PERSONS DIGEST The trial court applied Article 116 of the Family Code, which reads:

CPG
Art. 116. All property acquired during the marriage, whether
the acquisition appears to have been made, contracted or registered
PROPERTIES UNDER CONJUGAL PARTNERSHIP OF GAINS
in the name of one or both spouses, is presumed conjugal unless the
contrary is proved.
CASE #1
VILLANUEVA vs COURT OF APPEALS
The trial court ruled that the documents and other evidence Eusebia
presented constitute "solid evidence" which proved that the subject
FACTS: Plaintiff Eusebia Napisa Retuya, is the legal wife of defendant
properties were acquired during her marriage with Nicolas. This made
Nicolas Retuya, having been married to the latter on October 7, 1926.
the presumption in Article 116 applicable to the subject properties.
Out of the lawful wedlock, they begot five (5) children, namely,
Thus, the trial court ruled that Eusebia had proved that the subject
Natividad, Angela, Napoleon, Salome, and Roberta. Spouses Retuya
properties are conjugal in nature. On the other hand, the trial court
resided at Tipolo, Mandaue City. During their marriage they acquired
found that petitioners failed to meet the standard of proof required to
real properties and improvements situated in Mandaue City, and
maintain their claim that the subject properties are paraphernal
Consolacion, Cebu. They have 22 parcels of land.
properties of Nicolas. The trial court added that Pacita presented no
Nicolas Retuya, is co-owner of a parcel of land situated in
"factual solidity" to support her claim that she bought Lot No. 152
Mandaue City which he inherited from his parents. He is also the
exclusively with her own money.
purchaser of hereditary shares of approximately eight (8) parcels of
land in Mandaue City.
The trial court rendered its Decision in favor of Eusebia:
Some of these properties above-mentioned earn income
1. Declaring the properties listed in paragraph 2 (the 22 parcels
from coconuts and the other lands/houses are leased to Mandaue
of land) of the amended complaint as conjugal properties
Food Products Company, Barben Wood Industries, Inc., Metaphil,
of the spouses plaintiff Eusebia Retuya and the defendant
Inc., Benedicto Development Corp., Visayan Timber and Machinery
Nicolas Retuya;
Corp., and some house lessees.
2. Ordering the transfer of the sole administration of conjugal
In 1945, Nicolas Retuya no longer lived with his legitimate
properties of the spouses Eusebia Retuya and Nicolas
family and cohabited with defendant, Pacita Villanueva, wherein
Retuya in accordance with Art. 124 of the Family Code to the
defendant, Procopio Villanueva, is their illegitimate son. Nicolas, then,
plaintiff Eusebia Napisa Retuya;
was the only person who received the income of the above-mentioned
3. Ordering defendant Procopio Villanueva to account and
properties.
turnover all proceeds or rentals or income of the conjugal
Defendant, Pacita Villanueva, from the time she started living
properties from January 27, 1985 when he took over as
in concubinage with Nicolas, has no occupation, she had no properties
'administrator' thereof and until he shall have ceased
of her own from which she could derive income.
administering the same in accordance with the judgment of
In 1985, Nicolas suffered a stroke and cannot talk and walk
this Court;
anymore. Natividad, one of Nicolas child with Eusebia, knew of the
physical condition of her father because they visited him at the
Petitioners appealed the trial court's decision to the Court of
hospital.
Appeals. Eusebia Retuya died on 23 November 1996. On 16
From the time defendant Nicolas Retuya suffered a stroke
December 1996, Pacita Villanueva and Nicolas Retuya were
on January 27, 1985 and until the present, it is defendant Procopio
married.Thereafter, Eusebia's heirs substituted her pursuant to the
Villanueva, Nicolas’ illegitimate child who has been receiving the
resolution of the Court of Appeals.
income of these properties. Witness Natividad Retuya went to
Petitioners claim that the subject properties are exclusive
Procopio to negotiate because at this time their father Nicolas was
properties of Nicolas except for Lot No. 152, which they claim is
already senile and has a childlike mind. She told defendant, Procopio
Pacita's exclusive property.
that their father was already incapacitated and they had to talk things
Petitioners also point out that all the other tax declarations
over and the latter replied that it was not yet the time to talk about the
presented before the trial court are in the name of Nicolas alone.
matter.
Petitioners argue that this serves as proof of Nicolas' exclusive
Eusebia Retuya, then, complained to the Barangay Captain
ownership of these properties
for reconciliation/mediation but no settlement was reached, hence, the
In some of the documents that petitioners presented, Nicolas
said official issued a certification to file action. Written demands were
misrepresented his civil status by claiming that he was single.
made by plaintiff Eusebia, through her counsel, to the defendants,
Petitioners point to this as proof of Nicolas' desire to exclude Eusebia
including the illegitimate family asking for settlement but no
from the properties covered by the documents. Petitioners further
settlement was reached by the parties.
claim that this supports their stand that the subject properties are not
Eusebia Napisa Retuya filed a complaint before the RTC of
conjugal.
Mandaue City (trial court) against her husband Nicolas Retuya, Pacita
Villanueva, and Procopio Villanueva. Eusebia sought the
The Court of Appeals eventually upheld the Decision of the trial
reconveyance from Nicolas and Pacita of several properties, claiming
court.
the subject properties are her conjugal properties with Nicolas.
Eusebia also prayed for accounting, damages and the delivery of rent
Petitioners filed a Motion for Reconsideration which the CA
and other income from the subject properties.
denied.
Thus, this petition for review on certiorari the decision of CA
Pacita Villanueva contends that the properties were not conjugal and
affirming decision of the trial court.
Lot No. 152 is her exclusive property.

ISSUE: WON the subject properties are conjugal.

TRIAL COURT RULING:
HELD: The subject properties are conjugal. Thus, Petition for review
on certiorari is denied. The decision of the CA is hereby affirmed.
The Family Code provisions on conjugal partnerships govern
the property relations between Nicolas and Eusebia even if they were
married before the effectivity of Family Code. Article 105 of the Family
Code explicitly mandates that the Family Code shall apply to conjugal
partnerships established before the Family Code without prejudice to
vested rights already acquired under the Civil Code or other laws.
Thus, under the Family Code, if the properties are acquired during the
marriage, the presumption is that they are conjugal. The burden of
proof is on the party claiming that they are not conjugal. This is
counter-balanced by the requirement that the properties must first be
proven to have been acquired during the marriage before they are
presumed conjugal.
The SC ruled that the subject properties were in fact
acquired during the marriage of Nicolas and Eusebia. The tax
declarations covering the subject properties, along with the unrebutted
testimony of Eusebia's witnesses, establish this fact.
Upon the petitioners contention that Lot No. 152 is not
the conjugal property of Eusebia and Nicolas is answered by the
petitioners themselves.
Petitioners themselves admit that Lot No. 152 was
purchased on 4 October 1957. The date of acquisition of Lot No. 152
is clearly during the marriage of Nicolas and Eusebia.
Since the subject properties, including Lot No. 152, were
acquired d u rin g the marriage of Nicolas and Eusebia, the
presumption under Article 116 of the Family Code is that all these are
conjugal properties of Nicolas and Eusebia. The burden is on
petitioners to prove that the subject properties are not conjugal. The
burden of proving that a property is exclusive property of a spouse
rests on the party asserting it and the evidence required must be clear
and convincing. Petitioners failed to meet this standard.
Petitioners further argue that since Nicolas and Pacita
were already cohabiting when Lot No. 152 was acquired, the lot
cannot be deemed conjugal property of Nicolas and Eusebia.
Petitioners keep belaboring this point in their petition and
memorandum.
The cohabitation of a spouse with another person, even for
a long period, does not sever the tie of a subsisting previous marriage.
What petitioners fail to grasp is that Nicolas and Pacita's cohabitation
cannot work to the detriment of Eusebia, the legal spouse. The
marriage of Nicolas and Eusebia continued to exist regardless of the
fact that Nicolas was already living with Pacita. Hence, all property
acquired from 7 October 1926, the date of Nicolas and Eusebia's
marriage, until 23 November 1996, the date of Eusebia's death, are
still presumed conjugal.
Petitioners also point out that all the other tax
declarations presented before the trial court are in the name of
Nicolas alone.
The tax declarations are not sufficient proof to overcome the
presumption under Article 116 of the Family Code. All property
acquired by the spouses during the marriage, regardless in whose
name the property is registered, is presumed conjugal unless
proved otherwise. The presumption is not rebutted by the mere fact
that the certificate of title of the property or the tax declaration is in the
name of one of the spouses only. Article 116 of the Family Code
expressly provides that the presumption remains even if the property
is "registered in the name of one or both of the spouses."
In some of the documents that petitioners presented,
Nicolas misrepresented his civil status by claiming that he was
single. Petitioners point to this as proof of Nicolas' desire to
exclude Eusebia from the properties covered by the documents.
Petitioners further claim that this supports their stand that the
subject properties are not conjugal.
Whether a property is conjugal or not is determined by law
and not by the will of one of the spouses. No unilateral declaration by
one spouse can change the character of conjugal property.
CASE #2
BANK OF THE PHILIPPINE ISLANDS vs POSADAS, JR.
FACTS: Rosario Gelano Vda. de Schuetze was married to the
deceased Adolphe Oscar Schuetze. She is a native of Manila
Philippines and is residing in Germany.
The deceased Adolphe Oscar Schuetze came to the
Philippine Islands for the first time on 1890 and worked in the several
German firm as a mere employee and from the year 1903 until the
year 1918 he was partner in the business of Alfredo Roensch.
From 1903 to 1922, the said Adolphe Oscar Schuetze was
in the habit of making various trips to Europe.
In 1927, the late Adolphe Oscar Schuetze coming from Java,
and with the intention of going to Bremen, landed in the Philippine
Islands where he met his death on February 2, 1928.
Prior his death, while in Germany, executed a will, in
accordance with its laws, wherein Rosario Gelano was named his
universal heir. Then the Bank of the Philippine Islands by order of the
Court of First Instance of Manila was appointed administrator of the
estate of the deceased Adolphe Oscar Schuetze.
According to the testamentary proceedings instituted in the
Court of First Instance of Manila, the deceased at the time of his death
was possessed of not only real property situated in the Philippine
Islands, but also personal property consisting of shares of stock in
nineteen (19) domestic corporations. Among the personal property of
the deceased was found life-insurance policy No. 194538 issued at
Manila, Philippine Islands, on 1913, for the sum of $10,000 by the Sun
Life Assurance Company of Canada, Manila branch, a foreign
corporation duly organized and existing under and by virtue of the laws
of Canada, and duly authorized business in the Philippine Islands. It
must be noted that on 1914 he contracted marriage with his wife,
Rosario Gelano.
In the insurance policy, the estate of the said Adolphe Oscar
Schuetze was named the beneficiary without any qualification. For five
consecutive years, the deceased Adolphe Oscar Schuetze paid the
premiums of said policy to the Sun Life Assurance Company of
Canada, Manila branch.
About the year 1918, the Sun Life Assurance Company of
Canada, Manila branch, transferred said policy to the Sun Life
Assurance Company of Canada, London branch; that due to said
transfer the said Adolphe Oscar Schuetze from 1918 to the time of
his death (1928) paid the premiums of said policy to the Sun Life
Assurance Company of Canada, London Branch.
On July 13, 1928, the Bank of the Philippine Islands as
administrator of Adolphe’s estate received from the Sun Life
Assurance Company of Canada, Manila branch, the sum of P20,150
representing the proceeds of the insurance policy, as shown in the
statement of income and expenses of the estate of the deceased
submitted on June 18, 1929 by the administrator to the Court of First
Instance of Manila.
The Bank of the Philippine Islands then delivered to Rosario
the said sum of P20,150.
 It was then when Juan Posadas, Jr., defendant, Collector of
Internal Revenue, on or about July 1929, imposed an inheritance tax
upon the transmission of the proceeds of the insurance policy in
question in the sum of P20,150 from the estate of the late Adolphe
Oscar Schuetze to Rosario which inheritance tax amounted to the
sum of P1,209.
The Bank of the Philippine Islands as administrator of the
decedent's estate and as attorney-in-fact of Rosario, having been
demanded by Juan Posadas Jr., to pay inheritance tax amounting to
the sum of P1,209, paid to Juan Posada, Jr. under protest the said
sum. Notwithstanding the various demands made by The BPI to the
Juan Posadas, Jr., said defendant has refused and refuses to refund
to BPI the above mentioned sum of P1,209.
