [26] over
the same property; 4) that he paid the monthly amortizations
for the loan[27] as well as the semi-annual premiums[28] for a
Philam Life insurance policy, which he was required to take as
additional security; and 5) that with the proceeds of his life
insurance policy, the balance of the loan was paid to
Commonwealth by Philam Life Insurance Company.[29]
All told, respondents have shown that the property was
bought during the marriage of Rodolfo and Lourdes, a fact that
gives rise to the presumption that it is conjugal. More
important, they have established that the proceeds of the loan
obtained by Rodolfo were used to pay for the property; and
that the loan was, in turn, paid from his salaries and earnings,
which were conjugal funds under the Civil Code.
In contrast, petitioner has failed to substantiate either of
her claims -- that she was financially capable of buying the
house and lot, or that she actually contributed to the payments
therefor.
Indeed, it does not appear that she was gainfully
employed at any time after 1961[30] when the property was
purchased. Hearsay are the Affidavits[31] and the undated
Certification[32] she had presented to prove that she borrowed
money from her siblings and had earnings from a jewelry

85
business. Respondents had not been given any opportunity to
cross-examine the affiants, who had not testified on these
matters. Based on the rules of evidence, the Affidavits and the
Certification have to be rejected. In fact, they have no
probative value.[33] The CA was also correct in disregarding
petitioners allegation that part of the purchase money had
come from the sale of a drugstore[34] four years earlier.

wife.[38] In this case, a constructive trust is deemed created

under Article 1456 of the Civil Code, which we quote:

Under the circumstances, therefore, the purchase and the

subsequent registration of the realty in petitioners name was
tantamount to a donation by Rodolfo to Milagros. By express
provision of Article 739(1) of the Civil Code, such donation was
void, because it was made between persons who were guilty
of adultery or concubinage at the time of the donation.

The registration of the property in petitioners name was

clearly designed to deprive Rodolfos legal spouse and
compulsory heirs of ownership. By operation of law, petitioner
is deemed to hold the property in trust for them. Therefore, she
cannot rely on the registration in repudiation of the trust, for
this case is a well-known exception to the principle of
conclusiveness of a certificate of title.[39]

The
prohibition
against
donations
between
spouses[35] must likewise apply to donations between persons
living together in illicit relations; otherwise, the latter would be
better situated than the former.[36] Article 87 of the Family Code
now expressly provides thus:
Art.87.Everydonationorgrantofgratuitousadvantage,director
indirect,betweenthespousesduringthemarriageshallbevoid,
exceptmoderategiftswhichthespousesmaygiveeachotheronthe
occasionofanyfamilyrejoicing.Theprohibitionshallalsoapplyto
personslivingtogetherashusbandandwifewithoutavalid
marriage.(Italicssupplied)
Regarding the registration of the property in petitioners
name, it is enough to stress that a certificate of title under
the Torrens system aims to protect dominion; it cannot be used
as an instrument for the deprivation of ownership. [37] It has
been held that property is conjugal if acquired in a commonlaw relationship during the subsistence of a preexisting legal
marriage, even if it is titled in the name of the common-law

Art.1456.Ifpropertyisacquiredthroughmistakeorfraud,the
personobtainingitis,byforceoflaw,consideredatrusteeofan
impliedtrustforthebenefitofthepersonfromwhomtheproperty
comes.

Second Issue:
Ruling on Illegitimate Filiation
Not Proper
It is petitioners alternative submission that her children are
entitled to a share in the disputed property, because they were
voluntarily acknowledged by Rodolfo as his children. Claiming
that the issue of her childrens illegitimate filiation was duly
established in the trial court, she faults the CA for ruling that
the issue was improper in the instant case.
Her position is untenable.
Indeed, it has been ruled that matters relating to the rights
of filiation and heirship must be ventilated in the proper
probate court in a special proceeding instituted precisely for
the purpose of determining such rights.[40] Sustaining the

86
appellate court in Agapay v. Palang,[41] this Court held that the
status of an illegitimate child who claimed to be an heir to a
decedents estate could not be adjudicated in an ordinary civil
action which, as in this case, was for the recovery of property.
Considerations of due process should have likewise
deterred the RTC from ruling on the status of petitioners
children. It is evident from the pleadings of the parties that this
issue was not presented in either the original[42] or the
Supplemental Complaint[43] for reconveyance of property and
damages; that it was not pleaded and specifically prayed for
by petitioner in her Answers[44] thereto; and that it was not
traversed by respondents Reply to the Supplemental
Complaint.[45] Neither did petitioners Memorandum,[46] which
was submitted to the trial court, raise and discuss this issue. In
view thereof, the illegitimate filiation of her children could not
have been duly established by the proceedings as required by
Article 887 of the Civil Code.[47]
In view of the foregoing reasons, the CA cannot be faulted
for tackling the propriety of the RTCs ruling on the status of the
children of petitioner, though she did not assign this matter as
an error. The general rule -- that only errors assigned may be
passed upon by an appellate court admits of exceptions. Even
unassigned errors may be taken up by such court if the
consideration of those errors would be necessary for arriving
at a just decision or for serving the interest of justice.[48]
The invocation by petitioner of Articles 19[49] and 21[50] of
the Civil Code is also unmeritorious. Clearly, the illegitimate
filiation of her children was not the subject of inquiry and was
in fact not duly established in this case. Thus, she could not
have shown that respondents had acted in bad faith or with
intent to prejudice her children. These are conditions
necessary to show that an act constitutes an abuse of rights
under Article 19.[51] She also failed to show that respondents --

in violation of the provisions of Article 21 of the Civil Code -had acted in a manner contrary to morals, good customs or
public policy.
Moreover, we note that the issue concerning the
applicability of Articles 19 and 21 was not raised by petitioner
in the trial court or even in the CA. Hence, she should not be
permitted to raise it now. Basic is the rule that parties may not
bring up on appeal issues that have not been raised on trial.[52]
WHEREFORE, the Petition is hereby DENIED, and the
assailed Decision and Resolution of the Court of
Appeals AFFIRMED. Costs against petitioner.
SO ORDERED.
Davide,
Jr.,
C.J.,
(Chairman),
Carpio, and Azcuna, JJ., concur.

Ynares-Santiago,

[1]

Rollo, pp. 10-53.

[2]

Id., pp. 119-133. Sixth Division. Penned by Justice Teodoro P.

Regino and concurred in by Justices Eugenio S. Labitoria
(Division chairman) and Rebecca de Guia-Salvador
(member).

[3]

Id., p. 161.

[4]

CA Decision, pp. 14-15; rollo, pp. 132-133.

[5]

Id., pp. 2-9 & 120-127.

87
[6]

The case was deemed submitted for decision on October 7,

2003, upon the Courts receipt of respondents
Memorandum, signed by Atty. Edgar B. Francisco of
Francisco & Francisco. Petitioners Memorandum, signed
by Atty. Teresita S. de Guzman of the Public Attorneys
Office (PAO), was received on July 30, 2003.

ART. 144. When a man and a woman live together as husband

and wife, but they are not married, or their marriage is
void from the beginning, the property acquired by either or
both of them through their work or industry or their wages
and salaries shall be governed by the rules on coownership.

[7]

Petitioners Memorandum, pp. 19-20; rollo, pp. 250-251.

[17]

[8]

Exhibit
A,
Marriage
and Lourdes Reyes.

Tumlos v. Spouses Fernandez, 386 Phil. 936,950, April 12,

2000; Valdes v. RTC,
Br.
102, Quezon City, 328
Phil.1289, 1296, July 31, 1996; Juaniza v. Jose, 89 SCRA
306, 308, March 30, 1979.

[9]

In the absence of a marriage settlement, the conjugal

partnership of gains (CPG) is ordained.

[18]

Tumlos v. Spouses Fernandez, supra.

[19]

Agapay v. Palang, 342 Phil. 302, 310, July 28, 1997.

[20]

Twin Towers Condominium Corporation v. CA, 398 SCRA 203,

222, February 27, 2003; Yu Bun Guan v. Ong, 419 Phil
845, 854, October 18, 2001; Boneng v. People, 363 Phil.
594, 600, March 4, 1999.

[21]

Ninoy Aquino International Airport Authority v. CA, 398 SCRA

703, 710, March 10, 2003; Spouses Calvo v. Spouses
Vergara, 423 Phil. 939, 947, December 19, 2001; Sps.
Uy Tansipek v. Philippine Bank of Communications, 423
Phil. 727, 733, December 14, 2001.

[22]

This was released by Warner Barnes & Co., Inc.; Exhibit C,

records, p. 15; rollo, p. 62.

[23]

See Exhibit F, Deed of Absolute Sale dated July 12, 1979.

[24]

See Exhibit I, Application for Mortgage Loan.

[25]

Exhibit I-1.

[10]

Contract

between

Rodolfo

Article 175 of the Civil Code.

[11]

Article 143 of the Civil Code.

[12]

Diancin v. CA, 345 SCRA 117, 122, November 20, 2000;

Francisco v. CA, 359 Phil. 519, 526, November 25, 1998;
Tan v. CA, 339 Phil. 423, 430-431, June 10, 1997.

[13]

This is defined under 1 of Rule 131 of the Rules of Court as

follows:

Section 1. Burden of Proof. - Burden of proof is the duty of a party

to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence
required by law.
[14]

[15]

[16]

1, Rule 133 of the Rules of Court.

Jison v. CA, 350 Phil.138, 173, February 24, 1998.
Article 144 of the Civil Code reads in full:

88
[26]

[27]

See Exhibit H. The mortgage was executed by Milagros

Joaquino to secure the loan of Rodolfo Reyes, whom she
had appointed as her attorney-in-fact, also on July 12,
1979. See also Exhibit G, Special Power of Attorney.

Ibid.

[29]

See Exhibit K, Certification dated August 18, 1982 from

Commonwealth Insurance Company, which confirmed
that Philam Life Insurance Company had paid the balance
of the mortgage loan account of Rodolfo Reyes.

[31]

[32]

[33]

Arcaba v. Vda. de Batocael, 370 SCRA 414, 422, November

22, 2001; Matabuena v. Cervantes, 148 Phil. 295, 298299, March 31, 1971.

[37]

Adriano v. CA, 385 Phil. 474, 485-486, March 27, 2000 (citing
Padilla v. Padilla, 74 Phil. 377, 383, October 4, 1943).

[38]

Belcodero v. Court of Appeals, 227 SCRA 303, 307-308,

October 20, 1993 (cited in Adriano v. CA, supra).

[39]

Adriano v. CA, supra; Padilla v. Padilla, supra.

[40]

Agapay v. Palang, supra, p. 313.

[41]

Supra.

[42]

Records, pp. 7-11.

[43]

Id., pp. 115-117.

[44]

Id., pp. 27-19 and pp. 113-115, respectively.

[45]

Id., pp. 124-125.

[46]

Id., pp. 206-219.

[47]

The Article requires that all cases of illegitimate filiation must

be duly proved.

[48]

De Vera Jr. v. CA, 419 Phil. 820, 834, October 18, 2001;
Diamonon v. Department of Labor and Employment, 384
Phil. 19, 23, March 7, 2000.

[49]

Article 19 of the Civil Code, which embodies the principle of

abuse of rights, provides:

See Exhibit J, Ledger of Payments re Account of Rodolfo

Reyes.

[28]

[30]

[36]

Her Service Record, Exhibit 4, showed that she was employed

only until July 19, 1961, as clerk at the Office of the
Governor of Cebu.
Exhibits 10 and 40. These Affidavits, dated April 7,
1986 and November 27, 1987, were executed by Teresa
Joaquino-Bermejo and Jesus B. Joaquino -- petitioners
sister and brother, respectively.
See Exhibit 39.
De la Torre v. CA, 381 Phil. 819, 829, February 8, 2000; Midas
Touch Food Corporation v. National Labor Relations, 328
Phil. 1033, 1044, July 29, 1996.

[34]

The Absolute Deed of Sale over the drugstore was executed

on February 14, 1975. Exhibit 3, Folder of Exhibits.

[35]

Article 133 of the Civil Code

89
Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
[50]

Article 21 of the Civil Code reads as follows:

Art. 21. Any person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.
[51]

[52]

Barons Marketing Corp. v. CA, 286 SCRA 96, 105, February 9,

1998.
Lazaro v. CA, 423 Phil. 554, 558, December 14,
2001; Magellan Capital Management Corporation v. Zosa,
355 SCRA 157, 170, March 26, 2001; Sumbad v. CA, 308
SCRA 575, 596, June 21, 1999.

EN BANC
G.R. No. L-9984

March 23, 1916

PETRONA JAVIER, plaintiff-appellee,

vs.
LAZARO OSMEA, as administrator of the estate of the
deceased Tomas Osmea, defendant-appellant.
Haussermann, Cohn and Fisher for appellant.
Southworth, Hargis, Adams and Jordain for appellee.
ARELLANO, C.J.:
Florentino Collantes, husband of Petrona Javier, became
indebted to the estate of Tomas Osmea in the sum of
P26,467.94. On June 15, 1913, judgment for this amount was
rendered in behalf of the estate and the sheriff executed it by
selling at public auction all the right, title, interest or share
which the judgment debtor, Collantes, had or might have in
two parcels of improved real estate situated in this city of
Manila, and especially the usufructuary interest therein of
Pascuala Santos, the surviving widow of Felix Javier y
Sanchez, which interest was acquired by Petrona Javier,
Collantes' wife, on March 20, 1911.
Petrona Javier, Collantes' wife, was the only daughter of Felix
Javier and Matea Corunan, the latter of whom died in 1901,
and the former ion 1908. Felix Javier, after the death of his
wife Matea Corunan, married Pascuala Santos. It was in the
year 1890 that Florentino Collantes and Petrona Javier had
contracted marriage. Felix Javier and his wife Matea Corunan
left at their death, as an inheritance to their only daughter
Petrona Javier, two urban properties situated one on Calle

90
Carriedo, and the other on Calle San Sebastian. For the
purpose of consolidating her full ownership in and to both
properties, Petrona Javier acquired from her father's second
wife, Pascuala Santos, the latter's usufructuary right in her
deceased husband's estate for the sum of P3,000, which
amount, it appears, Javier was obliged to borrow, giving as
security for the loan a mortgage on the property she had
inherited.
These properties that were inherited by Petrona Javier from
her parents were those levied upon by the sheriff in the
execution of the judgment against Florentino Collantes, and
notwithstanding her protests the sale was carried out. The
successful bidder therein was the Osmea estate itself which
paid P500 for each parcel of property, that is, P1,000 for
Collantes' right in both parcels and in the usufructuary interest
acquired by his wife from Pascuala Santos.
Inasmuch as Petrona Javier claimed that her husband
Collantes had no rights whatever in said two pieces of property
or in the usufructuary interest acquired by her, she filed claim
of intervention in order to recover her ownership of the
properties and her right to usufruct after the sheriff's sale
should be annulled.
The defendant Osmea estate, in answer to the complaint,
admitted plaintiff's exclusive right of ownership in the said two
aforementioned parcels of real estate, subject to the
usufructuary right of the second wife of plaintiff's father, and
also admitted the purchase of this right by plaintiff. Defendant
claimed, however, that the money with which said usufructuary
interest was purchased belonged to the conjugal partnership
and therefore that the right of usufruct so acquired belonged to
the said conjugal partnership. Defendant concluded by praying
that the court rendered judgment holding that the revenues
from both properties are conjugal partnership property of the

married couple Collantes and Javier; that said revenues be

made liable for the payment of the judgment rendered in
behalf of the Osmea estate; that for this purpose a receiver
be appointed to take charge of said two properties and
manage them with the object of applying the revenues
obtained therefrom to the payment of the judgment obtained
by the Osmea estate against Collantes.
The Court of First Instance of Manila rendered judgment
annulling only the sale of the two properties and ordering the
cancellation of their registration in the property registry, with
the costs of the suit.
Defendant appealed.
The question raised in this appeal is whether the sum owed by
the husband to the Osmea estate can and should be paid out
of the fruits and revenues of the two aforementioned parcels of
real estate that exclusively belong to the wife, the herein
plaintiff, as prayed for by the appellant in his written answer.
To decide this question the nature of the debt must be inquired
into the defined. The appellee herself, in this instance,
describes it thus:
A short while prior to 1892, Collantes was employed by
appellee's father, Felix Javier, in a commission
business which the latter conducted in Manila. In 1902,
Felix Javier retired from the business and was
succeeded therein by Collantes who, as a
consequence, changed his commercial status as an
employee of his father-in-law to that of an independent
commission merchant, and continued that business for
six years, or until 1908. One of the chief clients
(principals) both of Javier and Collantes, was Thomas
Osmea , a merchant of Cebu, whom Javier, and later

91
Collantes, had represented as his agents in Manila for
the sale of tobacco consigned to them by Osmea from
Cebu and for the investment of the profits, in Osmea
's name and as his agent in Manila, in merchandise
which these agents consigned to him at Cebu (record,
p. 2). When Javier retired from the commission
business in 1902, it appears that he was indebted to
Tomas Osmea in the sum of four or five thousand
pesos, and that this debt was assumed by this
successor Collantes. How this debt originated, the
record does not show. In 1908, Collantes rendered a
statement (they probably were accounts) to Osmea
which showed that his debt to the latter amounted to
fourteen or fifteen thousand pesos. No steps were
taken by Osmea during his lifetime to collect this debt,
but after his death a judgment for the same was
obtained by the administrator of his estate in June,
1913. This judgment was founded on the statement
made by Collantes in 1908 in which he admitted is
debt, together with interest thereon at the rate of 12 per
centum per annum.

Although the appellee admits that the debt arose out of

the business conducted by her father and subsequently
by her husband, there is no evidence that throws any
light on the particular transaction which was the cause
of the indebtedness . . . . It must be observed that there
is the natural presumption of fact that whatever he
(Collantes) may have contributed toward defraying the
expenses of his family, was contributed by him out of
what he earned by the commission paid him for the
services he rendered to his clients as a broker (as
commission merchant). It has not been proven or
alleged that any part of the debt to Osmea was
originated by Collantes' having paid the family
expenses as they are defined in paragraph 5 of article
1408 of the Civil Code. (Appellee's brief, pp. 3 and 4.)
The appellee herself having set forth the origin of the debt,
which is none other than the balance against Collantes
resulting from the accounts rendered by him as commissionmerchant to his principal Osmea ; and the appellee also
having set forth that "there is the natural presumption of fact
what whatever Collantes contributed by him out of what he
earned by the commission paid him for the services he
rendered to his clients as commission merchant," it is decisive
and conclusive that the debt must be paid out of the
community property of the marriage, since, article 1408 of the
Civil Code provides:
The conjugal partnership shall be liable for:
1. All the debts and obligations contracted during the
marriage by the husband,
xxx

xxx

5. The support of the family . . . .

xxx

92
And inasmuch as "the fruits, revenue, or interest collected or
accrued during the marriage coming from the partnership
property, or from that which belongs to either one of the
spouses," is community property, according to article 1401;
and, further, as the law expressly provides that "the fruits of
the paraphernal property form a part of the assets of the
conjugal partnership, and are liable for the payment of the
marriage expenses" (art. 1385), hence it follows that the
creditor of the husband may bring his action, not against the
paraphernal property, but against the fruits and revenues of
this private property of the wife.
This conclusion is not barred by the provision of article 1386,
to wit, that "the personal obligation of the husband cannot be
paid out of the fruits of the paraphernal property unless it be
proven that they were incurred for the benefit of the family." It
is chiefly upon this article that appellee's whole brief is based.
The antecedents of this article of the Civil Code are not only
the laws embraced in some of the codes enacted prior thereto,
but principally the numerous cases decided by the supreme
court of Spain which interpret the old law which the appellee
says is identical with article 1386 of the present Civil Code.
Among the various decisions which might be cited, the most
important is that of June 9, 1883, because it covers the entire
question at issue in this case: Quirico Casanovas was a
creditor of Jose Gimiso for the value of certain drafts protested
for nonpayment; he brought suit to recover and attached
various properties belonging to the marriage partnership, for
Gimiso was married, and also several parcels of real estate
that belonged to the debtor's wife, Antonia Carruana. The latter
filed a third party claim and alleged that this real estate was
her paraphernal property and that the fruits thereof were
subject to the payment of the marriage expenses; that the
husband could dispose of such fruits only after the payment of
such expenses, among which his personal debts were not

included; that this doctrine was sanctioned by the decisions of

the supreme court of March 1, 1867, and June 20, 1879, which
hold that the rights in the dowry and paraphernal fruits or
revenue, granted by law to the husband as the head of the
family and manager of the conjugal partnership, are
understood to be subordinate to the preferred obligation of
paying the marriage partnership expenses with such fruits or
revenue. Casanovas answered the complaint alleging, among
other reasons, that Gimiso's debt arose from shipments of
paper and other articles connected with the business in which
he was engaged, and that the supreme court itself, in its
decisions of October 26, 1863, November 25, 1864, October
8, 1866, and March 1 and October 27, 1867, had laid down the
rule that, although the management of the wife's paraphernal
property pertains to her, it is understood to be without
prejudice to the husband's collecting and disposing of the
products of such property, as the head of the family and for the
purpose of attending to its needs. The Audiencia of Valencia
decided the suit in favor of Casanovas. But Carruana took it in
cassation to the supreme court, alleging that it violated
(second assignment of error) "The well-established rule
reaffirmed by the supreme court in its decision of February 21,
1881, and several others, to the effect that in order that a
creditor may secure preference over the rights of the wife with
respect to the products and revenue of the paraphernal
property, he must prove at trial that the debt, the payment of
which he demands, was contracted by the husband to meet
obligations of the conjugal partnership; that this was not
proven in the case at bar, and it is insufficient to say, as it is
said in the judgment appealed from, that among the resources
declared by the husband and those for which the revenue from
the wife's property is liable, should be included the credit, that
is, the debts, for, according to well-settled jurisprudence of that
supreme court, any money or sums borrowed by the husband
must by invested in business of the conjugal partnership."

93
The decision of the supreme court did not sustain the appeal
in cassation:
Considering that the debts contracted by the husband
during the marriage, for and in the exercise of the
industry or profession by which he contributes toward
the support of his family, cannot be deemed his
personal and private debts, nor consequently, can they
be excepted from payment out of the products or
revenue of the wife's own property which are liable, like
those of her husband's, for the discharge of the
liabilities of the marriage couple; and considering that
the debt claimed by Don Quirico Casanovas, for the
payment of which attachment has been levied on
certain property belonging to the petitioner, is
of this nature,inasmuch as it was contracted in the
exercise of the industry or business carried on by her
husband; therefore, the doctrine cited in
the second assignment of error of the appeal,
is inapplicable, and has not been violated by the
judgment appealed from, in holding, as it does, that
intervention prayed for by the wife, cannot be allowed.
The appellee herself established the presumption that
whatever the husband contributed toward the support of his
family, he gave out of what he earned from his commissions
and profession. In conformity, then, with the aforecited
decision on cassation, the debts contracted for and in the
exercise of such industry or profession cannot be considered
as his personal and private debts, nor can they be excepted
from payment out of the products or revenue of the wife's own
property, which, like that of her husband's, is liable for the
discharge of the marriage liabilities. So far were they from
being personal debts of the husband, that the wife herself
avers that the payment to Osmea of four or five thousand
pesos of the twenty-six and odd thousand pesos of the total

debt, had been assumed by her husband, relieving her father

therefrom. He would not have assumed the payment for
private purposes of his own, for his purely personal
satisfaction, and in the eyes of the law, notwithstanding his
having assumed payment, relieving her father-in-law
therefrom, he was a perfect creditor of the latter's heir in the
settlement of her father's estate and could have deducted the
amount of that credit of four or five thousand pesos from her
entire inheritance, that is, from that same property,
subsequently called paraphernal, that his wife inherited intact.
Subrogation transfers to the subrogated the credit, with
the corresponding rights, either against the debtor or
against third persons, be they sureties or holders of
mortgages. (Art. 1212, Civ. Code.)
It is undeniable that if in the same manner as the 26,000 and
odd pesos were a loss, the had been a gain, the husband
would not have been permitted to call the amount his personal
and private gain; in the same way, the debts or losses resulting
from the business cannot be called his personal and private
debts or losses.
The petition of the defendant in his answer to the complaint, to
wit, that the sum owed by the husband to the Osmea estate
can and ought to be paid out of the fruits or revenue of the two
parcels of real estate mentioned, which belong exclusively to
the wife, now the plaintiff, is proper and in accordance with the
law.
Defendant also prayed in his answer that a receiver be
appointed to take charge of the management of the said two
properties and apply their revenue to the payment of the
judgment rendered in behalf of the Osmea estate against
Collantes.

