G.R. No. 165803 September 1, 2010 the property. During their meeting, Ma.
the property. During their meeting, Ma. Elena showed to them the following
SPOUSES REX AND CONCEPCION AGGABAO, Petitioners,
vs.
DIONISIO Z. PARULAN, JR. and MA. ELENA PARULAN, Respondents.
DECISION
BERSAMIN, J.:
On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in Makati City
annulled the deed of absolute sale executed in favor of the petitioners covering
two parcels of registered land the respondents owned for want of the written
consent of respondent husband Dionisio Parulan, Jr. On July 2, 2004, in C.A.-
G.R. CV No. 69044,1 the Court of Appeals (CA) affirmed the RTC decision.
Hence, the petitioners appeal by petition for review on certiorari, seeking to
reverse the decision of the CA. They present as the main issue whether the sale
of conjugal property made by respondent wife by presenting a special power of
attorney to sell (SPA) purportedly executed by respondent husband in her favor
was validly made to the vendees, who allegedly acted in good faith and paid the
full purchase price, despite the showing by the husband that his signature on the
SPA had been forged and that the SPA had been executed during his absence
from the country.
We resolve the main issue against the vendees and sustain the CA’s finding that
the vendees were not buyers in good faith, because they did not exercise the
necessary prudence to inquire into the wife’s authority to sell. We hold that the
sale of conjugal property without the consent of the husband was not merely
voidable but void; hence, it could not be ratified.
Antecedents
Involved in this action are two parcels of land and their improvements (property)
located at No. 49 Miguel Cuaderno Street, Executive Village, BF Homes,
Parañaque City and registered under Transfer Certificate of Title (TCT) No.
633762 and TCT No. 633773 in the name of respondents Spouses Maria Elena A.
Parulan (Ma. Elena) and Dionisio Z. Parulan, Jr. (Dionisio), who have been
estranged from one another.
In January 1991, real estate broker Marta K. Atanacio (Atanacio) offered the
property to the petitioners, who initially did not show interest due to the rundown
condition of the improvements. But Atanacio’s persistence prevailed upon them,
so that on February 2, 1991, they and Atanacio met with Ma. Elena at the site of
documents, namely: (a) the owner’s original copy of TCT No. 63376; (b) a
certified true copy of TCT No. 63377; (c) three tax declarations; and (d) a copy of
the special power of attorney (SPA) dated January 7, 1991 executed by Dionisio
authorizing Ma. Elena to sell the property.4 Before the meeting ended, they paid
₱20,000.00 as earnest money, for which Ma. Elena executed a handwritten
Receipt of Earnest Money, whereby the parties stipulated that: (a) they would pay
an additional payment of ₱130,000.00 on February 4, 1991; (b) they would pay
the balance of the bank loan of the respondents amounting to ₱650,000.00 on or
before February 15, 1991; and (c) they would make the final payment of
₱700,000.00 once Ma. Elena turned over the property on March 31, 1991.5
On February 4, 1991, the petitioners went to the Office of the Register of Deeds
and the Assessor’s Office of Parañaque City to verify the TCTs shown by Ma.
Elena in the company of Atanacio and her husband (also a licensed
broker).6 There, they discovered that the lot under TCT No. 63376 had been
encumbered to Banco Filipino in 1983 or 1984, but that the encumbrance had
already been cancelled due to the full payment of the obligation.7 They noticed
that the Banco Filipino loan had been effected through an SPA executed by
Dionisio in favor of Ma. Elena.8 They found on TCT No. 63377 the annotation of
an existing mortgage in favor of the Los Baños Rural Bank, also effected through
an SPA executed by Dionisio in favor of Ma. Elena, coupled with a copy of a
court order authorizing Ma. Elena to mortgage the lot to secure a loan of
₱500,000.00.9
The petitioners and Atanacio next inquired about the mortgage and the court
order annotated on TCT No. 63377 at the Los Baños Rural Bank. There, they
met with Atty. Noel Zarate, the bank’s legal counsel, who related that the bank
had asked for the court order because the lot involved was conjugal property.10
Following their verification, the petitioners delivered ₱130,000.00 as additional
down payment on February 4, 1991; and ₱650,000.00 to the Los Baños Rural
Bank on February 12, 1991, which then released the owner’s duplicate copy of
TCT No. 63377 to them.11
On March 18, 1991, the petitioners delivered the final amount of ₱700,000.00 to
Ma. Elena, who executed a deed of absolute sale in their favor. However, Ma.
Elena did not turn over the owner’s duplicate copy of TCT No. 63376, claiming
that said copy was in the possession of a relative who was then in
Hongkong.12 She assured them that the owner’s duplicate copy of TCT No.
63376 would be turned over after a week.
On March 19, 1991, TCT No. 63377 was cancelled and a new one was issued in
the name of the petitioners.
1
Ma. Elena did not turn over the duplicate owner’s copy of TCT No. 63376 as
promised. In due time, the petitioners learned that the duplicate owner’s copy of
TCT No. 63376 had been all along in the custody of Atty. Jeremy Z. Parulan, who
appeared to hold an SPA executed by his brother Dionisio authorizing him to sell
both lots.13
At Atanacio’s instance, the petitioners met on March 25, 1991 with Atty. Parulan
at the Manila Peninsula.14 For that meeting, they were accompanied by one Atty.
Olandesca.15 They recalled that Atty. Parulan "smugly demanded ₱800,000.00"
in exchange for the duplicate owner’s copy of TCT No. 63376, because Atty.
Parulan represented the current value of the property to be ₱1.5 million. As a
counter-offer, however, they tendered ₱250,000.00, which Atty. Parulan
declined,16 giving them only until April 5, 1991 to decide.
Hearing nothing more from the petitioners, Atty. Parulan decided to call them on
April 5, 1991, but they informed him that they had already fully paid to Ma.
Elena.17
Thus, on April 15, 1991, Dionisio, through Atty. Parulan, commenced an action
(Civil Case No. 91-1005 entitled Dionisio Z. Parulan, Jr., represented by Jeremy
Z. Parulan, as attorney in fact, v. Ma. Elena Parulan, Sps. Rex and Coney
Aggabao), praying for the declaration of the nullity of the deed of absolute sale
executed by Ma. Elena, and the cancellation of the title issued to the petitioners
by virtue thereof.
In turn, the petitioners filed on July 12, 1991 their own action for specific
performance with damages against the respondents.
Both cases were consolidated for trial and judgment in the RTC.18
Ruling of the RTC
After trial, the RTC rendered judgment, as follows:
WHEREFORE, and in consideration of the foregoing, judgment is hereby
rendered in favor of plaintiff Dionisio A. Parulan, Jr. and against defendants Ma.
Elena Parulan and the Sps. Rex and Concepcion Aggabao, without prejudice to
any action that may be filed by the Sps. Aggabao against co-defendant Ma.
Elena Parulan for the amounts they paid her for the purchase of the subject lots,
as follows:
1. The Deed of Absolute Sale dated March 18, 1991 covering the sale of
the lot located at No. 49 M. Cuaderno St., Executive Village, BF Homes,
Parañaque, Metro Manila, and covered by TCT Nos. 63376 and 63377 is
declared null and void.
2. Defendant Mrs. Elena Parulan is directed to pay litigation expenses
amounting to ₱50,000.00 and the costs of the suit.
SO ORDERED.19
The RTC declared that the SPA in the hands of Ma. Elena was a forgery, based
on its finding that Dionisio had been out of the country at the time of the
execution of the SPA;20 that NBI Sr. Document Examiner Rhoda B. Flores had
certified that the signature appearing on the SPA purporting to be that of Dionisio
and the set of standard sample signatures of Dionisio had not been written by
one and the same person;21 and that Record Officer III Eliseo O. Terenco and
Clerk of Court Jesus P. Maningas of the Manila RTC had issued a certification to
the effect that Atty. Alfred Datingaling, the Notary Public who had notarized the
SPA, had not been included in the list of Notaries Public in Manila for the year
1990-1991.22
The RTC rejected the petitioners’ defense of being buyers in good faith because
of their failure to exercise ordinary prudence, including demanding from Ma.
Elena a court order authorizing her to sell the properties similar to the order that
the Los Baños Rural Bank had required before accepting the mortgage of the
property.23 It observed that they had appeared to be in a hurry to consummate
the transaction despite Atanacio’s advice that they first consult a lawyer before
buying the property; that with ordinary prudence, they should first have obtained
the owner’s duplicate copies of the TCTs before paying the full amount of the
consideration; and that the sale was void pursuant to Article 124 of the Family
Code.24
Ruling of the CA
As stated, the CA affirmed the RTC, opining that Article 124 of the Family Code
applied because Dionisio had not consented to the sale of the conjugal property
by Ma. Elena; and that the RTC correctly found the SPA to be a forgery.
The CA denied the petitioners’ motion for reconsideration.25
Issues
The petitioners now make two arguments: (1) they were buyers in good faith; and
(2) the CA erred in affirming the RTC’s finding that the sale between Mrs. Elena
and the petitioners had been a nullity under Article 124 of the Family Code.
2
The petitioners impute error to the CA for not applying the "ordinary prudent
man’s standard" in determining their status as buyers in good faith. They contend
that the more appropriate law to apply was Article 173 of the Civil Code, not
Article 124 of the Family Code; and that even if the SPA held by Ma. Elena was a
forgery, the ruling in Veloso v. Court of Appeals26 warranted a judgment in their
favor.
Restated, the issues for consideration and resolution are as follows:
1) Which between Article 173 of the Civil Code and Article 124 of the
Family Code should apply to the sale of the conjugal property executed
without the consent of Dionisio?
2) Might the petitioners be considered in good faith at the time of their
purchase of the property?
3) Might the ruling in Veloso v. Court of Appeals be applied in favor of
the petitioners despite the finding of forgery of the SPA?
Ruling
The petition has no merit. We sustain the CA.
1.
Article 124, Family Code, applies to sale of conjugal
properties made after the effectivity of the Family Code
The petitioners submit that Article 173 of the Civil Code, not Article 124 of the
Family Code, governed the property relations of the respondents because they
had been married prior to the effectivity of the Family Code; and that the second
paragraph of Article 124 of the Family Code should not apply because the other
spouse held the administration over the conjugal property. They argue that
notwithstanding his absence from the country Dionisio still held the administration
of the conjugal property by virtue of his execution of the SPA in favor of his
brother; and that even assuming that Article 124 of the Family Code properly
applied, Dionisio ratified the sale through Atty. Parulan’s counter-offer during the
March 25, 1991 meeting.