The Bank of the Philippines filed a complaint against Juan
Posadas, Jr.
The CFI of Manila dismissed said complaint.
Thus, this appeal assailing the decision of CFI of Manila
dismissing the complaint by the BPI.
ISSUE: WON the Juan Posadas, Jr. correctly imposed the inheritance
tax of P1,209 on the estate of Adophe Osacar Schuetze having it the
beneficiary of the deceased’s insurance policy
HELD: NO. The Supreme Court ruled that inasmuch as one of the
questions raised in the appeal is whether an insurance policy on said
Adolphe Oscar Schuetze's life was, by reason of its ownership, subject
to the inheritance tax, it would be well to decide first whether the
amount thereof is paraphernal or community property.
According to the facts, the estate of Adolphe Oscar
Schuetze is the sole beneficiary named in the life-insurance policy for
$10,000, issued by the Sun Life Assurance Company of Canada on
January 14, 1913. During the following five years the insured paid the
premiums at the Manila branch of the company, and in 1918 the policy
was transferred to the London branch.
The record shows that the deceased Adolphe Oscar Schuetze married
the plaintiff-appellant Rosario Gelano on January 16, 1914.
With the exception of the premium for the first year covering
the period from January 14, 1913 to January 14, 1914, all the money
used for paying the premiums, i. e., from the second year, or January
14, 1914, or when the deceased Adolphe Oscar Schuetze married the
plaintiff-appellant Rosario Gelano, until his death on 1928, is conjugal
property inasmuch as it does not appear to have exclusively belonged
to him or to his wife.
As the sum of P20,150 here in controversy is a product of
such premium it must also be deemed conjugal property, because it
was acquired for a valuable consideration, during said Adolphe Oscar
Schuetze's marriage with Rosario Gelano at the expense of the
common fund, except for the small part corresponding to the first
premium paid with the deceased's own money.
So considered, the question may be said to be decided by
articles 1396 and 1401: if the premiums are paid with the exclusive
property of husband or wife, the policy belongs to the owner; if with
conjugal property, or if the money cannot be proved as coming from
one or the other of the spouses, the policy is community property.
Our Civil Code and in the cited case of Martin vs Moran
decided by the Supreme Court of Texas provide that the proceeds of
a life-insurance policy whereon the premiums were paid with conjugal
money, belong to the conjugal partnership.
As all the premiums on the life-insurance policy taken out by
the late Adolphe Oscar Schuetze, were paid out of the conjugal funds,
with the exception of the first, the proceeds of the policy, excluding the
proportional part corresponding to the first premium, constitute
community property, notwithstanding the fact that the policy was made
payable to the deceased's estate, so that one-half of said proceeds
belongs to the estate, and the other half to the deceased's widow, the
plaintiff-appellant Rosario Gelano Vda. de Schuetze.
Thus, the proceeds of a life-insurance policy payable to
the insured's estate, on which the premiums were paid by the
conjugal partnership, constitute community property, and belong
one-half to the husband and the other half to the wife, exclusively.
The defendant, Juan Posadas Jr. is ordered to return to the
Rosario the one-half of the tax collected upon the amount of P20,150,
being the proceeds of the insurance policy on the life of the late
Adolphe Oscar Schuetze, after deducting the proportional part
corresponding to the first premium. The other half of the inheritance
tax however will not be reimbursed because the situs of said proceeds
is in the Philippine Islands.
DISPOSITIVE: Judgement appealed is reversed and the defendant is
ordered to return to Rosario the one-half of the inheritance tax paid.
CASE #3
JOCSON vs CA
FACTS: Petitioner Moises Jocson and respondent Agustina Jocson-
Vasquez are the only surviving offsprings of the spouses Emilio
Jocson and Alejandra Poblete. Respondent Ernesto Vasquez was the
husband of Agustina.
Alejandra Poblete predeceased her husband without her
intestate estate being settled. Subsequently, Emilio Jocson also died
intestate on April 1, 1972.
The present controversy concerns the validity of 3
documents executed by Emilio Jocson during his lifetime. These
documents purportedly conveyed, by sale, to Agustina Jocson-
Vasquez what apparently covers almost all of his properties, including
his 1/3 share in the estate of his wife. Petitioner Moises Jocson assails
these documents and prays that they be declared null and void and
the properties subject matter therein be partitioned between him and
Agustina as the only heirs of the deceased parents.
The documents, which were presented as evidence not by
Moises Jocson, as the party assailing its validity, but rather by herein
respondents, are the following:
1. “Kasulatan ng Bilihan ng Lupa” By this document Emilio
Jocson sold to Agustina Jocson-Vasquez 6 parcels of land
all located at Naic, Cavite, for the sum of P10,000.
2. “Kasulatan ng Ganap na Bilihan” On the face of this
document, Emilio Jocson sold to Agustina 2 rice mills and a
camarin (camalig) located at Naic, Cavite for the sum of
P5,000.
3. “Deed of Extrajudicial Partition and Adjudication with Sale”
whereby Emilio Jocon and Agustina Jocson-Vasquez,
without the participants and intervention of Moises Jocson,
extrajudicially partitioned the unsettled estate of Alejandra
Poblete, dividing the same into 3 parts, 1/3 of each for the
heirs of Alejandra Poblete namely: (1) Emilio Jocson, (2)
Agustina Jocson-Vasquez, (3) Moises Jocson. By the same
instrument, Emilio sold his 1/3 share to Agustina for the sum
of P8,000.
These documents were executed before a notary public. Both the
first 2 documents were registered with the Office of the Register of
Deeds of Cavite while the 3rd document was not registered with the
Office of the Register of Deeds.
 Moises Jocson filed his complaint with the CFI of Naic, Cavite,
and which is twice amended. In his Second Amended Complaint,
herein petitioner assailed the above documents, as aforementioned,
for being null and void. He claims that the properties mentioned in
“Kasulatan ng Bilihan ng Lupa” and “Kasulatan ng Ganap na Bilihan”
are the unliquidated conjugal properties of Emilio Jocson and
Alejandra Poblete which his father, Emilio Jocson, cannot validly sell.
As far as the “Deed of Extrajudicial Partition and Adjudication with
Sale” is concerned, petitioner questions not the extrajudicial partition
but only the sale by his father to Agustina of his father’s 1/3 share.
Trial Court sustained petitioner Moises Jocson’s contention.
The trials court further declared the properties mentioned in the
first 2 documents as conjugal properties of Emilio and Alejandra,
because they were registered in the name of “Emilio Jocson,
married to Alejandra Poblete” and ordered that the properties
subject matter of all the documents be registered in the name of
Moises Jocson and the private respondents, Agustina and
Ernesto Vasquez.
On appeal, CA reversed that of the trial court.
Thus, this petitione for review on certiorari assailing CA’s
decision.
ISSUE: WON the registration of the properties mentioned in the
document in the name of “Emilio Jocson, married to Alejandra Poblete”
is indicative that these properties are conjugal properties.
HELD: NO. Article 160 of the Civil Code provides that:
“All property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains exclusively to
the husband or to the wife.”
In Cobb-Perez vs Hon. Gregorio Lantin, it has been held that
the party who invokes this presumption must first prove that the
property in controversy was acquired during the marriage. In other
words, proof of acquisition during the coverture is a condition sine qua
non for the operation of the presumption in favor of conjugal
ownership. It is sufficient to prove that the property was acquired
during the marriage in order that the same may be deemed conjugal
property.
It is thus clear before Moises Jocson may validly invoke the
presumption under Article 160, he must first present proof that the
disputed properties were acquired during the marriage of Emilio
Jocson and Alejandra Poblete. The certificates of title, however, are
insufficient proof. The fact that the properties were registered in the
name of “Emilio Jocson, married to Alejandra Poblete” is no proof that
the properties were acquired during the spouses’ coverture. Acquisiton
of title and registration thereof are two different acts. It is well settled
that registration does not confer title but merely confirms one already
existing. It may be that the properties under dispute were acquired by
Emilio Jocson when he was still a bachelor but were registered only
after his marriage to Alejandra Poblete, which explains why he was
described in the certificates of title as married to the latter.
The certificates of title show, on their face, that the properties
were exclusively Emilio Jocson’s, the registered owner. This is so
because the words “married to” preceding “Alejandra Poblete” are
merely descriptive of the civil status of Emilio Jocson. In other words,
the import from the certificates of title is that Emilio Jocson is the owner
of the properties, the same having been registered in his name alone,
and that he is married to Alejandra Poblete.
DISPOSITIVE: Petition is dismissed and the decision of the CA is
affirmed
CASE #4
JOVELLANOS v. COURT OF APPEALS
FACTS: September 1955- Daniel Jovellanos and Philippine
American Life Insurance Company (Philamlife) entered into a
contract denominated as a lease and conditional sale agreement
over Lot 8, Block 3 of the latter's Quezon City Community
Development Project, including a bungalow thereon, located at and
known as No. 55 South Maya Drive, Philamlife Homes, Quezon City.
At that time, Daniel Jovellanos was married to Leonor Dizon, with
whom he had three children, the petitioners herein. Leonor Dizon
died on January 2, 1959.
May 1967- Daniel married private respondent Annette H. Jovellanos
with whom he begot two children, her herein co-respondents.
December 1971, petitioner Mercy Jovellanos married Gil Martinez
and, at the behest of Daniel Jovellanos, they built a house on the
back portion of the premises.
January 1975- with the lease amounts having been paid, Philamlife
executed to Daniel Jovellanos a deed of absolute sale and, on the
next day, the latter donated to herein petitioners all his rights, title
and interests over the lot and bungalow thereon.
September 1985- Daniel Jovellanos died and his death spawned the
present controversy, resulting in the filing by private respondents of
Civil Case No. Q-52058.
CONTENTION OF THE RESPONDENTS:
 The aforestated property was acquired by her deceased
husband while their marriage was still subsisting, by virtue
of the deed of absolute sale dated January 8, 1975
executed by Philamlife in favor of her husband, Daniel
Jovellanos, who was issued Transfer Certificate of Title No.
212286 of the Register of Deeds of Quezon City. Hence, it
forms part of the conjugal partnership of the second
marriage.
CONTENTION OF THE PETITIONERS
 The property, specifically the lot and the bungalow erected
thereon, as well as the beneficial and equitable title thereto,
were acquired by their parents during the existence of the
first marriage under their lease and conditional sale
agreement with Philamlife of September 2, 1955.
RTC
1. Ordered the liquidation of the partnership of the second
marriage and directed the reimbursement of the amount
advanced by the partnership of the first marriage as well
(as) by the late Daniel Jovellanos and the defendants
spouses Gil and Mercia in the acquisition of the lot and
bungalow described in the Lease and Conditional Sale
Agreement (Exhs. D and 1);
2. After such liquidation and reimbursement, declared the
plaintiff Annette Jovellanos as pro-indiviso owner of 1/2 of
the property described in TCT No. 212268 (sic) and the
bungalow erected there in;
3. Declared the plaintiff Annette Jovellanos, as well as the
minors Anna Marie and Ma. Jeannette Jovellanos and the
herein defendants, as owners pro indiviso of 1/6 each of the
other half of said property;
 4. Declared the defendants spouses Gil and Mercia Martinez
as exclusive owners of the two-storey house erected on the
property at the back of the said bungalow, with all the rights
vested in them as builders in good faith under Article 448 of
the New Civil Code;
5. Ordered the parties to make a partition among themselves
by proper instruments of conveyances, subject to the
confirmation of this Court, and if they are unable to agree
upon the partition, ordering that the partition should be
made by not more than three (3) competent and
disinterested persons as commissioners who shall make
the partition in accordance with Sec. 5, Rule 69 of the
Revised Rules of Court.
CA
 MODIFICATION: private respondents should also
reimburse to petitioners their proportionate shares in the
proven hospitalization and burial expenses of the late
Daniel Jovellanos.
 AFFIRMED RTC’s JUDGMENT citing Article 118 of the
Family Code which provides:
o "Art. 118. Property bought on installment paid
partly from exclusive funds of either or both
spouses and partly from conjugal funds belongs
to the buyer or buyers if full ownership was vested
before the marriage and to the conjugal
partnership if such ownership was vested during
the marriage. In either case, any amount
advanced by the partnership or by either or both
spouses shall be reimbursed by the owner or
owners upon liquidation of the partnership."
