677
VOL. 129, JUNE 22, 1984 675
Calimlim-Canullas vs. Fortun
No. L-57499. June 22, 1984.
*
MERCEDES CALIMLIM-CANULLAS, petitioner, vs.HON. WILLELMO
FORTUN, Judge, Court of First Instance of Pangasinan, Branch I, and
CORAZON DAGUINES, respondents.
Property; Husband and Wife; Where conjugal house is constructed on land belonging
exclusively to the husband, the land ipso facto becomes conjugal, but husband is entitled to
reimbursement of
_______________
FIRST DIVISION.
*
676
6 SUPREME COURT REPORTS ANNOTATED
76
Calimlim-Canullas vs. Fortun
value of land.—We hold that pursuant to the foregoing provision both the land and
the building belong to the conjugal partnership but the conjugal partnership is indebted to
the husband for the value of the land. The spouse owning the lot becomes a creditor of the
conjugal partnership for the value of the lot, which value would be reimbursed at the
liquidation of the conjugal partnership.
Same; Same; Same.—“As to the above properties, their conversion from paraphernal
to conjugal assets should be deemed to retroact to the time the conjugal buildings were first
constructed thereon or at the very latest, to the time immediately before the death of
Narciso A. Padilla that ended the conjugal partnership. They can not be considered to have
become conjugal property only as of the time their values were paid to the estate of the
widow Concepcion Paterno because by that time the conjugal partnership no longer existed
and it could not acquire the ownership of said properties. The acquisition by the partnership
of these properties was, under the 1943 decision, subject to the suspensive condition that
their values would be reimbursed to the widow at the liquidation of the conjugal
partnership; once paid, the effects of the fulfillment of the condition should be deemed to
retroact to the date the obligation was constituted (Art. 1187, New Civil Code). x x x”
Same; Same; Same; Sale; Consent of wife needed for validity of sale of land of
husband on which conjugal house was constructed.—The foregoing premises considered, it
follows that FERNANDO could not have alienated the house and lot to DAGUINES since
MERCEDES had not given her consent to said sale.
Same; Same; Same; Sale to concubine null and void.—Anent the second issue, we find
that the contract of sale was null and void for being contrary to morals and public policy.
The sale was made by a husband in favor of a concubine after he had abandoned his family
and left the conjugal home where his wife and children lived and from whence they derived
their support. That sale was subversive of the stability of the family, a basic social
institution which public policy cherishes and protects.
PETITION for certiorari to review the decision of the Court of First Instance of
Pangasinan, Br. I. Fortun, J.
The facts are stated in the opinion of the Court.
VOL. 129, JUNE 22, 1984 677
Calimlim-Canullas vs. Fortun
Fernandez Law Offices for petitioner.
Francisco Pulido for respondents.
MELENCIO-HERRERA, J.:
A Petition for Review on Certiorari assailing the Decision, dated October 6, 1980,
and the Resolution on the Motion for Reconsideration, dated November 27, 1980,
of the then Court of First Instance of Pangasinan, Branch I, in Civil Case No.
15620 entitled “Corazon DAGUINES vs. MERCEDES Calimlim-Canullas”,
upholding the sale of a parcel of land in favor of DAGUINES but not of the
conjugal house thereon.
The background facts may be summarized as follows: Petitioner MERCEDES
Calimlim-Canullas and FERNANDO Canullas were married on December 19,
1962. They begot five children. They lived in a small house on the residential land
in question with an area of approximately 891 square meters, located at Bacabac,
Bugallon, Pangasinan. After FERNANDO’s father died in 1965, FERNANDO
inherited the land.
In 1978, FERNANDO abandoned his family and was living with private
respondent Corazon DAGUINES. During the pendency of this appeal, they were
convicted of concubinage in a judgment rendered on October 27, 1981 by the then
Court of First Instance of Pangasinan, Branch II, which judgment has become
final.
On April 15, 1980, FERNANDO sold the subject property with the house
thereon to DAGUINES for the sum of P2,000.00. In the document of sale,
FERNANDO described the house as “also inherited by me from my deceased
parents.”
Unable to take possession of the lot and house, DAGUINES initiated a
complaint on June 19, 1980 for quieting of title and damages against
MERCEDES. The latter resisted and claimed that the house in dispute where she
and her children were residing, including the coconut trees on the land, were built
and planted with conjugal funds and through her industry; that the sale of the
land together with the house and improvements to DAGUINES was null and void
because they
678
678 SUPREME COURT REPORTS ANNOTATED
Calimlim-Canullas vs. Fortun
are conjugal properties and she had not given her consent to the sale.
In its original judgment, respondent Court principally declared DAGUINES
“as the lawful owner of the land in question as well as the one-half (½) of the
house erected on said land.” Upon reconsideration prayed for by MERCEDES,
however, respondent Court resolved:
“WHEREFORE, the dispositive portion of the Decision of this Court, promulgated on
October 6, 1980, is hereby amended to read as follows:
1. “(1)Declaring plaintiff as the true and lawful owner of the land in question and the
10 coconut trees;
2. “(2)Declaring as null and void the sale of the conjugal house to plaintiff on April
15, 1980 (Exhibit A) including the 3 coconut trees and other crops planted during
the conjugal relation between Fernando Canullas (vendor) and his legitimate
wife, herein defendant Mercedes Calimlim-Canullas:
x x x”
The issues posed for resolution are (1) whether or not the construction of a
conjugal house on the exclusive property of the husband ipso facto gave the land
the character of conjugal property; and (2) whether or not the sale of the lot
together with the house and improvements thereon was valid under the
circumstances surrounding the transaction.