94
According to article 1384, the wife shall have the management
of her paraphernal property. Pursuant to article 1412, the
husband is the administrator of the community property of the
conjugal partnership and of the conjugal capital in general, and
we have already said that the fruits of the paraphernal property
form a part of the assets of the conjugal partnership (art.
1385). To confide the management of the property and of its
revenue to a receiver would be to deprive the husband and the
wife of their respective rights. In the case at bar, the wife has
given no cause for being deprived, nor has any reason
whatever been advanced for depriving her, of her right to
manage her own property. The same may be said of the
husband with respect to the community property of the
marriage. There is no reason to change the present status of
affairs. Neither has any sufficient reason been offered for the
appointment of a receiver, nor has any of the cases
enumerated in section 174 of the Code of Civil Procedure,
been invoked.
Therefore, the appellant's petition for the appointment of a
receiver must be denied.
The lower court having failed to make any ruling on the
declaration and the appointment prayed for by appellant, the
judgment appealed from is reversed in so far as regards this
omission, and we hold that the fruits and revenue from the two
properties belonging to the wife, described in the judgment
appealed from, are liable for the payment of the debt owing by
the husband, the judgment debtor, and that there is no need
for the appointment of a receiver. Without special finding as to
costs, it is so ordered.
Torres, Trent, and Araullo, JJ., concur.
Moreland, J., concurs in the result.

FIRST DIVISION
G.R. No. L-56479 November 15, 1982
SOCORRO L. VDA. DE STA. ROMANA, petitioner,
vs.
PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK and
HON. SANCHO Y. INSERTO, as Judge of Branch I, COURT
OF FIRST INSTANCE OF ILOILO, respondents.
German M. Lopez for petitioner.
Tirol & Tirol Law Offices for private respondent.

VASQUEZ, J.:
In this petition for review by certiorari, petitioner seeks to annul
and set aside an Order of the respondent Judge of the Court
of First Instance of Iloilo, Branch I, which dismissed Civil Case

95
No. 13533, entitled Socorro L. Vda. de Sta. Romana, Plaintiff,
versus The Philippine Commercial and Industrial Bank, et al.,
Defendants. The petition was given due course in the
Resolution dated July 29, 1981 and the parties have submitted
their respective memoranda.
Civil Case No. 13533 is an offshoot of Civil Case No. 7678,
entitled "PCIB, et al. versus Ramon. Sta. Romana" which was
filed way back on August 6, 1968. Civil Case No. 7678 was an
action for rescission with damages filed by herein private
respondent PCIB as Administrator of the estate of the
deceased C.N. Hodges, and for the recovery of a parcel of
land known as Lot No. 1258-G which Ramon Sta. Romana
purchased from the late C. N. Hodges under a Contract to
Sell. On motion of private respondent PCIB, a writ of
preliminary attachment was issued in said case by virtue of
which the Sheriff levied on August 23, 1968 on the rights and
interests of Ramon Sta. Romana over Lot No. 1258-F and the
improvements existing thereon, which lot Ramon Sta. Romana
also purchased from C. N, Hodges under another Contract to
Sell. A third party claim was filed by a certain Emilio Sta.
Romana who claimed that Lot No. 1258-F and its
improvements had been sold to him by Ramon Sta. Romana
on August 16,1963.
The trial court rendered its decision in Civil Case No. 7678 on
June 16, 1975 rescinding the Contract to Sell and ordering
Ramon Sta. Romana to return the possession of Lot No. 1258G to the herein private respondent, as well as to pay rentals or
damages for use and occupation thereof. The decision was
appealed to the Court of Appeals which affirmed the same and
further ordered Ramon Sta. Romana to pay the land taxes and
the interest thereon.
On October 5, 1979, the trial judge issued a writ of execution
by virtue of which the Sheriff issued a notice of sale at public

auction of the rights and interests of Ramon Sta. Romana as

defendant in the case over Lot No. 1258-F and its
improvements for the satisfaction of the damages awarded in
the decision.
Ramon Sta. Romana died intestate on October 21, 1979. On
November 26, 1949, herein petitioner Socorro L. Vda. de Sta.
Romana, the surviving spouse of Ramon Sta. Romana, filed a
motion to quash the writ of execution alleging principally that
the proceedings in Civil Case No. 7678 did not affect her rights
and interests over Lot No. 1258-G and Lot No. 1258-F
inasmuch as she was not a party in said action. The trial court
denied the said motion to quash the writ of execution. The
public auction sale was held and the private respondent was
issued the corresponding certificate of sale. A Motion for
Reconsideration filed by the herein petitioner was likewise
denied in the Order dated May 15, 1980.
On September 1, 1980, herein petitioner instituted Civil Case
No. 13533 praying therein that the writ of execution and the
levy on execution made on Lot No. 1258-F and the
improvements existing thereon be annulled insofar as her
ONE HALF (1/2) share in the said properties is concerned,
and that she be declared the lawful and absolute owner of said
ONE-HALF (1/2) share of the said properties. Private
respondent filed a motion to dismiss the complaint in Civil
Case No. 13533 on the ground of res judicata. After the
petitioner filed her opposition to the motion to dismiss, the
respondent court, in its Order dated November 30, 1980,
granted the motion to dismiss on the grounds of res
judicata and laches. This is the order that the petitioner seeks
to annul in the present proceeding.
Petitioner assails the pronouncement by the respondent court
that Civil Case No. 13533 is barred by res judicata on the
principal ground that, not being a party in Civil Case No. 7678,

96
she could not be bound by the judgment rendered in said case
and, consequently, the writ of attachment and the consequent
writ of execution which levied on Lot No. 1258-F, together with
its existing improvements, are null and void insofar as her
ONE-HALF (1/2) interest in said properties is concerned.
We find no merit in this contention of the petitioner.
The action filed by private respondent against the petitioner
Ramon Sta. Romana was clearly a suit to enforce an
obligation of the conjugal partnership. Civil Case No. 7678
arose out of the failure of Ramon Sta. Romana to pay the
purchase price of a lot he bought from C. N. Hodges
presumably in behalf of the conjugal partnership. Petitioner
does not deny the conjugal nature of both Lots Nos. 1258-G
and 1258-F. Indeed, she bases her contention on the claim
that at least Lot No. 1258-F, together with its improvements
existing thereon, constitutes property of the conjugal
partnership. It may not be denied, therefore, that the liability
incurred by Ramon Sta. Romana is chargeable against the
conjugal partnership assets, it being undisputed that the said
obligation was contracted by the husband for the benefit of the
conjugal partnership. (Art. 161 [1], Civil Code.)
The non-inclusion of the herein petitioner as a party-defendant
in Civil Case No. 7678 is immaterial. There is no rule or law
requiring that in a suit against the husband to enforce an
obligation, either pertaining to him alone or one chargeable
against the conjugal partnership, the defendant husband must
be joined by his wife. The contrary rule is prescribed in Section
4, Rule 3, of the Rules of Court and Article 113 of the Civil
Code, but not the other way around, obviously in recognition of
the legal status of the husband as the administrator of the
conjugal partnership. (Art. 112, Civil Code.) There was,
therefore, no need of including the petitioner as a party in Civil
Case No. 7678 for the purpose of binding the conjugal

partnership properties for the satisfaction of the judgment that

could be rendered therein.
We likewise agree with the view that the issues raised by the
petitioner in Civil Case No. 13533 may not be litigated anew, if
not by the principle of res judicata but at least by
conclusiveness of judgment. The record reveals that the
contentions being raised by the petitioner in Civil Case No.
13533 were squarely placed before and ruled upon by the
respondent court in connection with the execution proceedings
in Civil Case No. 7678. After the writ of execution was issued
on October 5, 1979 (Annex E, Petition), herein petitioner filed
a motion to quash the said writ of execution (Annex F,
Petition), In said motion, the petitioner raised the following
issues:
xxx xxx xxx
3. That as will be noted from the records, the herein
movant as spouse of the defendant was not impleaded
as a defendant in the above entitled case;
4. That on the other hand, it would appear from Exh. A,
contract to sell dated October 6, 1956, that the property
in question, having been transacted and/or bought by
the defendant during his marriage life with the herein
movant is a sort of a conjugal property or asset of the
defendant and the herein movant:
5. That accordingly, the herein movant would have
been an indispensable party in the case at bar;
specially when the aforesaid transaction was perfected
at the time the Civil Code of the Philippines had already
taken effect;

97
6. That the herein movant having been not impleaded
in the case at bar; no jurisdiction over his person had
been vested in the proceedings; therefore whatever
acts of levy on the property of which she is or
presumed to be a co-owner and which has never been
liquidated yet is an ultra vires following a well-known
principle that a person who is not a party in a given
case cannot be reached by any process or order of the
given court;
7. Thus, the rule is well-settled in this jurisdiction
that"on the contention that at least one-half of the
conjugal partnership belongs to the husband, and
therefore could be validly levied upon to satisfy the
money judgment against said husband, it must be said
that as long as the conjugal partnership subsists, there
can be no one-half share of the husband or the wife.
Only when the conjugal partnership is dissolved and
liquidated between husband and wife. In the meantime,
the interest of each in the conjugal partnership property
is inchoate and is a mere expectancy. Therefore, any
levy on the conjugal partnership property to satisfy the
money judgment against the husband is null and void.
(Quintos Ansaldo vs. Sheriff of Manila, 64 Phil. 116).
Conformably to the foregoing doctrine, it is therefore
respectfully submitted that the writ of execution, notice
of levy if one has been made and the notice of sale in
public auction are null and void. (Rollo, pp. 38-39.)
The respondent court ruled on this motion by issuing the Order
dated March 5, 1980 denying the same for lack of merit.
(Annex B, Petition, Rollo, p. 41.) The petitioner did not seek a
further review of the said order of denial either in the
respondent court or in any other tribunal; instead, she resorted
to the remedy of filing on June 10, 1980 Civil Case No. 13533.

Technically speaking, if may be said that the judgment

rendered in the main action Civil Case No. 7678 does not
constitute res judicata with respect to Civil Case No. 13533.
The causes of action in the two (2) cases are not the same;
neither is there Identity of the subject-matter involved. Civil
Case No. 7678 was essentially an action to rescind the
Contract to Sell Lot No. 1258-G and to recover Possession
thereof plus damages. Civil Case No. 13533, on the other
hand, is to annul the levy and execution sale of Lot No. 1258-F
and the improvements existing thereon with respect to the
ONE- HALF (1/2) interest claimed by the petitioner.
However, it may not be denied that the issues raised by the
petitioner in Civil Case No. 13533 had already been litigated
and finally decided in the subsequent proceedings taken to
enforce the judgment in Civil Case No. 7678. The parties
involved in said proceedings are the same, and so are the
subject-matter involved and the cause of action relied upon by
the petitioner in Civil Case No. 13533. The only possible doubt
as to whether res judicata may be utilized as a bar to the filing
of Civil Case No. 13533 is that the pronouncement constituting
the bar to a new action was not in the main judgment in Civil
Case No. 7678 but only in a subsequent incident therein.
It is Our considered opinion that such circumstance does not
militate against the existence of res judicata if all the requisites
for its application are otherwise present. The order denying the
petitioner's motion to quash the writ of execution issued in Civil
Case No. 7678 is not merely an interlocutory order. It attained
finality due to the failure of the petitioner to appeal or seek a
review of the same. It is not questioned that the trial court had
jurisdiction to take cognizance of the motion to quash the writ
of execution and over the parties litigating the same. The order
of denial is on the merits of the motion. There was also Identity
of parties involved in the motion to quash the writ of execution,
Identity of subject-matter and Identity of causes of action. The

98
requisites of res judicata being all present in the incident
concerning the issuance of the writ of execution, We feel no
hesitancy in declaring that the filing of Civil Case No. 13533 is
barred by the principle of res judicata, The underlying
philosophy of this doctrine is:
... that parties ought not to be permitted to litigate the
same issue more than once; that, when a right or fact
has been judicially tried and determined by a court of
competent jurisdiction, or an opportunity for such trial
has been given the judgment of the court, so long as it
remains unreversed, should be conclusive upon the
parties and those in privity with them in law or
estat........ (2 Moran Rules of Court, p. 362, citing Sta.
Ana v. Narvades, L-24390, Nov. 28, 1969, 30 SCRA
454, 463.)
To sanction the filing of Civil Case No. 13533 is to nullify
altogether the proceedings had in connection with the
petitioner's motion to quash the writ of execution and the ruling
made by the respondent court thereon which had already
attained the status of finality.
In the least, the institution of Civil Case No. 13533 may be
deemed barred by the principle of conclusiveness of judgment
which is expressed in the Rules in the following terms:
Effect of judgments. The effect of a judgment or final
order rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order,
may be as follows:
xxx xxx xxx
(c) In any other litigation between the same parties or
their successors in interest, that only is deemed to

have an adjudged in a former judgment which appears

upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary
thereto. (SEC. 49, Rule 39, New Rules of Court.)
Even assuming, therefore, that Civil Case No. 13533 is on a
different cause of action than that involved in Civil Case No.
7678, the ruling in the latter on the motion for the quashing of
the levy on execution made on Lot 1258- F which involved the
same subject-matter and parties litigating Civil Case No.
13533 is rendered conclusive under the doctrine of
conclusiveness of judgment.
Petitioner has further argued that her having filed the motion to
quash the writ of execution in Civil Case No. 7678 to assert
her claim over ONE- HALF (1/2) interest in Lot No. 1258-F and
its improvements does not preclude her from filing a separate
civil action to pursue the same claim. She cites the case of
Manila Fidelity and Surety Company vs. Teodoro, et al., 20
SCRA 463, which holds that "'a third party claim is not an
exclusive remedy; the same rule (Section 17, Rule 29),
provides that nothing therein shall prevent such third person
from vindicating his claim to the property by any proper
action.'"
We find no merit in this argument. The petitioner did not
merely file a third party claim on the property levied upon in
connection with the writ of execution issued in Civil Case No.
7678. Instead of a third party claim which, under the rules,
must be filed with the "officer making the levy and a copy
thereof upon the judgment creditor" (Sec. 17, Rule 39, Rules
of Court), the petitioner filed a "Motion to Quash Writ of
Execution and All Subsequent Proceedings" (Record on
Appeal, p. 17) to which private respondent filed its Opposition
(Ibid, pp. 20-24), and to which in turn the petitioner filed her
Reply to Opposition (Ibid, pp. 25-31). When the respondent

99
court issued its Order dated May 5, 1980 denying the
aforesaid Motion to Quash Execution for lack of merit (Ibid, p.
32), the petitioner filed a Motion for Reconsideration (Ibid, pp.
33-34) which was opposedly the private respondent in writing
(Ibid, pp. 35-35-B) and which in turn a Reply to Opposition,
was filed by the petitioner (Ibid., pp. 36-38). In said motions,
oppositions and replies repeatedly filed by the parties, the
same issues sought to be reopened by the petitioner in Civil
Case No, 13533 had been fully and exhaustively ventilated. It
was in the basis of such exposure of those issues that the
respondent court issued its Order denying the motion to quash
the writ of execution, and also the Order denying a motion for
a reconsideration of the same.
WHEREFORE, the Petition is DENIED, and the Orders of the
respondent Judge issued in Civil Case No. 13533 dated March
5, 1980 and May 15, 1980 are hereby AFFIRMED. With costs
against the petitioner.

SECOND DIVISION

SO ORDERED.

G.R. No. L-57402 February 28, 1985

Teehankee (Chairman), Melencio-Herrera, Plana, Relova and

Gutierrez, JJ., concur.

G-TRACTORS, INC., petitioner,

vs.
HONORABLE COURT OF APPEALS and LUIS R. NARCISO
AND JOSEFINA SALAK NARCISO, respondents.
Francisco, De Castro, Zulueta & Reyes Law Office for
petitioner.
Fernando F. Villoria for private respondents.

CUEVAS, J.:

100
Assailed and challenged in this Petition for Review is the
Decision dated April 29, 1977 of the then Court of Appeals in
its CA-G.R. No. SP-05920, the dispositive portion of which
reads as follows
WHEREFORE, the petition is hereby granted.
The levy on execution dated February 11, 1976,
the sheriff's certificate of sale dated March 25,
1975 and final deed of sale, and the orders of
the respondent judge dated April 26, 1976, July
12, 1976 and August 26, 1976, are set aside
and declared null and void. The writ of
preliminary injunction heretofore in force is
made permanent. Costs against private
respondent.
SO ORDERED.
Private respondent Luis R. Narciso is a businessman. He is
engaged in business as a producer and exporter of Philippine
mahogany logs and operates a logging concession at del
Gallego, Camarines Sur. He is legally married to the other
private respondent Josefina Salak Narciso.
Petitioner G-Tractors, Inc. upon the other hand, is a domestic
corporation engaged primarily in the business of leasing heavy
equipments such as tractors, bulldozers, and the like.
Sometime in February 26, 1973, private respondent Luis R.
Narciso entered into a Contract of Hire of Heavy Equipment
with petitioner G-Tractors under the terms of which the latter
leased to the former tractors for the purpose of constructing
switchroads and hauling felled trees at the jobsite of Narciso's
logging concession at del Gallego, Camarines Sur. The
contract provided for payment of rental for the use of said
tractors.

Luis R. Narciso defaulted in his rental payments. Hence, on

August 15, 1974, G-Tractors instituted an action against him to
collect the total amount of P155,410.25 with legal interest
thereon, representing unpaid rentals for the leased tractors,
25% thereof as liquidated damages, P30,000.00 as and for
attorney's fees, and the costs of suit, before the then Court of
First Instance of Rizal, Quezon City, Branch IX. The case was
docketed thereat as Civil Case No. Q-19173.
Luis R. Narciso was declared in default. On his
representations, however, G-Tractors accepted his offer for a
compromise agreement. A compromise agreement was
thereupon signed by G-Tractors and Luis R. Narciso and on
the basis thereof, judgment thereon was rendered on October
10, 1974.
The compromise agreement stipulated for payment by Luis R.
Narciso of the total claim of G-Tractors on an installment plan.
Luis R. Narciso failed to comply and so on November 29,
1974, G-Tractors filed a motion for execution. This was
opposed by Luis R. Narciso who asked for the suspension of
the issuance of a writ of execution on the ground that he
allegedly has a pending loan with a banking institution. The
lower court, finding the allegation without legal basis, denied
the request for suspension and ordered the issuance of a writ
of execution to enforce the judgment based on the
compromise agreement. The writ of execution was issued on
February 7, 1975. 1 Levy was accrdingly made on February
19, 1975 by the City Sheriff of Quezon City on certain personal
properties of private respondents-at their residence at 208
Retiro Street, Quezon City. Auction sale was held on March 1,
1975, and G-Tractors, being the highest bidder, was awarded
the sale by the City Sheriff of Quezon City of all the personal
properties listed under the levy, for the total amount of
P4,090.00.

101
On March 5, 1975, Luis R. Narciso offered to redeem and/or
buy back all the personal properties sold to G-Tractors for the
same amount of P4,090.00 which the latter agreed and for
which a Deed of Reconveyance was executed by G-Tractors.
Likewise, on February 12, 1975, the Sheriff of Quezon City
made a levy on "all rights, interest, title, participation which the
defendant Luis R. Narciso" may have over a parcel of
residential land covered by TCT No. 120923 of the Registry of
Deeds of Quezon City 2 which parcel of land is allegedly the
conjugal property of the spouses Luis R. Narciso and Josefina
Salak Narciso.
On February 22, 1975, the Sheriff notified the general public,
in his Notice of Sheriff's sale, that on March 25, 1975 he would
sell at public auction to the highest bidder for cash "the rights,
interest and participation of the aforementioned defendant Luis
R. Narciso in the aforesaid real estate property covered by
Transfer Certificate of Title No. 120923, together with all the
improvements existing thereon" to satisfy the aforementioned
writ of execution. 3
On March 25, 1975, a "Certificate of Sale" was issued to the
effect that "on said date (March 25, 1975) by virtue of the writ
of execution issued by the Honorable Ulpiano Sarmiento in
Civil Case No. Q-19173, the ex-oficio Sheriff of Quezon City
sold at public auction to the highest bidder (plaintiff G-Tractors,
Inc.) for P180,000.00 the real estate property covered by TCT
No. 120923, Quezon City, and levied upon on February 12,
1975, together with all the improvements thereon. 4 At that
time, however, TCT No. 120923 was mortgaged to Mercantile
Financing Corporation to guarantee an outstanding unpaid
account of Luis R. Narciso and his wife in the amount of
P74,327.52.

Soon after the issuance of the aforesaid Certificate of Sale,

Luis R. Narciso and G-Tractors, Inc. executed a contract of
lease over the aforesaid property whereby the former
obligated himself to pay a monthly rental of P1,000.00 and by
virtue of the said contract of lease, Luis R. Narciso actually
paid to G-Tractors, Inc. the amount of P12,000.00 as rental for
one year.
On March 31, 1976, Josefina Salak Narciso and her husband
Luis R. Narciso filed a complaint in the same Court of First
Instance of Quezon City for "declaration of nullity of levy on
execution and auction sale of plaintiff's conjugal property with
damages and injunction," docketed as Civil Case No. Q21267. Among other things, the complaint alleged that
whatever transpired in Civil Case No. Q-19173 could be
binding only on the husband Luis R. Narciso and could not
affect or bind the plaintiff-wife Josefina Salak Narciso who was
not a party to that case; that the nature of the Sheriff's sale
clearly stated that only the property of the husband may be
sold to satisfy the money judgment against him; that the
conjugal property of the plaintiffs-spouses could not be made
liable for the satisfaction of the judgment in Civil Case No. Q19173 considering that the subject matter of said case was
never used for the benefit of the conjugal partnership or of the
family; and that the levy of the wife's share in the conjugal
property to satisfy the money judgment against her husband is
null and void. 5
On April 5, 1976, the President of G-Tractors, Inc. executed an
affidavit of consolidation of ownership and on the next day,
April 6, 1976, the sheriff issued a Sheriff's Final Deed of Sale. 6
On April 12, 1976, G-Tractors, Inc. filed in Civil Case No. Q19173, a "Motion for Entry and Issuance of New Torrens
Certificate of Title" asking the Court to direct the Register of
Deeds of Quezon City to cancel TCT No. 120923 and to allow

102
the entry and issuance of a new torrens title in the name of GTractors, Inc.

reconsider the order denying the preliminary injunction was

likewise denied.

On April 22, 1976, Luis R. Narciso filed an opposition to the

aforesaid motion calling attention to the fact that he and his
wife had filed a complaint which was docketed as Civil Case
No. Q-21267 and pointing out that the Sheriff's final deed of
sale and affidavit of consolidation of ownership would have no
effect should the levy on execution and the subsequent
auction sale of the conjugal property be nullified. 7

Hence, on October 2, 1976, the spouses Luis R. Narciso and

Josefina Salak Narciso filed before the then Court of Appeals,
a petition for certiorari with Preliminary Injunction, docketed in
the said court as CA-G.R. No. SP-05920, seeking-

Civil Case No. Q-21267 was subsequently transferred to

Branch IX of the same Court of First Instance which tried Civil
Case No. Q-19173.

(1) Levy on execution dated February 11, 1975;

On April 26, 1976, Judge Sarmiento issued an Order cancelled

TCT No. 120923 and directing the Register of Deeds of
Quezon City to issue in lieu thereof a new title in the name of
G-Tractors, Inc. 8

(3) Sheriff's Final Deed of Sale dated April 6, 1976;

Luis R. Narciso move to reconsider the aforesaid order of April

26, 1976. This was followed by a motion filed by the Narciso
spouses for a preliminary injunction in Civil Case No. Q-21267.
Meanwhile, immediately after receiving a copy of the order of
April 26, 1976, G-Tractors, Inc. caused the cancellation of TCT
No. 120923 and the issuance of TCT No. 218552 in its name.
On May 21, 1976, the lower court enjoined G-Tractors, Inc.
from transferring, conveying or in any manner alienating the
property covered by TCT No. 218552 until the motion for
reconsideration of the order of April 26, 1976 has been
resolved.
On July 12, 1976, two (2) orders were issued by the lower
court, one denying the motion for reconsideration and the
other denying the motion for preliminary injunction. A motion to

A To annul, set aside and declare null and void the

following:

(2) Sheriff's Certificate of sale dated March 25, 1975;

(4) Order of respondent Judge dated April 26, 1976;

(5) Orders of the respondent Judge both dated July 12,
1976; and
(6) Order of the respondent Judge dated August 26,
1976.
B To restrain and enjoin the respondent from further
giving force and effect to the levy and sale on
execution and to the disputed orders; the private
respondent G-Tractors, Inc. from alienating the Lot
covered by TCT No. 218552 and from dispossessing
the petitioners of said Lot and the house standing
thereon; the respondent Judge from further proceeding
in Civil Case Nos. Q-19173 and Q-21267; and

103
C To direct the Register of Deeds of Quezon City to
cancel TCT No. 218552 in the name of G-Tractors, Inc.
and to issue a new one in the name of petitionersspouses.
On April 29, 1977, the then Court of Appeals rendered its now
assailed Decision, annulling the levy on execution dated
February 11, 1975, the sheriff's certificate of sale dated March
25, 1975, as well as the sheriff's final deed of sale; and the
Orders dated April 26, July 12 and August 26,1976.
G-Tractors, Inc.'s motion for reconsideration having been
denied, the instant petition for Review on certiorari was filed
before this Court, petitioner contending that respondent Court
of Appeals erred
1. In holding that a levy on a residential land does not
include the residential house or any improvement
erected and existing thereon;
2. In holding that the judgment debt of private
respondent Luis R. Narciso, subject of Civil Case No.
Q-19173, entitled G-Tractors, Inc. vs. Luis R. Narciso,
Court of First Instance of Rizal, Quezon City, Branch IX
was not the conjugal debt of private respondentsspouses Luis R. Narciso and Josefina Salak Narciso;
3. In not holding that there was laches and delay in the
firing by private respondents-spouses of CA-G.R. No.
05920-SP with the respondent Court of Appeals.
4. In granting the writs applied for by private
respondents spouses in CA-G.R. No. 05920, the
petition itself not being the proper remedy.