Petitioners now seek this review, contending that the lower court
erred in holding that the lot and bungalow covered by the lease and
conditional sale agreement is conjugal property of the second
marriage of the late Daniel
Jovellanos
ISSUE: WON the lot and the bungalow covered by the lease and
conditional sale agreement is a conjugal property of the second
marriage of the late Daniel Jovellanos.
HELD: YES. The contract entered into by the late Daniel Jovellanos
and Philamlife is specifically denominated as a "Lease and
Conditional Sale Agreement" over the property involved with a lease
period of twenty years at a monthly rental of P288.87, by virtue of
which the former, as lessee-vendee, had only the right of possession
over the property. In a lease agreement, the lessor transfers merely
the temporary use and enjoyment of the thing leased.
In a contract to sell or a conditional sale, ownership is not transferred
upon delivery of the property but upon full payment of the purchase
price. Generally, ownership is transferred upon delivery, but even if
delivered, the ownership may still be with the seller until full payment
of the price is made, if there is a stipulation to this effect. The
stipulation is usually known as pactum reservati dominii, or
contractual reservation of title, and is common in sales on the
installment plan.
The deed of absolute sale was executed in 1975 by Philamlife,
pursuant to the basic contract between the parties, only after
full payment of the rentals. Upon the execution of said deed of
absolute sale, full ownership was vested in Daniel Jovellanos.
Since, as early as 1967, he was already married to Annette H.
Jovellanos, this property necessarily belonged to his conjugal
partnership with his said second wife.
The courts ordered that reimbursements should be made in line
of Mercy Jovellanos Martinez with the pertinent provision of
Article 118 of the Family Code that "any amount advanced by
the partnership or by either or both spouses shall be
reimbursed by the owner or owners upon liquidation of the
partnership."
Decision of the RTC AFFIRMED.
CASE #5
Castillo Jr. v. Pasco (Toffy, Art. 109 and Art. 117, fishpond)
FACTS: Instant case is a petition for review and reversal of the
decision given by the Court of Appeals, which affirmed the decision
of CFI of Bulacan, declaring that the fishpond was the exclusive
property of respondent Macaria Pasco, the surviving spouse of the
deceased Marcelo Castillo Sr, and dismissing the petition for partition
and accounting filed by petitioners Marcelo Castillo Jr., and other
heirs and descendants of the deceased.
A Deed of Sale conveying subject property was executed in favor of
spouses Marcelo Castillo and Macario Pasco for the sum of P6,000.
Said amount is payable in three tranches — P1,000 upon the
execution of the DOS, P2,000, and another P3,000 within one year
from the second installment.
The first installment was paid out of the exclusive funds of
respondent Macaria Pasco — original seller had a debt to Pasco
amounting to P600 and the latter paid additional P400 in cash. The
second installment was paid out of the proceeds of the loan extended
in favor of the both spouses by Dr. Jacinto, to whom the fishpond
was mortgaged by the former. The third installment was paid out of
another loan made in favor of the spouses. The security of which was
a mortgage on two exclusive properties of Macaria Pasco. When
Marcelo died, the loans were still outstanding, and Macaria Pasco
had to pay for the loan and the penalties and principals when they
defaulted and Dr. Jacinto called on the mortgage.
The CFI, which the CA affirmed, held that the fishpond was an
exclusive property of Macaria Pasco since it was purchased out of
her exclusive funds. The petitioners, on the other hand, contended
that the fishpond was bought during the existence of the marriage
thus should form part of the conjugal partnership.
ISSUE: WON the CA erred in holding that the fishpond was an
exclusive property by Macaria Pasco.
HELD: YES. While it can be gainsaid that indeed the first installment
was paid out of exclusive funds of Macaria Pasco, the same cannot
be said for the second and third installments. The second and third
installments were paid out of loans made in favor of the spouses.
While the loans were secured by exclusive properties of the
respondent and allegedly paid by Macaria Pasco (who was in the
better position to do so than Marcelo), the loans were issued in favor
of them both, thus were considered liabilities of the conjugal
partnership, regardless of the fact that they were secured by
paraphernal property of Pasco. As such, the said installments were
paid out of the common fund making the fishpond partly conjugal
property.
The fishpond should then be partitioned as follows: 1/6 should belong
to Macario Pasco exclusively (in consideration of the P1,000
payment that she made exclusively), an additional 1/2 of 5/6
representing her share of the conjugal partnership, and 1/2 of 5/6
representing the share of the deceased spouse which shall be
divided in accordance to the successional rights of Pasco and other
heirs of Marcelo. The widow has also a right to reimbursement for
any amounts advanced by her in paying the mortgage debt and
penalties.
CASE #6
MAGALLON v. MONTEJO
FACTS: The petition before this Court seeks the annulment of a writ
of execution issued by the respondent Judge in Civil Case No. 727 of
her court (RTC Davao del Sur). Said case was instituted by the
plaintiffs (private respondents herein) against Martin Lacerna to
compel partition of parcel of land located in Barrio Kasuga,
Municipality of Magsaysay, Davao del Sur, to which said defendant
had perfected a claim by homestead.
The plaintiffs, claiming to be the common children of Martin Lacerna
and his wife, Eustaquia Pichan, who died in 1953, asserted a right to
one-half of the land as their mother's share in her conjugal
partnership with Martin. While said defendant denied having
contracted marriage with Eustaquia Pichan — although he admitted
living with her without benefit of marriage until she allegedly
abandoned him — as well as paternity of two of the plaintiffs who, he
claimed, were fathered by other men, the Trial Court gave his denials
no credence. Said Court, on the basis of the evidence presented to it,
found that Martin had in fact been married to Eustaquia, and that the
plaintiffs were his children with her.
The Trial Court further found that Martin had begun working the
homestead and his right to a patent to the land accrued, during his
coverture with Eustaquia. On the basis of these findings, the plaintiffs
were declared entitled to the half of the land claimed by them. Martin
Lacerna appealed to the Intermediate Appellate Court. That Court
affirmed, in a Decision promulgated on August 31, 1984 which has
since become final.
It appears
that while the case was being heard in the trial court, no certifi
cate of land title to the land had yet been issued to Lacerna.
The Original Certificate
of Title was issued only while Lacerna’s appeal was pending
in Intermediate Appellate Court. It states on the face that it
is issued in the name of “Martin Lacerna, Filipino,
legal age, married to Epifania Magallon”, the latter being
the present petitioner.
The confirmative decision of the Intermediate Appellate Court h
ad become final and executory. The Judge issued a writ of ex
ecution
commanding the Provincional Sheriff to order the Lacerna to d
ivide and partition the property located Davao del Sur, ½ of wh
ich is the
share of Pichan in the conjugal property and plaintiffs being Pic
han’s children are also entitled thereto. The said writ was serve
d to both
Lacerna and Magallon. Magallon then filed with the trial court a
Motion for Intervention and to Stay Execution alleging that the
land subject
of the writ was conjugal property of herself and Martin Lacerna.
ISSUE: Is petitioner bound by final judgment rendered in an action to
which she was not made a party.
RULING: No.
Indeed, it is clear that the petitioner cannot assert any claim to the
land other than by virtue of her supposed marriage to Lacerna. As a
mere mistress, she cannot pretend to any right thereto. But whether
the petitioner is a lawful wife or a mere "live-in" partner, the Court
simply cannot believe that she never became aware of the litigation
concerning the land until presented with the writ of execution. What is
far more probable and credible is that she has known of the lawsuit
since 1956 when Martin Lacerna "married" her. Her silence and
inaction since then and until barely a year ago bespeak, more than
anything else, a confession that she had and has no right to the land
and no defense to offer to the action, either on her part or on the part
of Martin Lacerna. Had she even the semblance of a right, there is no
doubt she would have lost no time asserting it.
From the averments of the petition, it is evident that the petitioner
relies mainly, if not solely, on the fact that the certificate of title to the
land carries her name as the "wife" of the owner named therein,
Martin Lacerna. As already observed, such entry on the certificate
of title has been established by evidence no longer disputable
as resulting from a mistake if, indeed, it was not procured
through fraud. Moreover, the phrase "married to Epifania
Magallon" written after the name of Martin Lacerna in said
certificate of title is merely, descriptive of the civil status of
Martin Lacerna, the registered owner, and does not necessarily
prove that the land is "conjugal" property of Lacerna and
petitioner herein. Neither can petitioner invoke the presumption
established in Article 160 of the Civil Code that property
acquired during the marriage belongs to the conjugal
partnership, there being no proof of her alleged marriage to
Martin Lacerna except that which arises by implication from the
aforestated entry in the certificate of title and for the far more
compelling reason that the homestead claim on the land was
shown to have been perfected during Martin Lacerna's marriage
to Eustaquia Pichan, mother of the private respondents.
The ruling in Maramba vs. Lozano that the presumption does
not operate where there is no showing as to when property
alleged to be conjugal was acquired applies with even greater
force here.
The writ of execution, however, must be set aside, though not for the
reasons urged in the petition. The judgment of the respondent Trial
Court which was affirmed by the Intermediate Appellate Court merely
declared the private respondents entitled to one-half of the land in
question, without specifically ordering partition and delivery to them
of said half portion.
Both the Trial Court and the IAC, in affirming the decision, appear to
have overlooked the fact that the surviving spouse is the legal and
compulsory heir of the deceased husband or wife; otherwise,
consistent with the finding that the half portion of the land sued for
pertained to the late Eustaquia Pichan as her share in the conjugal
partnership with Martin Lacerna, they should have ruled that Martin
Lacerna concurred with the three private respondents in the
succession to said portion, each of them taking an equal share.
Unfortunately, said error is beyond review because Martin Lacerna
allowed the judgment to become final and executory without raising
that point of law, even on appeal.
DECISION: writ of execution complained of is set aside and annulled.
Instead of enforcing said writ, the respondent Trial Court is ordered
to effect the partition of the land in question in accordance with the
terms of its now final and executory decision and the provisions of
Rule 69 of the Rules of Court.
CASE #7
VDA. DE PADILLA v. VDA. DE PADILLA
This case is an incident of the settlement of the testate estate of the
late Narciso A. Padilla. In order that his property may be divided
according to his last will and testament, it is necessary first to
liquidate the conjugal partnership.
FACTS: Narciso A. Padilla and Concepcion Paterno were married on
December 12, 1912. The husband, who was a medical student,
contributed a small capital to the conjugal partnership at the time of
the marriage. The wife, on the other hand, brought to the marriage
considerable property in real estate, jewelry and cash.
Practically all of the conjugal partnership property came from the
fruits of the paraphernal property. The conjugal partnership lasted
twenty-one years, the husband having died on February 12, 1934.
The common fortune, consisting of real and personal property, is
fairly large. The husband, who left no children, executed a will giving
his whole estate to his mother, Isabel Bibby Vda. de Padilla,
appellant herein.
The property included in the inventory is appraised at P261,000.
Seven pieces of real estate are in
controversy in this case. The remaining ten real properties left by the
deceased husband admittedly pertain to the conjugal partnership.
It was in connection with such liquidation that the widow, Concepcion
Paterno Vda. de Padilla, commenced the instant proceedings by
filing a petition wherein she prayed that:
 her paraphernal property be segregated from the
inventoried estate and delivered to her together with the
corresponding reimbursements and indemnities;
 she be given one- half of the conjugal partnership property;
 her usufructuary right over one-half of the portion pertaining
to the heir instituted in the will be recognized.
CFI of Manila: Declared certain pieces of real estate and jewelry as
well as certain sums of money to be paraphernal, and ordering the
same to be delivered to the widow (appellee herein).
From the foregoing judgment the testator's mother and instituted heir,
Isabel Bibby Vda. de Padilla, appeals.
ISSUES AND RULINGS
1. Whether the value of the paraphernal land to be reimbursed to the
wife is that obtaining at the time of the construction of the building, or
the value at the time of the liquidation of the conjugal partnership.
 With conjugal funds the husband constructed buildings on
the wife's lots on Arquiza, Juan Luna, Camba and Martin
Ocampo streets.
 The court a quo ordered that the value of the lots occupied
by these constructions, to be paid to the widow, should be
that prevailing at the time of the liquidation of the conjugal
partnership.