The determination of the first issue revolves around the interpretation to be
given to the second paragraph of Article 158 of the Civil Code, which reads:
“x x x
“Buildings constructed at the expense of the partnership during the marriage on land
belonging to one of the spouses also pertain to the partnership, but the value of the land
shall be reimbursed to the spouse who owns the same.”
We hold that pursuant to the foregoing provision both the land and the building
belong to the conjugal partnership but the conjugal partnership is indebted to the
husband for the value of the land. The spouse owning the lot becomes a creditor
679
VOL. 129, JUNE 22, 1984 679
Calimlim-Canullas vs. Fortun
of the conjugal partnership for the value of the lot, which value would be
1
reimbursed at the liquidation of the conjugal partnership. 2
In his commentary on the corresponding provision in the Spanish Civil Code
(Art. 1404), Manresa stated:
“El articulo cambia la doctrina; los edificios construidos durante el matrimonio en suelo
propio de uno de los conjuges son gananciales, abonandose el valor del suelo al conjuge a
quien pertenezca.”
It is true that in the case of Maramba vs. Lozano, relied upon by respondent
3 the institution of marriage, which is the cornerstone of family law. The
Judge, it was held that the land belonging to one of the spouses, upon which the
spouses have built a house, becomes conjugal property only when the conjugal
partnership is liquidated and indemnity paid to the owner of the land. We believe
that the better rule is that enunciated by Mr. Justice JBL Reyes in Padilla vs.
Paterno, 3 SCRA 678, 691 (1961), where the following was explained:
“As to the above properties, their conversion from paraphernal to conjugal assets should be
deemed to retroact to the time the conjugal buildings were first constructed thereon or at
the very latest, to the time immediately before the death of Narciso A. Padilla that ended
the conjugal partnership. They can not be considered to have become conjugal property only
as of the time their values were paid to the estate of the widow Concepcion Paterno because
by that time the conjugal partnership no longer existed and it could not acquire the
ownership of said properties. The acquisition by the partnership of these properties was,
under the 1943 decision, subject to the suspensive condition that their values would be
reimbursed to the widow at the liquidation of the conjugal partnership; once paid, the
effects of the fulfillment of the condition should be deemed to retroact to the date the
obligation was constituted (Art. 1187, New Civil Code). x x x”
The foregoing premises considered, it follows that FERNANDO could not have
alienated the house and lot to
_______________
Tabotabo vs. Molero, 22 Phil. 418 (1912).
1
2Vda. de Padilla vs. Paterno, 3 SCRA 678, 691 (1961).
320 SCRA 474 (1967).
680
680 SUPREME COURT REPORTS ANNOTATED
Calimlim-Canullas vs. Fortun
DAGUINES since MERCEDES had not given her consent to said sale. 4
Anent the second issue, we find that the contract of sale was null and void for
being contrary to morals and public policy. The sale was made by a husband in
favor of a concubine after he had abandoned his family and left the conjugal home
where his wife and children lived and from whence they derived their support.
That sale was subversive of the stability of the family, a basic social institution
which public policy cherishes and protects. 5
Article 1409 of the Civil Code states inter alia that: contracts whose cause,
object, or purpose is contrary to law, morals, good customs, public order, or public
policy are voidand inexistent from the very beginning.
Article 1352 also provides that: “Contracts without cause, or with unlawful
cause, produce no effect whatsoever.The cause is unlawful if it is contrary to law,
morals, good customs, public order, or public policy.”
Additionally, the law emphatically prohibits the spouses from selling property
to each other subject to certain exceptions. Similarly, donations between spouses
6
during marriage are prohibited. And this is so because if transfers or conveyances
7
between spouses were allowed during marriage, that would destroy the system of
conjugal partnership, a basic policy in civil law. It was also designed to prevent
the exercise of undue influence by one spouse over the other, as well as to protect
8
prohibitions apply to a couple living as husband and wife without benefit of
marriage, otherwise, “the condition of those who incurred guilt would turn out to
be better than those in legal union.” Those provisions are dictated by public
interest and their criterion must be imposed upon the will of the parties. That
was the ruling in Buenaventura vs.
________________
4 Article 166, Civil Code.
5 Article 216, Civil Code.
6 Article 1490, ibid.
7 Article 133, ibid.
 8Article 1337, ibid. Property acquired partly with paraphernal and partly with conjugal funds is
681
held to belong to both patrimonies in common, in proportion to the contribution of
VOL. 129, JUNE 22, 1984 681 each of the total purchase price. (Castillo, Jr. vs. Pasco, 11 SCRA 102.)
Calimlim-Canullas vs. Fortun
Bautista, also penned by Justice JBL Reyes (CA) 50 O.G. 3679, and cited in ——o0o——
Matabuena vs. Cervantes. We quote hereunder the pertinent dissertation on this
9

point: © Copyright 2018 Central Book Supply, Inc. All rights reserved.
“We reach a different conclusion. While Art. 133 of the Civil Code considers as void a
donation between the spouses during the marriage, policy considerations of the most exigent
character as well as the dictates of morality require that the same prohibition should apply
to a common-law relationship.