The crucial issue that poses itself for our resolution in the
instant petition is-whether or not the judgment debt of private
respondent Luis R. Narciso is a conjugal debt for which the
conjugal partnership property can be held answerable.
Article 161 of the New Civil Code provides that the conjugal
partnership shall be liable for:
(1) All the 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.
There is no question that private respondent Luis R. Narciso is
engage in business as a producer and exporter of Philippine
mahogany logs. He operates a logging concession at del
Gallego, Camarines Sur and holds office right in the conjugal
dwelling at 208 Retiro Street, Talayan Village, Quezon City,
Metro Manila, where he and his family reside. His account with
petitioner G-Tractors, Inc. represents rentals for the use of
petitioner's tractors which he leased for the purpose of
constructing switchroads and hauling felled trees at the jobsite
of the logging concession at del Gallego, Camarines Sur which
is not his exclusive property but that of his family. There is no
doubt then that his account with the petitioner was brought
about in order to enhance the productivity of said logging
business, a commercial enterprise for gain which he had the
right to embark the conjugal partnership.
This is the finding of the trial court and we find no cogent
reason to deviate therefrom. It held:
Lastly, the contention that the conjugal partnership is
not liable because the obligation contracted by the
husband is personal in nature is not applicable in this

104
case. The record shows that Luis R. Narciso is a
producer and exporter of Philippine mahogany logs and
that the bulldozers leased to him was used for the
construction of switchroads for logging. It is very clear,
therefore, that the obligations were contracted in
connection with his legitimate business as a producer
and exporter in mahogany logs and certainly benefited
the conjugal partnership. Justice J.B.L. Reyes is very
liberal in interpreting Art. 161 of the Civil Code when he
declared in Luzon Surety Co., Inc. versus de Garcia
(30 SCRA 118) that the words in said article "all debts
and obligations contracted by the husband for the
benefit of the conjugal partnership "do not require that
actual profit or benefit must accrue to the conjugal
partnership from the husband's transaction", but it
suffices that the transaction should be one that
normally would produce such benefit for the
partnership. 9
10

In the case of Cobb-Perez vs. Lantin, citing the case of

Abella de Diaz vs- Erlanger and Galinger, 11 and Javier vs.
Osmena, 12 this court ruledThe aforesaid obligation was contracted in the
purchase of leather used in the shoe manufacturing
business of the petitioner husband. Said business is an
ordinary commercial enterprise for gain, in the pursuit
of which Damaso Perez had the right to embark the
partnership. It is well settled that the debts contracted
by the husband for and in the exercise of the industry
or profession by which he contributes to the support of
the family cannot be deemed to be his exclusive and
private debts. (Emphasis supplied)
The husband is the administrator of the conjugal partnership
and as long as he believes he is doing right to his family, he

should not be made to suffer and answer alone. 13 So that, if he

incurs an indebtedness in the legitimate pursuit of his career or
profession or suffers losses in a legitimate business, the
conjugal partnership must equally bear the indebtedness and
the losses, unless he deliberately acted to the prejudice of his
family. Such is the nature of the judgment debt of private
respondent Luis R. Narciso to petitioner. Consequently, the
conjugal partnership of gains of private respondents Narcisos,
must answer for the same. 14 Necessarily the sale at public
auction by the Sheriff of Quezon City of TCT No. 120923
belonging to the conjugal partnership of gains of the private
respondents Narcisos in order to satisfy the judgment debt of
the private respondent Luis R. Narciso with petitioner, was
validly and legally made in accordance with law and not legally
assailable as held in the analogous case of Vda. de Sta.
Romana vs. Philippine Commercial and Industrial
Bank 15 where We laid down the following dictum :
Petitioner assails the pronouncement by the
respondent court that Civil Case No. 13553 is barred
byres judicata on the principal ground that, not being a
party in Civil Case No. 7678, she could not be bound
by the judgment rendered in said case and,
consequently, the writ of attachment and the
consequent writ of execution which levied on Lot No.
1258-F, together with its existing improvements, are
null and void insofar as her ONE-HALF () interest in
said properties is concerned.
We find no merit in this contention of the petitioner.
The action filed by private respondent against the
petitioner Ramon Sta. Romana was clearly a suit to
enforce an obligation of the conjugal partnership. Civil
Case No. 7678 arose out of the failure of Ramon Sta.
Romana to pay the purchase price of a lot he bought

105
from C.N. Hodges presumably in behalf of the conjugal
partnership. Petitioner does not deny the conjugal
nature of both Lots Nos. 1258-G and 1258-F. Indeed,
she bases her contention on the claim that at least Lot
No. 1258-F, together with its improvements existing
thereon, constitutes property of the conjugal
partnership. It may not be denied, therefore, that the
liability incurred by Ramon Sta. Romana is chargeable
against the conjugal partnership assets, it being
undisputed that the said obligation was contracted by
the husband for the benefit of the conjugal partnership.
(Art. 161(l), Civil Code)
The non-inclusion of the herein petitioner as a partydefendant in Civil Case No. 7678 is immaterial. There
is no rule or law requiring that in a suit against the
husband to enforce an obligation, either pertaining to
him alone or one chargeable against the conjugal
partnership, the defendant husband must be joined by
his wife. The contrary rule is prescribed in Sec. 4, Rule
3, of the Rules of Court and Article 113 of the Civil
Code, but not the other way around, obviously in
recognition of the legal status of the husband as the
administrator of the conjugal partnership. (Art. 112,
Civil Code) There was therefore, no need of including
the petitioner as a party in Civil Case No. 7678 for the
purpose of binding the conjugal partnership properties
for the satisfaction of the judgment that could be
rendered thereon. (Emphasis supplied)
WHEREFORE, the Decision of the then Court of Appeals
sought to be reviewed is hereby REVERSED and SET ASIDE.
No pronouncement as to costs.

Makasiar, Aquino, Concepcion Jr., Abad Santos and Escolin

JJ., concur.
Footnotes
1 Annex "A", page 28, Records.
2 Annex "B", page 29, Records.
3 Annex "C", pages 30-31, Records.
4 Annex "D", page 32, Records.
5 Annex "E", pages 34-38, Records.
6 Annex "F", page 39, Records.
7 Annex "G", pages 41-42, Records.
8 Annex "I", page 52, Records.
9 Order of Aug. 21, 1976, p. 181, Records.
10 23 SCRA 637.
11 56 Phil. 336.
12 34 Phil. 336.
13 Tintigan vs. Tintigan, Sr., 100 SCRA 619.
14 Gelano vs. Hon. CA, 103 SCRA 90.
15 118 SCRA 330-339.

FIRST DIVISION
[G.R. No. L-48889. May 11, 1989.]
DEVELOPMENT BANK OF THE PHILIPPINES
(DBP), Petitioner,
v. THE HONORABLE MIDPANTAO L. ADIL, Judge of the
Second Branch of the Court of First Instance of Iloilo and
SPOUSES PATRICIO CONFESOR and JOVITA
VILLAFUERTE, Respondents.
SYLLABUS

SO ORDERED.

106
1. CIVIL LAW; PRESCRIPTION OF ACTIONS; MAY BE
EXPRESSLY RENOUNCED OR WAIVED; CASE AT BAR.
The right to prescription may be waived or renounced. There is
no doubt that prescription has set in as to the first promissory
note of February 10, 1940. However, when respondent
Confesor executed the second promissory note on April 11,
1961 whereby he promised to pay the amount covered by the
previous promissory note on or before June 15, 1961, and
upon failure to do so, agreed to the foreclosure of the
mortgage, said respondent thereby effectively and expressly
renounced and waived his right to the prescription of the action
covering the first promissory note. This is not a mere case of
acknowledgment of a debt that has prescribed but a new
promise to pay the debt. The consideration of the new
promissory note is the pre-existing obligation under the first
promissory note. The statutory limitation bars the remedy but
does not discharge the debt.
2. ID.; FAMILY RELATIONS; CONJUGAL PARTNERSHIP OF
GAINS; HUSBAND AS ADMINISTRATOR BINDS THE
PARTNERSHIP FOR ALL DEBTS AND OBLIGATIONS
CONTRACTED BY HIM. Under Article 165 of the Civil
Code, the husband is the administrator of the conjugal
partnership. As such administrator, all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership, are chargeable to the conjugal partnership. No
doubt, in this case, respondent Confesor signed the second
promissory note for the benefit of the conjugal partnership.
Hence the conjugal partnership is liable for this obligation.

The issue posed in this petition for review on certiorari is the

validity of a promissory note which was executed in
consideration of a previous promissory note the enforcement
of which had been barred by prescription.
On February 10, 1940 spouses Patricio Confesor and Jovita
Villafuerte obtained an agricultural loan from the Agricultural
and Industrial Bank (AIB), now the Development Bank of the
Philippines (DBP), in the sum of P2,000.00, Philippine
Currency, as evidenced by a promissory note of said date
whereby they bound themselves jointly and severally to pay
the account in ten (10) equal yearly amortizations. As the
obligation remained outstanding and unpaid even after the
lapse of the aforesaid ten-year period, Confesor, who was by
then a member of the Congress of the Philippines, executed a
second promissory note on April 11, 1961 expressly
acknowledging said loan and promising to pay the same on or
before June 15, 1961. The new promissory note reads as
follows
"I hereby promise to pay the amount covered by my
promissory note on or before June 15, 1961. Upon my failure
to do so, I hereby agree to the foreclosure of my mortgage. It
is understood that if I can secure a certificate of indebtedness
from the government of my back pay I will be allowed to pay
the amount out of it." library
Said spouses not having paid the obligation on the specified
date, the DBP filed a complaint dated September 11, 1970 in
the City Court of Iloilo City against the spouses for the
payment of the loan.chanrobles virtual lawlibrary
After trial on the merits a decision was rendered by the inferior
court on December 27, 1976, the dispositive part of which
reads as follows:jgc:chanrobles.com.ph

DECISION
GANCAYCO, J.:

"WHEREFORE, premises considered, this Court renders

107
judgment, ordering the defendants Patricio Confesor and
Jovita Villafuerte Confesor to pay the plaintiff Development
Bank of the Philippines, jointly and severally, (a) the sum of
P5,760.96 plus additional daily interest of P1.04 from
September 17, 1970, the date Complaint was filed, until said
amount is paid; (b) the sum of P576.00 equivalent to ten (10%)
of the total claim by way of attorneys fees and incidental
expenses plus interest at the legal rate as of September 17,
1970, until fully paid; and (c) the costs of the suit."
Defendants-spouses appealed therefrom to the Court of First
Instance of Iloilo wherein in due course a decision was
rendered on April 28, 1978 reversing the appealed decision
and dismissing the complaint and counter-claim with costs
against the plaintiff.

Prescription is deemed to have been tacitly renounced when

the renunciation results from acts which imply the
abandonment of the right acquired."
There is no doubt that prescription has set in as to the first
promissory note of February 10, 1940. However, when
respondent Confesor executed the second promissory note on
April 11, 1961 whereby he promised to pay the amount
covered by the previous promissory note on or before June 15,
1961, and upon failure to do so, agreed to the foreclosure of
the mortgage, said respondent thereby effectively and
expressly renounced and waived his right to the prescription of
the action covering the first promissory note.
This Court had ruled in a similar case that

A motion for reconsideration of said decision filed by plaintiff

was denied in an order of August 10, 1978.
Hence this petition wherein petitioner alleges that the decision
of respondent judge is contrary to law and runs counter to
decisions of this Court when respondent judge (a) refused to
recognize the law that the right to prescription may be
renounced or waived; and (b) that in signing the second
promissory note respondent Patricio Confesor can bind the
conjugal partnership; or otherwise said respondent became
liable in his personal capacity.

". . . when a debt is already barred by prescription, it cannot be

enforced by the creditor. But a new contract recognizing and
assuming the prescribed debt would be valid and
enforceable. . ." 1
Thus, it has been held
"Where, therefore, a party acknowledges the correctness of a
debt and promises to pay it after the same has prescribed and
with full knowledge of the prescription he thereby waives the
benefit of prescription." 2

The petition is impressed with merit.

The right to prescription may be waived or renounced. Article
1112 of Civil Code provides: virtual law library
"Art. 1112. Persons with capacity to alienate property may
renounce prescription already obtained, but not the right to
prescribe in the future.

This is not a mere case of acknowledgment of a debt that has

prescribed but a new promise to pay the debt. The
consideration of the new promissory note is the pre-existing
obligation under the first promissory note. The statutory
limitation bars the remedy but does not discharge the debt.
"A new express promise to pay a debt barred . . . win take the
case from the operation of the statute of limitations as this

108
proceeds upon the ground that as a statutory limitation merely
bars the remedy and does not discharge the debt, there is
something more than a mere moral obligation to support a
promise, to wit a pre-existing debt which is a sufficient
consideration for the new promise; the new promise upon this
sufficient consideration constitutes, in fact, a new cause of
action." 3

WHEREFORE, the decision subject of the petition is reversed

and set aside and another decision is hereby rendered
reinstating the decision of the City Court of Iloilo City of
December 27, 1976, without pronouncement as to costs in this
instance. This decision is immediately executory and no
motion for extension of time to file motion for reconsideration
shall be granted.

". . . It is this new promise, either made in express terms or

deduced from an acknowledgment as a legal implication,
which is to be regarded as reanimating the old promise, or as
imparting vitality to the remedy (which by lapse of time had
become extinct) and thus enabling the creditor to recover upon
his original contract." 4

SO ORDERED.
Narvasa and Cruz, JJ., concur.
Grio-Aquino, J., took no part.

However, the court a quo held that in signing the promissory

note alone, respondent Confesor cannot thereby bind his wife,
respondent Jovita Villafuerte, citing Article 166 of the New Civil
Code which provides:
"Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership without
the wifes consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same."
virtua1aw library
We disagree. Under Article 165 of the Civil Code, the husband
is the administrator of the conjugal partnership. As such
administrator, all debts and obligations contracted by the
husband for the benefit of the conjugal partnership, are
chargeable to the conjugal partnership. 5 No doubt, in this
case, respondent Confesor signed the second promissory note
for the benefit of the conjugal partnership. Hence the conjugal
partnership is liable for this obligation.

SECOND DIVISION

G.R. No. 101522 May 28, 1993

LEONARDO MARIANO, AVELINA TIGUE, LAZARO
MARIANO, MERCEDES SAN PEDRO, DIONISIA M.
AQUINO, and JOSE N.T. AQUINO, petitioners,
vs.
HON. COURT OF APPEALS, (Sixteenth Division), GRACE
GOSIENGFIAO, assisted by her husband GERMAN
GALCOS; ESTER GOSIENGFIAO, assisted by her husband
AMADOR BITONA; FRANCISCO GOSIENGFIAO, JR.,
NORMA GOSIENGFIAO, and PINKY ROSE
GUENO, respondents.

109
The Baristers Law Office for petitioners.
Simeon T. Agustin for private respondents.

NOCON, J.:
Before Us is a petition foe review of the decision, dated May
13, 1991 of the Court of Appeals in CA-G.R. CV No. 13122,
entitled Grace Gosiengfiao, et al. v. Leonardo Mariano
v. Amparo Gosiengfiao 1 raising as issue the distinction
between Article 1088 2 and Article 1620 3 of the Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco
Gosiengfiao is the registered owner of a residential lot
located at Ugac Sur, Tuguegarao, Cagayan, particularly
described as follows, to wit:
"The eastern portion of Lot 1351, Tuguegarao
Cadastre, and after its segregation now
designated as Lot 1351-A, Plan PSD-67391,
with an area of 1,1346 square meters."
and covered by Transfer Certificate of Title No. T-2416
recorded in the Register of Deeds of Cagayan.
The lot in question was mortgaged by the decedent to
the Rural Bank of Tuguegarao (designated as
Mortgagee bank, for brevity) on several occasions
before the last, being on March 9, 1956 and 29, 1958.

On August 15, 1958, Francisco Gosiengfiao died

intestate survived by his heirs, namely: Third-Party
Defendants: wife Antonia and Children Amparo, Carlos,
Severino and herein plaintiffs-appellants Grace, Emma,
Ester, Francisco, Jr., Norma, Lina (represented by
daughter Pinky Rose), and Jacinto.
The loan being unpaid, the lot in dispute was
foreclosed by the mortgagee bank and in the
foreclosure sale held on December 27, 1963, the same
was awarded to the mortgagee bank as the highest
bidder.
On February 7, 1964, third-party defendant Amparo
Gosiengfiao-Ibarra redeemed the property by paying
the amount of P1,347.89 and the balance of P423.35
was paid on December 28, 1964 to the mortgagee
bank.
On September 10, 1965, Antonia Gosiengfiao on her
behalf and that of her minor children Emma, Lina,
Norma together with Carlos and Severino executed a
"Deed of Assignment of the Right of Redemption" in
favor of Amparo G. Ibarra appearing in the notarial
register of Pedro (Laggui) as Doc. No. 257, Page No.
6, Book No. 8, Series of 1965.
On August 15, 1966, Amparo Gosiengfiao sold the
entire property to defendant Leonardo Mariano who
subsequently established residence on the lot subject
of this controversy. It appears in the Deed of Sale
dated August 15, 1966 that Amparo, Antonia, Carlos
and Severino were signatories thereto.
Sometime in 1982, plaintiff-appellant Grace
Gosiengfiao learned of the sale of said property by the

110
third-party defendants. She went to the Barangay
Captain and asked for a confrontation with defendants
Leonardo and Avelina Mariano to present her claim to
said property.

plaintiffs are co-owners with the third-party defendants,

their right of redemption had already been barred by
the Statute of Limitations under Article 1144 of the Civil
Code, if not by laches.4

On November 27, 1982, no settlement having been

reached by the parties, the Barangay captain issued a
certificate to file action.

After trial on the merits, the Regional Trial Court of Cagayan,

Branch I, rendered a decision dated September 16, 1986,
dismissing the complaint and stating that respondents have no
right of ownership or possession over the lot in question. The
trial court further said that when the subject property
foreclosed and sold at public auction, the rights of the heirs
were reduced to a mere right of redemption. And when
Amparo G. Ibarra redeemed the lot from the Rural Bank on her
own behalf and with her own money she became the sole
owner of the property. Respondents' having failed to redeem
the property from the bank or from Amparo G. Ibarra, lost
whatever rights the might have on the property. 5

On December 8, 1982, defendant Leonardo Mariano

sold the same property to his children Lazaro F.
Mariano and Dionicia M. Aquino as evidenced by a
Deed of Sale notarized by Hilarion L. Aquino as Doc.
No. 143, Page No. 19, Book No. V, Series of 1982.
On December 21, 1982, plaintiffs Grace Gosiengfiao,
et al. filed a complaint for "recovery of possession and
legal redemption with damages" against defendants
Leonardo and Avelina Mariano. Plaintiffs alleged in
their complaint that as co-heirs and co-owners of the lot
in question, they have the right to recover their
respective shares in the same, and property as they did
not sell the same, and the right of redemption with
regard to the shares of other co-owners sold to the
defendants.
Defendants in their answer alleged that the plaintiffs
has (sic) no cause of action against them as the money
used to redeem lot in question was solely from the
personal funds of third-party defendant Amparo
Gosiengfiao-Ibarra, who consequently became the sole
owner of the said property and thus validly sold the
entire property to the defendants, and the fact that
defendants had already sold the said property to the
children, Lazaro Mariano and Dionicia M. Aquino.
Defendants further contend that even granting that the

The Court of Appeals in its questioned decision reversed and

set aside the ruling of the trial court and declared herein
respondents as co-owners of the property in the question. The
Court of Appeals said:
The whole controversy in the case at bar revolves on
the question of "whether or not a co-owner who
redeems the whole property with her own personal
funds becomes the sole owner of said property and
terminates the existing state of co-ownership."
Admittedly, as the property in question was mortgaged
by the decedent, a co-ownership existed among the
heirs during the period given by law to redeem the
foreclosed property. Redemption of the whole property
by a co-owner does not vest in him sole ownership
over said property but will inure to the benefit of all coowners. In other words, it will not end to the existing

111
state of co-ownership. Redemption is not a mode of
terminating a co-ownership.
xxx xxx xxx
In the case at bar, it is undisputed and supported by
records, that third-party defendant Amparo G. Ibarra
redeemed the propety in dispute within the one year
redemption period. Her redemption of the property,
even granting that the money used was from her own
personal funds did not make her the exclusive owner of
the mortgaged property owned in common but inured
to the benefit of all co-owners. It would have been
otherwise if third-party defendant Amparo G. Ibarra
purchased the said property from the mortgagee bank
(highest, bidder in the foreclosure sale) after the
redemption period had already expired and after the
mortgagee bank had consolidated it title in which case
there would no longer be any co-ownership to speak
of. 6
The decision of the Court of Appeals is supported by a long
line of case law which states that a redemption by a co-owner
within the period prescribed by law inures to the benefit of all
the other co-owners. 7
The main argument of petitioners in the case at bar is that the
Court of Appeals incorrectly applied Article 1620 of the Civil
Code, instead of Article 1088 of the same code which governs
legal redemption by co-heirs since the lot in question, which
forms part of the intestate estate of the late Francisco
Gosiengfiao, was never the subject of partition or distribution
among the heirs, thus, private respondents and third-party
defendants had not ceased to be co-heirs.

On that premise, petitioners further contend that the right of

legal redemption was not timely exercised by the private
respondents, since Article 1088 prescribes that the same must
be done within the period of one month from the time they
were notified in writing of the sale by the vendor.
According to Tolentino, the fine distinction between Article
1088 and Article 1620 is that when the sale consists of an
interest in some particular property or properties of the
inheritance, the right redemption that arises in favor of the
other co-heirs is that recognized in Article 1620. On the other
hand, if the sale is the hereditary right itself, fully or in part, in
the abstract sense, without specifying any particular object, the
right recognized in Article 1088 exists. 8
Petitioners allege that upon the facts and circumstances of the
present case, respondents failed to exercise their right of legal
redemption during the period provided by law, citing as
authority the case of Conejero, et al., v. Court of Appeals, et
al. 9wherein the Court adopted the principle that the giving of a
copy of a deed is equivalent to the notice as required by law in
legal redemption.
We do not dispute the principle laid down in
the Conejero case. However, the facts in the said case are not
four square with the facts of the present case.
In Conejero, redemptioner Enrique Conejero was shown and
given a copyof the deed of sale of the subject property. The
Court in that case stated that the furnishing of a copy of the
deed was equivalent to the giving of a written notice required
by law. 11
The records of the present petition, however, show no written
notice of the sale being given whatsoever to private
respondents. Although, petitioners allege that sometime on
October 31, 1982 private respondent, Grace Gosiengfiao was

112
given a copy of the questioned deed of sale and shown a copy
of the document at the Office of the Barangay Captain
sometime November 18, 1982, this was not supported by the
evidence presented. On the contrary, respondent, Grace
Gosiengfiao, in her testimony, declared as follows:

Thereafter, Grace Gosiengfiao explicitly stated that she was

never given a copy of the said Deed of Sale.
Q. Where did Don Mariano, Dr. Mariano and you see
each other?

Q. When you went back to the residence of Atty. Pedro

Laggui were you able to see him?

A. In the house of Brgy. Captain Antonio Bassig.

A. Yes, I did.

Q. What transpired in the house of the Brgy. Captain

when you saw each other there?

Q. When you saw him, what did you tell?

A. I asked him about the Deed of Sale which Mrs.
Aquino had told me and he also showed me a Deed of
Sale. I went over the Deed of Sale and I asked Atty.
Laggui about this and he mentioned here about the
names of the legal heirs. I asked why my name is not
included and I was never informed in writing because I
would like to claim and he told me to better consult my
own attorney.
Q. And did you go?
A. Yes, I did.
Q. What kind of copy or document is that?
A. It is a deed of sale signed by my mother, sister
Amparo and my brothers.
Q. If shown to you the copy of the Deed of Sale will you
be able to identify it?
A. Yes, sir.