We do not subscribe to the petitioners’ submissions.
To start with, Article 25427 the Family Code has expressly repealed several titles
under the Civil Code, among them the entire Title VI in which the provisions on
the property relations between husband and wife, Article 173 included, are found.
Secondly, the sale was made on March 18, 1991, or after August 3, 1988, the
effectivity of the Family Code. The proper law to apply is, therefore, Article 124 of
the Family Code, for it is settled that any alienation or encumbrance of conjugal
property made during the effectivity of the Family Code is governed by Article
124 of the Family Code.28
Article 124 of the Family Code provides:
Article 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 disposition or encumbrance without 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.
Thirdly, according to Article 25629 of the Family Code, the provisions of the
Family Code may apply retroactively provided no vested rights are impaired.
In Tumlos v. Fernandez,30 the Court rejected the petitioner’s argument that the
Family Code did not apply because the acquisition of the contested property had
occurred prior to the effectivity of the Family Code, and pointed out that Article
256 provided that the Family Code could apply retroactively if the application
would not prejudice vested or acquired rights existing before the effectivity of the
Family Code. Herein, however, the petitioners did not show any vested right in
the property acquired prior to August 3, 1988 that exempted their situation from
the retroactive application of the Family Code.
Fourthly, the petitioners failed to substantiate their contention that Dionisio, while
holding the administration over the property, had delegated to his brother, Atty.
Parulan, the administration of the property, considering that they did not present
in court the SPA granting to Atty. Parulan the authority for the administration.
3
Nonetheless, we stress that the power of administration does not include acts of
disposition or encumbrance, which are acts of strict ownership. As such, an
authority to dispose cannot proceed from an authority to administer, and vice
versa, for the two powers may only be exercised by an agent by following the
provisions on agency of the Civil Code (from Article 1876 to Article 1878).
Specifically, the apparent authority of Atty. Parulan, being a special agency, was
limited to the sale of the property in question, and did not include or extend to the
power to administer the property.31
Lastly, the petitioners’ insistence that Atty. Parulan’s making of a counter-offer
during the March 25, 1991 meeting ratified the sale merits no consideration.
Under Article 124 of the Family Code, the transaction executed sans the written
consent of Dionisio or the proper court order was void; hence, ratification did not
occur, for a void contract could not be ratified.32
On the other hand, we agree with Dionisio that the void sale was a continuing
offer from the petitioners and Ma. Elena that Dionisio had the option of accepting
or rejecting before the offer was withdrawn by either or both Ma. Elena and the
petitioners. The last sentence of the second paragraph of Article 124 of the
Family Code makes this clear, stating that in the absence of the other spouse’s
consent, the transaction should 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 upon authorization by the
court before the offer is withdrawn by either or both offerors.
2.
Due diligence required in verifying not only vendor’s title,
but also agent’s authority to sell the property
A purchaser in good faith is one who buys the property of another, without notice
that some other person has a right to, or interest in, such property, and pays the
full and fair price for it at the time of such purchase or before he has notice of the
claim or interest of some other persons in the property. He buys the property with
the belief that the person from whom he receives the thing was the owner and
could convey title to the property. He cannot close his eyes to facts that should
put a reasonable man on his guard and still claim he acted in good faith.33 The
status of a buyer in good faith is never presumed but must be proven by the
person invoking it.34
Here, the petitioners disagree with the CA for not applying the "ordinary prudent
man’s standard" in determining their status as buyers in good faith. They insist
that they exercised due diligence by verifying the status of the TCTs, as well as
by inquiring about the details surrounding the mortgage extended by the Los
Baños Rural Bank. They lament the holding of the CA that they should have been
put on their guard when they learned that the Los Baños Rural Bank had first
required a court order before granting the loan to the respondents secured by
their mortgage of the property.
The petitioners miss the whole point.
Article 124 of the Family Code categorically requires the consent of both spouses
before the conjugal property may be disposed of by sale, mortgage, or other
modes of disposition. In Bautista v. Silva,35 the Court erected a standard to
determine the good faith of the buyers dealing with
a seller who had title to and possession of the land but whose capacity to sell
was restricted, in that the consent of the other spouse was required before the
conveyance, declaring that in order to prove good faith in such a situation, the
buyers must show that they inquired not only into the title of the seller but also
into the seller’s capacity to sell.36 Thus, the buyers of conjugal property must
observe two kinds of requisite diligence, namely: (a) the diligence in verifying the
validity of the title covering the property; and (b) the diligence in inquiring into the
authority of the transacting spouse to sell conjugal property in behalf of the other
spouse.
It is true that a buyer of registered land needs only to show that he has relied on
the face of the certificate of title to the property, for he is not required to explore
beyond what the certificate indicates on its face.37 In this respect, the petitioners
sufficiently proved that they had checked on the authenticity of TCT No. 63376
and TCT No. 63377 with the Office of the Register of Deeds in Pasay City as the
custodian of the land records; and that they had also gone to the Los Baños
Rural Bank to inquire about the mortgage annotated on TCT No. 63377. Thereby,
the petitioners observed the requisite diligence in examining the validity of the
TCTs concerned.
Yet, it ought to be plain enough to the petitioners that the issue was whether or
not they had diligently inquired into the authority of Ma. Elena to convey the
property, not whether or not the TCT had been valid and authentic, as to which
there was no doubt. Thus, we cannot side with them.
Firstly, the petitioners knew fully well that the law demanded the written consent
of Dionisio to the sale, but yet they did not present evidence to show that they
had made inquiries into the circumstances behind the execution of the SPA
purportedly executed by Dionisio in favor of Ma. Elena. Had they made the
appropriate inquiries, and not simply accepted the SPA for what it represented on
its face, they would have uncovered soon enough that the respondents had been
estranged from each other and were under de facto separation, and that they
probably held conflicting interests that would negate the existence of an agency
between them. To lift this doubt, they must, of necessity, further inquire into the
4
SPA of Ma. Elena. The omission to inquire indicated their not being buyers in
good faith, for, as fittingly observed in Domingo v. Reed:381avvphi1
What was required of them by the appellate court, which we affirm, was merely to
investigate – as any prudent vendee should – the authority of Lolita to sell the
property and to bind the partnership. They had knowledge of facts that should
have led them to inquire and to investigate, in order to acquaint themselves with
possible defects in her title. The law requires them to act with the diligence of a
prudent person; in this case, their only prudent course of action was to
investigate whether respondent had indeed given his consent to the sale and
authorized his wife to sell the property.39
Indeed, an unquestioning reliance by the petitioners on Ma. Elena’s SPA without
first taking precautions to verify its authenticity was not a prudent buyer’s
move.40 They should have done everything within their means and power to
ascertain whether the SPA had been genuine and authentic. If they did not
investigate on the relations of the respondents vis-à-vis each other, they could
have done other things towards the same end, like attempting to locate the
notary public who had notarized the SPA, or checked with the RTC in Manila to
confirm the authority of Notary Public Atty. Datingaling. It turned out that Atty.
Datingaling was not authorized to act as a Notary Public for Manila during the
period 1990-1991, which was a fact that they could easily discover with a
modicum of zeal.
Secondly, the final payment of ₱700,000.00 even without the owner’s duplicate
copy of the TCT No. 63376 being handed to them by Ma. Elena indicated a
revealing lack of precaution on the part of the petitioners. It is true that she
promised to produce and deliver the owner’s copy within a week because her
relative having custody of it had gone to Hongkong, but their passivity in such an
essential matter was puzzling light of their earlier alacrity in immediately and
diligently validating the TCTs to the extent of inquiring at the Los Baños Rural
Bank about the annotated mortgage. Yet, they could have rightly withheld the
final payment of the balance. That they did not do so reflected their lack of due
care in dealing with Ma. Elena.
Lastly, another reason rendered the petitioners’ good faith incredible. They did
not take immediate action against Ma. Elena upon discovering that the owner’s
original copy of TCT No. 63376 was in the possession of Atty. Parulan, contrary
to Elena’s representation. Human experience would have impelled them to exert
every effort to proceed against Ma. Elena, including demanding the return of the
substantial amounts paid to her. But they seemed not to mind her inability to
produce the TCT, and, instead, they contented themselves with meeting with
Atty. Parulan to negotiate for the possible turnover of the TCT to them.
3.
Veloso v. Court of Appeals cannot help petitioners
The petitioners contend that the forgery of the SPA notwithstanding, the CA could
still have decided in their favor conformably with Veloso v. Court of Appeals,41 a
case where the petitioner husband claimed that his signature and that of the
notary public who had notarized the SPA the petitioner supposedly executed to
authorize his wife to sell the property had been forged. In denying relief, the
Court upheld the right of the vendee as an innocent purchaser for value.
Veloso is inapplicable, however, because the contested property therein was
exclusively owned by the petitioner and did not belong to the conjugal
regime. Veloso being upon conjugal property, Article 124 of the Family Code did
not apply.
In contrast, the property involved herein pertained to the conjugal regime, and,
consequently, the lack of the written consent of the husband rendered the sale
void pursuant to Article 124 of the Family Code. Moreover, even assuming that
the property involved in Veloso was conjugal, its sale was made on November 2,
1987, or prior to the effectivity of the Family Code; hence, the sale was still
properly covered by Article 173 of the Civil Code, which provides that a sale
effected without the consent of one of the spouses is only voidable, not void.
However, the sale herein was made already during the effectivity of the Family
Code, rendering the application of Article 124 of the Family Code clear and
indubitable.
The fault of the petitioner in Veloso was that he did not adduce sufficient
evidence to prove that his signature and that of the notary public on the SPA had
been forged. The Court pointed out that his mere allegation that the signatures
had been forged could not be sustained without clear and convincing proof to
substantiate the allegation. Herein, however, both the RTC and the CA found
from the testimonies and evidence presented by Dionisio that his signature had
been definitely forged, as borne out by the entries in his passport showing that he
was out of the country at the time of the execution of the questioned SPA; and
that the alleged notary public, Atty. Datingaling, had no authority to act as a
Notary Public for Manila during the period of 1990-1991.
WHEREFORE, we deny the petition for review on certiorari, and affirm the
decision dated July 2, 2004 rendered by the Court of Appeals in C.A.-G.R. CV
No. 69044 entitled "Dionisio Z. Parulan, Jr. vs. Ma. Elena Parulan and Sps. Rex
and Concepcion Aggabao" and "Sps. Rex and Concepcion Aggabao vs. Dionisio
Z. Parulan, Jr. and Ma. Elena Parulan."
Costs of suit to be paid by the petitioners.