 Appellant claims such pronouncement of the trial court to
be erroneous because from the time of the construction of
the buildings, the conjugal partnership became the owner of
the whole property (lot and building) in each instance, and
therefore the subsequent increase in value should accrue
to the conjugal partnership, and any depreciation should be
suffered by the partnership
HELD: Yes. Appellant's theory is untenable. The
ownership of the land is retained by the wife until she
is paid the value of the lot, as a result of the liquidation
of the conjugal partnership. The mere construction of a
building from common funds does not automatically
convey the ownership of the wife's land to the conjugal
partnership. Such mode of using the land, namely, by
erecting a building thereon, is simply an exercise of the
right of usufruct pertaining to the conjugal partnership over
the wife's land. In consequence of this usufructuary right,
the conjugal partnership is not bound to pay any rent during
the occupation of the wife's land because if the lot were
leased to a third person, instead of being occupied by the
new construction from partnership funds, the rent from the
third person would belong to the conjugal partnership.
Therefore, before payment of the value of the land is made from
the common funds, inasmuch as the owner of the land is the
wife, all the increase or decrease in its value must be for her
benefit or loss. And when may she demand payment? Not until
the liquidation of the conjugal partnership because up to that
time, it is neither necessary nor appropriate to transfer to the
partnership the dominion over the land, which is lawfully held in
usufruct by the conjugal partnership during the marriage.
2. Whether the value of the paraphernal buildings which were
demolished to make possible the construction of new ones, at the
expense of the conjugal partnership, should be reimbursed to the
wife.
 Such tearing down of buildings was done with regard to the
Arquiza, Juan Luna and Martin Ocampo properties.
 Appellant maintains that it is doubtful if these buildings had
any value at the time they were destroyed, and that there is
no evidence that the conjugal partnership realized any
benefit therefrom.
HELD: YES. It is certain that these old buildings had some value,
though small, and it will be the duty of the commissioners mentioned
in the judgment appealed from, to assess that value. We entertain no
manner of doubt that the conjugal partnership derived a positive
advantage from the demolition, which made it possible to erect new
constructions for the partnership. It is but just, therefore, that the
value of the old buildings at the time they were torn down should be
paid to the wife. We dismiss, as without any merit whatever, the
appellant's contention that because article 1404, par. 2, of the Civil
Code does not provide for the reimbursement of the value of
demolished improvements, the wife should not be indemnified.
3. Is the P7,000 borrowed by the husband chargeable to the conjugal
property?
 There is the total amount of P7,000 borrowed by the husband
from the wife, thus itemized: (1) P3,000 lost in horse-races and
in poker; (2) P3,000 spent for pastime ("diversion"); and (3)
P1,000 to pay a personal debt of the husband.
 The trial court applied article 1386 of the Civil Code, and
ordered that said amount of P7,000 be deducted from the
husband's share. But appellant's theory is that articles 1408
(par. 1) and 1411 should govern, so that the amount is
chargeable against the conjugal partnership.
HELD: NO.. Applying
Art. 1386 of the Spanish Code which reads, the personal
obligations of the husband cannot be enforced against
the fruits of the paraphernal property, unless it
is proven that they redounded to the benefit of the family,
said amount cannot be applied to the conjugal
partnership and should be paid by the husband alone.
While it is true that under Art. 1408,
all debts and obligations contracted by the husband during
the marriage are chargeable to against the conjugal partnership,
Art. 1386 is an exception and exempts the fruits of the
paraphernal property from the payment of the personal
obligations of the husband unless there is proof that
the redounded to the benefit of the family.
In this case, it clearly did not
and as a result, they should be taken from the husband’s fund
s. If the conjugal partnership assets are derived almost entirely,
if not entirely, from the fruits of the paraphernal property,
as in this case, it is neither lawful
nor equitable to apply article 1411 because by so doing,
the fruits of the paraphernal
property would in reality be the only
kind of property to bear the husband's gambling losses.
In other words, what
the husband loses in gambling should be shouldered by hi
m property, it is well within the Civil Code that payment may
and not by the conjugal partnership if the latter's assets c
ome solely from the fruits of the paraphernal property.
This is but just, because gambling
losses of the husband cannot by any process of reasoning be
considered beneficial to the family. By the same token,
to charge the gambling
losses against the conjugal partnership in such a situation woul
d fly in the case of the stern prohibition of article 1386, which
protects the fruits of the paraphernal property precisely against
expenses of the husband that are of no help to the family.
4. Whether interest should be paid by the widow on the amount of
P9,229.48 withdrawn by her from the Monte de Piedad savings
account No. 3317 of the conjugal partnership.
HELD: Yes. There is no question that the principal should be
credited to the partnership as the appellee's counsel does not
dispute this point. The withdrawal of said amount was made on April
7, 1934, about two months after the husband's death, and while the
widow was a special administratrix. There being no evidence in the
record as to the purpose for which this amount was used, although
counsel for appellee suggests the possibility that the same might
have been disbursed for funeral and similar expenses, we believe
she should pay such interest, if any, as the Monte de Piedad would
have paid on the amount aforesaid, had not the same been
withdrawn by the widow.
CASE #8
LILIUS VS MANILA RAILROAD CO [Denise]
FACTS: In G.R. No. L-39587, Aleko E. Lilius, who is a well-known
journalist, author and photographer and a staff correspondent
American newspaper. together with his wife Sonja Maria Lilius and
their daughter, Brita Marianne Lilius were driving for sightseeing in
Pagsanjan Laguna.
 It was his first time in the area and was entirely
unacquainted with the conditions of the road and had no
knowledge of the existence of a railroad crossing.
 Before reaching the crossing in question, there was nothing
to indicate its existence and, it was impossible to see an
approaching train.
 At about seven or eight meters from the crossing, the
plaintiff saw an autotruck parked on the left side of the road.
Several people, who seemed to have alighted from the said
truck, were walking on the opposite side.
 He slowed down and sounded his horn for the people to get
out of the way. With his attention thus occupied, he did not
see the crossing but he heard two short whistles.
 Immediately afterwards, he saw a huge black mass fling
itself upon him, which turned out to be locomotive No. 713
of the MRC’s train.
 The locomotive struck the plaintiff’s car right in the center.
The 3 victims were injured and were hospitalized.
 Aleko suffered great financial loss as he was unable to
write articles and short stories for the newspapers and
magazines. The Supreme Court ruled in favor of Aleko
Lilius, et al, awarding them in the amount of P33,525.03 as
damages, including interest and costs.
In G.R. No. 42551, herein case, Laura Lindley Shuman and co-
defendants contended that the funds which separately awarded
Sonja, partake the nature of conjugal property.
 And that even assuming that the sums awarded separately
to Sonja are not conjugal property but her own paraphernal
be required out of said funds, her husband being insolvent,
it is under her liability for the medical expenses incurred as
one of the obligations imposed by the law as wife.
ISSUE: WON damages awarded to Sonja partake the nature of
conjugal or paraphernal property
HELD: YES. There are two distinct theories as to whether damages
arising from an injury suffered by one of the spouses should be
considered conjugal or separate property of the injured spouse.
 The theory holding that such damages should form part of
the conjugal partnership property is based wholly on the
proposition, also advanced by the Manila Wine Merchants,
Ltd., that by the injury the earning capacity of the injured
spouse is diminished to the consequent prejudice of the
conjugal partnership.
 Assuming the correctness of this theory, a reading of the
decision of this court in G. R. No. 39587 will show that the
sum of P10,000 was awarded to Sonja Maria Lilius "by way
of indemnity for patrimonial and moral damages."
 It should be added that the interest on that sum is part of
the damages "patrimonial and moral" awarded to Sonja
Maria Lilius.
 Furthermore it appears in the decision of the trial court in G.
R. No. 39587 that Aleko E. Lilius claimed the sum of
P10,000 as damages on account of the loss of the services
of Sonja Maria Lilius as secretary and translator, her
particular work as a member of the conjugal partnership.
 In view of the foregoing it is held that the sum of P10,000
with interest thereon awarded to Sonja Maria Lilius as
damages is paraphernal property.
CASE #9
VILLANUEVA VS IAC
FACTS: Graciano Aranas and Nicolasa Bunsa owned Lot 13. When
they died, surviving children Modesto and Federico Aranas
adjudicated the land to themselves.
 His wife Victoria Comorro dies before he did and they had
no children.
 Modesto was survived by two illegitimate children named
Dorothea and Teodoro Aranas.
 They borrowed 18k from Jesus Bernas and mortgaged their
father’s property.
 Their relative, Consolacio Villanueva and Raymundo
Aranas was their witnesses.
 Dorothea and Teodoro failed to pay their loan so Bernas
filed a petition to foreclose the mortgage of Lot 13 but the
former executed a deed of extrajudicial partition in which
they adjudicated Lot 13 to themselves.
 Bernas claimed ownership over Lot 13.
 Consolacion Villanueva and Raymundo Aranas filed a
complaint against RTC praying that the title of Bernas over
Lot 13 be cancelled and they be declared owners of the
land on the ground that Modesto’s wife Victoria Comorro
allegedly bequeatheed to them all interests, rights and
properties, real or personal
 RTC: ruled adversely to petitioners
 Petitoners appealed to IAC but was denied.
 Consolacion Villanueva appealed to IAC.
 ISSUE: WON petitioner has a right over Lot 13 and the
improvements thereon notwithstanding her not being
named as an heiress of Modesto Aranas
HELD: NO. Lot 13 was not "conjugal partnership property"
of Victoria Comorro and her husband, Modesto Aranas. It
was the latter's exclusive, private property, which he had
inherited from his parents.
 Article 148 of the Civil Code clearly decrees: that to be
considered as "the exclusive property of each spouse" is
inter alia, "that which is brought to the marriage as his or
her own," or "that which each acquires, during the
marriage, by lucrative title."
 Thus, even if it be assumed that Modesto's acquisition by
succession of Lot 13 took place during his marriage to
Victoria Comorro, the lot would nonetheless be his
"exclusive property" because acquired by him, "during the
marriage, by lucrative title."
 Victoria died before Modesto so shed had nothing to inherit.
 There are improvements on Lot 13, petitioner claiming right
over them
 *SECOND ISSUE: WON the improvements are conjugal
property, so that Victoria Comorro may be said to have
acquired a right over them by succession, as voluntary heir
of Victoria Comorro.
 HELD: The Civil Code says that improvements, "whether
for utility or adornment, made on the separate property of
the spouses through advancements from the partnership or
through the industry of either the husband or the wife,
belong to the conjugal partnership," and 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."
 The land on which the improvements stand was the
exclusive property of Modesto Aranas and that where, as
here, property is registered in the name of one spouse only
and there is no showing of when precisely the property was
acquired, the presumption is that it belongs exclusively to
said spouse. It is not therefore possible to declare the
improvements to be conjugal in character.
CASE #10
BA FINANCE VS CA
FACTS: 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.
 He 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.
 This purportedly authorized Augusto Yulo to procure the
loan and sign the promissory note.
 About two months prior to the loan, Augusto Yulo had
already abandoned his wife Lily Yulo and their children.
 When the obligation became due and demandable,
Augusto Yulo failed to pay the same.
 Petitioner filed a complaint against spouses Yulo, charging
them of fraud.
 RTC: issued writ of attachment enabling petitioner to attach
the properties of A & L Industries.
 Private respondent Lily Yulo argued that although she and
Augusto are husband and wife, the former abandoned her.
They were already separated when the promissory note
was executed,
 RTC: dismissed petitioner’s complaint
 Petitioner appealed. CA affirmed
ISSUE: WON A&L Industries can be held liable for the
obligations contracted by the husband.
HELD: NO. A&L Industries is a single proprietorship, whose
registered owner is Lily Yulo.
 The said proprietorship was established during the
marriage and assets were also acquired during the same.
 Hence, it is presumed that the property forms part of the
conjugal partnership of the spouses and be held liable for
the obligations contracted by the husband.
 However, for the property to be liable, the obligation
contracted by the husband must have redounded to the
benefit of the conjugal partnership.
 The obligation was contracted by Augusto for his own
benefit because at the time he incurred such obligation, he
had already abandoned his family and left their conjugal
home.
 He likewise made it appear that he was duly authorized by
his wife in behalf of the company to procure such loan from
the petitioner, showing his selfish interest.