11

A. Brgy. Captain Bassig informed my intention of

claiming the lot and I also informed him about the Deed
of Sale that was not signed by me since it is mine it is
already sold and I was informed in writing about it. I am
a legal heir and I have also the right to claim.
Q. And what was the reply of Don Mariano and Dr.
Mariano to the information given to them by Brgy.
Captain Bassig regarding your claim?
A. He insisted that the lot is already his because of the
Deed of Sale. I asked for the exact copy so that I could
show to him that I did not sign and he said he does not
have a copy.12
The above testimony was never refuted by Dr. Mariano who
was present before Brgy. Captain Bassig.
The requirement of a written notice has long been settled as
early as in the case of Castillo v. Samonte, 13 where this Court
quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:
Both the letter and spirit of the New Civil Code argue
against any attempt to widen the scope of the notice
specified in Article 1088 by including therein any other

113
kind of notice, such as verbal or by registration. If the
intention of the law had been to include verbal notice or
any other means of information as sufficient to give the
effect of this notice, then there would have been no
necessity or reasons to specify in Article 1088 of the
New Civil Code that the said notice be made in writing
for, under the old law, a verbal notice or information
was sufficient. 14
Moreover, petitioners themselves adopted in their argument
respondents' allegation In their complaint that sometime on
October, 1982 they sought the redemption of the property from
spouses Leonardo Mariano and Avelina Tigue, by tendering
the repurchase money of P12,000.00, which the spouses
rejected. 15 Consequently, private respondents exercised their
right of redemption at the first opportunity they have by
tendering the repurchase price to petitioners. The complaint
they filed, before the Barangay Captain and then to the
Regional Trial Court was necessary to assert their rights. As
we learned in the case of Castillo, supra:
It would seem clear from the above that the
reimbursement to the purchaser within the period of
one month from the notice in writing is a requisite or
condition precedent to the exercise of the right of legal
redemption; the bringing of an action in court is the
remedy to enforce that right in case the purchaser
refuses the redemption. The first must be done within
the month-period; the second within the prescriptive
period provided in the Statute of Limitation. 16
The ruling in Castillo v. Samonte; supra, was reiterated in the
case of Garcia v. Calaliman, where We also discussed the
reason for the requirement of the written notice. We said:

Consistent with aforesaid ruling, in the interpretation of

a related provision (Article 1623 of the New Civil Code)
this Court had stressed that written notice is
indispensable, actual knowledge of the sale acquired in
some other manners by the redemptioner,
notwithstanding. He or she is still entitled to written
notice, as exacted by the code to remove all
uncertainty as to the sale, its terms and its validity, and
to quiet and doubt that the alienation is not definitive.
The law not having provided for any alternative, the
method of notifications remains exclusive, though the
Code does not prescribe any particular form of written
notice nor any distinctive method written notification of
redemption (Conejero et al. v. Court of Appeals et al.,
16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148
SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No.
75069, April 15, 1988). 17 (Emphasis ours)
We likewise do not find merit in petitioners' position that private
respondents could not have validly effected redemption due to
their failure to consign in court the full redemption price after
tender thereof was rejected by the petitioners. Consignation is
not necessary, because the tender of payment was not made
to discharge an obligation, but to enforce or exercise a right. It
has been previously held that consignation is not required to
preserve the right of repurchase as a mere tender of payment
is enough on time as a basis for an action to compel the
vendee a retroto resell the property; no subsequent
consignation was necessary to entitle private respondents to
such
reconveyance. 18
Premises considered, respondents have not lost their right to
redeem, for in the absence of a written notification of the sale
by the vendors, the 30-day period has not even begun to run.

114
WHEREFORE, the decision of the Court of Appeals is hereby
AFFIRMED. Cost against petitioners.
SO ORDERED.
Narvasa, C.J., Padilla and Nocon, JJ., concur.
# Footnotes
1 Justice Justo P. Torres, Jr., ponente, Justices Ricardo J.
Francisco and Consuelo Ynares-Santiago concurring.
2 Article 1088. Should any of the heirs sell his hereditary rights
to a stranger before the partition, any or all of the co-heirs may
be subrogated to the rights of the purchaser by reimbursing
him for the price of the sale, provided they so within the period
of the month from the time they were notified in writing of the
sale by the vendor.
3 Article 1620. A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or of
any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay only
a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
4 Decision, pp. 2-4; Rollo, pp. 71-73.
5 Rollo pp. 67-68.
6 Decision, pp. 5-6; Rollo, pp. 74-75.
7 Annie Tan v. C.A., G.R. No. 79899, 172 SCRA 660 (1989);
Adille v. C.A., G.R. No. 44546, 157 SCRA 445 (1988); De
Guzman v. C.A., G.R. No. 47378, 148 SCRA 75 (1987).
8 Tolentino, Arturo M., Commentaries and Jurisprudence on
the Civil Code of the Philippines, Vol. III, pp. 607608, citing Manresa at p. 777.
9 16 SCRA 775 (1966).
10 Id., at pp. 779-780.

11 TSN, October 9, 1984, pp. 11-12.

12 Id., at pp. 14-15.
13 106 Phil. 1023 (1960).
14 Id., at 1028.
15 Amended Complaint; par. 15-16, Rollo p. 34.
16 Ibid., at 1029.
17 Garcia v. Calaliman, G.R. No. 26855, 172 SCRA 201
(1989).
18 Francisco v. Bautista, G.R. No. 44167, 192 SCRA 388
(1991).

EN BANC
G.R. No. L-25659

October 31, 1969

LUZON SURETY CO., INC., petitioner,

vs.
JOSEFA AGUIRRE DE GARCIA, VICENTE GARCIA and the
FOURTH DIVISION OF THE COURT OF
APPEALS, respondents.
Tolentino and Garcia and D. R. Cruz for petitioner.
Rodolfo J. Herman for respondents.

FERNANDO, J.:

115
The crucial question in this petition for the review of a decision
of the Court of Appeals, to be passed upon for the first time, is
whether or not a conjugal partnership, in the absence of any
showing of benefits received, could be held liable on an
indemnity agreement executed by the husband to
accommodate a third party in favor of a surety company. The
Court of Appeals held that it could not. Petitioner Luzon Surety
Co., Inc., dissatisfied with such a judgment, which was an
affirmance of a lower court decision, would have us reverse.
We do not see it that way. The Court of Appeals adjudicated
the matter in accordance with law. We affirm what it did.
As noted in the brief of petitioner Luzon Surety Co., Inc., on
October 18, 1960, a suit for injunction was filed in the Court of
First Instance of Negros Occidental against its Provincial
Sheriff by respondents-spouses, Josefa Aguirre de Garcia and
Vicente Garcia "to enjoin [such Sheriff] from selling the sugar
allegedly owned by their conjugal partnership, pursuant to a
writ of garnishment issued by virtue of a writ of execution
issued in Civil Case No. 3893 of the same Court of First
Instance ... against the respondent Vicente Garcia ... ."1
There was a stipulation of facts submitted. There is no
question as to one Ladislao Chavez, as principal, and
petitioner Luzon Surety Co., Inc., executing a surety bond in
favor of the Philippine National Bank, Victorias Branch, to
guaranty a crop loan granted by the latter to Ladislao Chavez
in the sum of P9,000.00. On or about the same date, Vicente
Garcia, together with the said Ladislao Chavez and one
Ramon B. Lacson, as guarantors, signed an indemnity
agreement wherein they bound themselves, jointly and
severally, to indemnify now petitioner Luzon Surety Co., Inc.
against any and all damages, losses, costs, stamps, taxes,
penalties, charges and expenses of whatsoever kind and
nature which the petitioner may at any time sustain or incur in
consequence of having become guarantor upon said bond, to

pay interest at the rate of 12% per annum, computed and

compounded quarterly until fully paid; and to pay 15% of the
amount involved in any litigation or other matters growing out
of or connected therewith for attorney's fees.
It was likewise stipulated that on or about April 27, 1956, the
Philippine National Bank filed a complaint before the Court of
First Instance of Negros Occidental, docketed as its Civil Case
No. 3893, against Ladislao Chavez and Luzon Surety Co., Inc.
to recover the amount of P4,577.95, in interest, attorney's
fees, and costs of the suit. On or about August 8, 1957, in turn,
a third-party complaint against Ladislao Chavez, Ramon B.
Lacson and Vicente Garcia, based on the indemnity
agreement, was instituted by Luzon Surety Co., Inc.
Then, as set forth by the parties, on September 17, 1958, the
lower court rendered a decision condemning Ladislao Chavez
and Luzon Surety Co., Inc., to pay the plaintiff jointly and
severally the amount of P4,577.95 representing the principal
and accrued interest of the obligation at the rate of 6% per
annum as of January 6, 1956, with a daily interest of P0.7119
on P4,330.91 from January 6, 1956, until fully paid, plus the
sum of P100.00 as attorney's fees, and to pay the costs. The
same decision likewise ordered the third party defendants,
Ladislao Chavez, Vicente Garcia, and Ramon B. Lacson, to
pay Luzon Surety Co., Inc., the total amount to be paid by it to
the plaintiff Philippine National Bank.
On July 30, 1960, pursuant to the aforesaid decision, the Court
of First Instance of Negros Occidental issued a writ of
execution against Vicente Garcia for the satisfaction of the
claim of petitioner in the sum of P8,839.97. Thereafter, a writ of
garnishment was issued by the Provincial Sheriff of Negros
Occidental dated August 9, 1960, levying and garnishing the
sugar quedans of the now respondent-spouses, the Garcias,
from their sugar plantation, registered in the names of both of

116
them.2 The suit for injunction filed by the Garcia spouses was
the result.
As noted, the lower court found in their favor. In its decision of
April 30, 1962, it declared that the garnishment in question
was contrary to Article 161 of the Civil Code and granted their
petition, making the writ of preliminary injunction permanent.
Luzon Surety, Inc. elevated the matter to the Court of Appeals,
which, as mentioned at the outset, likewise reached the same
result. Hence this petition for review.
We reiterate what was set forth at the opening of this opinion.
There is no reason for a reversal of the judgment. The decision
sought to be reviewed is in accordance with law.

submitted by its counsel, would impress on us that in this case

it could not be said that no benefit was received by the
conjugal partnership. It sought to lend some semblance of
plausibility to this view thus: "The present case involves a
contract of suretyship entered into by the husband, the
respondent Vicente Garcia, in behalf of a third person. A
transaction based on credit through which, by our given
definitions, respondent Vicente Garcia, by acting as guarantor
and making good his guaranty, acquires the capacity of being
trusted, adds to his reputation or esteem, enhances his
standing as a citizen in the community in which he lives, and
earns the confidence of the business community. He can thus
secure money with which to carry on the purposes of their
conjugal partnership."4

As explained in the decision now under review: "It is true that

the husband is the administrator of the conjugal property
pursuant to the provisions of Art. 163 of the New Civil Code.
However, as such administrator the only obligations incurred
by the husband that are chargeable against the conjugal
property are those incurred in the legitimate pursuit of his
career, profession or business with the honest belief that he is
doing right for the benefit of the family. This is not true in the
case at bar for we believe that the husband in acting as
guarantor or surety for another in an indemnity agreement as
that involved in this case did not act for the benefit of the
conjugal partnership. Such inference is more emphatic in this
case, when no proof is presented that Vicente Garcia in acting
as surety or guarantor received consideration therefor, which
may redound to the benefit of the conjugal partnership."3

While not entirely, without basis, such an argument does not

carry conviction. Its acceptance would negate the plain
meaning of what is expressly provided for in Article 161. In the
most categorical language, a conjugal partnership under that
provision is liable only for such "debts and obligations
contracted by the husband for the benefit of the conjugal
partnership." There must be the requisite showing then of
some advantage which clearly accrued to the welfare of the
spouses. There is none in this case. Nor could there be,
considering that the benefit was clearly intended for a third
party, one Ladislao Chavez. While the husband by thus signing
the indemnity agreement may be said to have added to his
reputation or esteem and to have earned the confidence of the
business community, such benefit, even if hypothetically
accepted, is too remote and fanciful to come within the
express terms of the provision.

In the decision before us, the principal error assigned is the

above holding of the Court of Appeals that under Article 161 of
the Civil Code no liability was incurred by the conjugal
partnership. While fully conscious of the express language of
Article 161 of the Civil Code, petitioner, in its well-written brief

Its language is clear; it does not admit of doubt. No process of

interpretation or construction need be resorted to. It
peremptorily calls for application. Where a requirement is
made in explicit and unambiguous terms, no discretion is left

117
to the judiciary. It must see to it that its mandate is obeyed. So
it is in this case. That is how the Court of Appeals acted, and
what it did cannot be impugned for being contrary to law.5
Moreover, it would negate the plain object of the additional
requirement in the present Civil Code that a debt contracted by
the husband to bind a conjugal partnership must redound to its
benefit. That is still another provision indicative of the
solicitude and tender regard that the law manifests for the
family as a unit. Its interest is paramount; its welfare
uppermost in the minds of the codifiers and legislators.
This particular codal provision in question rightfully
emphasizes the responsibility of the husband as
administrator.6He is supposed to conserve and, if possible,
augment the funds of the conjugal partnership, not dissipate
them. If out of friendship or misplaced generosity on his part
the conjugal partnership would be saddled with financial
burden, then the family stands to suffer. No objection need
arise if the obligation thus contracted by him could be shown
to be for the benefit of the wife and the progeny if any there
be. That is but fair and just. Certainly, however, to make a
conjugal partnership respond for a liability that should
appertain to the husband alone is to defeat and frustrate the
avowed objective of the new Civil Code to show the utmost
concern for the solidarity and well-being of the family as a
unit.7 The husband, therefore, as is wisely thus made certain,
is denied the power to assume unnecessary and unwarranted
risks to the financial stability of the conjugal partnership.
No useful purpose would be served by petitioner assigning as
one of the errors the observation made by the Court of
Appeals as to the husband's interest in the conjugal property
being merely inchoate or a mere expectancy in view of the
conclusion thus reached as to the absence of any liability on
the part of the conjugal partnership. Nor was it error for the

Court of Appeals to refuse to consider a question raised for the

first time on appeal. Now as to the question of jurisdiction of
the lower court to entertain this petition for injunction against
the Provincial Sheriff, to which our attention is invited, neither
the Court of Appeals nor the lower court having been asked to
pass upon it. Of course, if raised earlier, it ought to have been
seriously inquired into. We feel, however, that under all the
circumstances of the case, substantial justice would be served
if petitioner be held as precluded from now attempting to
interpose such a barrier. The conclusion that thereby laches
had intervened is not unreasonable. Such a response on our
part can be predicated on the authoritative holding in Tijam v.
Sibonghanoy.8
WHEREFORE, the decision of the Court of Appeals of
December 17, 1965, now under review, is affirmed with costs
against petitioner Luzon Surety Co., Inc.
Concepcion, C.J., Dizon, Makalintal, Zaldivar Sanchez,
Castro, Teehankee and Barredo, JJ., concur.

Separate Opinions
REYES, J., concurring:
I concur in the result, but would like to make of record that, in
my opinion, the words "all debts and obligations contracted by
the husband for the benefit of the conjugal partnership" used in
Article 161 of the Civil Code of the Philippines in describing the
charges and obligations for which the conjugal partnership is
liable, do not require that actual profit or benefit must accrue to
the conjugal partnership from the husband's transactions; but
that it suffices that the transaction should be one that normally

118
would produce such benefit for the partnership. This is the
ratio behind our ruling in Javier vs. Osmea, 34 Phil. 336, that
obligations incurred by the husband in the practice of his
profession are collectible from the conjugal partnership.

Footnotes
1

Brief for Petitioner, p. 3.

Ibid., Appendix, pp. 39-42.

Ibid., pp. 46-47.

Ibid., pp. 24-25.

Cf. People v. Mapa, 20 SCRA 1164 (1967); Pacific

Oxygen & Acetylene Co. v. Central Bank, 22 SCRA 917
(1968); Dequito v. Lopez, 22 SCRA 1352 (1968);
Padilla v. City of Pasay, 23 SCRA 1349 (1968); Garcia
v. Vasquez, 27 SCRA 505 (1969); La Perla Cigar &
Cigarette Factory v. Capapas, L- 27948 & 28001-11,
July 31, 1969; Mobil Oil Philippines v. Diocares, L26371, Sept 30, 1969.
6

Article 165, New Civil Code.

Cf. Report of the Code Commission, p. 17 (1948).

23 SCRA 29 (1968). Cf. Carillo vs. Allied Workers'

Association, 24 SCRA 566 (1968).

THIRD DIVISION
G.R. No. L-61464 May 28, 1988
BA FINANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO
YULO, LILY YULO (doing business under the name and
style of A & L INDUSTRIES), respondents.

GUTIERREZ, JR., J.:

This is a petition for review seeking to set aside the decision of
the Court of Appeals which affirmed the decision of the then
Court of First Instance of Manila, dismissing the complaint

119
instituted by the petitioner and ordering it to pay damages on
the basis of the private respondent's counterclaim.

proceeds for their own use and benefit, without the knowledge
or consent of the petitioner.

On July 1, 1975, private respondent Augusto Yulo secured a

loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own behalf
and as representative of the A & L Industries. Respondent Yulo
presented an alleged special power of attorney executed by
his wife, respondent Lily Yulo, who manages A & L Industries
and under whose name the said business is registered,
purportedly authorizing Augusto Yulo to procure the loan and
sign the promissory note. About two months prior to the loan,
however, Augusto Yulo had already left Lily Yulo and their
children and had abandoned their conjugal home. When the
obligation became due and demandable, Augusto Yulo failed
to pay the same.

The trial court issued the writ of attachment prayed for thereby
enabling the petitioner to attach the properties of A & L
Industries. Apparently not contented with the order, the
petitioner filed another motion for the examination of
attachment debtor, alleging that the properties attached by the
sheriff were not sufficient to secure the satisfaction of any
judgment that may be recovered by it in the case. This was
likewise granted by the court.

On October 7, 1975, the petitioner filed its amended complaint

against the spouses Augusto and Lily Yulo on the basis of the
promissory note. It also prayed for the issuance of a writ of
attatchment alleging that the said spouses were guilty of fraud
in contracting the debt upon which the action was brought and
that the fraud consisted of the spouses' inducing the petitioner
to enter into a contract with them by executing a Deed of
Assignment in favor of the petitioner, assigning all their rights,
titles and interests over a construction contract executed by
and between the spouses and A. Soriano Corporation on June
19, 1974 for a consideration of P615,732.50 when, in truth, the
spouses did not have any intention of remitting the proceeds of
the said construction contract to the petitioner because despite
the provisions in the Deed of Assignment that the spouses
shall, without compensation or costs, collect and receive in
trust for the petitioner all payments made upon the
construction contract and shall remit to the petitioner all
collections therefrom, the said spouses failed and refuse to
remit the collections and instead, misappropriated the

Private respondent Lily Yulo filed her answer with

counterclaim, alleging that although Augusta Yulo and she are
husband and wife, the former had abandoned her and their
children five (5) months before the filing of the complaint; that
they were already separated when the promissory note was
executed; that her signature in the special power of attorney
was forged because she had never authorized Augusto Yulo in
any capacity to transact any business for and in behalf of A & L
Industries, which is owned by her as a single proprietor, that
she never got a single centavo from the proceeds of the loan
mentioned in the promissory note; and that as a result of the
illegal attachment of her properties, which constituted the
assets of the A & L Industries, the latter closed its business
and was taken over by the new owner.
After hearing, the trial court rendered judgment dismissing the
petitioner's complaint against the private respondent Lily Yulo
and A & L Industries and ordering the petitioner to pay the
respondent Lily Yulo P660,000.00 as actual damages;
P500,000.00 as unrealized profits; P300,000.00 as exemplary
damages; P30,000.00 as and for attorney's fees; and to pay
the costs.

120
The petitioner appealed. The Court of Appeals affirmed the
trial court's decision except for the exemplary damages which
it reduced from P300,000.00 to P150,000.00 and the
attorney's fees which were reduced from P30,000.00 to
P20,000.00.

Q. In this document marked as Exhibit B

although it appears here that this is an
acknowledgment, you have not stated here that
the principal actually acknowledged this
document to be her voluntary act and deed?

In resolving the question of whether or not the trial court erred

in holding that the signature of respondent Lily Yulo in the
special power of attorney was forged, the Court of Appeals
said:

A This in one of those things that escaped my

attention. Actually I have not gone over the
second page. I believed it was in order I signed
it. (TSN pp. 13-14, Hearing of Nov. 26, 1976).

The crucial issue to be determined is whether or not

the signatures of the appellee Lily Yulo in Exhibits B
and B-1 are forged. Atty. Crispin Ordoa, the Notary
Public, admitted in open court that the parties in the
subject documents did not sign their signatures in his
presence. The same were already signed by the
supposed parties and their supposed witnesses at the
time they were brought to him for ratification. We quote
from the records the pertinent testimony of Atty.
Ordoa, thus:

The glaring admission by the Notary Public that he

failed to state in the acknowledgment portion of Exhibit
B-1 that the appellee Lily Yulo acknowledged the said
document to be her own voluntary act and deed, is a
very strong and commanding circumstance to show
that she did not appear personally before the said
Notary Public and did not sign the document.

Q. This document marked as Exhibit B-1, when

this was presented to you by that common
friend, June Enriquez, it was already
typewritten, it was already accomplished, all
typewritten.?
A. Yes, sir.
Q And the parties had already affixed their
signatures in this document?
A. Yes, sir.

Additionally, the Notary Public admitted that, while June

Enriquez is admittedly a mutual friend of his and the
defendant Augusta Yulo, and who is also an
instrumental witness in said Exhibit B-1., he could not
recognize or tell which of the two signatures appearing
therein, was the signature of this June Enriquez.
Furthermore, as the issue is one of credibility of a
witness, the findings and conclusions of the trial court
before whom said witness, Atty. Crispin Ordoa, the
Notary Public before whom the questioned document
was supposedly ratified and acknowledged, deserve
great respect and are seldom disturbed on appeal by
appellate tribunals, since it is in the best and peculiar
advantage of determining and observing the conduct,
demeanor and deportment of a particular witness while
he is testifying in court, an opportunity not enjoyed by

121
the appellate courts who merely have to rely on the
recorded proceedings which transpired in the court
below, and the records are bare of any circumstance of
weight, which the trial court had overlooked and which
if duly considered, may radically affect the outcome of
the case.
On the other hand, the appellee Lily Yulo, to back up
her claim of forgery of her signature in Exhibit B-1,
presented in court a handwriting expert witness in the
person of Police Captain Yakal Giron of the Integrated
National Police Training Command, and who is also a
Document Examiner of the same Command's Crime
Laboratory at Fort Bonifacio, Metro Manila. His
experience as an examiner of questioned and disputed
documents, in our mind, is quite impressive. To qualify
him as a handwriting expert, he declared that he
underwent extensive and actual studies and
examination of disputed or questioned document, both
at the National Bureau of Investigation Academy and
National Bureau of Investigation Questioned Document
Laboratory, respectively, from July 1964, up to his
appointment as Document Examiner in June, 1975,
and, to further his experience along this line, he
attended the 297th Annual Conference of the American
Society of Questioned Docurnent Examiners held at
Seattle, Washington, in August 1971, as a
representative of the Philippines, and likewise
conducted an observation of the present and modern
trends of crime laboratories in the West Coast, U.S.A.,
in 1971; that he likewise had conducted actual tests
and examination of about 100,000 documents, as
requested by the different courts, administrative, and
governmental agencies of the Government, substantial
portions of which relate to actual court cases.