SO ORDERED.
5
 WHEREFORE, viewed from the foregoing considerations, judgment is hereby
rendered declaring the legal separation of plaintiff Rita C. Quiao and defendant-
respondent Brigido B. Quiao pursuant to Article 55.

As such, the herein parties shall be entitled to live separately from each other,
but the marriage bond shall not be severed.
G.R. No 176556 July 4, 2012
Except for Letecia C. Quiao who is of legal age, the three minor children, namely,
BRIGIDO B. QUIAO, Petitioner, Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the custody of
vs. the plaintiff who is the innocent spouse.
RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO,
represented by their mother RITA QUIAO, Respondents.
Further, except for the personal and real properties already foreclosed by the
RCBC, all the remaining properties, namely:
DECISION
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
REYES, J.:
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
The family is the basic and the most important institution of society. It is in the
family where children are born and molded either to become useful citizens of the
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
country or troublemakers in the community. Thus, we are saddened when
parents have to separate and fight over properties, without regard to the
message they send to their children. Notwithstanding this, we must not shirk from 4. coffee mill in Esperanza, Agusan del Sur;
our obligation to rule on this case involving legal separation escalating to
questions on dissolution and partition of properties. 5. a parcel of land with an area of 1,200 square meters located in
Tungao, Butuan City;
The Case
6. a parcel of agricultural land with an area of 5 hectares located in
This case comes before us via Petition for Review on Certiorari1 under Rule 45 of Manila de Bugabos, Butuan City;
the Rules of Court. The petitioner seeks that we vacate and set aside the
Order2 dated January 8, 2007 of the Regional Trial Court (RTC), Branch 1, 7. a parcel of land with an area of 84 square meters located in Tungao,
Butuan City. In lieu of the said order, we are asked to issue a Resolution defining Butuan City;
the net profits subject of the forfeiture as a result of the decree of legal separation
in accordance with the provision of Article 102(4) of the Family Code, or 8. Bashier Bon Factory located in Tungao, Butuan City;
alternatively, in accordance with the provisions of Article 176 of the Civil Code.
shall be divided equally between herein [respondents] and [petitioner] subject to
Antecedent Facts
the respective legitimes of the children and the payment of the unpaid conjugal
liabilities of [₱]45,740.00.
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint for
legal separation against herein petitioner Brigido B. Quiao [Petitioner’s] share, however, of the net profits earned by the conjugal partnership
(Brigido).3 Subsequently, the RTC rendered a Decision4 dated October 10, 2005, is forfeited in favor of the common children.
the dispositive portion of which provides:
He is further ordered to reimburse [respondents] the sum of [₱]19,000.00 as
attorney's fees and litigation expenses of [₱]5,000.00[.]

6
SO ORDERED.5
Neither party filed a motion for reconsideration and appeal within the period
provided for under Section 17(a) and (b) of the Rule on Legal Separation.6
7
On December 12, 2005, the respondents filed a motion for execution which the
trial court granted in its Order dated December 16, 2005, the dispositive portion
of which reads:
"Wherefore, finding the motion to be well taken, the same is hereby granted. Let
a writ of execution be issued for the immediate enforcement of the Judgment.
SO ORDERED."8
Subsequently, on February 10, 2006, the RTC issued a Writ of Execution9 which
reads as follows:
NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B.
QUIAO you cause to be made the sums stated in the afore-quoted DECISION
[sic], together with your lawful fees in the service of this Writ, all in the Philippine
Currency.
But if sufficient personal property cannot be found whereof to satisfy this
execution and your lawful fees, then we command you that of the lands and
buildings of the said [petitioner], you make the said sums in the manner required
by law. You are enjoined to strictly observed Section 9, Rule 39, Rule [sic] of the
1997 Rules of Civil Procedure.
You are hereby ordered to make a return of the said proceedings immediately
after the judgment has been satisfied in part or in full in consonance with Section
14, Rule 39 of the 1997 Rules of Civil Procedure, as amended.10
On July 6, 2006, the writ was partially executed with the petitioner paying the
respondents the amount of ₱46,870.00, representing the following payments:
(a) ₱22,870.00 – as petitioner's share of the payment of the conjugal
share;
(b) ₱19,000.00 – as attorney's fees; and
(c) ₱5,000.00 – as litigation expenses.11
On July 7, 2006, or after more than nine months from the promulgation of the
Decision, the petitioner filed before the RTC a Motion for Clarification,12 asking
the RTC to define the term "Net Profits Earned."
To resolve the petitioner's Motion for Clarification, the RTC issued an
Order13 dated August 31, 2006, which held that the phrase "NET PROFIT
EARNED" denotes "the remainder of the properties of the parties after deducting
the separate properties of each [of the] spouse and the debts."14 The Order
further held that after determining the remainder of the properties, it shall be
forfeited in favor of the common children because the offending spouse does not
have any right to any share of the net profits earned, pursuant to Articles 63, No.
(2) and 43, No. (2) of the Family Code.15 The dispositive portion of the Order
states:
WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all
the remaining properties after deducting the payments of the debts for only
separate properties of the defendant-respondent shall be delivered to him which
he has none.
The Sheriff is herein directed to proceed with the execution of the Decision.
IT IS SO ORDERED.16
Not satisfied with the trial court's Order, the petitioner filed a Motion for
Reconsideration17 on September 8, 2006. Consequently, the RTC issued another
Order18 dated November 8, 2006, holding that although the Decision dated
October 10, 2005 has become final and executory, it may still consider the
Motion for Clarification because the petitioner simply wanted to clarify the
meaning of "net profit earned."19 Furthermore, the same Order held:
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside.
NET PROFIT EARNED, which is subject of forfeiture in favor of [the] parties'
common children, is ordered to be computed in accordance [with] par. 4 of Article
102 of the Family Code.20
On November 21, 2006, the respondents filed a Motion for
Reconsideration,21 praying for the correction and reversal of the Order dated
November 8, 2006. Thereafter, on January 8, 2007,22 the trial court had changed
its ruling again and granted the respondents' Motion for Reconsideration whereby
the Order dated November 8, 2006 was set aside to reinstate the Order dated
August 31, 2006.
7
Not satisfied with the trial court's Order, the petitioner filed on February 27, 2007
this instant Petition for Review under Rule 45 of the Rules of Court, raising the
following:
Issues
I Section 3, Rule 41 of the Rules of Court provides:
IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE
COMMON PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE
DECREE OF LEGAL SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF
THE FAMILY CODE?
II
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE
CONJUGAL PARTNERSHIP FOR PURPOSES OF EFFECTING THE
FORFEITURE AUTHORIZED UNDER ARTICLE 63 OF THE FAMILY CODE?
III
WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE
HUSBAND AND WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY
CODE OF THE PHILIPPINES BE GIVEN RETROACTIVE EFFECT FOR
PURPOSES OF DETERMINING THE NET PROFITS SUBJECT OF
FORFEITURE AS A RESULT OF THE DECREE OF LEGAL SEPARATION
WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER THE
CIVIL CODE?
IV
WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE
SHARE OF THE GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP
AS A RESULT OF THE ISSUANCE OF THE DECREE OF LEGAL
SEPARATION?23
Our Ruling
While the petitioner has raised a number of issues on the applicability of certain
laws, we are well-aware that the respondents have called our attention to the fact
that the Decision dated October 10, 2005 has attained finality when the Motion
for Clarification was filed.24 Thus, we are constrained to resolve first the issue of
the finality of the Decision dated October 10, 2005 and subsequently discuss the
matters that we can clarify.
The Decision dated October 10, 2005 has become final and executory at the
time the Motion for Clarification was filed on July 7, 2006.
Section 3. Period of ordinary appeal. - The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a
record on appeal is required, the appellant shall file a notice of appeal and a
record on appeal within thirty (30) days from notice of the judgment or final order.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed.
In Neypes v. Court of Appeals,25 we clarified that to standardize the appeal
periods provided in the Rules and to afford litigants fair opportunity to appeal their
cases, we held that "it would be practical to allow a fresh period of 15 days within
which to file the notice of appeal in the RTC, counted from receipt of the order
dismissing a motion for a new trial or motion for reconsideration."26
In Neypes, we explained that the "fresh period rule" shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the RTCs; Rule 42 on
petitions for review from the RTCs to the Court of Appeals (CA); Rule 43 on
appeals from quasi-judicial agencies to the CA and Rule 45 governing appeals by
certiorari to the Supreme Court. We also said, "The new rule aims to regiment or
make the appeal period uniform, to be counted from receipt of the order denying
the motion for new trial, motion for reconsideration (whether full or partial) or any
final order or resolution."27 In other words, a party litigant may file his notice of
appeal within a fresh 15-day period from his receipt of the trial court's decision or
final order denying his motion for new trial or motion for reconsideration. Failure
to avail of the fresh 15-day period from the denial of the motion for
reconsideration makes the decision or final order in question final and executory.
In the case at bar, the trial court rendered its Decision on October 10, 2005. The
petitioner neither filed a motion for reconsideration nor a notice of appeal. On
December 16, 2005, or after 67 days had lapsed, the trial court issued an order
granting the respondent's motion for execution; and on February 10, 2006, or
after 123 days had lapsed, the trial court issued a writ of execution. Finally, when
the writ had already been partially executed, the petitioner, on July 7, 2006 or
after 270 days had lapsed, filed his Motion for Clarification on the definition of the
"net profits earned." From the foregoing, the petitioner had clearly slept on his
right to question the RTC’s Decision dated October 10, 2005. For 270 days, the
8
petitioner never raised a single issue until the decision had already been partially
executed. Thus at the time the petitioner filed his motion for clarification, the trial
court’s decision has become final and executory. A judgment becomes final and
executory when the reglementary period to appeal lapses and no appeal is
perfected within such period. Consequently, no court, not even this Court, can
arrogate unto itself appellate jurisdiction to review a case or modify a judgment
that became final.28
The petitioner argues that the decision he is questioning is a void judgment.
Being such, the petitioner's thesis is that it can still be disturbed even after 270
days had lapsed from the issuance of the decision to the filing of the motion for
clarification. He said that "a void judgment is no judgment at all. It never attains
finality and cannot be a source of any right nor any obligation."29 But what
precisely is a void judgment in our jurisdiction? When does a judgment becomes
void?