 Clearly, there must be the requisite showing that some
advantage accrued to the welfare of the spouses.
 Thus, the Court ruled that petitioner cannot enforce the
obligation contracted by Augusto against his conjugal
properties with Lily.’
CASE #11
SECURITY BANK AND TRUST COMPANY v. MAR TIERRA CORP
FACTS: 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.
 Respondent corporation was not able to pay all its debt
balance as it suffered business reversals, eventually
ceasing operations.
 Petitioner filed a complaint against respondent corp and
individual respondents.
 RTC issued a writ of attachment on all real and personal
properties of respondent corporation and individual
respondent Martinez including the conjugal house and lot of
the spouses but it found that it 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.
 Petitioner appealed to CA. CA affirmed RTC decision.
PetitioneR APPEALED TO SC
 ISSUE: WON the conjugal partnership may be held liable
for an indemnity agreement entered into by the husband to
accommodate a third party
 HELD: NO. Under Article 161(1) of the Civil Code, the
conjugal partnership is liable for “all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership.”
  Jurisprudence provides that when 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.
 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.
 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. It is for the benefit of the principal debtor and
not for the surety or his family.
 In the case at bar, 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 latter’s benefit.
 Proof must be presented to establish the benefit of
redounding to the conjugal partnership. 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.
CASE #12
CARANDANG VS HEIRS OF DE GUZMAN
FACTS: Spouses Arcadio and Maria Luisa Carandang and Quirino de
Guzman are stockholders as well as corporate officers of Mabuhay
Broadcasting System (MBS), with 46% and 54% shares respectively.
Through the years, the capital stock of MBS was increased from
P500,000 to P3 million and part of this increase was subscribed by the
spouses Carandang. De Guzman claimed that part of the payment for
the subscriptions were paid by him with a total of P336,375. Spouses
Carandang refused to pay. De Guzman filed his complaint. De
Guzman thereafter died. 3 of the 4 checks used to pay their stock
subscrptions were issued in the name of Milagros Carandang, wife of
the deceased. Carandang contended that the RTC should have
dismissed the case for failure to state a cause of action, considering
that Milagros de Guzman, allegedly and indispensable party, was not
included as a party-plaintiff since “if a suit is not brought in the name
of or against the real party in interest, a motion to dismiss may be filed
on the ground that the comlaint states no cause of action”
HELD: The joint account of Quirino and Milagros de Guzman from
which the four checks were drawn is part of their conjugal property and
under both the Civil Code and Family Code, the husband alone may
instittue an action for the recovery of the spouses’ conjugal property.
Under the New Civil Code, joint management or administration does
not require that the husband and wife always act together. Each
spouse may validly exercise full power alone. Petitioners erred in
interchanging the terms “real party in interest” and “indispensable
party”. Real party in interest is the party who stands to be benefited or
injured by the judgment of the suit, or the party who stands to suit.
Indispensable party is a party in interest without whom no final
determination can be had of an action. Quirino and Milagros were
married before the Family Code. As they did not execute any marriage
settlement, by default, the CPG governs their property relations.
Creditsloaned during the time of the marriage ar epresumed to be
conjugal. Assuming that the four checks created a debt for which the
spouses Carandang are liable, such credits are presumed to be
conjugal property.
Being co-owners of the alleged credit, Quirino and Milagros de
Guzman may separately bring an action for the recovery. Court held
that Milagros de Guzman is not an indispensable party in the action
for recovery of loaned money. Dismissal of the suit is not warranted by
her not being a part thereto.
CASE #13
SPOUSES GO VS YAMANE
FACTS: A 750-square meter parcel of lot in Baguio City was registered
under the name of Muriel Pucay Yamane, wife of Respondent Leonard
Yamane. In a case involving the Pucay sisters vs. Cypress
Corporation, the subject property was levied to satisfy the lien for
attorney’s fees in the amount of P10, 000. The propery was schedule
to be open for auction. Four days before the actio, Respondent filed a
claim to stop the public auction on the ground that the subject property
is conjugal property and therefore should not be held liable for the
personal obligation of the Pucay sisters. However, the auction
proceeded and highest bidders were spouses Josephine and Henry
Go. RTC Baguio held that said property was the paraphernal property
of the late Muriel Pucay Yamane. The appearance of his name on the
Transfer Certificate of Title was deemed to be merely descriptive of
the civil status of the egistered owner, his wife. The CA reversed the
RTC decision and declared said sale null and void. Petitioners
contended that the Deed of Absolute Sale is in the sole name of Muriel.
HELD: Property acquired during the marriage is presumed to be
conjugal, unless the exclusive funds areshown to have been used for
the purpose. Because of petitioners’ failure to establish that the land
has been acquired by Muriel using her exclusive funds. The purchase
of the property concluded in 1967. Yamane’s property regime was
automatically CPG. Said property was acquired during the marriage.
The nature of a property is determined by law and not by will of the
spouses, that’s why the mere registration of a property in the name of
one spouse does not destroys its conjugal nature. It cannot be
contended that simply because the Deed of Sale were in the name of
Muriel alone. Supreme Court held that all the property acquired by the
spouses, regardless of in whose name the same is registered, during
the marriage is presumed to belong to the CPG, unless it isproved that
it pertains exclusively to the husband or wife.
CASE #14
CHING V. CA AND ALLIED BANKING CORPORATION
FACTS: The Philippine Blooming Mills Company, Inc. (PBMCI)
obtained a loan from the Allied Banking Corporation (ABC). By virtue
of this loan, the PBMCI, through its Executive Vice-President Alfredo
Ching, executed a promissory note for the said amount promising to
pay. The PBMCI defaulted in the payment of all its loans. Hence, the
ABC led a complaint for sum of money with prayer for a writ of
preliminary attachment against the PBMCI to collect the amount
exclusive of interests, penalties and other bank charges. Impleaded
as co-defendants in the complaint were Alfredo Ching, Emilio Tañedo
and Chung Kiat Hua in their capacity as sureties of the PBMCI. In its
application for a writ of preliminary attachment, the ABC averred that
the "defendants are guilty of fraud in incurring the obligations upon
which the present action is brought in that they falsely represented
themselves to be in a financial position to pay their obligation upon
maturity thereof. Trial court granted the ABC’s application for a writ of
preliminary attachment. Upon the ABC's posting of the requisite
bond, the trial court issued a writ of preliminary attachment.
Subsequently, summonses were served on the defendants.
The deputy sheriff of the trial court levied on attachment the 100,000
common shares of Citycorp stocks in the name of Alfredo Ching.
Trial court issued a writ of preliminary attachment against Alfredo
Ching requiring the sheriff of to attach all the properties of said
Alfredo Ching to answer for the payment of the loans. Encarnacion T.
Ching, wife of Alfredo Ching, filed a Motion to Set Aside the levy on
attachment alleging inter alia that the 100,000 shares of stocks levied
on by the sheriff were acquired by her and her husband during their
marriage out of conjugal funds. Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive suretyship
contract executed by petitioner Alfredo Ching for the account of
PBMCI did not redound to the benefit of the conjugal partnership.
She, likewise, alleged that being the wife of Alfredo Ching, she was a
third-party claimant entitled to le a motion for the release of the
properties. She attached therewith a copy of her marriage contract
with Alfredo Ching.
The trial court issued on December 15, 1993 an Order lifting the writ
of preliminary attachment on the shares of stocks and ordering the
sheriff to return the said stocks to the petitioners. The CA rendered
judgment granting the petition and setting aside the assailed orders
of the trial court.
The CA ruled that the presumption in Article 160 of the New Civil
Code shall not apply where, as in this case, the petitioner-spouses
failed to prove the source of the money used to acquire the shares of
stock. It held that the levied shares of stocks belonged to Alfredo
Ching, as evidenced by the fact that the said shares were registered
in the corporate books of Citycorp solely under his name. Thus,
according to the appellate court, the RTC committed a grave abuse
of its discretion amounting to excess or lack of jurisdiction in issuing
the assailed orders. The petitioners' motion for reconsideration was
also denied by the CA.
Petitioners aver that the source of funds in the acquisition of the
levied shares of stocks is not the controlling factor when invoking the
presumption of the conjugal nature of stocks under Art. 160, and that
such presumption subsists even if the property is registered only in
the name of one of the spouses, in this case, petitioner Alfredo
Ching. According to the petitioners, the suretyship obligation was not
contracted in the pursuit of the petitioner-husband's profession or
business.
ISSUES: WON 100,000 shares of stocks may be levied on by the
sheriff to answer for the loans guaranteed by petitioner Alfredo Ching
HELD: Article 160 of the New Civil Code provides that all the
properties acquired during the marriage are presumed to belong to
the conjugal partnership, unless it be proved that it pertains
exclusively to the husband, or to the wife. In Tan v. Court of Appeals,
we held that it is not even necessary to prove that the properties
were acquired with funds of the partnership. As long as the
properties were acquired by the parties during the marriage, they are
presumed to be conjugal in nature. In fact, even when the manner in
which the properties were acquired does not appear, the
presumption will still apply, and the properties will still be considered
conjugal. The presumption of the conjugal nature of the properties
acquired during the marriage subsists in the absence of clear,
satisfactory and convincing evidence to overcome the same.
The private respondent failed to adduce evidence that the petitioner-
husband acquired the stocks with his exclusive money. The
barefaced fact that the shares of stocks were registered in the
corporate books of Citycorp Investment Philippines solely in the
name of the petitioner-husband does not constitute proof that the
petitioner-husband, not the conjugal partnership, owned the same.
For the conjugal partnership to be liable for a liability that should
appertain to the husband alone, there must be a showing that some
advantages accrued to the spouses. Certainly, to make a conjugal
partnership responsible for a liability that should appertain alone to
one of the spouses is to frustrate the objective of the New Civil Code
to show the utmost concern for the solidarity and well being of the
family as a unit. The husband, therefore, is denied the power to
assume unnecessary and unwarranted risks to the financial stability
of the conjugal partnership. In this case, the private respondent failed
to prove that the conjugal partnership of the petitioners was benefited
by the petitioner-husband's act of executing a continuing guaranty
and suretyship agreement with the private respondent for and in
behalf of PBMCI. The contract of loan was between the private
respondent and the PBMCI, solely for the benefit of the latter. No
presumption can be inferred from the fact that when the petitioner-
husband entered into an accommodation agreement or a contract of
surety, the conjugal partnership would thereby be benefited.
CASE #15
BORLONGAN V. BANCO DE ORO
FACTS: Sometime in 1976, Eliseo Borlongan and his wife Carmelita
acquired a real property. In 2012, they went to the Registry of Deeds
of Pasig City to obtain a copy of the TCT in preparation for a
prospective sale of the subject property. To their surprise, the title
contained an annotation that the property covered thereby was the
subject of an execution sale in a Civil Case which was pending
before the RTC of Makati. Petitioner then found out that respondent
Banco De Oro, formerly Equitable PCI Bank, filed a complaint for
sum of money against Tancho Corporation, the principal debtor of
loan obligations obtained from the bank. Likewise impleaded were
several persons, including Carmelita, who supposedly signed 4
security agreements to guarantee the obligations of Tancho
Corporation. It appears from the records of the Civil Case that RTC
issued an Order directing the service of summons to all the
defendants at the business address of Tancho Corporation provided
by BDO which was Fumakilla Compound. BDO already foreclosed
the Fumakilla Compound, following Tancho Corporation’s failure to
pay its obligation, and BDO already consolidated its ownership of the
property.
The Makati RTC rendered a Decision holding the defendants in the
Civil Case liable to pay BDO P32, 543,856 plus 12% interest per
annum from the time of the filing of the complaint until fully paid and
attorney’s fees. The Makati RTC issued a Writ of Execution upon
BDO’s motion. The order states that in the event that the judgment
obligors cannot pay all or part of the obligation, the sheriff shall levy
upon the properties of the defendants to satisfy the awards. Sheriff
then reported that he tried to serve the writ of execution upon the
defendants but was not able to do so since the defendants were no
longer holding office in Fumakilla compound, and that Carmelita was
no longer residing at the said address. Subsequently, BDO filed a
Motion to Conduct Auction of the subject property, the motion was
granted by the Makati RTC and it was then sold to the highest bidder
– BDO.