In concluding that the signatures of the appellee Lily

Yulo, in the disputed document in question (Exh. B-1),
were all forgeries, and not her genuine signature, the
expert witness categorically recited and specified in
open court what he observed to be about twelve (12)
glaring and material significant differences, in his
comparison of the signatures appearing in the genuine
specimen signatures of the said appellee and with
those appearing in the questioned document (Exhibit
B-1). Indeed, we have likewise seen the supposed
notable differences, found in the standard or genuine
signatures of the appellee which were lifted and
obtained in the official files of the government, such as
the Bureau of Internal Revenue on her income tax
returns, as compared to the pretended signature of the
appellee appearing in Exhibits B, B-1. It is also
noteworthy to mention that the appellant did not even
bother to conduct a cross-examination of the
handwriting expert witness, Capt. Giron, neither did the
appellant present another handwriting expert, at least
to counter-act or balance the appellee's handwriting
expert.
Prescinding from the foregoing facts, we subscribe fully
to the lower court's observations that the signatures of
the appellee Lily Yulo in the questioned document
(Exh. B-1) were forged. Hence, we find no factual basis
to disagree. (pp. 28-30, Rollo)
As to the petitioner's contention that even if the signature of
Lily Yulo was forged or even if the attached properties were
her exclusive property, the same can be made answerable to
the obligation because the said properties form part of the
conjugal partnership of the spouses Yulo, the appellate court
held that these contentions are without merit because there is
strong preponderant evidence to show that A & L Industries

122
belongs exclusively to respondent Lily Yulo, namely: a) The
Certificate of Registration of A & L Industries, issued by the
Bureau of Commerce, showing that said business is a single
proprietorship, and that the registered owner thereof is only
Lily Yulo; b) The Mayor's Permit issued in favor of A & L
Industries, by the Caloocan City Mayor's Office showing
compliance by said single proprietorship company with the
City Ordinance governing business establishments; and c) The
Special Power of Attorney itself, assuming but without
admitting its due execution, is tangible proof that Augusto Yulo
has no interest whatsoever in the A & L Industries, otherwise,
there would have been no necessity for the Special Power of
Attorney if he is a part owner of said single proprietorship.
With regard to the award of damages, the Court of Appeals
affirmed the findings of the trial court that there was bad faith
on the part of the petitioner as to entitle the private respondent
to damages as shown not only by the fact that the petitioner
did not present the Deed of Assignment or the construction
agreement or any evidence whatsoever to support its claim of
fraud on the part of the private respondent and to justify the
issuance of a preliminary attachment, but also by the following
findings:
Continuing and elaborating further on the
appellant's mala fide actuations in securing the writ of
attachment, the lower court stated as follows:
Plaintiff not satisfied with the instant case where
an order for attachment has already been
issued and enforced, on the strength of the
same Promissory Note (Exhibit"A"), utilizing the
Deed of Chattel Mortgage (Exhibit "4"), filed a
foreclosure proceedings before the Office of the
Sheriff of Caloocan (Exhibit"6") foreclosing the
remaining properties found inside the premises

formerly occupied by the A & L Industries. A

minute examination of Exhibit "4" will show that
the contracting parties thereto, as appearing in
par. 1 thereof, are Augusto Yulo, doing business
under the style of A & L Industries (should be A
& L Glass Industries Corporation), as mortgagor
and BA Finance Corporation as mortgagee,
thus the enforcement of the Chattel Mortgage
against the property of A & L Industries
exclusively owned by Lily T. Yulo appears to be
without any factual or legal basis whatsoever.
The chattel mortgage, Exhibit "4" and the
Promissory Note, Exhibit A, are based on one
and the same obligation. Plaintiff tried to
enforce as it did enforce its claim into two
different modes a single obligation.
Aware that defendant Lily Yulo, filed a Motion to
Suspend Proceedings by virtue of a complaint
she filed with the Court of First Instance of
Caloocan, seeking annulment of the Promissory
Note, the very basis of the plaintiff in filing this
complaint, immediately after the day it filed a
Motion for the Issuance of an Alias Writ of
Preliminary Attachment . . .Yet, inspite of the
knowledge and the filing of this Motion to
Suspend Proceedings, the Plaintiff still filed a
Motion for the Issuance of a Writ of Attachment
dated February 6, 1976 before this court. To
add insult to injury, plaintiff even filed a Motion
for Examination of the Attachment Debtor,
although aware that Lily Yulo had already
denied participation in the execution of Exhibits
"A" and "B". These incidents and actions taken
by plaintiff, to the thinking of the court, are
sufficient to prove and establish the element of

123
bad faith and malice on the part of plaintiff
which may warrant the award of damages in
favor of defendant Lily Yulo. (Ibid., pp. 102103).<re||an1w>

genuine by the party against whom the evidence is offered, or

proved to be genuine to the satisfaction of the judge," and that
there is no evidence on record which proves or tends to prove
the genuineness of the standards used.

Indeed, the existence of evident bad faith on the

appellant's part in proceeding against the
appellee Lily Yulo in the present case, may
likewise be distressed on the fact that its officer
Mr. Abraham Co, did not even bother to
demand the production of at least the duplicate
original of the Special Power of Attorney
(Exhibit B) and merely contended himself with a
mere xerox copy thereof, neither did he require
a more specific authority from the A & L
Industries to contract the loan in question, since
from the very content and recitals of the
disputed document, no authority, express or
implied, has been delegated or granted to
August Yulo to contract a loan, especially with
the appellant. (pp. 33-34, Rollo)

There is no merit in this contention.

Concerning the actual damages, the appellate court ruled that

the petitioner should have presented evidence to disprove or
rebut the private respondent's claim but it remained quiet and
chose not to disturb the testimony and the evidence presented
by the private respondent to prove her claim.
In this petition for certiorari, the petitioner raises three issues.
The first issue deals with the appellate court's affirmance of
the trial court's findings that the signature of the private
respondent on the Special Power of Attorney was forged.
According to the petitioner, the Court of Appeals disregarded
the direct mandate of Section 23, Rule 132 of the Rules of
Court which states in part that evidence of handwriting by
comparison may be made "with writings admitted or treated as

The records show that the signatures which were used as

"standards" for comparison with the alleged signature of the
private respondent in the Special Power of Attorney were
those from the latter's residence certificates in the years 1973,
1974 and 1975, her income tax returns for the years 1973 and
1975 and from a document on long bond paper dated May 18,
1977. Not only were the signatures in the foregoing documents
admitted by the private respondent as hers but most of the
said documents were used by the private respondent in her
transactions with the government. As was held in the case
of Plymouth Saving & Loan Assn. No. 2 v. Kassing (125 NE
488, 494):
We believe the true rule deduced from the authorities
to be that the genuineness of a "standard" writing may
be established (1) by the admission of the person
sought to be charged with the disputed writing made at
or for the purposes of the trial or by his testimony; (2)
by witnesses who saw the standards written or to
whom or in whose hearing the person sought to be
charged acknowledged the writing thereof; (3) by
evidence showing that the reputed writer of the
standard has acquiesced in or recognized the same, or
that it has been adopted and acted upon by him his
business transactions or other concerns....
Furthermore, the judge found such signatures to be sufficient
as standards. In the case of Taylor-Wharton Iron & Steel Co. v.
Earnshaw (156 N.E. 855, 856), it was held:

124
When a writing is offered as a standard of comparison
it is for the presiding judge to decide whether it is the
handwriting of the party to be charged. Unless his
finding is founded upon error of law, or upon evidence
which is, as matter of law, insufficient to justify the
finding, this court will not revise it upon exceptions."
(Costelo v. Crowell, 139 Mass. 588, 590, 2 N.E. 648;
Nuez v. Perry, 113 Mass, 274, 276.)
We cannot find any error on the part of the trial judge in using
the above documents as standards and also in giving
credence to the expert witness presented by the private
respondent whose testimony the petitioner failed to rebut and
whose credibility it likewise failed to impeach. But more
important is the fact that the unrebutted handwriting expert's
testimony noted twelve (12) glaring and material differences in
the alleged signature of the private respondent in the Special
Power of Attorney as compared with the specimen signatures,
something which the appellate court also took into account.
In Cesar v. Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant divergences
and distinctive characteristics between the sample
signatures and the signatures on the questioned
checks in his report which the court's Presiding Justice
kept mentioning during Maniwang's testimony.
In the course of his cross-examination, NBI expert
Tabayoyong admitted that he saw the differences
between the exemplars used and the questioned
signatures but he dismissed the differences because
he did not consider them fundamental. We rule that
significant differences are more fundamental than a few
similarities. A forger always strives to master some
similarities.

The second issue raised by the petitioner is that while it is true

that A & L Industries is a single proprietorship and the
registered owner thereof is private respondent Lily Yulo, the
said proprietorship was established during the marriage and its
assets were also acquired during the same. Therefore, it is
presumed that this property forms part of the conjugal
partnership of the spouses Augusto and Lily Yulo and thus,
could be held liable for the obligations contracted by Augusto
Yulo, as administrator of the partnership.
There is no dispute that A & L Industries was established
during the marriage of Augusta and Lily Yulo and therefore the
same is presumed conjugal and the fact that it was registered
in the name of only one of the spouses does not destroy its
conjugal nature (See Mendoza v. Reyes, 124 SCRA 161, 165).
However, for the said property to be held liable, the obligation
contracted by the husband must have redounded to the benefit
of the conjugal partnership under Article 161 of the Civil Code.
In the present case, the obligation which the petitioner is
seeking to enforce against the conjugal property managed by
the private respondent Lily Yulo was undoubtedly contracted
by Augusto Yulo for his own benefit because at the time he
incurred the obligation he had already abandoned his family
and had left their conjugal home. Worse, he made it appear
that he was duly authorized by his wife in behalf of A & L
Industries, to procure such loan from the petitioner. Clearly, to
make A & L Industries liable now for the said loan would be
unjust and contrary to the express provision of the Civil Code.
As we have ruled in Luzon Surety Co., Inc. v. De Gracia (30
SCRA 111, 115-117):
As explained in the decision now under review: "It is
true that the husband is the administrator of the
conjugal property pursuant to the provisions of Art. 163
of the new Civil Code. However, as such administrator
the only obligations incurred by the husband that are

125
chargeable against the conjugal property are those
incurred in the legitimate pursuit of his career,
profession or business with the honest belief that he is
doing right for the benefit of the family. This is not true
in the case at bar for we believe that the husband in
acting as guarantor or surety for another in an
indemnity agreement as that involved in this case did
not act for the benefit of the conjugal partnership. Such
inference is more emphatic in this case, when no proof
is presented that Vicente Garcia in acting as surety or
guarantor received consideration therefore, which may
redound to the benefit of the conjugal partnership.(Ibid,
pp. 46-47).
xxx xxx xxx

We, therefore, rule that the petitioner cannot enforce the

obligation contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo. Thus, it follows that the
writ of attachment cannot issue against the said properties.
Finally, the third issue assails the award of actual damages
according to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties referred
to are still subject to a levy on attachment. They are, therefore,
still under custodia legis and thus, the assailed decision should
have included a declaration as to who is entitled to the
attached properties and that assuming arguendo that the
attachment was erroneous, the lower court should have
ordered the sheriff to return to the private respondent the
attached properties instead of condemning the petitioner to
pay the value thereof by way of actual damages.

xxx xxx xxx

In the case of Lazatin v. Twao (2 SCRA 842, 847), we ruled:
In the most categorical language, a conjugal
partnership under that provision is liable only for such
"debts and obligations contracted by the husband for
the benefit of the conjugal partnership." There must be
the requisite showing then of some advantage which
clearly accrued to the welfare of the spouses. There is
none in this case.
xxx xxx xxx
Moreover, it would negate the plain object of the
additional requirement in the present Civil Code that a
debt contracted by the husband to bind a conjugal
partnership must redound to its benefit. That is still
another provision indicative of the solicitude and tender
regard that the law manifests for the family as a unit. Its
interest is paramount; its welfare uppermost in the
minds of the codifiers and legislators.

xxx xxx xxx

... It should be observed that Sec. 4 of Rule 59, does
not prescribed the remedies available to the
attachment defendant in case of a wrongful
attachment, but merely provides an action for recovery
upon the bond, based on the undertaking therein made
and not upon the liability arising from a tortuous act,
like the malicious suing out of an attachment. Under
the first, where malice is not essential, the attachment
defendant, is entitled to recover only the actual
damages sustained by him by reason of the
attachment. Under the second, where the attachment
is maliciously sued out, the damages recoverable may
include a compensation for every injury to his credit,
business or feed (Tyler v. Mahoney, 168 NC 237, 84

126
SE 362; Pittsburg etc. 5 Wakefield, etc., 135 NC 73, 47
SE 234). ...
The question before us, therefore, is whether the attachment
of the properties of A & L Industries was wrongful so as to
entitle the petitioner to actual damages only or whether the
said attachment was made in bad faith and with malice to
warrant the award of other kinds of damages. Moreover, if the
private respondent is entitled only to actual damages, was the
court justified in ordering the petitioner to pay for the value of
the attached properties instead of ordering the return of the
said properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was bad
faith on the part of the petitioner in securing the writ of
attachment. We do not think so. "An attachment may be said
to be wrongful when, for instance, the plaintiff has no cause of
action, or that there is no true ground therefore, or that the
plaintiff has a sufficient security other than the property
attached, which is tantamout to saying that the plaintiff is not
entitled to attachment because the requirements of entitling
him to the writ are wanting. (7 C.J.S., 664)" (p. 48, Section 4,
Rule 57, Francisco, Revised Rules of Court).
Although the petitioner failed to prove the ground relied upon
for the issuance of the writ of attachment, this failure cannot be
equated with bad faith or malicious intent. The steps which
were taken by the petitioner to ensure the security of its claim
were premised, on the firm belief that the properties involved
could be made answerable for the unpaid obligation due it.
There is no question that a loan in the amount of P591,003.59
was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual
damages and not for exemplary damages and attorney's fees.
Respondent Lily Yulo has manifested before this Court that

she no longer desires the return of the attached properties

since the said attachment caused her to close down the
business. From that time she has become a mere employee of
the new owner of the premises. She has grave doubts as to
the running condition of the attached machineries and
equipments considering that the attachment was effected way
back in 1975. She states as a matter of fact that the petitioner
has already caused the sale of the machineries for fear that
they might be destroyed due to prolonged litigation. We,
therefore, deem it just and equitable to allow private
respondent Lily Yulo to recover actual damages based on the
value of the attached properties as proven in the trial court, in
the amount of P660,000.00. In turn, if there are any remaining
attached properties, they should be permanently released to
herein petitioner.
We cannot, however, sustain the award of P500,000.00
representing unrealized profits because this amount was not
proved or justified before the trial court. The basis of the
alleged unearned profits is too speculative and conjectural to
show actual damages for a future period. The private
respondent failed to present reports on the average actual
profits earned by her business and other evidence of
profitability which are necessary to prove her claim for the said
amount (See G. A. Machineries, Inc. v. Yaptinchay, 126 SCRA
78, 88).
The judgment is therefore set aside insofar as it holds the
petitioner liable for P500,000.00 actual damages representing
unrealized profits, P150,000.00 for exemplary damages and
P20,000.00 for attorney's fees. As stated earlier, the attached
properties, should be released in favor of the petitioner.
WHEREFORE, the decision of the Court of Appeals is hereby
SET ASIDE and the petitioner is ordered to pay the private
respondent Lily Yulo the amount of SIX HUNDRED SIXTY

127
THOUSAND PESOS (P660,000.00) as actual damages. The
remaining properties subject of the attachment are ordered
released in favor of the petitioner.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes JJ., concur.

EN BANC
G.R. No. L-25355

August 28, 1969

THE PEOPLE OF THE PHILIPPINES, plaintiff,

vs.
FROILAN LAGRIMAS, accused,
HEIRS OF PELAGIO CAGRO, heirs-appellants,
MERCEDES AGUIRRE DE LAGRIMAS, movant-appellee.
Socrates G. Desales for heirs-appellants.
Marciano Chitongco for movant-appellee.
FERNANDO, J.:
The Civil Code, under the conditions therein specified,
recognizes the liability of the conjugal partnership for fines and

128
indemnities imposed upon either husband or wife "after the
responsibilities enumerated in article 161 have been covered,"
in the absence of any separate property of the offending
spouse or its insufficiency. 1 How such an obligation "may be
enforced against the partnership assets" is the question, one
of first impression, raised in this appeal from a lower court
order, based on the assumption of the total exemption of the
conjugal partnership from the liability thus incurred, prior to the
stage of liquidation. The result was to set aside the preliminary
attachment and thereafter the writ of execution in favor of the
heirs of the murdered victim, appellants before us, the
judgment against the accused imposing not only the penalty of
reclusion perpetua but also the indemnification to such heirs
having attained the status of finality. In view of the failure,
apparent on the face of the appealed order, to respect what
the Civil Code ordains, we reverse and remand the case for
further proceedings.
The brief of appellants, the heirs of Pelagio Cagro, the
murdered victim, discloses that on February 19, 1960 an
information was filed against the accused, Froilan Lagrimas,
for the above murder committed on February 15, 1960 in
Pambujan, Samar. Thereafter, appellants as such heirs, filed
on February 27, 1960 a motion for the issuance of a writ of
preliminary attachment on the property of the accused, such
motion being granted in an order of March 5, 1960. After trial,
the lower court found the accused guilty of the crime charged
and sentenced him to suffer the penalty of reclusion
perpetua and to indemnify the appellants as such heirs in the
sum of P6,000.00 plus the additional sum of P10,000.00 in the
concept of damages, attorney's fees and burial expenses. An
appeal from the judgment was elevated to this Court by the
accused but thereafter withdrawn, the judgment, therefore,
becoming final on October 11, 1962.

A writ of execution to cover the civil indemnity was issued by

the lower court upon motion of appellants. A levy was had on
eleven parcels of land in the province declared for tax
purposes in the name of the accused. The sale thereof at
public auction was scheduled on January 5, 1965 but on
December 29, 1964 the wife of the accused, Mercedes Aguirre
de Lagrimas, filed a motion to quash the writ of attachment as
well as the writ of execution with the allegation that the
property levied upon belonged to the conjugal partnership and,
therefore, could not be held liable for the pecuniary indemnity
the husband was required to pay. The then judge of the lower
court granted such motion declaring null and void the order of
attachment and the writ of execution, in accordance with
Article 161 of the new Civil Code. Another judge of the same
lower court set aside the above order, sustaining the legality of
the preliminary attachment as well as the writ of execution.
Thereafter, upon appellee filing a motion for the
reconsideration of the above order giving due course to the
writ of execution, a third judge, then presiding over such court,
the Hon. Ignacio Mangosing, revived the original order of
March 5, 1960, declaring such attachment and the writ of
execution thereafter issued as null and void.
This order of August 7, 1965, now on appeal, was premised on
the following considerations: "It can be readily seen from the
above-quoted provisions of law that only debts contracted by
the husband or the wife before the marriage, and those of
fines and indemnities imposed upon them, may be enforced
against the partnership assets after the charges enumerated in
article 161 have been covered. So that as long as the
obligations mentioned in said article 161 have not been paid,
the assets of the partnership cannot be made to answer for
indemnities like the one being sought to be enforced in the
instant case. And, before the obligations enumerated in said
article 161 can be paid, the conjugal partnership properties
should first, by necessity, be liquidated, and liquidation can

129
take place only after the dissolution of the partnership thru the
occurrence of any of the causes mentioned in article 175 of
the same Code, one of which is death of one of the spouses.
Since both are still living there cannot be any dissolution,
imprisonment for life of the husband notwithstanding, in the
absence of a judicial separation of properly decreed in
accordance with the provisions of article 191 thereof.
Moreover, the fines and indemnities sought to be charged
against the ganancial properties of the accused and his wife
are not such debts and obligations contracted by said
accused for the benefit of the conjugal partnership." 2
The conclusion arrived at by Judge Mangosing follows: "We
sympathize with the predicament of the widow and other heirs
of the deceased Pelagio Cagro, but the law is clear on the
matter. The indemnities adjudged by the Court in their favor
may only be charged against the exclusive properties of the
accused if he has any, or against his share in the partnership
assets after liquidation thereof if any still remains after the
payment of all the items enumerated in article 161 of the said
Civil Code." 3
Hence, this appeal, the heirs of Pelagio Cagro assigning as
sole error the quashing and annulling of the writs of
attachment and execution aforesaid. As stated at the outset,
we find the appeal meritorious.
The applicable Civil Code provision 4 is not lacking in
explicitness. Fines and indemnities imposed upon either
husband or wife "may be enforced against the partnership
assets after the responsibilities enumerated in article 161 have
been covered, if the spouse who is bound should have no
exclusive property or if it should be insufficient; ... ." It is quite
plain, therefore, that the period during which such a liability
may be enforced presupposes that the conjugal partnership is
still existing. The law speaks of "partnership assets." It

contemplates that the responsibilities to which enumerated in

Article 161, chargeable against such assets, must be complied
with first. It is thus obvious that the termination of the conjugal
partnership is not contemplated as a prerequisite. Whatever
doubt may still remain should be erased by the concluding
portion of this article which provides that "at the time of the
liquidation of the partnership such spouse shall be charged for
what has been paid for the purposes above-mentioned."
What other conclusion can there be than that the interpretation
placed upon this provision in the challenged order is at war
with the plain terms thereof? It cannot elicit our acceptance.
Nor is the reason for such a codal provision difficult to discern.
It is a fundamental postulate of our law that every person
criminally liable for felony is also civilly liable. 5 The accused,
Froilan Lagrimas, was, as noted, found guilty of the crime of
murder and sentenced toreclusion perpetua as well as to pay
the indemnification to satisfy the civil liability incumbent upon
him. If the appealed order were to be upheld, he would be in
effect exempt therefrom, the heirs of the offended party being
made to suffer still further.
It would follow, therefore, that the Civil Code provision, as thus
worded, precisely minimizes the possibility that such additional
liability of an accused would be rendered nugatory. In doing
justice to the heirs of the murdered victim, no injustice is
committed against the family of the offender. It is made a
condition under this article of the Civil Code that the
responsibilities enumerated in Article 161, covering primarily
the maintenance of the family and the education of the
children of the spouses or the legitimate children of one of
them as well as other obligations of a preferential character,
are first satisfied. It is thus apparent that the legal scheme
cannot be susceptible to the charge that for a transgression of
the law by either husband or wife, the rest of the family may be
made to bear burdens of an extremely onerous character.

130
The next question is how practical effect would be given this
particular liability of the conjugal partnership for the payment of
fines and indemnities imposed upon either husband or wife? In
the brief for appellants, the heirs of Pelagio Cagro, they seek
the opportunity to present evidence as to how the partnership
assets could be made to respond, this on the assumption that
the property levied upon does not belong exclusively to the
convicted spouse.
In Lacson v. Diaz, 6 which deals with the satisfaction of the
debt contracted by husband or wife before marriage by the
conjugal partnership, likewise included in this particular article,
it was held: "Considering that the enforceability of the personal
obligations of the husband or wife, against the conjugal assets,
forms the exception to the general rule, it is incumbent upon
the one who invokes this provision or the creditor to show that
the requisites for its applicability are obtaining."
Without departing from the principle thus announced, we make
this further observation. Considering that the obligations
mentioned in Article 161 are peculiarly within the knowledge of
the husband or of the wife whose conjugal partnership is made
liable, the proof required of the beneficiaries of the indemnity
should not be of the most exacting kind, ordinary credibility
sufficing. Otherwise, the husband or the wife, as the case may
be, representing the conjugal partnership, may find the
temptation to magnify its obligation irresistible so as to defeat
the right of recovery of the family of the offended party. That
result is to be avoided. The lower court should be on the alert,
therefore, in the appraisal of whatever evidence may be
offered to assure compliance with this codal provision.
WHEREFORE, the appealed order of August 7, 1965 is set
aside and the case remanded to the court of origin for the
reception of evidence in accordance with this opinion. With
costs against appellee Mercedes Aguirre de Lagrimas.

Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro,

Capistrano, Teehankee and Barredo, JJ., concur.
Reyes, J.B.L. and Zaldivar, JJ., are on leave.
Footnotes
1

According to Article 163 of the Civil Code: "The

payment of debts contracted by the husband or the
wife before the marriage shall not be charged to the
conjugal partnership. Neither shall the fines and
pecuniary indemnities imposed upon them be charged
to the partnership. However, the payment of debts
contracted by the husband or the wife before the
marriage, and that of fines and indemnities imposed
upon them, may be enforced against the partnership
assets after the responsibilities enumerated in article
161 have been covered, if the spouse who is bound
should have no exclusive property or if it should be
insufficient; but at the time of the liquidation of the
partnership such spouse shall be charged for what has
been paid for the purposes above-mentioned." Article
161 in turn provides: "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; (2) Arrears or income due, during the
marriage, from obligations which constitute a charge
upon property of either spouse or of the partnership; (3)
Minor repairs or for mere preservation made during the
marriage upon the separate property of either the
husband or the wife; major repairs shall not be charged
to the partnership; (4) Major or minor repairs upon the
conjugal partnership property; (5) The maintenance of
the family and the education of the children of both
husband and wife, and of legitimate children of one of

131
the spouses; (6) Expenses to permit the spouses to
complete a professional, vocational or other course."
2

Record on Appeal, pp. 72-73.

Ibid., pp. 43-74.

Article 163, Civil Code.

Article 100, Revised Penal Code.

L-19346, May 31, 1965.

SECOND DIVISION
SECURITY BANK and TRUST G.R. No. 143382
COMPANY,
Petitioner,
Present:

-versusMAR TIERRA
CORPORATION,
WILFRIDO C.
MARTINEZ,
MIGUEL J. LACSON
and
RICARDO A. LOPA,
Respondents.

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA and
GARCIA, JJ.