"A judgment is null and void when the court which rendered it had no power to
grant the relief or no jurisdiction over the subject matter or over the parties or
both."30 In other words, a court, which does not have the power to decide a case
or that has no jurisdiction over the subject matter or the parties, will issue a void
judgment or a coram non judice.31
The questioned judgment does not fall within the purview of a void judgment. For
sure, the trial court has jurisdiction over a case involving legal separation.
Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the Family
Court of a city, the exclusive original jurisdiction to hear and decide, among
others, complaints or petitions relating to marital status and property relations of
the husband and wife or those living together.32 The Rule on Legal
Separation33 provides that "the petition [for legal separation] shall be filed in the
Family Court of the province or city where the petitioner or the respondent has
been residing for at least six months prior to the date of filing or in the case of a
non-resident respondent, where he may be found in the Philippines, at the
election of the petitioner."34 In the instant case, herein respondent Rita is found to
reside in Tungao, Butuan City for more than six months prior to the date of filing
of the petition; thus, the RTC, clearly has jurisdiction over the respondent's
petition below. Furthermore, the RTC also acquired jurisdiction over the persons
of both parties, considering that summons and a copy of the complaint with its
annexes were served upon the herein petitioner on December 14, 2000 and that
the herein petitioner filed his Answer to the Complaint on January 9,
2001.35 Thus, without doubt, the RTC, which has rendered the questioned
judgment, has jurisdiction over the complaint and the persons of the parties.
From the aforecited facts, the questioned October 10, 2005 judgment of the trial
court is clearly not void ab initio, since it was rendered within the ambit of the
court's jurisdiction. Being such, the same cannot anymore be disturbed, even if
the modification is meant to correct what may be considered an erroneous
conclusion of fact or law.36 In fact, we have ruled that for "[as] long as the public
respondent acted with jurisdiction, any error committed by him or it in the
exercise thereof will amount to nothing more than an error of judgment which
may be reviewed or corrected only by appeal."37 Granting without admitting that
the RTC's judgment dated October 10, 2005 was erroneous, the petitioner's
remedy should be an appeal filed within the reglementary period. Unfortunately,
the petitioner failed to do this. He has already lost the chance to question the trial
court's decision, which has become immutable and unalterable. What we can
only do is to clarify the very question raised below and nothing more.
For our convenience, the following matters cannot anymore be disturbed since
the October 10, 2005 judgment has already become immutable and unalterable,
to wit:
(a) The finding that the petitioner is the offending spouse since he
cohabited with a woman who is not his wife;38
(b) The trial court's grant of the petition for legal separation of
respondent Rita;39
(c) The dissolution and liquidation of the conjugal partnership;40
(d) The forfeiture of the petitioner's right to any share of the net profits
earned by the conjugal partnership;41
(e) The award to the innocent spouse of the minor children's custody;42
(f) The disqualification of the offending spouse from inheriting from the
innocent spouse by intestate succession;43
(g) The revocation of provisions in favor of the offending spouse made in
the will of the innocent spouse;44
(h) The holding that the property relation of the parties is conjugal
partnership of gains and pursuant to Article 116 of the Family Code, all
properties acquired during the marriage, whether acquired by one or
both spouses, is presumed to be conjugal unless the contrary is
proved;45
(i) The finding that the spouses acquired their real and personal
properties while they were living together;46
9
 (j) The list of properties which Rizal Commercial Banking Corporation
(RCBC) foreclosed;47
(k) The list of the remaining properties of the couple which must be
dissolved and liquidated and the fact that respondent Rita was the one
who took charge of the administration of these properties;48
(l) The holding that the conjugal partnership shall be liable to matters
included under Article 121 of the Family Code and the conjugal liabilities
totaling ₱503,862.10 shall be charged to the income generated by these
properties;49
(m) The fact that the trial court had no way of knowing whether the
petitioner had separate properties which can satisfy his share for the
support of the family;50
(n) The holding that the applicable law in this case is Article 129(7);51
(o) The ruling that the remaining properties not subject to any
encumbrance shall therefore be divided equally between the petitioner
and the respondent without prejudice to the children's legitime;52
(p) The holding that the petitioner's share of the net profits earned by the
conjugal partnership is forfeited in favor of the common children;53 and
(q) The order to the petitioner to reimburse the respondents the sum of
₱19,000.00 as attorney's fees and litigation expenses of ₱5,000.00.54
After discussing lengthily the immutability of the Decision dated October 10,
2005, we will discuss the following issues for the enlightenment of the parties and
the public at large.
Article 129 of the Family Code applies to the present case since the parties'
property relation is governed by the system of relative community or
conjugal partnership of gains.
The petitioner claims that the court a quo is wrong when it applied Article 129 of
the Family Code, instead of Article 102. He confusingly argues that Article 102
applies because there is no other provision under the Family Code which defines
net profits earned subject of forfeiture as a result of legal separation.
Offhand, the trial court's Decision dated October 10, 2005 held that Article 129(7)
of the Family Code applies in this case. We agree with the trial court's holding.
First, let us determine what governs the couple's property relation. From the
record, we can deduce that the petitioner and the respondent tied the marital knot
on January 6, 1977. Since at the time of the exchange of marital vows, the
operative law was the Civil Code of the Philippines (R.A. No. 386) and since they
did not agree on a marriage settlement, the property relations between the
petitioner and the respondent is the system of relative community or conjugal
partnership of gains.55 Article 119 of the Civil Code provides:
Art. 119. The future spouses may in the marriage settlements agree upon
absolute or relative community of property, or upon complete separation of
property, or upon any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community or conjugal
partnership of gains as established in this Code, shall govern the property
relations between husband and wife.
Thus, from the foregoing facts and law, it is clear that what governs the property
relations of the petitioner and of the respondent is conjugal partnership of gains.
And under this property relation, "the husband and the wife place in a common
fund the fruits of their separate property and the income from their work or
industry."56 The husband and wife also own in common all the property of the
conjugal partnership of gains.57
Second, since at the time of the dissolution of the petitioner and the respondent's
marriage the operative law is already the Family Code, the same applies in the
instant case and the applicable law in so far as the liquidation of the conjugal
partnership assets and liabilities is concerned is Article 129 of the Family Code in
relation to Article 63(2) of the Family Code. The latter provision is applicable
because according to Article 256 of the Family Code "[t]his Code shall have
retroactive effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other law."58
Now, the petitioner asks: Was his vested right over half of the common properties
of the conjugal partnership violated when the trial court forfeited them in favor of
his children pursuant to Articles 63(2) and 129 of the Family Code?
We respond in the negative.
Indeed, the petitioner claims that his vested rights have been impaired, arguing:
"As earlier adverted to, the petitioner acquired vested rights over half of the
conjugal properties, the same being owned in common by the spouses. If the
provisions of the Family Code are to be given retroactive application to the point
of authorizing the forfeiture of the petitioner's share in the net remainder of the
conjugal partnership properties, the same impairs his rights acquired prior to the
effectivity of the Family Code."59 In other words, the petitioner is saying that since
the property relations between the spouses is governed by the regime of
10
Conjugal Partnership of Gains under the Civil Code, the petitioner acquired
vested rights over half of the properties of the Conjugal Partnership of Gains,
pursuant to Article 143 of the Civil Code, which provides: "All property of the
conjugal partnership of gains is owned in common by the husband and
wife."60 Thus, since he is one of the owners of the properties covered by the
conjugal partnership of gains, he has a vested right over half of the said
properties, even after the promulgation of the Family Code; and he insisted that
no provision under the Family Code may deprive him of this vested right by virtue
of Article 256 of the Family Code which prohibits retroactive application of the
Family Code when it will prejudice a person's vested right.
However, the petitioner's claim of vested right is not one which is written on
stone. In Go, Jr. v. Court of Appeals,61 we define and explained "vested right" in
the following manner:
A vested right is one whose existence, effectivity and extent do not depend upon
events foreign to the will of the holder, or to the exercise of which no obstacle
exists, and which is immediate and perfect in itself and not dependent upon a
contingency. The term "vested right" expresses the concept of present fixed
interest which, in right reason and natural justice, should be protected against
arbitrary State action, or an innately just and imperative right which enlightened
free society, sensitive to inherent and irrefragable individual rights, cannot deny.
To be vested, a right must have become a title—legal or equitable—to the
present or future enjoyment of property.62 (Citations omitted)
In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party List
Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R.
Ermita,63 we also explained:
The concept of "vested right" is a consequence of the constitutional guaranty
of due process that expresses a present fixed interest which in right reason and
natural justice is protected against arbitrary state action; it includes not only legal
or equitable title to the enforcement of a demand but also exemptions from new
obligations created after the right has become vested. Rights are considered
vested when the right to enjoyment is a present interest, absolute, unconditional,
and perfect or fixed and irrefutable.64 (Emphasis and underscoring supplied)
From the foregoing, it is clear that while one may not be deprived of his "vested
right," he may lose the same if there is due process and such deprivation is
founded in law and jurisprudence.
In the present case, the petitioner was accorded his right to due
process. First, he was well-aware that the respondent prayed in her complaint
that all of the conjugal properties be awarded to her.65 In fact, in his Answer, the
petitioner prayed that the trial court divide the community assets between the
petitioner and the respondent as circumstances and evidence warrant after the
accounting and inventory of all the community properties of the
parties.66 Second, when the Decision dated October 10, 2005 was promulgated,
the petitioner never questioned the trial court's ruling forfeiting what the trial court
termed as "net profits," pursuant to Article 129(7) of the Family Code.67 Thus, the
petitioner cannot claim being deprived of his right to due process.
Furthermore, we take note that the alleged deprivation of the petitioner's "vested
right" is one founded, not only in the provisions of the Family Code, but in Article
176 of the Civil Code. This provision is like Articles 63 and 129 of the Family
Code on the forfeiture of the guilty spouse's share in the conjugal partnership
profits. The said provision says:
Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her
share of the conjugal partnership profits, which shall be awarded to the children
of both, and the children of the guilty spouse had by a prior marriage. However, if
the conjugal partnership property came mostly or entirely from the work or
industry, or from the wages and salaries, or from the fruits of the separate
property of the guilty spouse, this forfeiture shall not apply.
In case there are no children, the innocent spouse shall be entitled to all the net
profits.