Following the discovery of the sale of their property, Eliseo Borlongan
executed and affidavit of adverse claim and filed a complaint. He
alleged that the subject property is a family home that belongs to the
conjugal partnership of gains he established with his wife. He further
averred that the alleged surety agreements upon which the
attachment of the property was anchored were signed by his wife
without his consent and did not redound to benefit their family. Thus,
he prayed that the surety agreements and all other documents and
processes, including the ensuing attachment, levy and execution
sale, based thereon be nullified. BDO led a Motion to Dismiss the
Complaint, asserting that the Pasig RTC has no jurisdiction to hear
Eliseo's Complaint, the case was barred by res judicata given the
Decision and orders of the Makati RTC and that the complaint failed
to state a cause of action. On a motion for reconsideration filed by
Eliseo, the Pasig RTC reinstated the case with qualification. Relying
on Buado v. Court of Appeals, the Pasig RTC held that since majority
of Eliseo's causes of action were premised on a claim that the
obligation contracted by his wife has not redounded to their family,
and, thus, the levy on their property was illegal, his filing of a
separate action is not an encroachment on the jurisdiction of the
Makati RTC, which ordered the attachment and execution in the first
place.
The Makati RTC ordered the issuance of a Writ of Possession and
the issuance of a new TCT covering the subject property in favor of
the respondent bank. Carmelita filed a Petition for Annulment of
Judgment With Urgent Prayer for Issuance of Temporary Restraining
Order and/or Writ of Preliminary Injunction with the CA. Before the
CA can act on the Petition for Annulment, the Borlongans found
posted on the subject property a Writ of Possession and a Notice to
Vacate. The appellate court denied Carmelita's prayer for the
issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction.
ISSUES: Whether or not the CA erred in refusing to issue a TRO
and/or WPI stopping the consolidation of BDO's ownership over the
subject property and whether the Pasig RTC has jurisdiction to hear
and decide a case led by the non- debtor husband to annul the levy
and execution sale of the subject property ordered by the Makati
RTC against his wife.
HELD: A writ of preliminary injunction is warranted where there is a
showing that there exists a right to be protected and that the acts
against which the writ is to be directed violate an established right.
Indeed, the petitioner's prayer for the issuance of a TRO and/or WPI
was intended to preserve the status quo ante, and not to pre-empt
the appellate court's decision on the merits of her petition for
annulment. Thus, it was a grievous error on the part of the CA to
deny her of this provisional remedy. Petitioner has a clear and
unmistakable right that must be protected. This right is not just her
proprietary rights over the subject property but her constitutionally
protected right to due process before she can be deprived of her
property.
As a rule, summons should be personally served on a defendant.
When summons cannot be served personally within a reasonable
period of time, substituted service may be resorted to. Service of
summons by publication can be resorted to only if the defendant's
"whereabouts are unknown and cannot be ascertained by diligent
inquiry." Simply put, personal service of summons is the preferred
mode. And, the rules on the service of summons other than by
personal service may be used only as prescribed and only in the
circumstances authorized by statute. Thus, the impossibility of
prompt personal service must be shown by stating that efforts have
been made to find the defendant personally and that such efforts
have failed before substituted service may be availed. The summons
was served on the petitioner by publication. Yet, the circumstances
surrounding the case do not justify the resort. Clearly, there was no
diligent effort made to find the petitioner and properly serve her the
summons before the service by publication was allowed. Neither was
it impossible to locate the residence of petitioner and her
whereabouts.
The subject property was not foreclosed by the respondent bank;
right of BDO to the possession of the subject property is
questionable.
Still unwilling to issue the TRO and/or WPI fervently prayed for by
petitioner, the appellate court held that "upon the expiration of the
redemption period, the right of the purchaser to the possession of the
foreclosed property becomes absolute." This Court cannot affirm the
appellate court's ruling. At the outset, it must be pointed out that the
subject property was never mortgaged to, much less foreclosed by,
the respondent bank. Thus, it was error for the CA to refer to the
subject property as "foreclosed property." Rather, as disclosed by the
records, the possession of the subject property was acquired by BDO
through attachment and later by execution sale. However, it is
presumptive to state that the right of BDO over the possession of the
subject property is now absolute considering that there is an action
that questions the validity of the bank's acquisition over the same
property.
Eliseo can file an independent action for the annulment of the
attachment of their conjugal property.
Section 16, Rule 39 of the Rules of Court allows third-party claimants
of properties under execution to vindicate their claims to the property
in a separate action with another court. Clearly, the availability of the
remedy provided under the foregoing provision requires only that that
the claim is a third-party or a "stranger" to the case.
The poser then is this: is the husband, who was not a party to the suit
but whose conjugal property was executed on account of the other
spouse's debt, a "stranger" to the suit? In Buado v. Court of Appeals,
this Court had the opportunity to clarify that, to resolve the issue, it
must first be determined whether the debt had redounded to the
benefit of the conjugal partnership or not. To reiterate, conjugal
property cannot be held liable for the personal obligation contracted
by one spouse, unless some advantage or benefit is shown to have
accrued to the conjugal partnership.
In the negative, the spouse is a stranger to the suit who can file an
independent separate action, distinct from the action in which the writ
was issued.
In the present case, it is not disputed that the conjugal property was
attached on the basis of a surety agreement allegedly signed by
Carmelita for and in behalf of Tancho Corporation. In our 2004
Decision in Spouses Ching v. Court of Appeals, we elucidated that
there is no presumption that the conjugal partnership is benefited
when a spouse enters into a contract of surety.
It is not apparent from the records of this case that BDO had
established the benefit to the conjugal partnership owing from the
surety agreement allegedly signed by Carmelita. Thus, Eliseo's claim
over the subject property lodged with the RTC Pasig is proper, with
the latter correctly exercising jurisdiction thereon. Besides, BDO's
reliance on Spouses Ching v. Court of Appeals is improper. In the
present case, Eliseo and his wife discovered the attachment of their
conjugal property only after the finality of the decision by the RTC
Makati. There was, therefore, no opportunity for Eliseo to intervene in
the case before the RTC Makati which attached the conjugal
property, as a motion to intervene can only be led "at any time before
rendition of judgment by the trial court.” This spells the whale of
difference between the case at bar and the earlier Spouses Ching.
Unlike in the present case, the debtor in the case cited by BDO was
properly informed of the collection suit and his spouse had the
opportunity to question the attachment of their conjugal property
before the court that issued the levy on attachment, but simply
refused to do so. Thus, to now deny Eliseo the opportunity to
question the attachment made by the RTC Makati in a separate and
independent action will be to, again, refuse him the due process of
law before their property is taken. As this Court is duty-bound to
protect and enforce Constitutional rights, this we cannot allow.
CASE#16
LACSON v. DIAZ
FACTS: A final decision rendered by the CFI of Negros Occidental
in a civil case sentenced defendant Abelardo Diaz to pay the
plaintiffs Soledad Lacson the sum of 97,532.93 with legal interest
thereon from July 1, 1960 until fully paid, plus attorney’s fees. A write
of execution was issued by the court. The Provincial Sheriff of
Negros Occidental sent to the manager of Talisay-Silay Milling
Company, wherein Diaz was employed, a notice to garnish 1/3 of his
monthly salary and of any other personal properties belonging to said
defendant, to cover the total amount of 132,718.30.
Diaz filed with the court a motion to quash the writ execution and to
lift the notice of garnishment of his salary on the ground that the
same are not enforceable against his present family. Since the
judgment arose out of a contract entered into by him during his first
marriage, the judgment cannot be enforced in his salaried which form
part of the conjugal properties of the second marriage. Plaintiffs
opposed the motion on the basis that re-marriage is not a cause for
extinction of obligations. Defendant’s motion was denied by the court,
hence, his appeal.
Diaz became a widower in 1951 and remarried in 1960. The writ of
execution and notice of garnishment were issued and implemented in
1961. Since obligation arose from the first marriage, such obligation
cannot be charged against the properties of the second union. And
since his salaries form part of the conjugal assets, the same cannot
be garnished to satisfy his personal obligations. Appellant cites ART
163.
ART. 163. 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."
HELD: As a general rule, debts contracted by the husband or wife
before the marriage are not chargeable to the conjugal partnership.
However, such obligations may be enforced against the conjugal
assets if the responsibilities enumerated in ART 161 has already
been covered, and that the obligor has no exclusive property or the
same is insufficient.
In the instant case, the judgment rendered is a personal obligation.
Yet, it has not been established that Diaz does not have properties of
his own or that the same are not adequate to satisfy the appellees’
claim. Furthermore, there is no showing that the responsibilities in
ART 161 of the Civil Code have already been covered in order that
the personal obligation of the husband may be made chargeable
against the properties of the second marriage. Case is remanded to
the court of origin for further proceedings.
CASE #17
Pana v Heirs of Juanite (Pao)
FACTS: Efren and Melecia Pana were accused of murder before the
RTC. Efren was acquitted while Melecia was found guilty and was
sentenced to death and to pay each of the heirs of the victims, jointly
and severally. On appeal, court modified it to reclusion perpetua,
affirmed the award of civil indemnity and moral damages but deleted
the award for actual damages. Upon motion for execution by heirs of
the deceased, the RTC ordered the issuance of the writ, resulting in
the levy of real properties registered in the Pana spouses. A notice of
levy and a notice of sale on execution were issued
Spouses then filed a motion to quash the writ of execution claiming
that the levied properties were conjugal assets and not paraphernal
assets of Melecia. RTC denied the motion. Spouses moved for
reconsideration but was still denied. Claiming that RTC gravely
abused its discretion, Efren filed a petition for certoriari before the
CA. CA dismissed the petition prompting him to file for the present
petition for review on certoriari.
ISSUE: WON CA erred in holding that the conjugal properties of the
spouses can be levied and executed upon for the satisfaction of
Melecia’s liability in the murder case.
HELD: Efren claims their marriage falls under the regime of CPG,
given that they were married prior to enactment of the FC and that
they did not execute any prenuptial agreement. The heirs however,
claim that the system of absolute community of property applied to
the spouses since the fact that they were married before the FC does
not prevent the application of Art. 94 because their property regime is
precisely governed by the law on absolute community. The RTC said
that admittedly, their property relation was conjugal but since the
transitory provision of the FC gave its provisions retroactive effect if
no vested or acquired rights are impaired, that property relation
between the couple was changed when the FC took effect in 1988.
The FC now provides ACP for all marriages unless the parties
entered into a prenuptial agreement. CA agreed.
Both RTC and CA are in error since Article 256 of the FC does not
intend to reach back and automatically convert into ACP all CPG that
existed before 1988 excepting only those with prenups. The FC in
Art. 76 itself provides that marriage settlements cannot be modified
except prior to marriage. Thus, CPG applies to the couple.
In CPG under the CC, the husband and the wife place only fruits of
their separate property and incomes from their work or industry in the
common fund. This means that they continue under such property
regime to enjoy rights of ownership over their separate properties.
Consequently, the Court must refer to the FC provisions in deciding
whether or not the conjugal properties of Efren and Melecia may be
held to answer for the civil liabilities of Melecia and since Efren does
not dispute the RTC’s finding that Melecia has no exclusive property
of her own, Art. 122 of the FC applies. The civil indemnity that the
decision in the murder case imposed on her may be enforced against
their conjugal assets after the responsibilities enumerated in Art. 121
of FC has been covered. Art. 121 allows payment of the criminal
indemnities imposed on his wife out of the partnership assets even
before these are liquidated. This is not unfair since upon liquidation
of the partnership, the offending spouse shall be charged for what
has been paid for the purposes above-mentioned.
CASE #18
Spouses Wong v Intermediate Appellate Court (Pao)
FACTS: Private respondent Romarico Henson married Katrina
Pineda on Jan. 6, ’64. They have three children but spent most of the
time living separately. During the marriage, Romarico bought a
parcel of land in Angeles City from his father with money borrowed
from an officemate. Meanwhile in Hong Kong, sometime in 1972,
Katrina entered into an agreement with Anita Chan whereby Chan
consigned to Katrina pieces of jewelry for sale valued at Php
321,830. 95. When Katrina failed to return the pieces of jewelry
within the 2o day period agreed upon, Chan demanded payment of
their value. Katrina then issued a check in favor of Anita for 55000
pesos which was dishonored for lack of funds. Hence, Katrina was
charged with estafa before the CFI of Pampanga and Angeles. CFI
dismissed the case.