“As announced in the outset of this opinion, a 1954 Court of Appeals decision,
Buenaventura vs. Bautista, 50 OG 3679, interpreting a similar provision of the old Civil
Code speaks unequivocally. If the policy of the law is, in the language of the opinion of the
then Justice J.B.L. Reyes of that Court, ‘to prohibit donations in favor of the other consort
and his descendants because of fear of undue influence and improper pressure upon the
donor, a prejudice deeply rooted in our ancient law, x x x, then there is every reason to apply
the same prohibitive policy to persons living together as husband and wife without benefit of
nuptials.For it is not to be doubted that assent to such irregular connection for thirty years
bespeaks greater influence of one party over the other, so that the danger that the law seeks
to avoid is correspondingly increased’. Moreover, as pointed out by Ulpian (in his lib 32 ad
Sabinum, fr. 1), ‘It would not be just that such donations should subsist, lest the conditions
of those who incurred guilt should turn out to be better.’ So long as marriage remains the
cornerstone of our family law, reason and morality alike demand that the disabilities
attached to marriage should likewise attach to concubinage” (Italics supplied).
WHEREFORE, the Decision of respondent Judge, dated October 6, 1980, and his
Resolution of November 27, 1980 on petitioner’s Motion for Reconsideration, are
hereby set aside and the sale of the lot, house and improvements in question, is
hereby declared null and void. No costs.
SO ORDERED.
Teehankee, (Chairman), Plana, Relova, Gutierrez, Jr., and De la Fuente,
JJ., concur.
Decision set aside.

________________

938 SCRA 284 (1971).

682
682 SUPREME COURT REPORTS ANNOTATED
People vs. Tumaliuan
Notes.—That all property acquired during marriage are conjugal is merely a
rebuttable presumption. (Laperal, Jr. vs. Katigbak, 10 SCRA 493.)
Husband’s power to alienate conjugal property must be with wife’s consent.
(Villocino vs. Doyon, 18 SCRA 1094.)
The contract of sale of conjugal property, in its entirety, executed by the
husband without the wife s consent may be annulled by the wife. (Bucoy vs.
Paulino, 23 SCRA 248.)

VOL. 204, NOVEMBER 29, 1991 297
Ong vs. Court of Appeals
G.R. No. 63025. November 29,1991. *
RAMON C. ONG, petitioner, vs. COURT OF APPEALS, FRANCISCO BOIX and
ARSENIO CAMINO AS DEPUTY SHERIFF OF CAMARINES NORTE,
respondents.
Judgments; Execution; Validity of auction sale.—Against petitioner’s argument that
the auction sale is null and void is the trial court’s assessment of the validity thereof, that
is, that the notice of public auction sale was published in accordance with law. Such a
________________
*SECOND DIVISION.
298
2 SUPREME COURT REPORTS ANNOTATED
98
Ong vs, Court of Appeals
factual finding of the trial court is entitled to great weight and should not be
disturbed on appeal. “Factual questions should be resolved by the lower courts and the
Supreme Court has no ju jurisdiction as a rule to reverse the findings of the lower courts
except in a clear showing of a grave abuse of discretion” (Korean Air Lines vs. Court of
Appeals, 154 SCRA 211). In the instant case, petitioner failed to show any grave abuse of
discretion committed by the lower court in appreciating private respondent’s allegation that
petitioner was previously notified of the supposed transfer of the date of public auction from
September 25, 1958 to October 10, 1958.
Civil Law; Paraphernal property.—The mere use of the surname of the husband in
the tax declaration of the subject property is not sufficient proof that said property was
acquired during the marriage and is therefore conjugal. It is undisputed that the subject
parcel was declared solely in the wife’s name, but the house built thereon was declared in
the name of the spouses. Under such circumstances, coupled with a careful scrutiny of the
records of the present case, We hold that the lot in question is paraphernal, and is therefore,
liable for the personal debts of the wife.
Same; Conjugal property; Necessity to prove that property was acquired during
marriage.—As correctly pointed out by the respondent Court. the party who invokes the
presumption that all property of the marriage belongs to the conjugal partnership (Art. 160,
New Civil Code) must first prove that the property was acquired during the marriage. Proof
of acquisition during the marriage is a condition sine qua non for the operation of the
presumption in favor of the conjugal partnership.
Same; Same; Liability of conjugal partnership for debts of wife incurred in the course
of her business.—Furthermore, even assuming for the sake of argument that the property in
dispute is conjugal, the same may still be held liable for the debts of the wife in this case.
Under Art. 117 of the Civil Code, the wife may engage in business although the husband
may object (but subject to certain conditions). It is clear from the records that the wife was
engaged in the logging business with the husband’s knowledge and apparently without any
objection on his part. The acts of the husband show that he gave his implied consent to the
wife’s engagement in business. According to Justice Ameurfina-Herrera (then Associate
Justice of the Court of Appeals) in her concurring opinion, the rule that should govern in
that case is that the wife’s paraphernal properties, as well as those of their conjugal
partnership, shall be liable for the obligations incurred by
299
VOL. 204, NOVEMBER 29, 1991 299
Ong vs. Court of Appeals
the wife in the course of her business (Arts, 117, 140, 172, 203, and 236, Civil Code;
Art. 10, Code of Commerce, cited in Commentaries on Phil. Commercial Laws, Martin, T.C.
Vol. 1, 1970 Revised Edition, pp. 14–16). After all, whatever profits are earned by the wife
from her business go to the conjugal partnership. It would only be just and equitable that
the obligations contracted by the wife in connection with her business may also be
chargeable not only against her paraphernal property but also against the conjugal property
of the spouses.
PETITION for certiorari to review the decision of the Court of Appeals.
Gopengco, J.