From the foregoing, the petitioner's claim of a vested right has no basis
considering that even under Article 176 of the Civil Code, his share of the
conjugal partnership profits may be forfeited if he is the guilty party in a legal
separation case. Thus, after trial and after the petitioner was given the chance to
present his evidence, the petitioner's vested right claim may in fact be set aside
under the Civil Code since the trial court found him the guilty party.
More, in Abalos v. Dr. Macatangay, Jr.,68 we reiterated our long-standing ruling
that:
[P]rior to the liquidation of the conjugal partnership, the interest of each spouse in
the conjugal assets is inchoate, a mere expectancy, which constitutes neither a
legal nor an equitable estate, and does not ripen into title until it appears that
there are assets in the community as a result of the liquidation and settlement.
The interest of each spouse is limited to the net remainder or "remanente liquido"
(haber ganancial) resulting from the liquidation of the affairs of the partnership
after its dissolution. Thus, the right of the husband or wife to one-half of the
conjugal assets does not vest until the dissolution and liquidation of the conjugal
partnership, or after dissolution of the marriage, when it is finally determined that,
after settlement of conjugal obligations, there are net assets left which can be
divided between the spouses or their respective heirs.69 (Citations omitted)
11
Finally, as earlier discussed, the trial court has already decided in its Decision
dated October 10, 2005 that the applicable law in this case is Article 129(7) of the
Family Code.70 The petitioner did not file a motion for reconsideration nor a notice
of appeal. Thus, the petitioner is now precluded from questioning the trial court's
decision since it has become final and executory. The doctrine of immutability
and unalterability of a final judgment prevents us from disturbing the Decision
dated October 10, 2005 because final and executory decisions can no longer be
reviewed nor reversed by this Court.71
From the above discussions, Article 129 of the Family Code clearly applies to the
present case since the parties' property relation is governed by the system of
relative community or conjugal partnership of gains and since the trial court's
Decision has attained finality and immutability.
The net profits of the conjugal partnership of gains are all the fruits of the
separate properties of the spouses and the products of their labor and
industry.
The petitioner inquires from us the meaning of "net profits" earned by the
conjugal partnership for purposes of effecting the forfeiture authorized under
Article 63 of the Family Code. He insists that since there is no other provision
under the Family Code, which defines "net profits" earned subject of forfeiture as
a result of legal separation, then Article 102 of the Family Code applies.
What does Article 102 of the Family Code say? Is the computation of "net profits"
earned in the conjugal partnership of gains the same with the computation of "net
profits" earned in the absolute community?
Now, we clarify.
First and foremost, we must distinguish between the applicable law as to the
property relations between the parties and the applicable law as to the definition
of "net profits." As earlier discussed, Article 129 of the Family Code applies as to
the property relations of the parties. In other words, the computation and the
succession of events will follow the provisions under Article 129 of the said Code.
Moreover, as to the definition of "net profits," we cannot but refer to Article 102(4)
of the Family Code, since it expressly provides that for purposes of computing
the net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2),
Article 102(4) applies. In this provision, net profits "shall be the increase in value
between the market value of the community property at the time of the
celebration of the marriage and the market value at the time of its
dissolution."72 Thus, without any iota of doubt, Article 102(4) applies to both the
dissolution of the absolute community regime under Article 102 of the Family
Code, and to the dissolution of the conjugal partnership regime under Article 129
of the Family Code. Where lies the difference? As earlier shown, the difference
lies in the processes used under the dissolution of the absolute community
regime under Article 102 of the Family Code, and in the processes used under
the dissolution of the conjugal partnership regime under Article 129 of the Family
Code.
Let us now discuss the difference in the processes between the absolute
community regime and the conjugal partnership regime.
On Absolute Community Regime:
When a couple enters into a regime of absolute community, the husband and
the wife becomes joint owners of all the properties of the marriage. Whatever
property each spouse brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the Family Code) form the
common mass of the couple's properties. And when the couple's marriage or
community is dissolved, that common mass is divided between the spouses, or
their respective heirs, equally or in the proportion the parties have established,
irrespective of the value each one may have originally owned.73
Under Article 102 of the Family Code, upon dissolution of marriage, an inventory
is prepared, listing separately all the properties of the absolute community and
the exclusive properties of each; then the debts and obligations of the absolute
community are paid out of the absolute community's assets and if the
community's properties are insufficient, the separate properties of each of the
couple will be solidarily liable for the unpaid balance. Whatever is left of the
separate properties will be delivered to each of them. The net remainder of the
absolute community is its net assets, which shall be divided between the
husband and the wife; and for purposes of computing the net profits subject to
forfeiture, said profits shall be the increase in value between the market value of
the community property at the time of the celebration of the marriage and the
market value at the time of its dissolution.74
Applying Article 102 of the Family Code, the "net profits" requires that we first find
the market value of the properties at the time of the community's dissolution.
From the totality of the market value of all the properties, we subtract the debts
and obligations of the absolute community and this result to the net assets or net
remainder of the properties of the absolute community, from which we deduct the
market value of the properties at the time of marriage, which then results to the
net profits.75
Granting without admitting that Article 102 applies to the instant case, let us see
what will happen if we apply Article 102:
(a) According to the trial court's finding of facts, both husband and wife
have no separate properties, thus, the remaining properties in the list
12
 above are all part of the absolute community. And its market value at the
time of the dissolution of the absolute community constitutes the "market
value at dissolution."
(b) Thus, when the petitioner and the respondent finally were legally
separated, all the properties which remained will be liable for the debts
and obligations of the community. Such debts and obligations will be
subtracted from the "market value at dissolution."
(c) What remains after the debts and obligations have been paid from
the total assets of the absolute community constitutes the net remainder
or net asset. And from such net asset/remainder of the petitioner and
respondent's remaining properties, the market value at the time of
marriage will be subtracted and the resulting totality constitutes the "net
profits."
(d) Since both husband and wife have no separate properties, and
nothing would be returned to each of them, what will be divided equally
between them is simply the "net profits." However, in the Decision dated
October 10, 2005, the trial court forfeited the half-share of the petitioner
in favor of his children. Thus, if we use Article 102 in the instant case
(which should not be the case), nothing is left to the petitioner since both
parties entered into their marriage without bringing with them any
property.
On Conjugal Partnership Regime:
Before we go into our disquisition on the Conjugal Partnership Regime, we make
it clear that Article 102(4) of the Family Code applies in the instant case for
purposes only of defining "net profit." As earlier explained, the definition of
"net profits" in Article 102(4) of the Family Code applies to both the absolute
community regime and conjugal partnership regime as provided for under Article
63, No. (2) of the Family Code, relative to the provisions on Legal Separation.
Now, when a couple enters into a regime of conjugal partnership of
gains under Article 142 of the Civil Code, "the husband and the wife place in
common fund the fruits of their separate property and income from their work or
industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage."76 From the foregoing provision, each of the couple has his
and her own property and debts. The law does not intend to effect a mixture or
merger of those debts or properties between the spouses. Rather, it establishes
a complete separation of capitals.77
Considering that the couple's marriage has been dissolved under the Family
Code, Article 129 of the same Code applies in the liquidation of the couple's
properties in the event that the conjugal partnership of gains is dissolved, to wit:
Art. 129. Upon the dissolution of the conjugal partnership regime, the following
procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of
the conjugal partnership and the exclusive properties of each spouse.
(2) Amounts advanced by the conjugal partnership in payment of
personal debts and obligations of either spouse shall be credited to the
conjugal partnership as an asset thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her exclusive
property, the ownership of which has been vested by law in the conjugal
partnership.
(4) The debts and obligations of the conjugal partnership shall be paid
out of the conjugal assets. In case of insufficiency of said assets, the
spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph (2)
of Article 121.
(5) Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
(6) Unless the owner had been indemnified from whatever source, the
loss or deterioration of movables used for the benefit of the family,
belonging to either spouse, even due to fortuitous event, shall be paid to
said spouse from the conjugal funds, if any.
(7) The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between husband
and wife, unless a different proportion or division was agreed upon in the
marriage settlements or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code.
(8) The presumptive legitimes of the common children shall be delivered
upon the partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot on
which it is situated shall, unless otherwise agreed upon by the parties,
13
 be adjudicated to the spouse with whom the majority of the common
children choose to remain. Children below the age of seven years are
deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide,
taking into consideration the best interests of said children.
In the normal course of events, the following are the steps in the liquidation of the
properties of the spouses:
(a) An inventory of all the actual properties shall be made, separately
listing the couple's conjugal properties and their separate properties.78 In
the instant case, the trial court found that the couple has no
separate properties when they married.79 Rather, the trial court
identified the following conjugal properties, to wit:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located
in Tungao, Butuan City;
6. a parcel of agricultural land with an area of 5 hectares located
in Manila de Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in
Tungao, Butuan City;
8. Bashier Bon Factory located in Tungao, Butuan City.80
(b) Ordinarily, the benefit received by a spouse from the conjugal
partnership during the marriage is returned in equal amount to the
assets of the conjugal partnership;81 and if the community is enriched at
the expense of the separate properties of either spouse, a restitution of
the value of such properties to their respective owners shall be made.82
(c) Subsequently, the couple's conjugal partnership shall pay the debts
of the conjugal partnership; while the debts and obligation of each of the
spouses shall be paid from their respective separate properties. But if
the conjugal partnership is not sufficient to pay all its debts and
obligations, the spouses with their separate properties shall be solidarily
liable.83
(d) Now, what remains of the separate or exclusive properties of the
husband and of the wife shall be returned to each of them.84 In the
instant case, since it was already established by the trial court that
the spouses have no separate properties,85 there is nothing to
return to any of them. The listed properties above are considered part
of the conjugal partnership. Thus, ordinarily, what remains in the above-
listed properties should be divided equally between the spouses and/or
their respective heirs.86 However, since the trial court found the petitioner
the guilty party, his share from the net profits of the conjugal partnership
is forfeited in favor of the common children, pursuant to Article 63(2) of
the Family Code. Again, lest we be confused, like in the absolute
community regime, nothing will be returned to the guilty party in the
conjugal partnership regime, because there is no separate property
which may be accounted for in the guilty party's favor.
In the discussions above, we have seen that in both instances, the petitioner is
not entitled to any property at all. Thus, we cannot but uphold the Decision dated
October 10, 2005 of the trial court. However, we must clarify, as we already did
above, the Order dated January 8, 2007.
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court,
Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for Clarification
dated July 7, 2006 in the Regional Trial Court, the Order dated January 8, 2007
of the Regional Trial Court is hereby CLARIFIED in accordance with the above
discussions.