Promulgated:

132
November 29, 2006

able to pay the balance as it suffered business reversals, eventually

ceasing operations in 1984.

x----------- ---------------------------------x
DECISION
CORONA, J.:
May the conjugal partnership be held liable for an indemnity
agreement entered into by the husband to accommodate a third
party?
This issue confronts us in this petition for review on
certiorari assailing the November 9, 1999 decision [1] of the Court of
Appeals (CA) in CA-G.R. CV No. 48107.
On May 7, 1980, respondent Mar Tierra Corporation, through its
president, Wilfrido C. Martinez, applied for a P12,000,000 credit
accommodation with petitioner Security Bank and Trust Company.
Petitioner approved the application and entered into a credit line
agreement with respondent corporation. It was secured by an
indemnity agreement executed by individual respondents Wilfrido C.
Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound
themselves jointly and severally with respondent corporation for the
payment of the loan.
On July 2, 1980, the credit line agreement was amended and
increased to P14,000,000. Individual respondents correspondingly
executed a new indemnity agreement in favor of the bank to secure
the increased credit line.
On September 25, 1981, respondent corporation availed of
its credit line and received the sum of P9,952,000 which it undertook
to pay on or before November 30, 1981. It was able to
pay P4,648,000 for the principal loan and P2,729,195.56 for the
interest and other charges. However, respondent corporation was not

Unable to collect the balance of the loan, petitioner filed a

complaint for a sum of money with a prayer for preliminary
attachment against respondent corporation and individual
respondents in the Regional Trial Court (RTC) of Makati, Branch 66.
It was docketed as Civil Case No. 3947.
Subsequently, however, petitioner had the case dismissed with
respect to individual respondents Lacson and Lopa,[2] leaving
Martinez as the remaining individual respondent.
On August 10, 1982, the RTC issued a writ of attachment on
all real and personal properties of respondent corporation and
individual respondent Martinez. As a consequence, the conjugal
house and lot of the spouses Wilfrido and Josefina Martinez in
Barrio Calaanan, Caloocan City covered by Transfer Certificate of
Title (TCT) No. 49158 was levied on.
The RTC rendered its decision[3] on June 20, 1994. It held respondent
corporation and individual respondent Martinez jointly and severally
liable to petitioner forP5,304,000 plus 12% interest per annum and
5% penalty commencing on June 21, 1982 until fully paid,
plus P10,000 as attorneys fees. It, however, found that the obligation
contracted by individual respondent Martinez did not redound to the
benefit of his family, hence, it ordered the lifting of the attachment
on the conjugal house and lot of the spouses Martinez.
Dissatisfied with the RTC decision, petitioner appealed to the CA but
the appellate court affirmed the trial courts decision in toto.
Petitioner sought reconsideration but it was denied. Hence, this
petition.
Petitioner makes two basic assertions: (1) the RTC and CA erred in
finding that respondent corporation availed of P9,952,000 only from
its credit line and not the entireP14,000,000 and (2) the RTC and CA

133
were wrong in ruling that the conjugal partnership of the Martinez
spouses could not be held liable for the obligation incurred by
individual respondent Martinez.
We uphold the CA.
Factual findings of the CA, affirming those of the trial court,
will not be disturbed on appeal but must be accorded great weight.
[4]
These findings are conclusive not only on the parties but on this
Court as well.[5]
The CA affirmed the finding of the RTC that the amount
availed of by respondent corporation from its credit line with
petitioner was only P9,952,000. Both courts correctly pointed out
that petitioner itself admitted this amount when it alleged in
paragraph seven of its complaint that respondent corporation
borrowed and received the principal sum of P9,952,000.[6] Petitioner
was therefore bound by the factual finding of the appellate and trial
courts, as well as by its own judicial admission, on this particular
point.
At any rate, the issue of the amount actually availed of by
respondent corporation is factual. It is not within the ambit of this
Courts discretionary power of judicial review under Rule 45 of the
Rules of Court which is concerned solely with questions of law.[7]
We now move on to the principal issue in this case.
Under Article 161(1) of the Civil Code,[8] the conjugal
partnership is liable for all debts and obligations contracted by the
husband for the benefit of the conjugal partnership. But when are
debts and obligations contracted by the husband alone considered for
the benefit of and therefore chargeable against the conjugal
partnership? Is a surety agreement or an accommodation contract
entered into by the husband in favor of his employer within the
contemplation of the said provision?

We ruled as early as 1969 in Luzon Surety Co., Inc. v. de

Garcia[9] that, in acting as a guarantor or surety for another, the
husband does not act for the benefit of the conjugal partnership as the
benefit is clearly intended for a third party.
In Ayala Investment and Development Corporation v. Court
of Appeals,[10] we ruled that, if the husband himself is the principal
obligor in the contract, i.e., the direct recipient of the money and
services to be used in or for his own business or profession, the
transaction falls within the term obligations for the benefit of the
conjugal partnership. In other words, where the husband contracts an
obligation on behalf of the family business, there is a legal
presumption that such obligation redounds to the benefit of the
conjugal partnership.[11]
On the other hand, if the money or services are given to
another person or entity and the husband acted only as a surety or
guarantor, the transaction cannot by itself be deemed an obligation
for the benefit of the conjugal partnership. [12] It is for the benefit of
the principal debtor and not for the surety or his family. No
presumption is raised that, when a husband enters into a contract of
surety or accommodation agreement, it is for the benefit of the
conjugal partnership. Proof must be presented to establish the benefit
redounding to the conjugal partnership. [13] In the absence of any
showing of benefit received by it, the conjugal partnership cannot be
held liable on an indemnity agreement executed by the husband to
accommodate a third party.[14]
In this case, the principal contract, the credit line agreement
between petitioner and respondent corporation, was solely for the
benefit of the latter. The accessory contract (the indemnity
agreement) under which individual respondent Martinez assumed the
obligation of a surety for respondent corporation was similarly for
the latters benefit. Petitioner had the burden of proving that the

134
conjugal partnership of the spouses Martinez benefited from the
transaction. It failed to discharge that burden.
To hold the conjugal partnership liable for an obligation
pertaining to the husband alone defeats the objective of the Civil
Code to protect the solidarity and well being of the family as a unit.
[15]
The underlying concern of the law is the conservation of the
conjugal partnership.[16] Hence, it limits the liability of the conjugal
partnership only to debts and obligations contracted by the husband
for the benefit of the conjugal partnership.

[10]

349 Phil. 942 (1998).

Id.
[12]
Id.
[13]
Id.
[14]
Luzon Surety Co., Inc. v. de Garcia, supra.
[15]
Ching v. Court of Appeals, G.R. No. 124642, 23 February 2004,
423 SCRA 356.
[16]
Ayala Investment and Development Corporation v. Court of
Appeals, supra.
[11]

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.
SO ORDERED.
RENATO C. CORONA
Associate Justice
[1]

Penned by Associate Justice Conrado M. Vasquez, Jr. and

concurred in by Associate Justices Salome A. Montoya
(retired) and Teodoro P. Regino (retired) of the Second
Division of the Court of Appeals; rollo, pp. 34-42.
[2]
Petition for Review, p. 5; id., p. 15. The reason for the dismissal,
however, was not mentioned.
[3]
Penned by Judge Eriberto Rosario.
[4]
Aboitiz Shipping Corporation v. New India Assurance Company,
Ltd., G.R. No. 156978, 02 May 2006.
[5]
Id.
[6]
CA Records, p. 3; rollo, p. 39.
[7]
Philippine National Bank v. Campos, G.R. No. 167270, 30 June
2006.
[8]
Now Article 121(2) of the Family Code.
[9]
140 Phil. 509 (1969).

SECOND DIVISION
G.R. No. L-60174 February 16, 1983
EDUARDO FELIPE, HERMOGENA V. FELIPE AND
VICENTE V. FELIPE, petitioners,
vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA
ALMOSARA, SOFIA ALDON, SALVADOR ALDON, AND
THE HONORABLE COURT OF APPEALS, respondents.
Romulo D. San Juan for petitioner.
Gerundino Castillejo for private respondent.

135
ABAD SANTOS, J.:
Maximo Aldon married Gimena Almosara in 1936. The
spouses bought several pieces of land sometime between
1948 and 1950. In 1960-62, the lands were divided into three
lots, 1370, 1371 and 1415 of the San Jacinto Public Land
Subdivision, San Jacinto, Masbate.
In 1951, Gimena Almosara sold the lots to the spouses
Eduardo Felipe and Hermogena V. Felipe. The sale was made
without the consent of her husband, Maximo.
On April 26, 1976, the heirs of Maximo Aldon, namely his
widow Gimena and their children Sofia and Salvador Aldon,
filed a complaint in the Court of First Instance of Masbate
against the Felipes. The complaint which was docketed as
Civil Case No. 2372 alleged that the plaintiffs were the owners
of Lots 1370, 1371 and 1415; that they had orally mortgaged
the same to the defendants; and an offer to redeem the
mortgage had been refused so they filed the complaint in order
to recover the three parcels of land.
The defendants asserted that they had acquired the lots from
the plaintiffs by purchase and subsequent delivery to them.
The trial court sustained the claim of the defendants and
rendered the following judgment:
a. declaring the defendants to be the lawful owners of
the property subject of the present litigation;
b. declaring the complaint in the present action to be
without merit and is therefore hereby ordered
dismissed;

c. ordering the plaintiffs to pay to the defendants the

amount of P2,000.00 as reasonable attorney's fees and
to pay the costs of the suit.
The plaintiffs appealed the decision to the Court of Appeals
which rendered the following judgment:
PREMISES CONSIDERED, the decision appealed
from is hereby REVERSED and SET ASIDE, and a
new one is hereby RENDERED, ordering the
defendants-appellees to surrender the lots in question
as well as the plaintiffs'-appellants' muniments of title
thereof to said plaintiffs-appellants, to make an
accounting of the produce derived from the lands
including expenses incurred since 1951, and to
solidarity turn over to the plaintiffs-appellants the NET
monetary value of the profits, after deducting the sum
of P1,800.00. No attorney's fees nor moral damages
are awarded for lack of any legal justification therefor.
No. costs.
The ratio of the judgment is stated in the following paragraphs
of the decision penned by Justice Edgardo L. Paras with the
concurrence of Justices Venicio Escolin and Mariano A. Zosa:
One of the principal issues in the case involves the
nature of the aforementioned conveyance or
transaction, with appellants claiming the same to be
an oral contract of mortgage or antichresis, the
redemption of which could be done anytime upon
repayment of the P1,800.00 involved (incidentally the
only thing written about the transaction is the
aforementioned receipt re the P1,800). Upon the other
hand, appellees claim that the transaction was one of
sale, accordingly, redemption was improper. The
appellees claim that plaintiffs never conveyed the

136
property because of a loan or mortgage or antichresis
and that what really transpired was the execution of a
contract of sale thru a private document designated as
a 'Deed of Purchase and Sale' (Exhibit 1), the
execution having been made by Gimena Almosara in
favor of appellee Hermogena V. Felipe.
After a study of this case, we have come to the
conclusion that the appellants are entitled to recover
the ownership of the lots in question. We so hold
because although Exh. 1 concerning the sale made in
1951 of the disputed lots is, in Our opinion, not a
forgery the fact is that the sale made by Gimena
Almosara is invalid, having been executed without the
needed consent of her husband, the lots being
conjugal. Appellees' argument that this was an issue
not raised in the pleadings is baseless, considering the
fact that the complaint alleges that the parcels 'were
purchased by plaintiff Gimena Almosara and her late
husband Maximo Aldon' (the lots having been
purchased during the existence of the marriage, the
same are presumed conjugal) and inferentially, by force
of law, could not, be disposed of by a wife without her
husband's consent.
The defendants are now the appellants in this petition for
review. They invoke several grounds in seeking the reversal of
the decision of the Court of Appeals. One of the grounds is
factual in nature; petitioners claim that "respondent Court of
Appeals has found as a fact that the 'Deed of Purchase and
Sale' executed by respondent Gimena Almosara is not a
forgery and therefore its authenticity and due execution is
already beyond question." We cannot consider this ground
because as a rule only questions of law are reviewed in
proceedings under Rule 45 of the Rules of Court subject to
well-defined exceptions not present in the instant case.

The legal ground which deserves attention is the legal effect of

a sale of lands belonging to the conjugal partnership made by
the wife without the consent of the husband.
It is useful at this point to re-state some elementary rules: The
husband is the administrator of the conjugal partnership. (Art.
165, Civil Code.) Subject to certain exceptions, the husband
cannot alienate or encumber any real property of the conjugal
partnership without the wife's consent. (Art. 166, Idem.) And
the wife cannot bind the conjugal partnership without the
husband's consent, except in cases provided by law. (Art. 172,
Idem.)
In the instant case, Gimena, the wife, sold lands belonging to
the conjugal partnership without the consent of the husband
and the sale is not covered by the phrase "except in cases
provided by law." The Court of Appeals described the sale as
"invalid" - a term which is imprecise when used in relation to
contracts because the Civil Code uses specific names in
designating defective contracts, namely: rescissible (Arts.
1380 et seq.), voidable (Arts. 1390 et
seq.), unenforceable (Arts. 1403, et seq.), and void or
inexistent (Arts. 1409 et seq.)
The sale made by Gimena is certainly a defective contract but
of what category? The answer: it is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable
contracts are "[T]hose where one of the parties is incapable of
giving consent to the contract." (Par. 1.) In the instant caseGimena had no capacity to give consent to the contract of
sale. The capacity to give consent belonged not even to the
husband alone but to both spouses.
The view that the contract made by Gimena is a voidable
contract is supported by the legal provision that contracts

137
entered by the husband without the consent of the wife when
such consent is required, are annullable at her instance during
the marriage and within ten years from the transaction
questioned. (Art. 173, Civil Code.)
Gimena's contract is not rescissible for in such contract all the
essential elements are untainted but Gimena's consent was
tainted. Neither can the contract be classified as
unenforceable because it does not fit any of those described in
Art. 1403 of the Civil Code. And finally, the contract cannot be
void or inexistent because it is not one of those mentioned in
Art. 1409 of the Civil Code. By process of elimination, it must
perforce be a voidable contract.
The voidable contract of Gimena was subject to annulment by
her husband only during the marriage because he was the
victim who had an interest in the contract. Gimena, who was
the party responsible for the defect, could not ask for its
annulment. Their children could not likewise seek the
annulment of the contract while the marriage subsisted
because they merely had an inchoate right to the lands sold.
The termination of the marriage and the dissolution of the
conjugal partnership by the death of Maximo Aldon did not
improve the situation of Gimena. What she could not do during
the marriage, she could not do thereafter.
The case of Sofia and Salvador Aldon is different. After the
death of Maximo they acquired the right to question the
defective contract insofar as it deprived them of their
hereditary rights in their father's share in the lands. The
father's share is one-half (1/2) of the lands and their share is
two-thirds (2/3) thereof, one-third (1/3) pertaining to the widow.

The petitioners have been in possession of the lands since

1951. It was only in 1976 when the respondents filed action to
recover the lands. In the meantime, Maximo Aldon died.
Two questions come to mind, namely: (1) Have the petitioners
acquired the lands by acquisitive prescription? (2) Is the right
of action of Sofia and Salvador Aldon barred by the statute of
limitations?
Anent the first question, We quote with approval the following
statement of the Court of Appeals:
We would like to state further that appellees [petitioners
herein] could not have acquired ownership of the lots
by prescription in view of what we regard as their bad
faith. This bad faith is revealed by testimony to the
effect that defendant-appellee Vicente V. Felipe (son of
appellees Eduardo Felipe and Hermogena V. Felipe)
attempted in December 1970 to have Gimena
Almosara sign a ready-made document purporting to
self the disputed lots to the appellees. This actuation
clearly indicated that theappellees knew the lots did not
still belong to them, otherwise, why were they
interested in a document of sale in their favor? Again
why did Vicente V. Felipe tell Gimena that the purpose
of the document was to obtain Gimena's consent to the
construction of an irrigation pump on the lots in
question? The only possible reason for purporting to
obtain such consent is that the appellees knew the lots
were not theirs. Why was there an attempted
improvement (the irrigation tank) only in 1970? Why
was the declaration of property made only in 1974?
Why were no attempts made to obtain the husband's
signature, despite the fact that Gimena and
Hermogena were close relatives? An these indicate the
bad faith of the appellees. Now then, even if we were to

138
consider appellees' possession in bad faith as a
possession in the concept of owners, this possession
at the earliest started in 1951, hence the period for
extraordinary prescription (30 years) had not yet lapsed
when the present action was instituted on April 26,
1976.
As to the second question, the children's cause of action
accrued from the death of their father in 1959 and they had
thirty (30) years to institute it (Art. 1141, Civil Code.) They filed
action in 1976 which is well within the period.
WHEREFORE, the decision of the Court of Appeals is hereby
modified. Judgment is entered awarding to Sofia and Salvador
Aldon their shares of the lands as stated in the body of this
decision; and the petitioners as possessors in bad faith shall
make an accounting of the fruits corresponding to the share
aforementioned from 1959 and solidarity pay their value to
Sofia and Salvador Aldon; costs against the petitioners.
SO ORDERED.

As a rule, the husband cannot dispose of the conjugal realty

without the wife's consent (Art. 166, Civil Code). Thus, a sale
by the husband of the conjugal realty without the wife's
consent was declared void (Tolentino vs. Cardenas, 123 Phil.
517; Villocino vs. Doyon, L-19797, December 17, 1966, 18
SCRA 1094 and L-28871, April 25, 1975, 63 SCRA 460; Reyes
vs. De Leon, L-22331, June 6,1967, 20 SCRA 369; Bucoy vs.
Paulino, L-25775, April 26, 1968, 23 SCRA 248; Tinitigan vs.
Tinitigan, L-45418, October 30,1980, 100 SCRA 619).
With more reason, the wife cannot make such a disposition
without the husband's consent since the husband is the
administrator of the conjugal assets.
In the instant case, the Court of Appeals did not err in voiding
the wife's sale of the conjugal land without the husband's
consent. As that sale is contrary to law, the action to have it
declared void or inexistent does not prescribe.
Moreover, there are indications that the contract between the
parties was an antichresis, a transaction which is very
common in rural areas.

Concepcion Jr., Guerrero and De Castro, JJ., concur.

Makasiar, (Chairman), J., In the result.
Escolin J., took no part.

SECOND DIVISION
G.R. No. 92245

June 26, 1991

Separate Opinions
AQUINO, J., concurring:
I concur in the result. The issue is whether the wife's sale in
1651 of an unregistered sixteen-hectare conjugal land, without
the consent of her husband (he died in 1959), can be annulled
in 1976 by the wife and her two children.

MELANIA A. ROXAS, petitioner,

vs.
THE HON. COURT OF APPEALS and ANTONIO M.
CAYETANO, respondents.
Agustin V. Velante for petitioner.
Manuel M. Katapang for private respondent.

139
PARAS, J.:
The only issue before Us is whether or not a husband, as the
administrator of the conjugal partnership, may legally enter
into a contract of lease involving conjugal real property without
the knowledge and consent of the wife.
According to the Decision * rendered by the respondent Court
of Appeals, the pertinent facts of the case as alleged in
plaintiff-petitioner's complaint indicate:
1. That plaintiff is of legal age, married but living
separately from husband, one of the defendants herein
and presently residing at No. 4 Ambrocia St., Quezon
City; while defendant Antonio S. Roxas is likewise of
legal age and living separately from his wife, plaintiff
herein, with residence at No. 950 Quirino Highway,
Novaliches, Quezon City where he may be served with
summons; and defendant Antonio M. Cayetano is of
legal age and residing at No. 28 Mariano Olondriz
Street, BF Homes, Paranaque, Metro Manila where he
may be served with summons;
2. That only recently, plaintiff discovered that her
estranged husband, defendant Antonio S. Roxas, had
entered into a contract of lease with defendant Antonio
M. Cayetano sometime on March 30, 1987 covering a
portion of their conjugal lot situated at 854 Quirino
Highway, Novaliches, Quezon City, described in T.C.T.
No. 378197 (formerly T.C.T. No. 23881) of the Land
Registry for Quezon City without her previous
knowledge, much less her marital consent-xerox; copy
of which lease contract is hereto attached as Annex
"A", and made an integral part hereof.

3. That on the same lot, plaintiff had planned to put up

her flea market with at least twenty (20) stalls and minimart for grocery and dry goods items for which she had
filed an application for the corresponding Mayor's
Permit and Municipal License which had been
approved since 1986, but when she attempted to
renew it for 1986, the same was disapproved last
month due to the complaint lodged by defendant
Antonio M. Cayetano whose application for renewal of
Mayor's Permit and License for the same business of
putting up a flea market, had been allegedly earlier
approved;
4. That for the planning and initial construction of
plaintiffs project to put up her own business of flea
market and mini-mart grocery and wet and dry stores
which she had intended to operate partly by herself and
lease the rest of the twenty (20) stalls thereon, she had
spent some P135,000.00 for the said construction,
including materials and labor, where she had expected
to earn as daily net income in the minimum amount of
P500.00 daily;
5. That due to the illegal lease contract entered into
between the herein defendants and the resultant
unlawful deprivation of plaintiff from operating her own
legitimate business on the same lot of which she is a
conjugal owner, plaintiff has been compelled to seek
redress and ventilate her grievance to the court for
which she has to engage the services of counsel with
whom she agreed to pay as and for attorney's fees the
sum of P10,000.00; plus the amount equivalent to 20%
of whatever damages may be awarded to her in
addition to the sum of P500.00 per appearance in
court.

140
xxx

xxx

xxx

xxx

xxx

xxx

Dated July 31, 1989 defendant Antonio M. Cayetano

moved to dismiss the complaint on the sole ground that
the complaint states no cause of action, to which an
Opposition was filed by plaintiff (now petitioner herein),
while defendant Antonio S. Roxas, estranged husband
of plaintiff-petitioner, filed an answer.

Petitioner directly appealed the Decision of the lower court to

the Supreme Court.
On November 27, 1989, the Second Division of this Court
referred this case to the Court of Appeals for "proper
determination and disposition."
Respondent Court of Appeals rendered judgment affirming in
toto the Order of the trial court.
Hence, this petition.

Confronted with the private respondent's Motion to

Dismiss, on August 16, 1989, respondent Judge
resolved said Motion by dismissing plaintiff-petitioner's
complaint in its Order dated August 16, 1989, the
dispositive portion of which reads, as follows:
It is said that the test of sufficiency of the cause
of action is whether admitting the facts alleged
to be true, the court could render a valid
judgment in accordance with the prayer in the
complaint. After examining the material
allegations in the complaint, the Court finds that
the complaint failed to satisfy the test of
sufficiency.
WHEREFORE, the complaint is dismissed for
failure to state a sufficient cause of action.
IT IS SO ORDERED. (p. 2 Order, dated August
16, 1989).
Plaintiff-petitioner filed a Motion for Reconsideration,
which was denied by respondent Judge in its Order
dated September 29, 1989. (Decision of Court of
Appeals, pp. 1-4; Rollo, Annex "A", pp. 26-29)

Under the New Civil Code (NCC), "Art. 165. The husband is
the administrator of the conjugal partnership," in view of the
fact that the husband is principally responsible for the support
of the wife and the rest of the family. If the conjugal partnership
does not have enough assets, it is the husband's capital that is
responsible for such support, not the paraphernal property.
Responsibility should carry authority with it.
The husband is not an ordinary administrator, for while a mere
administrator has no right to dispose of, sell, or otherwise
alienate the property being administered, the husband can do
so in certain cases allowed by law. He is not required by law to
render an accounting. Acts done under administration do not
need the prior consent of the wife.
However, administration does not include acts of ownership.
For while the husband can administer the conjugal assets
unhampered, he cannot alienate or encumber the conjugal
realty. Thus, under Art. 166 of NCC "unless the wife has been
declared a non-compos mentis or a spendthrift, or is under
civil interdiction or is confined in a leprosarium, the husband
cannot alienate or encumber any real property of the conjugal
partnership the wife's consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the

141
same." This rule prevents abuse on the part of the husband,
and guarantees the rights of the wife, who is partly responsible
for the acquisition of the property, particularly the real property.
Contracts entered into by the husband in violation of this
prohibition are voidable and subject to annulment at the
instance of the aggrieved wife. (Art. 173 of the Civil Code)
As stated in Black's Law Dictionary, the word "alienation"
means 'the transfer of the property and possession of lands,
tenements, or other things from one person to another . . . The
act by which the title to real estate is voluntarily assigned by
one person to another and accepted by the latter, in the form
prescribed by law. Cf. In re Enrhardt U.S.D.C. 19 F. 2d 406,
407 . . . ." While encumbrance "has been defined to be every
right to, or interest in, the land which may subsist in third
persons, to the diminution of the value of the land, but
consistent with the passing of the fee by the conveyance; any
(act) that impairs the use or transfer of property or real estate .
. ." (42 C.J.S., p. 549).
The pivotal issue in this case is whether or not a lease is an
encumbrance and/or alienation within the scope of Art. 166 of
the New Civil Code.
Under Art. 1643 of the New Civil Code "In the lease of things,
one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period
which may be definite or indefinite. However, no lease for
more than ninety-nine years shall be valid." Under the law,
lease is a grant of use and possession: it is not only a grant of
possession as opined by the Court of Appeals. The right to
possess does not always include the right to use. For while the
bailee in the contract of deposit holds the property in trust, he
is not granted by law the right to make use of the property in
deposit.