The facts are stated in the opinion of the Court.
Jose L. Lapak for petitioner.
Jose M. Abola for private respondent.
PARAS, J.:
The instant petition for certiorari seeks a reversal of the decision ** of herein
public respondent Court of Appeals dated October 24, 1977 in CA-G.R. No. 47063-
R and its resolution dated January 14, 1983 denying herein petitioner’s Motion
for Reconsideration.
The Court of Appeals narrates the facts thus:
The record shows that on November 16,1961, Ramon C. Ong filed a complaint
against defendants Arsenio Camino as Deputy Sheriff of Camarines Norte and
Francisco Boix, to annul the auction sale of a parcel of land, allegedly owned
conjugally by plaintiff and his former wife Teodora B. Ong, awarded in favor of
Boix, as highest bidder, in an auction sale conducted on October 10, 1958 by the
Deputy Sheriff of Camarines Norte, herein defendant Camino, pursuant to a writ
of execution dated August 8, 1958 (Exhibits “C", “2-A") issued by the Court of
First Instance of Manila, Branch IV, to enforce its decision in Civil Case No.
33396, entitled, “Francisco Boix, Plaintiff vs. Teodora B. Ong and Ramon C. Ong,
Defendants” wherein judgment was rendered to wit:
________________
** Penned by the then Associate Justice (now deceased) Simeon M. Gopengco
and concurred in by Associate Justices Ameurfina A. Melencio-Herrera and
Vicente G. Ericta.
300
300 SUPREME COURT REPORTS ANNOTATED
 Ong vs. Court of Appeals
WHEREFORE. judgment is hereby rendered in favor of plaintiff, ordering the
defendant Teodora B. Ong to pay to the plaintiff the sum of P2,827.83, with
interest of 8% per annum on the sum of P1,000.00 from September 5, 1955, on the
sum of P1,000.00 from October 30, 1955; and on the sum of P827.83 from
December 30, 1955 plus 15% on the total amount of P2,827.83 as attorney’s fees;
and the further amount of P2,503 with interest at 6% per annum from date of the
filing of the complaint, and the costs of the suit.” (Exhibit “1")
The title to the property, in favor of the execution-creditor Boix was duly
registered in the Office of the Register of Deeds of Camarines Norte (Exhibit “4").
It is not disputed that plaintiffs wife, Teodora B. Ong conducted her own
logging business in Camarines Sur. In furtherance of her business operation, on
August 18, 1955, she secured from Francisco Boix a loan in the amount of
P2,827.83. Unfortunately, because of mismanagement, Teodora defaulted in her
obligation. This prompted Boix to file a complaint, based on the promissory notes
executed by Teodora, to collect the sum legally due plus interest against Teodora
and Ramon Ong, the latter being joined as husband of the former. Defendant-
spouses were declared in default and judgment was rendered, as aforesaid, in
favor of Boix.
After the aforementioned decision became final and executory, Boix moved to
execute the judgment. The motion was granted and a corresponding writ of
execution, dated August 8, 1958 (Exhibits “C", “2-A"), was issued. Accordingly, the
Sheriff of Camarines Norte levied and attached a parcel of land situated at Diego
Linan St., Daet, Camarines Norte, declared under Tax No. 05378 in the sole name
of Teodora B. Ong, subject-parcel of herein suit. In a notice of levy on Execution
dated August 22, 1958 (Exhibit “2-B") and notice of Public Auction sale dated
September 10, 1958 (Exhibit “2-C"), auction sales was held on October 10, 1958
and as already mentioned, defendant Boix was adjudged highest bidder. A writ of
possession was issued to place the execution-creditor in possession of the property
levied upon and sold on execution. A corresponding Certificate of Sale (Exhibit
“H") was also issued in favor of Boix.
Subsequently, thereafter, Ramon C. Ong filed an Omnibus motion dated
October 2,1961 (Exhibit “D") with the same Court of First Instance of Manila
asking to quash the writ of possession, which was denied in an order dated
December 6,1961. A motion for reconsideration dated December 29,1961 (Exhibit
“F") was likewise denied in an order dated February 10,1962 (Exhibit “G"). (Pp. 1–
4, Decision; pp. 11–14, Rollo)
301
VOL. 204, NOVEMBER 29, 1991 301
Ong vs. Court of Appeals
Consequently, petitioner brought the case to the Court of Appeals to
annul the auction sale allegedly irregularly executed on the following
grounds, namely, that the property was conjugal and thus could not be
held liable for personal debts contracted by the wife, and that there was
no valid publication thus making the auction sale void.
The Court of Appeals affirmed the decision of the trial court,
prompting petitioner to file a motion for reconsideration thereof. Said
motion was denied on January 15, 1983; hence, the present petition.
Petitioner contends that the auction sale of the property in dispute is
null and void, having been made on a date different from that reflected in
the advertisement thereof, aside from having been published in a
newspaper which is not of general circulation in the province where the
property is situated, According to the petitioner, respondent court’s
failure to touch on such a jurisdictional issue constitutes grave abuse of
discretion which justifies a reversal of its decision affirming the finding of
the trial court which in itself constitutes a misappreciation of facts.
The other argument advanced by the petitioner is that the subject
property is really corjugal which the wife in the case at bar could not
legally bind, and considering that the indebtedness was contracted by the
wife only, the levy of the subject property not owned exclusively by the
wife but owned jointly with the husband is improper.