SO ORDERED.
[G.R. No. 122749. July 31, 1996.]
ANTONIO A. S. VALDES, Petitioner, v. REGIONAL TRIAL COURT, BRANCH
102, QUEZON CITY, and CONSUELO M. GOMEZ-VALDES, Respondents.
DECISION
14

VITUG, J.:
The petition for review bewails, purely on a question of law, an alleged error
committed by the Regional Trial Court in Civil Case No. Q-92-12539. Petitioner
avers that the court a quo has failed to apply the correct law that should govern
the disposition of a family dwelling in a situation where a marriage is declared
void ab initio because of psychological incapacity on the part of either or both of
the parties to the contract.
The pertinent facts giving rise to this incident are, by and large, not in dispute.
Antonio Valdes and Consuelo Gomez were married on 05 January 1971.
Begotten during the marriage were five children. In a petition, dated 22 June
1992, Valdes sought the declaration of nullity of the marriage pursuant to Article
36 of the Family Code (docketed Civil Case No. Q-92-12539, Regional Trial
Court of Quezon City, Branch 102). After hearing the parties following the joinder
of issues, the trial court, 1 in its decision of 29 July 1994, granted the petition;
viz:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered as follows:jgc:chanrobles.com.ph
"(1) The marriage of petitioner Antonio Valdes and respondent Consuelo Gomez-
Valdes is hereby declared null and void under Article 36 of the Family Code on
the ground of their mutual psychological incapacity to comply with their essential
marital obligations;
"(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela
Rosario shall choose which parent they would want to stay with.
"Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother,
herein respondent Consuelo Gomez-Valdes.
"The petitioner and respondent shall have visitation rights over the children who
are in the custody of the other.
"(3) The petitioner and respondent are directed to start proceedings on the
liquidation of their common properties as defined by Article 147 of the Family
Code, and to comply with the provisions of Articles 50,51 and 52 of the same
code, within thirty (30) days from notice of this decision.
"Let a copy of this decision be furnished the Local Civil Register of Mandaluyong,
Metro Manila, for proper recording in the registry of marriages." 2 (Emphasis
ours.)
Consuelo Gomez sought a clarification of that portion of the decision directing
compliance with Articles 50, 51 and 52 of the Family Code. She asserted that the
Family Code contained no provisions on the procedure for the liquidation of
common property in "unions without marriage." Parenthetically, during the
hearing on the motion, the children filed a joint affidavit expressing their desire to
remain with their father, Antonio Valdes, herein petitioner.
In an Order, dated 05 May 1995, the trial court made the following
clarification:jgc:chanrobles.com.ph
"Consequently, considering that Article 147 of the Family Code explicitly provides
that the property acquired by both parties during their union, in the absence of
proof to the contrary, are presumed to have been obtained through the joint
efforts of the parties and will be owned by them in equal shares, plaintiff and
defendant will own their ‘family home’ and all their other properties for that matter
in equal shares.
"In the liquidation and partition of the properties owned in common by the plaintiff
and defendant, the provisions on co-ownership found in the Civil Code shall
apply." 3 (Emphasis supplied.)
In addressing specifically the issue regarding the disposition of the family
dwelling, the trial court said:jgc:chanrobles.com.ph
"Considering that this Court has already declared the marriage between
petitioner and respondent as null and void ab initio, pursuant to Art. 147, the
property regime of petitioner and respondent shall be governed by the rules on
co-ownership.
"The provisions of Articles 102 and 129 of the Family Code finds no application
since Article 102 refers to the procedure for the liquidation of the conjugal
partnership property and Article 129 refers to the procedure for the liquidation of
the absolute community of property." 4
Petitioner moved for a reconsideration of the order. The motion was denied on 30
October 1995.
In his recourse to this Court, petitioner submits that Articles 50, 51 and 52 of the
Family Code should be held controlling; he argues that:chanrob1es virtual 1aw
library
"I
"Article 147 of the Family Code does not apply to cases where the parties are
psychological incapacitated.
15
 "II
"Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code
govern the disposition of the family dwelling in cases where a marriage is
declared void ab initio, including a marriage declared void by reason of the
psychological incapacity of the spouses.
"III
"Assuming arguendo that Article 147 applies to marriages declares void ab initio
on the ground of the psychological incapacity of a spouse, the same may be read
consistently with Article 129.
"IV
"It is necessary to determine the parent with whom majority of the children with to
stay." 5
The trial court correctly applied the law. In a void marriage, regardless of the
cause thereof, the property relations of the parties during the period of
cohabitation is governed by the provisions of Article 147 or Article 148, such as
the case may be, of the Family Code. Article 147 is a remake of Article 144 of the
Civil Code as interpreted and so applied in previous cases; 6 it
provides:jgc:chanrobles.com.ph
"ART. 147. When a man and a woman who are capacitated to marry each other,
live exclusively with each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of them through their
work or industry shall be governed by the rules on co-ownership.
"In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly in the acquisition thereof if
the former’s efforts consisted in the care and maintenance of the family and of
the household.
"Neither party can encumber or dispose by acts inter vivos of his or her share in
the property acquired during cohabitation and owned in common, without the
consent of the other, until after the termination of their cohabitation.
"When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation."cralaw virtua1aw library
This peculiar kind of co-ownership applies when a man and a woman, suffering
no legal impediment to marry each other, so exclusively live together as husband
and wife under a void marriage or without the benefit of marriage. The term
"capacitated" in the provision (in the first paragraph of the law) refers to the legal
capacity of a party to contract marriage, i.e., any "male or female of the age of
eighteen years or upwards not under any of the impediments mentioned in
Articles 37 and 38" 7 of the Code.
Under this property regime, property acquired by both spouses through their work
and industry shall be governed by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have been obtained through
their joint efforts. A party who did not participate in the acquisition of the property
shall still be considered as having contributed thereto jointly if said party’s "efforts
consisted in the care and maintenance of the family household." 8 Unlike the
conjugal partnership of gains, the fruits of the couple’s separate property are not
included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has
clarified Article 144 of the Civil Code; in addition, the law now expressly provides
that —
(a) Neither party can dispose or encumber by act inter vivos his or her share in
co-ownership property, without the consent of the other, during the period of
cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her
share in the co-ownership in favor of their common children; in default thereof or
waiver by any or all of the common children, each vacant share shall belong to
the respective surviving descendants, or still in default thereof, to the innocent
party. The forfeiture shall take place upon the termination of the cohabitation 9 or
declaration of nullity of the marriage. 10
When the common-law spouses suffer from a legal impediment to marry or when
they do not live exclusively with each other (as husband and wife), only the
property acquired by both of them through their actual joint contribution of money,
property or industry shall be owned in common and in proportion to their
respective contributions. Such contributions and corresponding shares, however,
are prima facie presumed to be equal. The share of any party who is married to
another shall accrue to the absolute community or conjugal partnership, as the
16
case may be, if so existing under a valid marriage. If the party who has acted in
bad faith is not validly married to another, his or her share shall be forfeited in the
manner already heretofore expressed. 11
In deciding to take further cognizance of the issue on the settlement of the
parties’ common property, the trial court acted neither imprudently nor
precipitately; a court which has jurisdiction to declare the marriage a nullity must
be deemed likewise clothed with authority to resolve incidental and consequential
matters. Nor did it commit a reversible error in ruling that petitioner and private
respondent own the "family home" and all their common property in equal shares,
as well as in concluding that, in the liquidation and partition of the property owned
in common by them, the provisions on co-ownership under the Civil Code, not
Articles 50, 51 and 52, in relation to Articles 102 and 129, 12 12a of the Family
Code, should aptly prevail. The rules set up to govern the liquidation of either the
absolute community or the conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages (in the latter case until the contract is
annulled), are irrelevant to the liquidation of the co-ownership that exists between
common-law spouses. The first paragraph of Article 50 of the Family Code,
applying paragraphs (2), (3), (4) and (5) of Article 43, 13 relates only, by its
explicit terms, to voidable marriages and, exceptionally, to void marriages under
Article 40 14 of the Code, i.e., the declaration of nullity of a subsequent marriage
contracted by a spouse of a prior void marriage before the latter is judicially
declared void. The latter is a special rule that somehow recognizes the
philosophy and an old doctrine that void marriages are inexistent from the very
beginning and no judicial decree is necessary to establish their nullity. In how
requiring for spouses of remarriage, the declaration of nullity by final judgment of
the previously contracted void marriage, the present law aims to do away with
any continuing uncertainty on the status of the second marriage. It is not then
illogical for the provisions of Article 43, in relation to Articles 41 15 and 42, 16 of
the Family Code, on the effects of the termination of a subsequent marriage
contracted during the subsistence of a previous marriage to be made applicable
pro hac vice. In all other case, it is not to be assumed that the law has also meant
to have coincident property relations, on the one hand, between spouses in valid
and voidable marriages (before annulment) and, on the other, between common-
law spouses or spouses of void marriages, leaving to ordain, in the latter case,
the ordinary rules on co-ownership subject to the provision of Article 147 and
Article 148 of the Family Code. It must be stressed, nevertheless, even as it may
merely state the obvious, that the provisions of the Family Code on the "family
home," i.e., the provisions found in Title V, Chapter 2, of the Family Code, remain
in force and effect regardless of the property regime of the spouses.
WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995,
of the trial court are AFFIRMED. No costs.
SO ORDERED.
[G.R. NO. 130623 : February 29, 2008]
LOREA DE UGALDE, Petitioner, v. JON DE YSASI, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a Petition for Review 1 assailing the 21 November 1996
Decision2 and 2 September 1997 Resolution3 of the Court of Appeals in CA-G.R.
CV No. 41121.
The Antecedent Facts
On 15 February 1951, Lorea de Ugalde (petitioner) and Jon de Ysasi
(respondent) got married before Municipal Judge Remigio Peña of Hinigaran,
Negros Occidental. On 1 March 1951,4 Rev. Msgr. Flaviano Arriola solemnized
their church wedding at the San Sebastian Cathedral in Bacolod City. Petitioner
and respondent did not execute any ante-nuptial agreement. They had a son
named Jon de Ysasi III.