In the contract of lease, the lessor transfers his light of use in

favor of the lessee. The lessor's right of use is impaired,
therein. He may even be ejected by the lessee if the lessor
uses the leased realty. Therefore, lease is a burden on the
land, it is an encumbrance on the land. The opinion of the
Court of Appeals that lease is not an encumbrance is not
supported by law. The concept of encumbrance includes
lease, thus "an encumbrance is sometimes construed broadly
to include not only liens such as mortgages and taxes, but also
attachment, LEASES, inchoate dower rights, water rights,
easements, and other RESTRICTIONS on USE."
(Capitalization is Ours) (533 Pacific Reporter [second series]
9, 12).
Moreover, lease is not only an encumbrance but also a
"qualified alienation, with the lessee becoming, for all legal
intents and purposes, and subject to its terms, the owner of
the thing affected by the lease." (51 C C.J.S., p. 522)
Thus, the joinder of the wife, although unnecessary for an oral
lease of conjugal realty which does not exceed one year in
duration, is required in a lease of conjugal realty for a period of
more than one year, such a lease being considered a
conveyance and encumbrance within the provisions of the
Civil Code requiring the joinder of the wife in the instrument by
which real property is conveyed or encumbered (See also 41
C.J.S., p. 1149). In case the wife's consent is not secured by
the husband as required by law, the wife has the remedy of
filing an action for the annulment of the contract. Art. 173 of
the Civil Code states "the wife may, during the marriage and
within ten years from the transaction questioned, ask the
courts for the annulment of any contract of the husband
entered into without her consent, when such consent is
required. . . .

142
In the case at bar, the allegation in paragraph 2 of the
complaint indicates that petitioner's estranged husband,
defendant Antonio S. Roxas had entered into a contract of
lease with defendant Antonio M. Cayetano without her marital
consent being secured as required by law under Art. 166 of the
Civil Code. Petitioner, therefore, has a cause of action under
Art. 173 to file a case for annulment of the contract of lease
entered into without her consent. Petitioner has a cause of
action not only against her husband but also against the
lessee, Antonio M. Cayetano, who is a party to the contract of
lease.
PREMISES CONSIDERED, the decision of the Court of
Appeals is hereby SET ASIDE and this case is hereby
REMANDED to the Regional Trial court for further
proceedings.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ.,
concur.
SECOND DIVISION
[G.R. No. 153802. March 11, 2005]

Footnotes
* Penned by Justice Jorge S. Imperial, and concurred
in by Justices Reynato S. Puno and Artemon D. Luna.

HOMEOWNERS SAVINGS & LOAN BANK, petitioner,

vs. MIGUELA C. DAILO, respondent.
DECISION
TINGA, J.:

143
This is a petition for review on certiorari under Rule 45 of
the Revised Rules of Court, assailing the Decision[1] of the
Court of Appeals in CA-G.R. CV No. 59986 rendered on June
3, 2002, which affirmed with modification the October 18,
1997 Decision[2] of the Regional Trial Court, Branch 29, San
Pablo City, Laguna in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr.
were married on August 8, 1967. During their marriage, the
spouses purchased a house and lot situated at Barangay San
Francisco, San Pablo City from a certain Sandra Dalida. The
subject property was declared for tax assessment purposes
under Assessment of Real Property No. 94-051-2802. The
Deed of Absolute Sale, however, was executed only in favor of
the late Marcelino Dailo, Jr. as vendee thereof to the exclusion
of his wife.[3]
On December 1, 1993, Marcelino Dailo, Jr. executed a
Special Power of Attorney (SPA) in favor of one Lilibeth
Gesmundo, authorizing the latter to obtain a loan from
petitioner Homeowners Savings and Loan Bank to be secured
by the spouses Dailos house and lot in San Pablo City.
Pursuant to the SPA, Gesmundo obtained a loan in the
amount of P300,000.00 from petitioner. As security therefor,
Gesmundo executed on the same day a Real Estate Mortgage
constituted on the subject property in favor of petitioner. The
abovementioned transactions, including the execution of the
SPA in favor of Gesmundo, took place without the knowledge
and consent of respondent.[4]
Upon maturity, the loan remained outstanding. As a result,
petitioner instituted extrajudicial foreclosure proceedings on
the mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of petitioner as the

highest bidder. After the lapse of one year without the property
being redeemed, petitioner, through its vice-president,
consolidated the ownership thereof by executing on June 6,
1996 an Affidavit of Consolidation of Ownership and a Deed of
Absolute Sale.[5]
In the meantime, Marcelino Dailo, Jr. died on December
20, 1995. In one of her visits to the subject property,
respondent learned that petitioner had already employed a
certain Roldan Brion to clean its premises and that her car, a
Ford sedan, was razed because Brion allowed a boy to play
with fire within the premises.
Claiming that she had no knowledge of the mortgage
constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court,
Branch 29, San Pablo City, Civil Case No. SP-2222 (97)
for Nullity of Real Estate Mortgage and Certificate of Sale,
Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latters Answer with
Counterclaim, petitioner prayed for the dismissal of the
complaint on the ground that the property in question was the
exclusive property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered
a Decision on October 18, 1997. The dispositive portion
thereof reads as follows:
WHEREFORE,theplaintiffhavingprovedbythepreponderanceof
evidencetheallegationsoftheComplaint,theCourtfindsforthe
plaintiffandherebyorders:
ONTHEFIRSTCAUSEOFACTION:
1.Thedeclarationofthefollowingdocumentsasnullandvoid:

144
(a)TheDeedofRealEstateMortgagedatedDecember1,
1993executedbeforeNotaryPublicRomuloUrreaand
hisnotarialregisterenteredasDoc.No.212;PageNo.
44,BookNo.XXI,Seriesof1993.
(b)TheCertificateofSaleexecutedbyNotaryPublic
ReynaldoAlcantaraonApril20,1995.
(c)TheAffidavitofConsolidationofOwnershipexecuted
bythedefendant
(c)TheAffidavitofConsolidationofOwnershipexecuted
bythedefendantovertheresidentiallotlocatedatBrgy.
SanFrancisco,SanPabloCity,coveredbyARPNo.95
0911236enteredasDoc.No.406;PageNo.83,Book
No.III,Seriesof1996ofNotaryPublicOctavioM.
Zayas.
(d)TheassessmentofrealpropertyNo.950511236.
2.Thedefendantisorderedtoreconveythepropertysubjectofthis
complainttotheplaintiff.
ONTHESECONDCAUSEOFACTION
1.ThedefendanttopaytheplaintiffthesumofP40,000.00
representingthevalueofthecarwhichwasburned.
ON BOTH CAUSES OF ACTION
1.ThedefendanttopaytheplaintiffthesumofP25,000.00as
attorneysfees;
2.ThedefendanttopayplaintiffP25,000.00asmoraldamages;

3.ThedefendanttopaytheplaintiffthesumofP10,000.00as
exemplarydamages;
4.Topaythecostofthesuit.
Thecounterclaimisdismissed.
SOORDERED.[6]
Upon elevation of the case to the Court of Appeals, the
appellate court affirmed the trial courts finding that the subject
property was conjugal in nature, in the absence of clear and
convincing evidence to rebut the presumption that the subject
property acquired during the marriage of spouses Dailo
belongs to their conjugal partnership.[7] The appellate court
declared as void the mortgage on the subject property
because it was constituted without the knowledge and consent
of respondent, in accordance with Article 124 of the Family
Code. Thus, it upheld the trial courts order to reconvey the
subject property to respondent.[8] With respect to the damage
to respondents car, the appellate court found petitioner to be
liable therefor because it is responsible for the consequences
of the acts or omissions of the person it hired to accomplish
the assigned task.[9] All told, the appellate court affirmed the
trial courts Decision, but deleted the award for damages and
attorneys fees for lack of basis.[10]
Hence, this petition, raising the following issues for this
Courts consideration:
1.WHETHERORNOTTHEMORTGAGECONSTITUTEDBY
THELATEMARCELINODAILO,JR.ONTHESUBJECT
PROPERTYASCOOWNERTHEREOFISVALIDASTOHIS
UNDIVIDEDSHARE.

145
2.WHETHERORNOTTHECONJUGALPARTNERSHIPIS
LIABLEFORTHEPAYMENTOFTHELOANOBTAINEDBY
THELATEMARCELINODAILO,JR.THESAMEHAVING
REDOUNDEDTOTHEBENEFITOFTHEFAMILY.[11]
First, petitioner takes issue with the legal provision
applicable to the factual milieu of this case. It contends that
Article 124 of the Family Code should be construed in relation
to Article 493 of the Civil Code, which states:
ART.493.Eachcoownershallhavethefullownershipofhispart
andofthefruitsandbenefitspertainingthereto,andhemaytherefore
alienate,assignormortgageit,andevensubstituteanotherpersonin
itsenjoyment,exceptwhenpersonalrightsareinvolved.Butthe
effectofthealienationorthemortgage,withrespecttotheco
owners,shallbelimitedtotheportionwhichmaybeallottedtohim
inthedivisionupontheterminationofthecoownership.
Article 124 of the Family Code provides in part:
ART.124.Theadministrationandenjoymentoftheconjugal
partnershippropertyshallbelongtobothspousesjointly....
Intheeventthatonespouseisincapacitatedorotherwiseunableto
participateintheadministrationoftheconjugalproperties,theother
spousemayassumesolepowersofadministration.Thesepowersdo
notincludethepowersofdispositionorencumbrancewhichmust
havetheauthorityofthecourtorthewrittenconsentoftheother
spouse.Intheabsenceofsuchauthorityorconsent,thedispositionor
encumbranceshallbevoid....
Petitioner argues that although Article 124 of the Family
Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law could
not have intended to curtail the right of a spouse from

exercising full ownership over the portion of the conjugal

property pertaining to him under the concept of co-ownership.
[12]
Thus, petitioner would have this Court uphold the validity of
the mortgage to the extent of the late Marcelino Dailo, Jr.s
share in the conjugal partnership.
In Guiang v. Court of Appeals,[13] it was held that the sale
of a conjugal property requires the consent of both the
husband and wife.[14] In applying Article 124 of the Family
Code, this Court declared that the absence of the consent of
one renders the entire sale null and void, including the portion
of the conjugal property pertaining to the husband who
contracted the sale. The same principle in Guiang squarely
applies to the instant case. As shall be discussed next, there is
no legal basis to construe Article 493 of the Civil Code as an
exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married
on August 8, 1967. In the absence of a marriage settlement,
the system of relative community or conjugal partnership of
gains governed the property relations between respondent and
her late husband.[15] With the effectivity of the Family Code on
August 3, 1988, Chapter 4 onConjugal Partnership of Gains in
the Family Code was made applicable to conjugal partnership
of gains already established before its effectivity unless vested
rights have already been acquired under the Civil Code or
other laws.[16]
The rules on co-ownership do not even apply to the
property relations of respondent and the late Marcelino Dailo,
Jr. even in a suppletory manner. The regime of conjugal
partnership of gains is a special type of partnership, where the
husband and wife place in a common fund the proceeds,
products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts
or by chance.[17] Unlike the absolute community of property

146
wherein the rules on co-ownership apply in a suppletory
manner,[18] the conjugal partnership shall be governed by the
rules on contract of partnership in all that is not in conflict with
what is expressly determined in the chapter (on conjugal
partnership of gains) or by the spouses in their marriage
settlements.[19] Thus, the property relations of respondent and
her late husband shall be governed, foremost, by Chapter 4
on Conjugal Partnership of Gains of the Family Code and,
suppletorily, by the rules on partnership under the Civil Code.
In case of conflict, the former prevails because the Civil Code
provisions on partnership apply only when the Family Code is
silent on the matter.
The basic and established fact is that during his lifetime,
without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject
property, which formed part of their conjugal partnership. By
express provision of Article 124 of the Family Code, in the
absence of (court) authority or written consent of the other
spouse, any disposition or encumbrance of the conjugal
property shall be void.
The aforequoted provision does not qualify with respect to
the share of the spouse who makes the disposition or
encumbrance in the same manner that the rule on coownership under Article 493 of the Civil Code does. Where the
law does not distinguish, courts should not distinguish.[20] Thus,
both the trial court and the appellate court are correct in
declaring the nullity of the real estate mortgage on the subject
property for lack of respondents consent.
Second, petitioner imposes the liability for the payment of
the principal obligation obtained by the late Marcelino Dailo, Jr.
on the conjugal partnership to the extent that it redounded to
the benefit of the family.[21]

Under Article 121 of the Family Code, [T]he conjugal

partnership shall be liable for: . . . (3) Debts and obligations
contracted by either spouse without the consent of the other to
the extent that the family may have been benefited; . . . . For
the subject property to be held liable, the obligation contracted
by the late Marcelino Dailo, Jr. must have redounded to the
benefit of the conjugal partnership. There must be the requisite
showing then of some advantage which clearly accrued to the
welfare of the spouses. Certainly, to make a conjugal
partnership respond for a liability that should appertain to the
husband alone is to defeat and frustrate the avowed objective
of the new Civil Code to show the utmost concern for the
solidarity and well-being of the family as a unit.[22]
The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such.[23] Ei incumbit probatio
qui dicit, non qui negat (he who asserts, not he who denies,
must prove).[24] Petitioners sweeping conclusion that the loan
obtained by the late Marcelino Dailo, Jr. to finance the
construction of housing units without a doubt redounded to the
benefit of his family, without adducing adequate proof, does
not persuade this Court. Other than petitioners bare allegation,
there is nothing from the records of the case to compel a
finding that, indeed, the loan obtained by the late Marcelino
Dailo, Jr. redounded to the benefit of the family. Consequently,
the conjugal partnership cannot be held liable for the payment
of the principal obligation.
In addition, a perusal of the records of the case reveals
that during the trial, petitioner vigorously asserted that the
subject property was the exclusive property of the late
Marcelino Dailo, Jr. Nowhere in the answer filed with the trial
court was it alleged that the proceeds of the loan redounded to
the benefit of the family. Even on appeal, petitioner never
claimed that the family benefited from the proceeds of the

147
loan. When a party adopts a certain theory in the court below,
he will not be permitted to change his theory on appeal, for to
permit him to do so would not only be unfair to the other party
but it would also be offensive to the basic rules of fair play,
justice and due process.[25] A party may change his legal
theory on appeal only when the factual bases thereof would
not require presentation of any further evidence by the
adverse party in order to enable it to properly meet the issue
raised in the new theory.[26]
WHEREFORE, the petition is DENIED. Costs against
petitioner.
SO ORDERED.
Puno,
(Chairman),
Austria-Martinez,
Sr., and Chico-Nazario, JJ., concur.

[1]

Callejo,

Penned by J. Juan Q. Enriquez and concurred in by JJ.

Eugenio S. Labitoria, Chairman, and Teodoro P.
Regino; Rollo, p. 34.

[2]

Penned by Judge Bienvenido Reyes.

[3]

Decision of the Court of Appeals dated June 3, 2002, p.

3; Rollo, p. 36,

[4]

Ibid.

[5]

Ibid.

[6]

As quoted in the Decision of the Court of Appeals, pp. 12; Rollo, pp. 34-35.

[7]

Decision of the Court of Appeals, p. 5; Rollo, p. 38.

[8]

Id. at 6; Rollo, p. 39.

[9]

Ibid.

[10]

Id. at 7; Rollo, p. 40.

[11]

Rollo, p. 24.

[12]

Rollo, p. 26.

[13]

353 Phil. 578 (1998).

[14]

Id. at 374.

[15]

Article 119, The New Civil Code.

[16]

Article 105, Family Code.

[17]

Article 106, Family Code.

[18]

Article 90, Family Code.

[19]

Article 108, Family Code.

[20]

Recaa, Jr. v. Court of Appeals, G.R. No. 123850, January 5,

2001, 349 SCRA 24, 33 .

[21]

Rollo, p. 27.

148
[22]

Ayala Investment & Development Corp. v. Court of Appeals,

349 Phil. 942, 952 (1998), citing Luzon Surety Co.,
Inc. v. De Garcia, 30 SCRA 111 (1969).

[23]

Id. at 954, 286 SCRA 272, 283 ( 1998).

[24]

Castilex Industrial Corporation v. Vasquez, Jr., 378 Phi.

1009 (1999).

[25]

Drilon v. Court of Appeals, 336 Phil. 949 (1997).

[26]

Heirs of Enrique Zambales v. Court of Appeals, 205 Phil.

789 (1983).

EN BANC
G.R. No. L-19565

January 30, 1968

ESTRELLA DE LA CRUZ, plaintiff-appellee,

vs.
SEVERINO DE LA CRUZ, defendant-appellant.
Estacion and Paltriguera for plaintiff-appellee.
Manuel O. Soriano and Pio G. Villoso for defendant-appellant.

CASTRO, J.:

The plaintiff Estrella de la Cruz filed a complaint on July 22,

1958 with the Court of First Instance of Negros Occidental,
alleging in essence that her husband, the defendant Severino
de la Cruz, had not only abandoned her but as well was
mismanaging their conjugal partnership properties, and
praying for (1) separation of property, (2) monthly support of
P2,500 during the pendency of the action, and (3) payment of
P20,000 as attorney's fees, and costs.
The court a quo forthwith issued an order allowing the plaintiff
the amount prayed for as alimony pendente lite, which
however, upon defendant's motion, was reduced to P2,000.
On June 1, 1961 the trial court rendered judgment ordering
separation and division of the conjugal assets, and directing
the defendant to pay to the plaintiff the sum of P20,000 as
attorney's fees, with legal interest from the date of the original
complaint, that is, from July 22, 1958, until fully paid, plus
costs. From this judgment the defendant appealed to the Court
of Appeals, which certified the case to us, "it appearing that the
total value of the conjugal assets is over P500,000".
The basic facts are not controverted. The plaintiff and the
defendant were married in Bacolod City on February 1, 1938.
Six children were born to them, namely, Zenia (1939), Ronnie
(1942), Victoria (1944), Jessie 1945), Bella (1946), and Felipe
(1948). During their coverture they acquired seven parcels of
land of the Bacolod Cadastre, all assessed at P45,429, and
three parcels of the Silay Cadastre, all assessed at P43,580.
All these parcels are registered in their names.
The hacienda in Silay yielded for the year 1957 a net profit of
P3,390.49.
They are also engaged in varied business ventures with fixed
assets valued as of December 31, 1956 at P496,006.92, from
which they obtained for that year a net profit of P75,655.78.

149
The net gain of the Philippine Texboard Factory, the principal
business of the spouses, was P90,454.48 for the year 1957.
As of December 31, 1959, the total assets of the various
enterprises of the conjugal partnership were valued at
P1,021,407.68, not including those of the Top Service Inc., of
which firm the defendant has been the president since its
organization in 1959 in Manila with a paid-up capital of
P50,000, P10,000 of which was contributed by him. This
corporation was the Beverly Hills Subdivision in Antipolo, Rizal,
the Golden Acres Subdivision and the Green Valley
Subdivision in Las Pias, Rizal, and a lot and building located
at M. H. del Pilar, Manila purchased for P285,000, an amount
borrowed from the Manufacturer's Bank and Trust Company.
The spouses are indebted to the Philippine National Bank and
the Development Bank of the Philippines for loans obtained, to
secure which they mortgaged the Philippine Texboard Factory,
the Silay hacienda, their conjugal house, and all their parcels
of land located in Bacolod City.
The essential issues of fact may be gleaned from the nine
errors the defendant imputes to the court a quo, namely,
1. In finding that the only visit, from May 15, 1955 to the
rendition of the decision, made by the defendant to the
conjugal abode to see his wife was on June 15, 1955;
2. In finding that the letter exh. 3 was written by one
Nenita Hernandez and that she and the defendant are
living as husband and wife;
3. In finding that since 1951 the relations between the
plaintiff and the defendant were far from cordial, and
that it was from 1948 that the former has been
receiving an allowance from the latter;

4. In finding that the defendant has abandoned the

plaintiff;
5. In finding that the defendant since 1956 has not
discussed with his wife the business activities of the
partnership, and that this silence constituted "abuse of
administration of the conjugal partnerships";
6. In declaring that the defendant mortgaged the
conjugal assets without the knowledge of the plaintiff
and thru false pretences to which the latter was prey;
7. In allowing the plaintiff, on the one hand, to testify on
facts not actually known by her, and, on the other hand,
in not allowing the defendant to establish his special
defenses;
8. In ordering separation of the conjugal partnership
properties; and
9. In sentencing the defendant to pay to the plaintiff
attorney's fees in the amount of P20,000, with interest
at the legal rate.1wph1.t
Two issues of law as well emerge, requiring resolution petition:
(1) Did the separation of the defendant from the plaintiff
constitute abandonment in law that would justify a separation
of the conjugal partnership properties? (2) Was the
defendant's failure and/or refusal to inform the plaintiff of the
state of their business enterprises such an abuse of his
powers of administration of the conjugal partnership as to
warrant a division of the matrimonial assets?
The plaintiff's evidence may be summarized briefly. The
defendant started living in Manila in 1955, although he
occasionally returned to Bacolod City, sleeping in his office at

150
the Philippine Texboard Factory in Mandalagan, instead of in
the conjugal home at 2nd Street, Bacolod City. Since 1955 the
defendant had not slept in the conjugal dwelling, although in
the said year he paid short visits during which they engaged in
brief conversations. After 1955 up to the time of the trial, the
defendant had never visited the conjugal abode, and when he
was in Bacolod, she was denied communication with him. He
has abandoned her and their children, to live in Manila with his
concubine, Nenita Hernandez. In 1949 she began to suspect
the existence of illicit relations between her husband and
Nenita. This suspicion was confirmed in 1951 when she found
an unsigned note in a pocket of one of her husband's polo shirt
which was written by Nenita and in which she asked "Bering"
to meet her near the church. She confronted her husband who
forthwith tore the note even as he admitted his amorous liaison
with Nenita. He then allayed her fears by vowing to forsake his
mistress. Subsequently, in November 1951, she found in the
iron safe of her husband a letter, exh. C, also written by
Nenita. In this letter the sender (who signed as "D") apologized
for her conduct, and expressed the hope that the addressee
("Darling") could join her in Baguio as she was alone in the
Patria Inn and lonely in "a place for honeymooners".
Immediately after her husband departed for Manila the
following morning, the plaintiff enplaned for Baguio, where she
learned that Nenita had actually stayed at the Patria Inn, but
had already left for Manila before her arrival. Later she met her
husband in the house of a relative in Manila from whence they
proceeded to the Avenue Hotel where she again confronted
him about Nenita. He denied having further relations with this
woman.
Celia Baez, testifying for the plaintiff, declared that she was
employed as a cook in the home of the spouses from May 15,
1955 to August 15, 1958, and that during the entire period of
her employment she saw the defendant in the place only once.
This declaration is contradicted, however, by the plaintiff

herself who testified that in 1955 the defendant "used to

have a short visit there," which statement implies more than
one visit.
The defendant, for his part, denied having abandoned his wife
and children, but admitted that in 1957, or a year before the
filing of the action, he started to live separately from his wife.
When he transferred his living quarters to his office in
Mandalagan, Bacolod City, his intention was not, as it never
has been, to abandon his wife and children, but only to teach
her a lesson as she was quarrelsome and extremely jealous
of every woman. He decided to live apart from his wife
temporarily because at home he could not concentrate on his
work as she always quarreled with him, while in Mandalagan
he could pass the nights in peace. Since 1953 he stayed in
Manila for some duration of time to manage their expanding
business and look for market outlets for their texboard
products. Even the plaintiff admitted in both her original and
amended complaints that "sometime in 1953, because of the
expanding business of the herein parties, the defendant
established an office in the City of Manila, wherein some of the
goods, effects and merchandise manufactured or produced in
the business enterprises of the parties were sold or disposed
of". From the time he started living separately in Mandalagan
up to the filing of the complaint, the plaintiff herself furnished
him food and took care of his laundry. This latter declaration
was not rebutted by the plaintiff.
The defendant, with vehemence, denied that he has
abandoned his wife and family, averring that he has never
failed, even for a single month, to give them financial support,
as witnessed by the plaintiff's admission in her original and
amended complaints as well as in open court that during the
entire period of their estrangement, he was giving her around
P500 a month for support. In point of fact, his wife and children
continued to draw allowances from his office of a total ranging