Against petitioner’s argument that the auction sale is null and void is
the trial court’s assessment of the validity thereof, that is, that the notice
of public auction sale was published in accordance with law. Such a
factual finding of the trial court is entitled to great weight and should not
be disturbed on appeal. “Factual questions should be resolved by the
lower courts and the Supreme Court has no jurisdiction as a
rule to reverse the findings of the lower courts except in a clear showing
of a grave abuse of discretion” (Korean Air Lines vs. Court of
Appeals, 154 SCRA 211). In the instant case, petitioner failed to show
any grave abuse of discretion committed by the lower court in
appreciating private respondent’s allegation that petitioner was
previously notified of the supposed transfer of the date of public auction
from September 25, 1958 to October 10, 1958.
302
302 SUPREME COURT REPORTS ANNOTATED
Ong vs. Court of Appeals
Petitioner’s other argument is also based on factual considerations.
Against the Court of Appeals’ finding that the subject property is
paraphernal property, in view of the fact that it was “declared, under Tax
No. 05378, in the name of Teodora B. Ong while the house erected
thereon was declared under Tax No. 06022 in the name of Ramon C. Ong
and Teodora B. Ong (Exhibits “B", “H", “2-B", “2-C, “4") (Decision, p. 4) is
petitioner’s claim that the subject property is conjugal. Petitioner stresses
heavily on the fact that since the surname “Ong” (which is the surname of
the husband Ramon C. Ong) was carried by Teodora in the aforesaid tax
declaration, that indicates that the subject property was acquired during
the marriage. By reason thereof, the property in dispute is presumed to
be owned jointly by both spouses.
We disagree. The mere use of the surname of the husband in the tax
declaration of the subject property is not sufficient proof that said
property was acquired during the marriage and is therefore conjugal. It is
undisputed that the subject parcel was declared solely in the wife’s name,
but the house built thereon was declared in the name of the spouses.
Under such circumstances, coupled with a careful scrutiny of the records
of the present case, We hold that the lot in question is paraphernal, and
is therefore, liable for the personal debts of the wife.
Thus, it was held in the case of Maramba vs. Lozano, 20 SCRA 474,
that
‘The presumption that property is conjugal (Art. 160, New Civil Code) refers to
property acquired during the marriage. When there is no showing as to when the
property was acquired by a spouse, the fact that the title is in the spouse’s name
is an indication that the property belongs exclusively to said spouse.”
As correctly pointed out by the respondent Court, the party who invokes
the presumption that all property of the marriage belongs to the conjugal
partnership (Art. 160, New Civil Code) must first prove that the property
was acquired during the marriage. Proof of acquisition during the
marriage is a condition sine qua non for the operation of the presumption
in favor of the conjugal partnership. (Cobb-Perez, et al. vs. Lantin, et
al., 23 SCRA 637; Jose Ponce de Leon vs. Rehabilitation Finance
303
VOL. 204, NOVEMBER 29, 1991 303
Ong vs. Court of Appeals
Corp., 36 SCRA 289). In the same manner, the recent case of PNB vs.
Court of Appeals, 153 SCRA 435 affirms that:
“When the property is registered in the name of a spouse only and there is no
showing as to when the property was acquired by said spouse, this is an
indication that the property belongs exclusively to said spouse. And this
presumption under Art. 160 of the Civil Code cannot prevail when the title is in
the name of only one spouse and the rights of innocent third parties are involved.”
Furthermore, even assuming for the sake of argument that the property
in dispute is conjugal, the same may still be held liable for the debts of
the wife in this case. Under Art. 117 of the Civil Code, the wife may
engage in business although the husband may object (but subject to
certain conditions). It is clear from the records that the wife was engaged
in the logging business with the husband’s knowledge and apparently
without any objection on his part. The acts of the husband show that he
gave his implied consent to the wife’s engagement in business, According
to Justice Ameurfina-Herrera (then Associate Justice of the Court of
Appeals) in her concurring opinion, the rule that should govern in that
case is that the wife’s paraphernal properties, as well as those of their
conjugal partnership, shall be liable for the obligations incurred by the
wife in the course of her business (Arts. 117, 140, 172, 203, and 236, Civil
Code; Art 10, Code of Commerce, cited in Commentaries on Phil.
Commercial Laws, Martin, T.C. Vol. 1, 1970 Revised Edition, pp. 14–15).
After all, whatever profits are earned by the wife from her business go to
the conjugal partnership. It would only be just and equitable that the
obligations contracted by the wife in connection with her business may
also be chargeable not only against her paraphernal property but also
against the conjugal property of the spouses.
Let it be noted that due to the length of time that this case has
remained pending, private respondents Francisco Boix and Arsenio
Camino have allegedly already died in the process. No proper substitution
of parties have apparently been made. Nevertheless, despite such
supervening events, for failure on the part of petitioner to show any grave
abuse of discretion or reversible error committed by respondent appellate
court, We
304
304 SUPREME COURT REPORTS ANNOTATED
Alabanzas vs. Intermediate Appellate Court
deem it wise to affirm the said court’s decision. Besides, the decision of
the trial court is in accordance with law and the evidence presented,
WHEREFORE, the petition is hereby DISMISSED for lack of merit
without pronouncement as to costs.
SO ORDERED.
Padilla and Regalado, JJ., concur.
Melencio-Herrera (Chairman, J., No Part Concurred in the Court
of Appeals decision under review.
Petition dismissed.
Note.—Proof of acquisition during the coverture is a condition sine
qua non for the operation of the presumption in favor of conjugal
ownership, (Jocson vs. Court of Appeals, 170 SCRA 333.)