Petitioner and respondent separated sometime in April 1957.5 On 26 May 1964,
respondent allegedly contracted another marriage with Victoria Eleanor Smith
(Smith) before Judge Lucio M. Tanco of Pasay City. Petitioner further alleged that
respondent and Smith had been acquiring and disposing of real and personal
properties to her prejudice as the lawful wife. Petitioner alleged that she had
been defrauded of rental income, profits, and fruits of their conjugal properties.
On 12 December 1984, petitioner filed a petition for dissolution of the conjugal
partnership of gains against respondent before the Regional Trial Court of
Negros Occidental, Bacolod City, Branch 48 (trial court). The case was docketed
as Special Proceedings No. 3330. In particular, petitioner asked for her conjugal
share in respondent's inheritance as per the settlement of the estate of
respondent's parents, Juan Ysasi6 and Maria Aldecoa de Ysasi, who died on 17
November 1975 and 25 February 1979, respectively.7 Petitioner also prayed for a
monthly support of P5,000 to be deducted from her share in the conjugal
partnership; the appointment of a receiver during the pendency of the litigation;
the annulment of all contracts, agreements, and documents signed and ratified
17
by respondent with third persons without her consent; and payment of
appearance and attorney's fees.
Respondent countered that on 2 June 1961, he and petitioner entered into an
agreement which provided, among others, that their conjugal partnership of gains
shall be deemed dissolved as of 15 April 1957. Pursuant to the agreement, they
submitted an Amicable Settlement in Civil Case No. 47918 then pending before
the Court of First Instance of Negros Occidental (CFI). The Amicable Settlement
stipulates:
2. That the petitioner shall pay the respondent the sum of THIRTY THOUSAND
PESOS (P30,000.00) in full satisfaction of and/or consideration for and to cover
any and all money and/or property claims she has or may have against the
petitioner in the future, including but not limited to pensions, allowances, alimony,
support, share in the conjugal property (if any), inheritance, etc.;
3. That for and in consideration of the foregoing premises and the payment of
THIRTY THOUSAND pesos (P30,000.00), the receipt of which sum is hereby
acknowledged and confessed by and to the entire satisfaction of the respondent,
she hereby completely and absolutely transfer, convey, assign, set over, waive,
remise, release and forever quitclaim, unto petitioner, his successors and
administrators, any and all rights, claims and interests which the respondent has
or may hereafter have against the petitioner arising, directly or indirectly, from the
fact that the petitioner and respondent were married on March 1, 1951, including
but not limited to any and all money and/or property claims mentioned in the
paragraph immediately preceding;
4. That, except with reference to the custody of the boy, the parties herein hereby
waive any and all rights to question the validity and effectivity of the provisions of
this amicable settlement, as well as the right to raise these matters on appeal[.]9
In its Order10 dated 6 June 1961, the CFI approved the Amicable Settlement.
Respondent further alleged that petitioner already obtained a divorce from him
before the Supreme Court of Mexico. Petitioner then contracted a second
marriage with Richard Galoway (Galoway). After Galoway's death, petitioner
contracted a third marriage with Frank Scholey. Respondent moved for the
dismissal of the petition for dissolution of the conjugal partnership of gains on the
grounds of estoppel, laches, and res judicata.
In his Supplemental Affirmative Defense, respondent alleged that the marriage
between him and petitioner was void because it was executed without the benefit
of a marriage license.
The Ruling of the Trial Court
On 22 November 1991, the trial court11 rendered judgment as follows:
WHEREFORE, after collating the evidence, the evidence for the respondent is
preponderant to prove his affirmative and special defenses that the petition does
not state a sufficient cause of action. On these bases and under the doctrine
of res judicata, the petition is hereby DISMISSED. Without pronouncements as to
costs and attorney's fees.
SO ORDERED.12
The trial court ruled that the existence of a conjugal partnership of gains is
predicated on a valid marriage. Considering that the marriage between petitioner
and respondent was solemnized without a marriage license, the marriage was
null and void, and no community of property was formed between them. The trial
court further ruled that assuming that the marriage was valid, the action was
barred by res judicata. The trial court noted that petitioner and respondent
entered into an amicable settlement in Civil Case No. 4791. The amicable
settlement was approved by the CFI and petitioner may no longer repudiate it.
Finally, the trial court ruled that there was no proof to show that during their
union, petitioner and respondent acquired properties.
Petitioner appealed from the trial court's Decision before the Court of Appeals.
The Ruling of the Court of Appeals
On 21 November 1996, the Court of Appeals affirmed the trial court's Decision.
The Court of Appeals ruled that the absence of a marriage license is fatal and
made the marriage between petitioner and respondent a complete nullity. Hence,
the trial court did not err in finding that there was no conjugal partnership of gains
between petitioner and respondent. The Court of Appeals further ruled that the
compromise agreement is a valid contract between the parties Since the
compromise agreement was entered into freely, voluntarily, and with the full
understanding of its consequences, it is conclusive and binding on the parties.
The Court of Appeals also ruled that the action was barred by laches since it was
filed by petitioner 23 years from the time the CFI approved the additional
amicable settlement in Civil Case No. 4791. The Court of Appeals sustained the
trial court's ruling that respondent's right over the estate of his deceased parents
was only inchoate and there was no evidence that petitioner and respondent
acquired any property that could be considered conjugal.
18
Petitioner filed a motion for reconsideration. In its 2 September 1997 Resolution,
the Court of Appeals denied the motion for lack of merit.
Hence, the petition before this Court, raising the following assignment of errors:
The lower court erred in ruling that since the marriage of the plaintiff and
respondent was void due to the absence of a marriage license, no conjugal
partnership arose from their union.
The lower court erred in ruling that the amicable settlement in Civil Case No.
4791 bars all claims by the plaintiff under the principle of res judicata.
The lower court erred in ruling that respondent's right to [the] estate of his
deceased parents was merely inchoate, thus, no property devolved to
respondent and no conjugal partnership was formed.
The lower court erred in ruling that the appellant's petition did not sufficiently
state a cause of action.13
The Issue
The issue in this case is whether the Court of Appeals committed a reversible
error in affirming the trial court's Decision which dismissed the action for
dissolution of conjugal partnership of gains.
The Ruling of this Court
The petition is without merit.
Validity of Petitioner and Respondent's Marriage
is the Subject of a Different Court Proceeding
Special Proceedings No. 3330 is an action for Dissolution of Conjugal
Partnership of Gains. In its 22 November 1991 Decision, the trial court ruled that
the existence of conjugal partnership of gains is predicated on a valid marriage.
The trial court then proceeded to rule on the validity of petitioner and
respondent's marriage. The trial court ruled that it was shown by competent
evidence that petitioner and respondent failed to obtain a marriage license.
Hence, the marriage between petitioner and respondent was null and void, and
no community of property was formed between them.
The trial court exceeded its jurisdiction in ruling on the validity of petitioner and
respondent's marriage, which was only raised by respondent as a defense to the
action for dissolution of the conjugal partnership of gains. The validity of
petitioner and respondent's marriage was the subject of another action, Civil
Case No. 430 for Judicial Declaration of Absolute Nullity of Marriage before the
Regional Trial Court of Himamaylan, Negros Occidental, Branch 55. In a
Decision14 dated 31 May 1995, Civil Case No. 430 was resolved, as follows:
In this jurisdiction it is required, except in certain cases, that the marriage license
must first be secured by the parties and shown to the judge before the latter can
competently solemnize the marriage. In this present case, none was ever
secured. Failure to comply with the formal and essential requirements of the law
renders the marriage void ab initio. Since void marriage can be assailed anytime
as the action on assailing it does not prescribe, the plaintiff is well within his right
to seek judicial relief.
WHEREFORE, premises considered[,] judgment is hereby rendered declaring
the marriage between JON A. DE YSASI and LOREA DE UGALDE as NULL and
VOID AB INITIO. The Local Civil Registrar for the Municipality of Hinigaran is
hereby directed to cancel the entry of marriage between JON A. DE YSASI and
LOREA DE UGALDE from the Marriage register and to render the same of no
force and effect.
Lastly, furnish copy of this decision the National Census and Statistics Office,
Manila, to make the necessary cancellation of the entry of marriage between the
plaintiff and the defendant.
SO ORDERED.15
No appeal or motion for reconsideration of the 31 May 1995 Decision in Civil
Case No. 430 has been filed by any of the parties, and a Certification of finality
was issued on 20 November 1995. Thus, the marriage between petitioner and
respondent was already judicially annulled as of 20 November 1995. The trial
court had no jurisdiction to annul again in Special Proceedings No. 3330 the
marriage of petitioner and Respondent.
Conjugal Partnership of Gains Dissolved
in Civil Case No. 4791
The finality of the 6 June 1961 CFI Order in Civil Case No. 4791 resulted in the
dissolution of the petitioner and respondent's conjugal partnership of gains.
Petitioner and respondent were married on 15 February 1951. The applicable law
at the time of their marriage was Republic Act No. 386, otherwise known as the
Civil Code of the Philippines (Civil Code) which took effect on 30 August
19
1950.16 Pursuant to Article 119 of the Civil Code, the property regime of petitioner
and respondent was conjugal partnership of gains, thus:
Art. 119. The future spouses may in the marriage settlements agree upon
absolute or relative community of property, or upon complete separation of
property, or upon any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community or conjugal
partnership of gains as established in this Code, shall govern the property
relations between husband and wife.
Article 142 of the Civil Code defines conjugal partnership of gains, as follows:
Art. 142. By means of the conjugal partnership of gains the husband and wife
place in a common fund the fruits of their separate property and the income from
their work or industry, and divide equally, upon the dissolution of the marriage or
of the partnership, the net gains or benefits obtained indiscriminately by either
spouse during the marriage.
Under Article 175 of the Civil Code, the judicial separation of property results in
the termination of the conjugal partnership of gains:
Art. 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191. (Emphasis
supplied)cralawlibrary
The finality of the 6 June 1961 Order in Civil Case No. 4791 approving the
parties' separation of property resulted in the termination of the conjugal
partnership of gains in accordance with Article 175 of the Family Code. Hence,
when the trial court decided Special Proceedings No. 3330, the conjugal
partnership between petitioner and respondent was already dissolved.
Petitioner alleges that the CFI had no authority to approve the Compromise
Agreement because the case was for custody, and the creditors were not given
notice by the parties, as also required under Article 191 of the Civil Code.
Petitioner cannot repudiate the Compromise Agreement on this ground. A
judgment upon a compromise agreement has all the force and effect of any other
judgment, and conclusive only upon parties thereto and their privies, and not
binding on third persons who are not parties to it.17
The Amicable Settlement had become final as between petitioner and
respondent when it was approved by the CFI on 6 June 1961. The CFI's approval
of the Compromise Agreement on 6 June 1961 resulted in the dissolution of the
conjugal partnership of gains between petitioner and respondent on even date.