In view of said decision, Chan and her husband Ricky Wong filed
against Katrina and husband Romarico an action for collection of a
sum of money. The court then promulgated a decision in favor of the
Wongs and ordered the spouses to pay the original amount with legal
interest, expenses for litigation and attorney’s fees.
A writ of execution was then issued. Levied upon were four lots in
Angeles City all in the name of “Romarico Henson … married to
Katrina Henson”. During the auction, two of the lots were sold to
Juanito Santos while the two other were sold to Leonardo Joson. A
month before such redemption, Romarico filed an action for the
annulment as well as the writ of execution, levy on execution and the
auction sale in the CFI claiming that he was not given a day in court
because he was not represented by counsel and that although he did
not file an answer to the complaint he was not declared in default in
the case and that he had nothing to do with the business transactions
of Katrina as he did not authorize her to enter into such transactions,
and that the properties levied on execution and sold at the auction
were his capital properties and therefore, as to him, all the
proceedings were null and void. The lower court found these claims
by Romarico meritorious.
Defendants then appealed to the IAC, which in turn, affirmed the
lower court’s decision, in toto. They then filed a motion for
reconsideration of the decision of the IAC but the same was denied
for lack of merit.
ISSUE: WON the execution of a decision in an action for collection of
a sum of money may be nullified on the ground that the real
properties levied upon and sold at public auction are the alleged
exclusive properties of a husband who did not participate in his wife’s
business transaction from which said action stemmed
HELD: IAC’s decision is affirmed with modifications. The Court
disagrees with the appellate court that the said properties are
exclusively owned by Romarico since they were acquired during the
marriage, they are presumed to belong to the conjugal partnership,
even though it was proven that they had been living separately and
that Katrina was estranged. The presumption of the conjugal nature
of the properties subsists in the absence of clear, satisfactory and
convincing evidence to overcome said presumption. While there is
proof that Romarico acquired the properties with money he had
borrowed, it is unclear where he obtained the money to repay the
loan. If he paid out of his salaries, then the money is part of the
conjugal assets and not exclusively his. However, the conjugal
properties may not be held liable since the purchases done by
Katrina were not necessary for the support of the family. Thus, the
Wongs may not bind the conjugal assets to answer Katrina’s
personal and exclusive obligation to them.
CASE #19
Pelayo v Perez (Pao)
FACTS: David Pelayo executed a deed of sale to Melki Perez two
parcels of agricultural land in Davao. Loreza and another one whose
signature is ineligible witnessed the execution of the deed. Loreza,
however, signed only on the third page which resulted in Perez’
application for registration of the deed was denied. Perez then asked
Loreza to sign on the first and second pages of the deed but she
refused which made Perez file an instant complaint for specific
performance against the spouses.
Spouses moved to dismiss the complaint on the ground that it stated
no cause of action, citing Section 6 of RA 6656 aka Comprehensive
Agrarian Reform Law which stated that contracts executed prior
thereto shall “be valid only when registered with the Register of
Deeds within a period of three months after the effectivity of this Act”.
TC dismissed the complaint. (Deed was executed January, the
defendants claimed that Perez had at least up to September within
which to register but failed to do so, it is not valid and therefore,
unenforceable). Upon appeal, the dismissal was set aside and was
remanded to the lower court for further proceedings.
Defendants claim that they never did sell the land to Perez but were
rather friends with them and that they simply made it appear that way
so they can scare off people who occupied the lots illegally especially
since Perez was known as an activist/leftist and thus is feared by
many. They also said that such omission of the signature was
intentional so that the deed is considered void. Perez on the other
hand claims that such land is a payment to him for being the spouses
attorney-in-fact but when the relationship went sour, Pelayo sent a
letter to the Register of Deeds of Tagum requesting not to entertain
any transaction concerning the lots title to which was entrusted to
Perez who misplaced and could not locate it.
Pelayo also claimed that the deed was without his wife’s consent,
hence, should be null and void
RTC assailed that the deed is null and void. Decision was appealed
by Perez to the CA. CA then ruled that Lorenza’s signing as witness
to the execution of the deed, she had knowledge of the transaction
and is deemed to have given her consent to the same. CA reversed
RT’s ruling declaring deed valid and enforceable and ordered
Lorenza to affix her signature on all pages of the document.
The spouses appealed the decision claiming that the court erred in
its decision
ISSUE: WON Loreza consented in the execution of the deed by his
husband David
Held:
Appeal is denied and the CA’s decision is affirmed. The court ruled
that even when the signature of Lorenza were not found in three
pages, and she was signing as an instrumental witness, the
circumstances leading to the execution and the fact that she signed
proves that se was fully aware of the sale of their conjugal property,
giving her implied consent. Consent need not be expressed.
CASE #20 HOMEOWNERS AND SAVINGS LOAN BANK VS DAILO
CASE #21
JOSE UY v CA (Divs)
FACTS: Dr. Ernesto Jardeleza, Sr.'s suffering of a Stroke left him
comatose and bereft of any motor of mental faculties. He is the father
of Teodoro Jardeleza (respondent) and husband to Gilda (herein
petitioner). Other petitions herein are spouses Jose Uy (bro in law)
and glenda jardelaza (respondent sister).
Respondent upon knowing that a piece of property belonging to the
father was about to be sold, he instituted a special proceeding in the
matter of guardianship of Dr. Ernesto Jardelza, Sr. Respondent says
that Ernesto’s state prevents him from administering his property and
contends that there is a need for the court to appoint a guardian to
administer said properties to avoid loss. He prayed for letters of
guardianship be issued in favour of Gilda.
Few days later, respondent Gilda L. Jardeleza herself filed a petition
docketed as Special Proceeding NO. 4691, regarding the declaration
of incapacity of Ernesto Jardeleza,
Sr., and prayed for assumption of sole powers of administration of
conjugal properties, and authorization to sell the same. She signified
to the court her desire to assume sole powers of administration of
their conjugal properties. She also alleged that her husband's
medical treatment and hospitalization expenses were piling up and
thus urgently needed to sell one piece of real property, specifically
Lot No. 4291 and its improvements. Thus,
she prayed for authorization from the court to sell said property.
caIETS
RTC of Iloilo City rendered its decision, granting prayers of Gilda.
"pursuant to Article 124 of the Family Code, and that the proceedings
thereon are governed by the rules on summary proceedings
sanctioned under Article 253 of the same Code . . . .
Teodor filed a motion for reconsideration and consolidation, arguing
that the declaration of incapacity assumption of sole powers of
administration, and authority to sell the conjugal properties was
essentially a petition for guardianship of the person and properties of
Ernesto Jardeleza, Sr. As such, it cannot be prosecuted in
accordance with the provisions on summary proceedings set out in
Article 253 of the Family Code. It should follow the rules governing
special proceedings in the Revised Rules of Court which require
procedural due process, particularly the need for notice and a
hearing on the
merits.
While the motion for reconsideration was pending, Gilda Jardeleza
disposed by
absolute sale Lot No. 4291 her daughter, Ma. Glenda Jardeleza Uy.
Teodoro Jardeleza opposed the sale. The CA reversed the sale,
declaring it null and void.
ISSUE: Whether or not Gilda may assume sole powers of
administration of the conjugal property under Article 124 of the
Family Code and dispose of a parcel of
with the approval of the court in a summary proceeding
HELD: The Court of Appeals ruled that in the condition of Dr.
Ernesto Jardeleza, Sr., the
procedural rules on summary proceedings in relation to Article 124 of
the Family Code are not applicable. Because of Dr. Ernesto’s
condition, the proper remedy
was the appointment of a judicial guardian of the person or estate or
both of such
incompetent, under Rule 93, Section 1, 1964 Revised Rules of Court.
Indeed, petitioner
earlier had filed such a petition for judicial guardianship.
Article 124 of the Family Code provides as follows:
"ART. 124. The administration and enjoyment of the conjugal
partnership
property shall belong to both spouses jointly. In case of
disagreement, the
husband's decision shall prevail, subject to recourse to the court by
the wife for a
proper remedy which must be availed of within five years from the
date of the
contract implementing such decision.
"In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do
not include the powers of disposition or encumbrance which must
have the authority of the court or the written consent of the other
spouse. In the absence of such authority or consent, the disposition
or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse
and the third person, and
may be perfected as a binding contract upon the acceptance by the
other spouse
or authorization by the court before the offer is withdrawn by either or
both
offerors. (165a)."
In regular manner, the rules on summary judicial proceedings under
the Family Code govern the proceedings under Article 124 of the
Family Code. The situation contemplated is one where the spouse is
absent, or separated in fact or has abandoned the other or consent is
withheld or cannot be obtained. Such rules do not apply to cases
where the nonconsenting spouse is incapacitated or incompetent to
give consent.
In the case of the Ernesto who is incapacitated because of stroke,
the proper remedy is a judicial guardianship proceedings under Rule
93 of the 1964 Revised Rules of Court.
Even assuming that the rules of summary judicial proceedings under
the Family Code may apply to the wife's administration of the
conjugal property, the law provides that the wife who assumes sole
powers of administration has the same powers and duties as a
guardian under the Rules of Court. Consequently, a spouse who
desires to sell real property as such administrator of the conjugal
property must observe the procedure for the sale of the ward's estate
required of judicial guardians under Rule 95, 1964 Revised Rules of
Court, not the summary judicial proceedings under the Family Code.
WHEREFORE, the Court AFFIRMS the decision of the Court of
Appeals in CA-G.R. SP No. 26936, in toto.
CASE #22
Jader Manalo v Spouses Camaisa
FACTS: Thelma A. Jader-Manalo (petitioner) allegedly came across
an advertisement placed by respondents, the Spouses Norma
Fernandez C. Camaisa and Edilberto Camais for the sale of their ten-
door apartment in Makati, as well as that in Taytay, Rizal.
Petitioner met w/ the spouses and proposed to buy the properties.
She made an offer to respondent Edilberto Camaisa w/ knowledge
and conformity of his wife, Norma. The agreement to purchase the
properties through instalment was handwritten by petitioner and
signed by edilberto. A formal contract to sell was prepared thereafter
which was signed the next day plus the delivery of two checks. The
contracts were given to Edilberto for the formal affixing of his wife’s
signature.
Spouses informed her that they were backing out of the agreement
because they needed spot cash for full amount (NB: the agreement
was instalment basis).
Norma refused to sign the contract, denied she participated in the
negotiations for the sale and did not give her consent and conformity
to the same.
Petitoner filed a complaint for specific performance w/c was denied
by the RTC. CA affirmed th dismissal. The Court of Appeals
explained that the properties subject of the contracts were conjugal
properties and as such, the consent of both spouses is necessary to
give effect to the sale; CA also stressed that the authority of the court
to allow sale or encumbrance of a conjugal property without the
consent of the other spouse is applicable only in cases where the
said spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal property.
ISSUE: whether or not the husband may validly dispose of a conjugal
property without the wife's written consent.
HELD: The law requires that the disposition of a conjugal property by
the husband as administrator in appropriate cases requires the
written consent of the wife, otherwise, the
disposition is void. Art. 124. The administration and enjoyment of the
conjugal partnership property shall belong to both spouses jointly. In
case of disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for a proper remedy, which must be
availed of within five years from the date of the contract implementing
such decision. In the event that one spouse is incapacitated or
otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the
court or the written consent of the other spouse. In the absence of
such authority or consent the disposition or encumbrance shall be
void. However, the transaction shall be construed as a continuing
offer on the part of the consenting spouse and the third person, and
may be perfected as a binding contract upon the acceptance by the
other spouse or authorization by the court before the offer is
withdrawn by either or both
offerors.
The properties subject of the contracts in this case were conjugal;
hence, for the contracts to sell to be effective, the consent of both
husband and wife must concur.
Pettioner argues that Norma unjustly refuses to affix her signature to
the contract to sell, court authorization under art 124 of FC is warrant
but the court stress that authorization under Art. 124 is only resorted
to in cases where the spouse who does not give consent is
incapacitated. Norma is not incapacited, she only refuses to give her
consent.
CASE #23
Guiang v CA

The sale of a conjugal property requires the consent of both the
husband and the wife. The absence of the consent of one renders
the sale null, and void, while the vitiation thereof makes it merely
voidable. Only in the latter case can ratification cure the defect.