——o0o——
© Copyright 2018 Central Book Supply, Inc. All rights reserved.
 VOL. 10, MARCH 31, 1964 493
Laperal, Jr. vs. Katigbak
No. L-16991. March 31, 1964.
ROBERTO LAPERAL, JR., ET AL., plaintiffs-appellants, vs. RAMON L.
KATIGBAK, ET AL., defendants-appellees.
Conjugal property; Presumption in favor of partnership rebutted.—The legal
presumption that all properties acquired during the marriage are conjugal is rebuttable. In
the case at bar, the property in question is paraphernal despite its having been acquired
during coverture as proven by the following circumstances: the disputed land is in the name
of the wife; the property was of such substantial value as the husband then by himself could
not have afforded to buy; the purchase price was furnished by the wife's mother; it was
established that it was a practice of the wife's parents to so provide their children with
money to purchase realties for themselves; and, the husband expressly acknowledged in the
deed of sale that the did not have any interest in the property.
494
494 SUPREME COURT REPORTS ANNOTATED
Laperal, Jr. vs. Katigbak
APPEAL from a judgment of the Court of First Instance of Manila. Gatmaitan, J.
The facts are stated in the opinion of the Court.
William H. Quasha & Associates for plaintiffs-appellants.
Bausa, Ampil & Suarez for defendant-appellee Evelina Kalaw Katigbak.
Ramon L. Katigbak in his own behalf as defendant-appellee.
REGALA, J.:
This is an appeal from a decision of the Court of First Instance of Manila
declaring the property covered by TCT No. 57626 in the City of Manila to be the
separate or paraphernal property of the defendant-appellee Evelina Kalaw.
Plaintiffs-appellants, the spouses Laperal, disagree with the said finding. Hence
they appealed from the said decision. They maintain that the realty in question,
with its improvements and income, are conjugal assets of the spouses Evelina
Kalaw and Ramon Katigbak.
This litigation is a sequel to the one instituted by the Laperals against
Katigbak and Kalaw way back in August, 1950. In that case, Civil Case No.
11767 of the Court of First Instance of Manila, the Laperals sought from the
therein defendants "recovery of P14,000 evidenced by various promissory notes
executed in favor of the Laperals by Katigbak, and for the return of jewelry
Valued at P97,500.00, delivered by the Laperals to Katigbak for sale on
commission, or a total of P111,500.00." On November , 1950, upon a confession of
judgment by Katigbak, the trial court rendered judgment against him to pay the
Laperals the sum of P14,000.00, and to return the jewelry involved, or in lieu
thereof, to pay plaintiffs P97,500.00, with interest from August 8, 1950.
About a month after this decision was rendered, Kalaw filed a complaint
against her husband Katigbak, for "judicial separation of property and separate
administration,'" docketed as Civil Case No. 12860, of the Court of First Instance
of Manila. Prior to the trial, Katigbak and Kalaw submitted an agreement or
stipulation of facts, on the basis of which, the court granted the prayer for the
"judicial
495
VOL. 10, MARCH 31, 1964 495
Laperal, Jr. vs. Katigbak
separation of property and separate administration."
On February 1, 1955, the Laperals filed another complaint against Kalaw and
Katigbak, Civil Case No. 25235 in the Court of First Instance of Manila, seeking
among other things, annulment of the proceedings had in Civil Case No. 12860 for
"judicial separation of property and separate administration/' to enforce the
judgment secured by the Laperals in Civil Case No. 11767 on the fruits of Kalaw's
paraphernal property, and to secure a ruling declaring the real property covered
by TCT No. 57626 as conjugal property of Katigbak and Kalaw. After trial, the
court dismissed the complaint, which dismissal the Laperals appealed to this
Court. Acting on the same, We rendered judgment under G.R. No. L-11418,
promulgated on December 27, 1958, the pertinent portion of which reads:
"However, our holding does not- write a finis to the case. Because the trial court held that
the conjugal partnership was not liable, it naturally, saw no reason or necessity for
rulingupon the other issues involved, such as the legality of the proceedings in Civil Case
No. 12860 for the dissolution of the conjugal partnership and whether or not the property
covered by Transfer Certificate of Title No. 57626 belongs to the conjugal partnership.
"In conclusion, .we hold that while the fruits of the paraphernal property of Kalaw are
not liable for the enforcement of the obligations contracted by Katigbak, nevertheless, the
conjugal properties are.
"The case is hereby ordered remanded for further proceedings to the trial court, the
latter to make the necessary findings indicated and then render a decision on the basis of
said findings in accordance with our decision. No costs."
In compliance with the above endorsement, the trial court, after submission by
the parties of their respective memoranda, there being already sufficient evidence
in the record, rendered judgment declaring the property covered by TCT No 57626
as paraphernal. Hence, this appeal.