WHEREFORE, we DENY the petition. We AFFIRM the result of the 21
November 1996 Decision and of the 2 September 1997 Resolution of the Court
of Appeals in CA-G.R. CV No. 41121.
SO ORDERED.
G.R. No. 178044 January 19, 2011
ALAIN M. DIÑO , Petitioner,
vs.
MA. CARIDAD L. DIÑO, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 18 October 2006
Decision2 and the 12 March 2007 Order3 of the Regional Trial Court of Las Piñas
City, Branch 254 (trial court) in Civil Case No. LP-01-0149.
The Antecedent Facts
Alain M. Diño (petitioner) and Ma. Caridad L. Diño (respondent) were childhood
friends and sweethearts. They started living together in 1984 until they decided to
separate in 1994. In 1996, petitioner and respondent decided to live together
again. On 14 January 1998, they were married before Mayor Vergel Aguilar of
Las Piñas City.
20
On 30 May 2001, petitioner filed an action for Declaration of Nullity of Marriage
against respondent, citing psychological incapacity under Article 36 of the Family
Code. Petitioner alleged that respondent failed in her marital obligation to give
love and support to him, and had abandoned her responsibility to the family,
choosing instead to go on shopping sprees and gallivanting with her friends that
depleted the family assets. Petitioner further alleged that respondent was not
faithful, and would at times become violent and hurt him.
Extrajudicial service of summons was effected upon respondent who, at the time
of the filing of the petition, was already living in the United States of America.
Despite receipt of the summons, respondent did not file an answer to the petition
within the reglementary period. Petitioner later learned that respondent filed a
petition for divorce/dissolution of her marriage with petitioner, which was granted
by the Superior Court of California on 25 May 2001. Petitioner also learned that
on 5 October 2001, respondent married a certain Manuel V. Alcantara.
On 30 April 2002, the Office of the Las Piñas prosecutor found that there were no
indicative facts of collusion between the parties and the case was set for trial on
the merits.
Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a psychological
report establishing that respondent was suffering from Narcissistic Personality
Disorder which was deeply ingrained in her system since her early formative
years. Dr. Tayag found that respondent’s disorder was long-lasting and by
nature, incurable.
In its 18 October 2006 Decision, the trial court granted the petition on the ground
that respondent was psychologically incapacited to comply with the essential
marital obligations at the time of the celebration of the marriage.
The Decision of the Trial Court
The trial court ruled that based on the evidence presented, petitioner was able to
establish respondent’s psychological incapacity. The trial court ruled that even
without Dr. Tayag’s psychological report, the allegations in the complaint,
substantiated in the witness stand, clearly made out a case of psychological
incapacity against respondent. The trial court found that respondent committed
acts which hurt and embarrassed petitioner and the rest of the family, and that
respondent failed to observe mutual love, respect and fidelity required of her
under Article 68 of the Family Code. The trial court also ruled that respondent
abandoned petitioner when she obtained a divorce abroad and married another
man.
The dispositive portion of the trial court’s decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Declaring the marriage between plaintiff ALAIN M. DIÑO and
defendant MA. CARIDAD L. DIÑO on January 14, 1998, and all its
effects under the law, as NULL and VOID from the beginning; and
2. Dissolving the regime of absolute community of property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued upon
compliance with Article[s] 50 and 51 of the Family Code.
Let copies of this Decision be furnished the parties, the Office of the Solicitor
General, Office of the City Prosecutor, Las Piñas City and the Office of the Local
Civil Registrar of Las Piñas City, for their information and guidance.
SO ORDERED.4
Petitioner filed a motion for partial reconsideration questioning the dissolution of
the absolute community of property and the ruling that the decree of annulment
shall only be issued upon compliance with Articles 50 and 51 of the Family Code.
In its 12 March 2007 Order, the trial court partially granted the motion and
modified its 18 October 2006 Decision as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1) Declaring the marriage between plaintiff ALAIN M. DIÑO and
defendant MA. CARIDAD L. DIÑO on January 14, 1998, and all its
effects under the law, as NULL and VOID from the beginning; and
2) Dissolving the regime of absolute community of property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be issued after
liquidation, partition and distribution of the parties’ properties under Article 147 of
the Family Code.
Let copies of this Order be furnished the parties, the Office of the Solicitor
General, the Office of the City Prosecutor of Las Piñas City and the Local Civil
Registrar of Las Piñas City, for their information and guidance.5
Hence, the petition before this Court.
The Issue
21
The sole issue in this case is whether the trial court erred when it ordered that a
decree of absolute nullity of marriage shall only be issued after liquidation,
partition, and distribution of the parties’ properties under Article 147 of the Family
Code.
The Ruling of this Court
The petition has merit.
Petitioner assails the ruling of the trial court ordering that a decree of absolute
nullity of marriage shall only be issued after liquidation, partition, and distribution
of the parties’ properties under Article 147 of the Family Code. Petitioner argues
that Section 19(1) of the Rule on Declaration of Absolute Nullity of Null Marriages
and Annulment of Voidable Marriages6 (the Rule) does not apply to Article 147 of
the Family Code.
We agree with petitioner.
The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void
marriage, regardless of its cause, the property relations of the parties during the
period of cohabitation is governed either by Article 147 or Article 148 of the
Family Code.7 Article 147 of the Family Code applies to union of parties who are
legally capacitated and not barred by any impediment to contract marriage, but
whose marriage is nonetheless void,8 such as petitioner and respondent in the
case before the Court.
Article 147 of the Family Code provides:
Article 147. When a man and a woman who are capacitated to marry each other,
live exclusively with each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of them through their
work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly in the acquisition thereof if
the former’s efforts consisted in the care and maintenance of the family and of
the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in
the property acquired during cohabitation and owned in common, without the
consent of the other, until after the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common
children. In case of default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place upon termination of the
cohabitation.
For Article 147 of the Family Code to apply, the following elements must be
present:
1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and
3. Their union is without the benefit of marriage, or their marriage is
void.9
All these elements are present in this case and there is no question that Article
147 of the Family Code applies to the property relations between petitioner and
respondent.
We agree with petitioner that the trial court erred in ordering that a decree of
absolute nullity of marriage shall be issued only after liquidation, partition and
distribution of the parties’ properties under Article 147 of the Family Code. The
ruling has no basis because Section 19(1) of the Rule does not apply to cases
governed under Articles 147 and 148 of the Family Code. Section 19(1) of the
Rule provides:
Sec. 19. Decision. - (1) If the court renders a decision granting the petition, it
shall declare therein that the decree of absolute nullity or decree of annulment
shall be issued by the court only after compliance with Articles 50 and 51 of the
Family Code as implemented under the Rule on Liquidation, Partition and
Distribution of Properties.
The pertinent provisions of the Family Code cited in Section 19(1) of the Rule
are:
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Article 50. The effects provided for in paragraphs (2), (3), (4) and (5) of Article 43
and in Article 44 shall also apply in proper cases to marriages which are declared
void ab initio or annulled by final judgment under Articles 40 and 45.10
The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the
common children, and the delivery of their presumptive legitimes, unless such
matters had been adjudicated in previous judicial proceedings.
All creditors of the spouses as well as of the absolute community of the conjugal
partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.
Article 51. In said partition, the value of the presumptive legitimes of all common
children, computed as of the date of the final judgment of the trial court, shall be
delivered in cash, property or sound securities, unless the parties, by mutual
agreement judicially approved, had already provided for such matters.
The children of their guardian, or the trustee of their property, may ask for the
enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed shall in no way
prejudice the ultimate successional rights of the children accruing upon the death
of either or both of the parents; but the value of the properties already received
under the decree of annulment or absolute nullity shall be considered as
advances on their legitime.
It is clear from Article 50 of the Family Code that Section 19(1) of the Rule
applies only to marriages which are declared void ab initio or annulled by final
judgment under Articles 40 and 45 of the Family Code. In short, Article 50 of
the Family Code does not apply to marriages which are declared void ab
initio under Article 36 of the Family Code, which should be declared void without
waiting for the liquidation of the properties of the parties.
Article 40 of the Family Code contemplates a situation where a second or
bigamous marriage was contracted.1avvphil Under Article 40, "[t]he absolute
nullity of a previous marriage may be invoked for purposes of remarriage on the
basis solely of a final judgment declaring such previous marriage void." Thus we
ruled:
x x x where the absolute nullity of a previous marriage is sought to be invoked for
purposes of contracting a second marriage, the sole basis acceptable in law, for
said projected marriage to be free from legal infirmity, is a final judgment
declaring a previous marriage void.11
Article 45 of the Family Code, on the other hand, refers to voidable marriages,
meaning, marriages which are valid until they are set aside by final judgment of a
competent court in an action for annulment.12 In both instances under Articles 40
and 45, the marriages are governed either by absolute community of
property13 or conjugal partnership of gains14 unless the parties agree to a
complete separation of property in a marriage settlement entered into before the
marriage. Since the property relations of the parties is governed by absolute
community of property or conjugal partnership of gains, there is a need to
liquidate, partition and distribute the properties before a decree of annulment
could be issued. That is not the case for annulment of marriage under Article 36
of the Family Code because the marriage is governed by the ordinary rules on
co-ownership.
In this case, petitioner’s marriage to respondent was declared void under Article
3615 of the Family Code and not under Article 40 or 45. Thus, what governs the
liquidation of properties owned in common by petitioner and respondent are the
rules on co-ownership. In Valdes, the Court ruled that the property relations of
parties in a void marriage during the period of cohabitation is governed either by
Article 147 or Article 148 of the Family Code.16 The rules on co-ownership apply
and the properties of the spouses should be liquidated in accordance with the
Civil Code provisions on co-ownership. Under Article 496 of the Civil Code,
"[p]artition may be made by agreement between the parties or by judicial
proceedings. x x x." It is not necessary to liquidate the properties of the spouses
in the same proceeding for declaration of nullity of marriage.
WHEREFORE, we AFFIRM the Decision of the trial court with
the MODIFICATION that the decree of absolute nullity of the marriage shall be
issued upon finality of the trial court’s decision without waiting for the liquidation,
partition, and distribution of the parties’ properties under Article 147 of the Family
Code.
SO ORDERED.
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