FACTS: Plaintiff Gilda Corpuz left for Manila trying to look for work
abroad. Unfortunately, she became a victim of an unscrupulous
illegal recruiter. She was not able to go abroad and stayed for a while
in manila.
Back home at South Cotabato, Harriet Corpuz (daughter of Gilda)
learned about her father’s intention to sell the remaining ½ portion of
their lot, including their house, to defendant Guiangs. She wrote to
her mother about it and Gilda Replied that she is objecting to the
sale. Harriet show the reply to Luzviminda Guiang (w/o her father’s
knowledge) so that Guiang would advise her father.
The sale pushed through despite absence of wife Gilda.
Gilda went home, her children staying at different households only to
be informed that the husband have a new wife already (like wtf
dude?). Gilda gathered her children to stay at their house.
For staying in their house (w/c was sold to Guiang spouses),
spouses Guiang filed a case for trespassing. Both parties signed
thereafter an amicable settlement that provides Gilda and her
children to leave voluntarily the house of spouses guiang where they
are boarding w/o charge
Gilda went to the brngy captain, asking for annulment of the
settlement.
RTC: Respondent Court found no reversible error in the trial court's
ruling that any alienation or encumbrance by the husband of the
conjugal property without the consent of his wife is null and void as
provided under Article 124 of the Family Code. It also rejected
petitioners' contention that the "amicable settlement" ratified said
sale, citing Article 1409 of the Code which expressly bars ratification
of the contracts specified therein, particularly those "prohibited or
declared void by law."
ISSUE: Whether or not:
(1) the contract of sale (Deed of Transfer of Rights) was merely
voidable (main issue)
(2) such contract was ratified by private respondent when she
entered into an amicable settlement with them
HELD:
FIRST ISSUE:
Petitioners insist that the questioned Deed of Transfer of Rights was
validly executed by the parties-litigants in good faith and for valuable
consideration. The absence of private respondent's consent merely
rendered the Deed voidable under Article 1390 of the Civil Code,
which provides:
"ART. 1390. The following contracts are voidable or annullable, even
though there may have been no damage to the contracting parties:
xxx xxx xxx
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud. These contracts are binding,
unless they are annulled by a proper action in court.
They are susceptible of ratification.(n)"
The error in petitioners' contention is evident. Article 1390, par. 2,
refers to contracts visited by vices of consent, i.e., contracts which
were entered into by a person whose consent was obtained and
vitiated through mistake, violence, intimidation, undue influence or
fraud. In this instance, private respondent's consent to the contract of
sale of their conjugal property was totally inexistent or absent.
Gilda had NO KNOWLEDGE OF THE SALE. Such being te case, it
falls under art 124
"ART. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must be
availed of within five years from the date of the contract implementing
such decision. In the event that one spouse is incapacitated or
otherwise unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the
court or the written consent of the other spouse. In the absence of
such authority or consent, the disposition or encumbrance shall be
void. However, the transaction shall be construed as a continuing
offer on the part of the consenting spouse and the third person, and
may be perfected as a binding contract upon the acceptance by the
other spouse or authorization by the court before the offer is
withdrawn by either or both offerors.
"… Under Article 166 of the Civil Code, the husband cannot generally
alienate or encumber any real property of the conjugal partnership
without the wife's consent. The alienation or encumbrance if so made
however is not null and void. It is merely voidable. The offended wife
may bring an action to
annul the said alienation or encumbrance. Thus, the provision of
Article 173 of
the Civil Code of the Philippines, to wit:
'Art. 173. The wife may, during the marriage and within ten years
from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which
tends to
defraud her or impair her interest in the conjugal partnership
property.
Should the wife fail to exercise this right, she or her heirs after the
dissolution of the marriage, may demand the value of property
fraudulently
alienated by the husband.(n)'
This particular provision giving the wife ten (10) years . . . during [the]
marriage to annul the alienation or encumbrance was not carried
over to the Family Code. It is thus clear that any alienation or
encumbrance made after August 3, 1988 when the Family Code took
effect by the husband of the conjugal partnership property without the
consent of the wife is null and void."
SECOND ISSUE
Insisting that the contract of sale was merely voidable, petitioners
aver that it was duly ratified by the contending parties through the
"amicable settlement" they executed on
March 16, 1990 in Barangay Case No. 38.
The trial court correctly held: 1"By the specific provision of the law
[Art. 1390, Civil Code] therefore, the Deed of Transfer of Rights (Exh.
'A') cannot be ratified, even by an 'amicable settlement'.
The participation by some barangay authorities in the 'amicable
settlement' cannot otherwise validate an invalid act. Moreover, it
cannot be denied that the 'amicable settlement' (Exh. 'B') entered into
by plaintiff Gilda Corpuz and defendant spouses Guiang is a
contract. It is a direct offshoot of the Deed of
Transfer of Rights (Exh. 'A'). By express provision of law, such a
contract is also void. Thus, the legal provision, to wit:
'Art. 1422. A contract which is the direct result of a previous illegal
contract, is also void and inexistent.' (Civil Code of the Philippines).
In summation therefore, both the Deed of Transfer of Rights (Exh.
'A') and the
'amicable settlement' (Exh. '3') are null and void."
Doctrinally and clearly, a void contract cannot be ratified.
Neither can the "amicable settlement" be considered a continuing
offer that was accepted
and perfected by the parties, following the last sentence of Article
124.
The amicable settlement, however, does not mention a continuing
offer to sell the property or an
acceptance of such a continuing offer. Its tenor was to the effect that
private respondent
would vacate the property. By no stretch of the imagination, can the
Court interpret this
document as the acceptance mentioned in Article 124.
WHEREFORE, the Court hereby DENIES the petition and AFFIRMS
the challenged Decision and Resolution. Costs against petitioners.
SO ORDERED. cdll
CASE #24
Quiao v Quiao (Toffy, Art. 129, net profits)
FACTS: Present case is a petition for review on certiorari asking that
the order promulgated by the RTC be vacated and set aside. In lieu
of that order, the SC was asked to issue a resolution defining the net
profits subject to the forfeiture as a result of the decree of legal
separation.
Spouses were married before the effectivity of the Family Code.
Subject conjugal partnership of property was solely comprised of
conjugal properties. No separate properties for both parties.
Herein petitioner, Brigido B. Quiao, was found to be the guilty spouse
in a legal separation case instituted by her wife Rita C. Quiao, herein
respondent. As a consequence, the RTC pursuant to Art. 63(3) in
relation to the provisions of Art. 43(2), forfeited the share of the net
profits of the husband in favor of their common children. In the
liquidation of the conjugal partnership, the trial court applied Art. 129.
As a result, herein petitioner received no properties.
Petitioner is assailing the basis of liquidation made by the RTC. He
argued that since the definition of “net profits” was provided in Art.
102(4) (the procedure by which ACPs are dissolved) and no other
provision in the code provide the definition for the same, Art. 102
should be applied in the instant case. Moreover, he argued that since
the transitory provisions of the Family Code explicitly provides that it
shall not have retroactive effect insofar as vested rights will be
impaired, the provisions of the FC cannot be made to apply in the
instant case. He opined that since the Civil Code explicitly provides
that as a partner he is entitled to half of the share of the conjugal
properties, no provisions of the FC can deprive him of the same.
ISSUES: (1) WON the Family Code can be given retroactive effect
in the instant case
(2) WON Art. 102 or Art. 129 shall govern the liquidation of the
conjugal partnership
HELD:: (1) Yes, the Family Code can be given retroactive effect. A
right is deemed to have been vested if it is already a titular and a
legal right. Mere right that is still expectant is not the right
contemplated in the prohibition of impairment of a vested right. Since
a spouse cannot conclusively identify his or share of the conjugal
partnership prior to liquidation, he has no titular right over the same.
Moreover, for sake of argument, if the spouse indeed already
accrued vested right, the same can be attacked provided that the
person claiming said right is afforded due process, which in the
instant case, he was.
(2). Art. 129 applies to the present case since the parties’ property
relation is governed by the system of relative community or conjugal
partnership of gains. Art. 102 will only be consulted as to the
definition of the net profits.
Thus the process for the liquidation of the properties shall be as
follows:
1. An inventory of all the actual properties shall be made. Note
that in the instant case, the trial court found that the couple
has no separate properties when they married.
2. Return of the advances and reimbursements.
3. Pay all debts of the conjugal partnership.
4. What remains of the separate or exclusive properties of
the husband and wife shall be returned to each of
them. In the instant case, since it was already
established by the trial court that the spouses have no
separate properties, there is nothing to return to any of
them. The remaining conjugal properties are part of the
conjugal partnership. Thus, what remains in the above-
listed properties should be divided equally between the
spouses and/or their respective heirs. However, since
petitioner is the guilty party, his share form the net
profits of the conjugal partnership is forfeited in favor
of the common children. Unlike in ACP, there is no
separate property which may be accounted for in the
guilty party’s favor. The petitioner is not entitled to any
property at all.
*Net profits in CPG constitute of all the net remainder of the conjugal
partnership properties. In a sense, all the properties that are not
exclusive properties of the spouses are to be treated as “profits”
already; it is already more than what they brought in the marriage.
(Kumita na sila). Thus the formula for net profits for CPG will be as
follows:
Net profits = Market value (MV) of the properties at the time of
dissolution + advancements - reimbursements - debts and
obligations of the conjugal assets - exclusive property = net
remainder of the conjugal partnership
CASE #25
Domingo v. Spouses Molina (Toffy, Art. 129, Art. 130, and Art.
493 of CC on co-ownership)
FACTS: Spouses Anastacio and Flora Domingo, married before the
effectivity of FC, bought a property in Camiling Tarlac, consisting of
an undivided portion over an 18,164 sqm parcel of land.
During the lifetime of Anastacio, he borrowed money from herein
respondent spouses Molina. 10 years after the death of Flora (1978),
Anastacio sold his interest over the land to the spouses Molina to
answer for his debts. Years after, Anastacio died. Spouses Molina
registered the sale of Anastacio’s interest and transferred the entire-
one half undivided portion of the land to the spouses Molina.
Melecio, herein petitioner and one of the heirs of spouses Domingo,
filed a complaint for annulment of title and recovery of ownership.
Melecio claims that Anastacio could not have validly sold his interest
over the land since Flora was already dead at the time of the sale
and thus could no longer give consent.
ISSUE: WON Anastacio can sell his interest over the property
notwithstanding the absence of consent of his deceased spouse
HELD: Yes. Anastacio and Flora’s conjugal partnership was
dissolved upon Flora’s death pursuant to Art. 175(1) of the Civil Code
(now Art. 126(1) of the Family Code).
Art. 130 provides that conjugal partnership should be liquidated upon
the death of a spouse and prohibits any disposition or encumbrance
of the conjugal property prior the liquidation. Furthermore, if upon the
lapse of the six month period no liquidation is made, any disposition
or encumbrance involving the conjugal partnership property of the
terminated marriage shall be void.
While Art. 130 of FC provides that any disposition involving the
conjugal property prior to liquidation is void (and the further
pronouncement that upon the lapse of 6 months and no liquidation is
made, all encumbrance and alienation shall be void), it does not
apply to the instant case since the FC cannot be applied without
prejudice to vested rights already acquired in accordance with the
CC (his wife died prior to the effectivity of FC, thus he already
acquired rights to dispose/encumber the property). In light of this,
thus, notwithstanding the mentioned prohibitions, any disposition
made by Anastacio is valid.

It is important to note, however, that properties of a dissolved

conjugal partnership that has not been liquidated fall under the
regime of co-ownership among the surviving spouse and theirs of the
deceased. The surviving spouse, has an actual and vested one-half
undivided share of the properties (which does not consist of
determinate and segregated properties until liquidation), in addition to
his successional right to the one-half undivided share of his
deceased spouse. Pursuant to Art. 493, each co-owner hall the full
ownership of his part and may alienate, assign or mortgage it but the
effect of the alienation or mortgage with respect to the co-owners
shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership. Thus, Anastacio,
as co-owner, cannot claim title to any specific portion of the property
without an actual partition being first done, but nonetheless, he had
the right to freely sell and dispose of his undivided interest in the
subject property.

In effect, Anastacio merely sold his co-ownership to Spouses Molina

and not the actual half of the property itself. Upon liquidation, what
should have been given to Anastacio if he held that co-ownership
right will be given to Spouses Molina.