The facts upon which the trial court predicated its con clusion that the realty
in question is paraphernal are as follows:
"For the reason that it is established without contradiction in the record that the spouses
Ramon Katigbak and Evelina Kalaw were married in 1938 (tsn, p. 20, hearing of Jan. 31,
1956) and either of them had brought properties unto the mar
496
496 SUPREME COURT REPORTS ANNOTATED
Laperal, Jr. vs. Katigbak
riage; that Ramon's occupation was that of Asst. Atty. of the Bank of the Phil. Islands
wherein his monthly salary was ?200.00 (id); that the property under TCT No. 57626 was
registered in the name of 'Evelina Kalaw-Katigbak, married to Ramon Katigbak' on
December 6, 1939, only two years after the marriage and the property was and is in Calle
Evangelista, which was and is a business district; the Court, notwithstanding the
presumption that all properties acquired during the marriage are conjugal, is led to believe
that, as Evelina declares, her mother Pura Villanueva was the one that had bought that
property for her and had placed it only in her name as was the practice of her mother; that
is, buying properties and placing them directly in the names of her children; and this is
recognized by Article 1448; and the Court is all the more led to the conclusion when it sees
that Ramon Katigbak, in the -same year 1939, that is, long before the spouses had come to
the parting of ways, made a manifestation that he had no interest in the properties—
'Ramon Katigbak, the husband of the vendor signed this document only for the purpose of assisting his
wife but he has no interest in the property.
(Sgd.) Ramon L. Katigbak'
(Exh. 5-a, p. 189, Record)"
As this case is before Us now, therefore, the issue is whether or not the above
findings warrant a rejection of the presumption that the property disputed, for
the reason that it was acquired during the marriage, is conjugal.
We find for the appellee.
There is no denying that all properties acquired during the marriage are, by
law, presumed conjugal. (Art. 160, Civil Code) The presumption, however, is not
conclusive but merely rebuttable, for the same law is unequivocal that it exists
only "unless it be proved that it (the property) belongs exclusively to the husband
or to the wife." And, examining the records and evidence in this suit, We hold that
this is a case where the presumption has been sufficiently and convincingly
disproven.
The facts recited by the trial judge in explanation of his view that the property
in dispute is paraphernal despite its having been acquired during coverture,
impress Us as adequate and conclusive. As a matter of fact, the factors he took
into account in rejecting the
497
VOL. 10, MARCH 31, 1964 497
Laperal, Jr. vs. Katigbak
presumption, on the whole, tally with Our own views in the cases of Casiano v.
Samaniego, 30 Phil. 135 and Coingco v. Flores, 82 Phil. 284.
In the Casiano case, the deeds to the property in question were in the name of
the defendant who testified that they were "purchased by her mother for herself"
and that the purchase price was paid with money furnished by her mother. On
the foregoing, the trial judge rendered judgment in favor of the defendant, and
declared the real properties to be paraphernal. On appeal to this Court, declaring
the ruling as essentially factual, We said:
"We do not question the correctness of the doctrine contended for, but we think it is
sufficient to say that the legal presumption established by article 1407 of the Civil Code has
been overcame by the evidence of record. There is nothing in the record which would justify
us in disturbing the findings of the trial judge as to the credibility of the witnesses called by
the defense, and if we believe the defendant herself there can be no doubt the land in
question was, purchased for the wife with her own separate funds."
It should be further noted that the husband in the aforecited case, apart from
relying on the presumption established by the Civil Code, sought to show the
conjugal nature of the disputed property by presenting a number of documentary
evidence. He exhibited, for instance, "certified copies of reports on file in the City
Assessor's Office showing that the land was assessed in his name; .a certified copy
of an inspector's report in which the name of the husband appears as the owner;
and, a tax declaration made in November, 1905, relating to the property in
dispute, in the name of the husband." Yet, even then, this Court declined to give
effect to the presumption as the wife's evidence to the contrary were more
preponderant. In the present case, on the other hand, We note that other than
invoking the presumption, the burden of denying the evidence so presented was
shifted to the appellant. In this latter task, the appellant failed completely.
Again, in the Coingco case, We ruled:
"The second question raised in the motion for reconsidera
498
498 SUPREME COURT REPORTS ANNOTATED
Laperal, Jr. vs. Katigbak
tion is, whether the presumption that the properties in litigation are conjugal properties
because they were acquired during the coverture may be sufficiently rebutted by any one of
the following facts: (1) the titles to them are in the name of the wife alone; (2) that the
husband gave his marital consent to their being mortgaged by the wife; (3) that the wife was
financially able to buy those properties. While it is true that each one of them, taken
separately, may not be sufficient to overcome the above-quoted presumption established by
Art. 1407 of the Civil Code, it is nonetheless true that all of them taken together, with all
the other facts and circumstances established by the evidence, might be, and were,
considered by the lower court as sufficient to rebut the same presumption."
In the case before Us now for review, the deed to the disputed land is in the name
of the wife. At the time of its purchase, the property was already of such
substantial value as admittedly, the husband, by himself could not have afforded
to buy, considering that his singular source of income then was his P200.00 a
month salary from a Manila bank. As in the Casiano case, supra, the defendant
herein testified, and was believed by the trial court, that the purchase price was
furnished by her mother so she could buy the property for herself. Furthermore, it
was established during the trial that it was a practice of defendant's parents to so
provide their children with money to purchase realties for themselves.
These facts, quite obviously, more than measure up to the circumstances
obtaining in the two cases previously cited wherein We held the conjugal
presumption to have been rebutted.
IN VIEW OF THE FOREGOING, the judgment of the lower Court declaring
the property covered by TCT No. 57626 of the Register of Deeds of Manila as
paraphernal is hereby affirmed, with costs against the appellants.
Bengzon, C.J., Concepcion, Reyes,
J.B.L., Barrera, Paredes and Makalintal, JJ., concur.
Padilla and Bautista Angelo, JJ., took no part.
Dizon, J., did not take part.
Judgment affirmed.