151
from P1,200 to P1,500 a month. He financed the education of
their children, two of whom were studying in Manila at the time
of the trial and were not living with the plaintiff. While in
Bacolod City, he never failed to visit his family, particularly the
children. His wife was always in bad need of money because
she playedmahjong, an accusation which she did not traverse,
explaining that she played mahjong to entertain herself and
forget the infidelities of her husband.
Marcos V. Ganaban, the manager of the Philippine Texboard
Factory, corroborated the testimony of the defendant on the
matter of the support the latter gave to his family, by declaring
in court that since the start of his employment in 1950 as
assistant general manager, the plaintiff has been drawing an
allowance of P1,000 to P1,500 monthly, which amount was
given personally by the defendant or, in his absence, by the
witness himself.
The defendant denied that he ever maintained a mistress in
Manila. He came to know Nenita Hernandez when she was
barely 12 years old, but had lost track of her thereafter. His
constant presence in Manila was required by the pressing
demands of an expanding business. He denied having
destroyed the alleged note which the plaintiff claimed to have
come from Nenita, nor having seen, previous to the trial, the
letter exh. C. The allegation of his wife that he had a
concubine is based on mere suspicion. He had always been
faithful to his wife, and not for a single instance had he been
caught or surprised by her with another woman.
On the matter of the alleged abuse by the defendant of his
powers of administration of the conjugal partnership, the
plaintiff declared that the defendant refused and failed to
inform her of the progress of their various business concerns.
Although she did not allege, much less prove, that her
husband had dissipated the conjugal properties, she averred

nevertheless that her husband might squander and dispose of

the conjugal assets in favor of his concubine. Hence, the
urgency of separation of property.
The defendant's answer to the charge of mismanagement is
that he has applied his industry, channeled his ingenuity, and
devoted his time, to the management, maintenance and
expansion of their business concerns, even as his wife threw
money away at the mahjong tables. Tangible proof of his
endeavors is that from a single cargo truck which he himself
drove at the time of their marriage, he had built up one
business after another, the Speedway Trucking Service, the
Negros Shipping Service, the Bacolod Press, the Philippine
Texboard Factory, and miscellaneous other business
enterprises worth over a million pesos; that all that the
spouses now own have been acquired through his diligence,
intelligence and industry; that he has steadily expanded the
income and assets of said business enterprises from year to
year, contrary to the allegations of the complainant, as proved
by his balance sheet and profit and loss statements for the
year 1958 and 1959 (exhibits 1 and 2); and that out of the
income of their enterprises he had purchased additional
equipment and machineries and has partially paid their
indebtedness to the Philippine National Bank and the
Development Bank of the Philippines.
It will be noted that the plaintiff does not ask for legal
separation. The evidence presented by her to prove
concubinage on the part of the defendant, while pertinent and
material in the determination of the merits of a petition for legal
separation, must in this case be regarded merely as an
attempt to bolster her claim that the defendant had abandoned
her, which abandonment, if it constitutes abandonment in law,
would justify separation of the conjugal assets under the
applicable provisions of article 178 of the new Civil Code which
read: "The separation in fact between husband and wife

152
without judicial approval, shall not affect the conjugal
partnership, except that . . . if the husband has abandoned the
wife without just cause for at least one year, she may petition
the court for a receivership, or administration by her of the
conjugal partnership property, or separation of property". In
addition to abandonment as a ground, the plaintiff also invokes
article 167 of the new Civil Code in support of her prayer for
division of the matrimonial assets. This article provides that "In
case of abuse of powers of administration of the conjugal
partnership property by the husband, the courts, on the
petition of the wife, may provide for a receivership, or
administration by the wife, or separation of property". It
behooves us, therefore, to inquire, in the case at bar, whether
there has been abandonment, in the legal sense, by the
defendant of the plaintiff, and/or whether the defendant has
abused his powers of administration of the conjugal
partnership property, so as to justify the plaintiff's plea for
separation of property.
We have made a searching scrutiny of the record, and it is our
considered view that the defendant is not guilty of
abandonment of his wife, nor of such abuse of his powers of
administration of the conjugal partnership, as to warrant
division of the conjugal assets.
The extraordinary remedies afforded to the wife by article 178
when she has been abandoned by the husband for at least
one year are the same as those granted to her by article 167
in case of abuse of the powers of administration by the
husband. To entitle her to any of these remedies, under article
178, there must be real abandonment, and not mere
separation. 1 The abandonment must not only be physical
estrangement but also amount to financial and moral
desertion.

Although an all-embracing definition of the term "abandonment

" is yet to be spelled out in explicit words, we nevertheless can
determine its meaning from the context of the Law as well as
from its ordinary usage. The concept of abandonment in article
178 may be established in relation to the alternative remedies
granted to the wife when she has been abandoned by the
husband, namely, receivership, administration by her, or
separation of property, all of which are designed to protect the
conjugal assets from waste and dissipation rendered imminent
by the husband's continued absence from the conjugal abode,
and to assure the wife of a ready and steady source of
support. Therefore, physical separation alone is not the full
meaning of the term "abandonment", if the husband, despite
his voluntary departure from the society of his spouse, neither
neglects the management of the conjugal partnership nor
ceases to give support to his wife.
The word "abandon", in its ordinary sense, means to forsake
entirely; to forsake or renounce utterly. 2 The dictionaries trace
this word to the root idea of "putting under a bar". The
emphasis is on the finality and the publicity with which some
thing or body is thus put in the control of another, and hence
the meaning of giving up absolutely, with intent never again to
resume or claim one's rights or interests. 3 When referring to
desertion of a wife by a husband, the word has been defined
as "the act of a husband in voluntarily leaving his wife with
intention to forsake her entirely, never to return to her, and
never to resume his marital duties towards her, or to claim his
marital rights; such neglect as either leaves the wife destitute
of the common necessaries of life, or would leave her destitute
but for the charity of others." 4 The word "abandonment", when
referring to the act of one consort of leaving the other, is "the
act of the husband or the wife who leaves his or her consort
wilfully, and with an intention of causing per perpetual
separation." 5 Giving to the word "abandoned", as used in
article 178, the meaning drawn from the definitions above

153
reproduced, it seems rather clear that to constitute
abandonment of the wife by the husband, there must be
absolute cessation of marital relations and duties and rights,
with the intention of perpetual separation.
Coming back to the case at bar, we believe that the defendant
did not intend to leave his wife and children permanently. The
record conclusively shows that he continued to give support to
his family despite his absence from the conjugal home. This
fact is admitted by the complainant, although she minimized
the amount of support given, saying that it was only P500
monthly. There is good reason to believe, however, that she
and the children received more than this amount, as the
defendant's claim that his wife and children continued to draw
from his office more than P500 monthly was substantially
corroborated by Marcos Ganaban, whose declarations were
not rebutted by the plaintiff. And then there is at all no showing
that the plaintiff and the children were living in want. On the
contrary, the plaintiff admitted, albeit reluctantly, that she
frequently played mahjong, from which we can infer that she
had money; to spare.
The fact that the defendant never ceased to give support to his
wife and children negatives any intent on his part not to return
to the conjugal abode and resume his marital duties and
rights. In People v. Schelske, 6 it was held that where a
husband, after leaving his wife, continued to make small
contributions at intervals to her support and that of their minor
child, he was not guilty of their "abandonment", which is an act
of separation with intent that it shall be perpetual, since
contributing to their support negatived such intent. In re Hoss'
Estate, supra, it was ruled that a father did not abandon his
family where the evidence disclosed that he almost always did
give his wife part of his earnings during the period of their
separation and that he gradually paid some old rental and
grocery bills.

With respect to the allegation that the defendant maintained a

concubine, we believe, contrary to the findings of the court a
quo, that the evidence on record fails to preponderate in favor
of the plaintiff's thesis. The proof that Nenita Hernandez was
the concubine of the defendant and that they were living as
husband and wife in Manila, is altogether too indefinite. Aside
from the uncorroborated statement of the plaintiff that she
knew that Nenita Hernandez was her husband's concubine,
without demonstrating by credible evidence the existence of
illicit relations between Nenita and the defendant, the only
evidence on record offered to link the defendant to his alleged
mistress is exh. C. The plaintiff however failed to connect
authorship of the said letter with Nenita, on the face whereof
the sender merely signed as "D" and the addressee was one
unidentified "Darling". The plaintiff's testimony on crossexamination, hereunder quoted, underscores such failure:
Q. You personally never received any letter from
Nenita?
A. No.
Q. Neither have you received on any time until today
from 1949 from Nenita?
A. No.
Q. Neither have you written to her any letter yourself
until now?
A. Why should I write a letter to her.
Q. In that case, Mrs. De la Cruz, you are not familiar
with the handwriting of Nenita. Is that right?
A. I can say that Nenita writes very well.

154
Q. I am not asking you whether she writes very well or
not but, my question is this: In view of the fact that you
have never received a letter from Nenita, you have ot
sent any letter to her, you are not familiar with her
handwriting?
A. Yes.
Q. You have not seen her writing anybody?
A. Yes.
Anent the allegation that the defendant had mismanaged the
conjugal partnership property, the record presents a different
picture. There is absolutely no evidence to show that he has
squandered the conjugal assets. Upon the contrary, he proved
that through his industry and zeal, the conjugal assets at the
time of the trial had increased to a value of over a million
pesos.
The lower court likewise erred in holding that mere refusal or
failure of the husband as administrator of the conjugal
partnership to inform the wife of the progress of the family
businesses constitutes abuse of administration. For "abuse" to
exist, it is not enough that the husband perform an act or acts
prejudicial to the wife. Nor is it sufficient that he commits acts
injurious to the partnership, for these may be the result of
mere inefficient or negligent administration. Abuse connotes
willful and utter disregard of the interests of the partnership,
evidenced by a repetition of deliberate acts and/or omissions
prejudicial to the latter. 7
If there is only physical separation between the spouses (and
nothing more), engendered by the husband's leaving the
conjugal abode, but the husband continues to manage the
conjugal properties with the same zeal, industry, and efficiency

as he did prior to the separation, and religiously gives support

to his wife and children, as in the case at bar, we are not
disposed to grant the wife's petition for separation of property.
This decision may appear to condone the husband's
separation from his wife; however, the remedies granted to the
wife by articles 167 and 178 are not to be construed as
condonation of the husband's act but are designed to protect
the conjugal partnership from waste and shield the wife from
want. Therefore, a denial of the wife's prayer does not imply a
condonation of the husband's act but merely points up the
insufficiency or absence of a cause of action.1wph1.t
Courts must need exercise judicial restraint and reasoned
hesitance in ordering a separation of conjugal properties
because the basic policy of the law is homiletic, to promote
healthy family life and to preserve the union of the spouses, in
person, in spirit and in property.
Consistent with its policy of discouraging a regime of
separation as not in harmony with the unity of the
family and the mutual affection and help expected of
the spouses, the Civil Code (both old and new)
requires that separation of property shall not prevail
unless expressly stipulated in marriage settlements
before the union is solemnized or by formal judicial
decree during the existence of the marriage (Article
190, new Civil Code, Article 1432, old Civil Code): and
in the latter case, it may only be ordered by the court
for causes specified in Article 191 of the new Civil
Code. 8
Furthermore, a judgment ordering the division of conjugal
assets where there has been no real abandonment, the
separation not being wanton and absolute, may altogether
slam shut the door for possible reconciliation. The estranged
spouses may drift irreversibly further apart; the already broken

155
family solidarity may be irretrievably shattered; and any
flickering hope for a new life together may be completely and
finally extinguished.
The monthly alimony in the sum of P2,000 which was allowed
to the wife in 1958, long before the devaluation of the
Philippine peso in 1962, should be increased to P3,000.
On the matter of attorney's fees, it is our view that because the
defendant, by leaving the conjugal abode, has given cause for
the plaintiff to seek redress in the courts, and ask
for adequate support, an award of attorney's fees to the
plaintiff must be made. Ample authority for such award is found
in paragraphs 6 and 11 of article 2208 of the new Civil Code
which empower courts to grant counsel's fees "in actions for
legal support" and in cases "where the court deems it just and
equitable that attorney's fees . . . should be recovered."
However, an award of P10,000, in our opinion, is, under the
environmental circumstances, sufficient.
This Court would be remiss if it did not, firstly, remind the
plaintiff and the defendant that the law enjoins husband and
wife to live together, and, secondly, exhort them to avail of
mutually, earnestly and steadfastly all opportunities for
reconciliation to the end that their marital differences may be
happily resolved, and conjugal harmony may return and, on
the basis of mutual respect and understanding, endure.
ACCORDINGLY, the judgment a quo, insofar as it decrees
separation of the conjugal properties, is reversed and set
aside. Conformably to our observations, however, the
defendant is ordered to pay to the plaintiff, in the concept of
support, the amount of P3,000 per month, until he shall have
rejoined her in the conjugal home, which amount may, in the
meantime, be reduced or increased in the discretion of the
court a quo as circumstances warrant. The award of attorney's

fees to the plaintiff is reduced to P10,000, without interest. No

pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon,
J.P., Zaldivar, Sanchez, Angeles and Fernando, JJ., concur.
Footnotes
1

Tolentino, Civil Code of the Philippines, Vol. 1, p. 436.

See Webster's International and standard dictionaries.

In re Hoss' Estate, 257 NYS 278.

Gay vs. State, 31 S. L. 569.

Note 4, supra.

154 N. W. 781, 783.

Tolentino, supra, p. 418.

Garcia vs. Manzano, 103 Phil. 798.

156
women and their respective offspring are not parties of these
case.
In 1980, the petitioner filed a complaint against Jo for judicial
separation of conjugal property, docketed as Civil Case No.
51, in addition to an earlier action for support, also against him
and docketed as Civil Case No. 36, in the Regional Trial Court
of Negros Oriental, Branch 35.
The two cases were consolidated and tried jointly. On
November 29, 1983, Judge German G. Lee, Jr. rendered an
extensive decision, the dispositive portion of which read:

FIRST DIVISION
G.R. No. 82606 December 18, 1992
PRIMA PARTOSA-JO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and HO HANG
(with aliases JOSE JO and CONSING), respondents.

CRUZ, J.:
The herein private respondent, Jose Jo, admits to having
cohabited with three women and fathered fifteen children. The
first of these women, the herein petitioner, claims to be his
legal wife whom he begot a daughter, Monina Jo. The other

WHEREFORE, in view of all the foregoing arguments

and considerations, this court hereby holds that the
plaintiff Prima Partosa was legally married to Jose Jo
alias Ho Hang, alias Consing, and, therefore, is entitled
to support as the lawfully wedded wife and the
defendant is hereby ordered to give a monthly support
of P500.00 to the plaintiff Prima Partosa, to be paid on
or before the 5th day of every month, and to give to the
plaintiff the amount of P40,000.00 for the construction
of the house in Zamboanguita, Negros Oriental where
she may live separately from the defendant being
entitled under the law to separate maintenance being
the innocent spouse and to pay the amount of
P19,200.00 to the plaintiff by way of support in arrears
and to pay the plaintiff the amount of P3,000.00 in the
concept of attorney's fees.
As will be noticed, there was a definite disposition of the
complaint for support but none of the complaint for judicial
separation of conjugal property.
Jo elevated the decision to the Court of Appeals, which
affirmed the ruling of the trial court in the complaint for

157
support. 1 The complaint for judicial separation of conjugal
property was dismissed for lack of a cause of action and on
the ground that separation by agreement was not covered by
Article 178 of the Civil Code.
When their motions for reconsideration were denied, both
parties came to this Court for relief. The private respondent's
petition for review on certiorari was dismissed for tardiness in
our resolution dated February 17, 1988, where we also
affirmed the legality of the marriage between Jose and Prima
and the obligation of the former to support her and her
daughter.
This petition deals only with the complaint for judicial
separation of conjugal property.
It is here submitted that the Court of Appeals erred in holding
that: a) the judicial separation of conjugal property sought was
not allowed under Articles 175, 178 and 191 of the Civil Code;
and b) no such separation was decreed by the trial court in the
dispositive portion of its decision.
The private respondent contends that the decision of the trial
court can longer be reviewed at this time because it has a long
since become final and executory. As the decretal portion
clearly made no disposition of Civil Case No. 51, that case
should be considered impliedly dismissed. The petitioner
should have called the attention of the trial court to the
omission so that the proper rectification could be made on
time. Not having done so, she is now concluded by the said
decision, which can no longer be corrected at this late hour.
We deal first with the second ground.
While admitting that no mention was made of Civil Case No.
51 in the dispositive portion of the decision of the trial court,

the petitioner argues that a disposition of the case was

nonetheless made in the penultimate paragraph of the
decision reading as follows:
It is, therefore, hereby ordered that all properties in
question are considered properties of Jose Jo, the
defendant in this case, subject to separation of property
under Article 178, third paragraph of the Civil Code,
which is subject of separate proceedings as enunciated
herein.
The petitioner says she believed this to be disposition enough
and so did not feel it was necessary for her to appeal,
particularly since the order embodied in that paragraph was in
her favor. It was only when the respondent court observed that
there was no dispositive portion regarding that case and so
ordered its dismissal that she found it necessary to come to
this Court for relief.
The petitioner has a point.
The dispositive portion of the decision in question was
incomplete insofar as it carried no ruling on the complaint for
judicial separation of conjugal property although it was
extensively discussed in the body of the decision. The drafting
of the decision was indeed not exactly careful. The petitioner's
counsel, noting this, should have taken immediate steps for
the rectification for the omission so that the ruling expressed in
the text of the decision could have been embodied in the
decretal portion. Such alertness could have avoided this
litigation on a purely technical issue.
Nevertheless, the technicality invoked in this case should not
be allowed to prevail over considerations of substantive
justive. After all, the technical defect is not insuperable. We
have said time and again that where there is an ambiguity

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caused by an omission or a mistake in the dispositive portion
of the decision, this Court may clarify such an ambiguity by an
amendment even after the judgment have become final. 2 In
doing so, the Court may resort to the pleading filed by the
parties and the findings of fact and the conclusions of law
expressed in the text or body of the decision. 3
The trial court made definite findings on the complaint for
judicial separation of conjugal property, holding that the
petitioner and the private respondent were legally married and
that the properties mentioned by the petitioner were acquired
by Jo during their marriage although they were registered in
the name of the apparent dummy.
There is no question therefore that the penultimate paragraph
of the decision of the trial court was a ruling based upon such
findings and so should have been embodied in the dispositive
portion. The respondent court should have made the
necessary modification instead of dismissing Civil Case No. 51
and thus upholding mere form over substance.
In the interest of substantive justice, and to expedite these
proceedings, we hereby make such modification.
And now to the merits of Civil Case No. 51.
The Court of Appeals dismissed the complaint on the ground
that the separation of the parties was due to their agreement
and not because of abondonment. The respondent court relied
mainly on the testimony of the petitioner, who declared under
oath that she left Dumaguete City, where she and Jo were
living together "because that was our agreement." It held that a
agreement to live separately without just cause was void under
Article 221 of the Civil Code and could not sustain any claim of
abandonment by the aggrieved spouse. Its conclusion was
that the only remedy availabe to the petitioner was legal

separation under Article 175 of the Civil Code, 4 by virtue of

which the conjugal partnership of property would be
terminated.
The petitioner contends that the respondent court has
misinterpreted Articles 175, 178 and 191 of the Civil Code.
She submits that the agreement between her and the private
respondent was for her to temporarily live with her parents
during the initial period of her pregnancy and for him to visit
and support her. They never agreed to separate permanently.
And even if they did, this arrangement was repudiated and
ended in 1942, when she returned to him at Dumaguete City
and he refused to accept her.
The petitioner invokes Article 178 (3) of the Civil Code, which
reads:
Art. 178. The separation in fact between husband and
wife without judicial approval, shall not affect the
conjugal partnership, except that:
xxx xxx xxx
(3) If the husband has abandoned the wife without just
cause for at least one year, she may petition the court
for a receivership, or administration by her of the
conjugal partnership property or separation of property.
The above-quoted provision has been superseded by Article
128 of the Family Code, which states:
Art. 128. If a spouse without just cause abandons the
other or fails to comply with his or her obligations to the
family, the aggrieved spouse may petition the court for
receivership, for judicial separation of property, of for
authority to be the sole administrator of the conjugal

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partnership property, subject to such precautionary
conditions as the court may impose.
The obligations to the family mentioned in the
preceding paragraph refer to martial, parental or
property relations.
A spouse is deemed to have abondoned the other
when he or she has left the conjugal dwelling without
any intention of returning. The spouse who has left the
conjugal dwelling for a period of three months or has
failed within the same period to give any information as
to his or her whereabouts shall be prima
facie presumed to have no intention of returning to the
conjugal dwelling.
Under the this provision, the aggrieved spouse may petition for
judicial separation on either of these grounds:
1. Abondonment by a spouse of the other without just
cause; and
2. Failure of one spouse to comply with his or her
obligations to the family without just cause, even if she
said spouse does not leave the other spouse.
Abandonment implies a departure by one spouse with the
avowed intent never to return, followed by prolonged absence
without just cause, and without in the meantime providing in
the least for one's family although able to do so. 5 There must
be absolute cessation of marital relations, duties and rights,
with the intention of perpetual separation. 6This idea is clearly
expressed in the above-quoted provision, which states that "a
spouse is deemed to have abandoned the other when he or
she has left the conjugal dwelling without any intention of
returning."

The record shows that as early as 1942, the private

respondent had already rejected the petitioner, whom he
denied admission to their conjugal home in Dumaguete City
when she returned from Zamboanguita. The fact that she was
not accepted by Jo demonstrates all too clearly that he had no
intention of resuming their conjugal relationship. Moreover,
beginning 1968 until the determination by this Court of the
action for support in 1988, the private respondent refused to
give financial support to the petitioner. The physical separation
of the parties, coupled with the refusal by the private
respondent to give support to the petitioner, sufficed to
constitute abandonment as a ground for the judicial separation
of their conjugal property.
In addition, the petitioner may also invoke the second ground
allowed by Article 128, for the fact is that he has failed without
just cause to comply with his obligations to the family as
husband or parent. Apart form refusing to admit his lawful wife
to their conjugal home in Dumaguete City, Jo has freely
admitted to cohabiting with other women and siring many
children by them. It was his refusal to provide for the petitioner
and their daughter that prompted her to file the actions against
him for support and later for separation of the conjugal
property, in which actions, significantly, he even denied being
married to her. The private respondent has not established any
just cause for his refusal to comply with his obligations to his
wife as dutiful husband.
Their separation thus falls also squarely under Article 135 of
the Family Code, providing as follows:
Art. 135. Any of the following shall be considered
sufficient cause for judicial separation of property:
xxx xxx xxx

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(6) That at the time of the petition, the spouse have
been separated in fact for at least one year and
reconciliation is highly improbable.
The amendments introduced in the Family Code are
applicable to the case before us although they became
effective only on August 3, 1988. As we held in Ramirez v.
Court of Appeals: 7
The greater weight of authority is inclined to the view
that an appellate court, in reviewing a judgment on
appeal, will dispose of a question according to the law
prevailing at the term of such disposition, and not
according to the law prevailing at the time of rendition
of the appealed judgement. The court will therefore
reverse a judgement which was correct at the time it
was originally rendered where, by statute, there has
been an intermediate change in the law which renders
such judgement erroneous at the time the case was
finally disposed of on appeal.
The order of judicial separation of the properties in question is
based on the finding of both the trial and respondent courts
that the private respondent is indeed their real owner. It is
these properties that should now be divided between him and
the petitioner, on the assumption that they were acquired
during coverture and so belong to the spouses half and half.
As the private respondent is a Chinese citizen, the division
must include such properties properly belonging to the
conjugal partnership as may have been registered in the name
of other persons in violation of the Anti-Dummy Law.

The past has caught up with the private respondent. After his
extramarital flings and a succession of illegitimate children, he
must now make an accounting to his lawful wife of the
properties he denied her despite his promise to their of his
eternal love and care.
WHEREFORE, the petition is GRANTED and the assailed
decision of the respondent court is MODIFIED. Civil Case No.
51 is hereby decided in favor the plaintiff, the petitioner herein,
and the conjugal property of the petitioner and the private
respondent is hereby ordered divided between them, share
and share alike. This division shall be implemented by the trial
court after determination of all the properties pertaining to the
said conjugal partnership, including those that may have been
illegally registered in the name of the persons.
SO ORDERED.
Padilla, Grio-Aquino and Bellosillo, JJ., concur.
Footnotes
1 Chua, Segundino G., J., ponente, Coquia,
Jorge R. and De Pano, Nathanael, Jr., P. JJ.,
concurring, promulgated on January 28, 1987.
2 Republic Surety and Insurance Co., Inc. vs.
Intermediate Appellant Court, 152 SCRA 316;
Alvendia vs. Intermediate Appellate Court, 181
SCRA 252.
3 Sentinel Insurance Co., Inc. vs. Court of
Appeals. 182 SCRA 516.
4 Art. 175. The conjugal partnership of gains
terminates:

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(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;

5 Tolentino, Commentaries and Jurisprudence

on the Civil Code of the Philippines, 1990 ed.,
Vol. 1, p. 398.

(3) When the marriage is annulled;

6 De la Cruz vs. De la Cruz, 22 SCRA 333.

(4) In case of judicial separation of property

under Article 191.

7 72 SCRA 231.