Notes.—The party who invokes the presumption of conjugal ownership in
Article 160 of the new Civil Code must first prove that the property in question
was acquired
499
 VOL. 10, MARCH 31, 1964 499
Insurance Company of North America vs. United States Lines Company
during the marriage; this is a condition sine qua non before the presumption will
apply. Cobb-Perez v. Lantin, L-22320, May 22, 1968, 23 SCRA 637, 644
citing Maramba v. Lozano, L-21533, June 29, 1967, 20 SCRA 474, and Camia de
Reyes v. Reyes de Ilano, 63 Phil. 629.
Once the property in question is proved to have been acquired during the
marriage, the presumption attaches. Registration alone of the property in the
name of one of the spouses does not destroy the conjugal nature of the
property. Bucoy v. Paulino, L-25775, April 26, 1968, 23 SCRA 248, 257
citing Alvarez v. Espiritu, L-18833, Aug. 14,1965; Silos v. Ramos, 97 Phil.
263; Guinoo v. Court of Appeals, 97 Phil. 235; Sideco v. Aznar, 92 Phil. 952; Vitug
v. Montemayor, 91 Phil. 286; Padilla v. Padilla, 74 Phil. 377; Romero de Pratts v.
Menzi & Co., Inc., 53 Phil. 51; and Marigsa v. Macabuntoc, 17 Phil. 107.

______________

© Copyright 2018 Central Book Supply, Inc. All rights reserved.


VOL. 128, MARCH 5, 1984 53
Berciles vs. Government Service Insurance System
No. L-57257. March 5, 1984. *
ILUMINADA PONCE BERCILES, ILONA BERCILES ALVAREZ, ELLERY P.
BERCILES, ENGLAND P. BERCILES and IONE P. BERCILES,
petitioners, vs.GOVERNMENT SERVICE INSURANCE SYSTEM, PASCUAL
VOLTAIRE BERCILES, MARIA LUISA BERCILES VILLAREAL, MERCY
BERCILES PATACSIL and RHODA BERCILES, respondents.
Adm. Matter No. 1337-Ret. March 5, 1984. *
RE: CLAIM OF THE HEIRS OF THE LATE PASCUAL G. BERCILES, Former
District Judge of the Court of First Instance of Cebu, Cebu City, FOR THE
UNPAID SALARY, MONEY VALUE OF TERMINAL LEAVE and
REPRESENTATION AND TRANSPORTATION ALLOWANCES OF THE
DECEASED JUDGE.
Adm. Matter No. 10468-CFI. March 5, 1984. *
RE: TERMINAL LEAVE PAY, UNPAID SALARY AND ALLOWANCE OF THE
LATE CFI JUDGE PASCUAL G. BERCILES: FLOR FUENTEBELLA AND HER
FOUR CHILDREN, ALL SURNAMED BERCILES, petitioners, vs. ILUMINADA
PONCE AND HER FOUR CHILDREN, ALL SURNAMED BERCILES,
respondents.
Civil Registry; Evidence; Succession; Parents and Children;Filiation; If alleged father
did not intervene in the birth certificate, the putting of his name by the mother or doctor or
registrar is null and void the signature of the alleged father on the birth certificate is
necessary.—The evidence considered by the Committee on Claims Settlement as basis of its
finding that Pascual Voltaire Berciles is an acknowledged natural child of the late Judge
Pascual Berciles is the birth certificate of said Pascual Voltaire Berciles marked “Exh. “6”.
We have examined carefully this birth certificate and We find that the same is not signed by
either the father or the mother; We find no
_______________
EN BANC.
*
54
5 SUPREME COURT REPORTS ANNOTATED
4 an authentic writing and is not a credible evidence of recognition.—We also agree with the
Berciles vs. Government Service Insurance System
participation or intervention whatsoever therein by the alleged father, Judge Pascual
Berciles. Under our jurisprudence, if the alleged father did not intervene in the birth
certificate, the putting of his name by the mother or doctor or registrar is null and void.
Such registration would not be evidence of paternity. (Joaquin P. Roces et al, vs. Local Civil
Registrar of Manila, 102 Phil. 1050). The mere certificate by the registrar without the
signature of the father is not proof of voluntary acknowledgment on his part (Dayrit vs.
Piccio, 92 Phil. 729). A birth certificate does not constitute recognition in a public
instrument. (Pareja vs. Pareja, et al., 95 Phil. 167). A birth certificate, to evidence
acknowledgment, must, under Section 5 of Act 3753, bear the signature under oath of the
acknowledging parent or parents. (Vidaurrazaga vs. Court of Appeals and Francisco Ruiz,
91 Phil. 492)
Same; Same; Same; Same; Same; If alleged parent had no intervention in the making
of the baptismal record, same has no evidentiary value for filiation purposes.—As to the
baptismal certificate, Exh. “7-A”, the rule is that although the baptismal record of a natural
child describes her as a child of the decedent, yet, if in the preparation of the record the
decedent had no intervention, the baptismal record cannot be held to be a voluntary
recognition of parentage. (Canales vs. Arrogante, et al., 91 Phil. 6; Adriano vs. De Jesus, 23
Phil. 350; Samson vs. Corrales Tan, 48 Phil. 401; Madridejo vs. De Leon, 55 Phil. 1;
Malonda vs. Infante Vda. de Malonda, 81 Phil. 149). The reason for this rule that canonical
records do not constitute the authentic document prescribed by Arts. 115 and 117 to prove
the legitimate filiation of a child is that such canonical record is simply proof of the only act
to which the priest may certify by reason of his personal knowledge, an act done by himself
or in his presence, like the administration of the sacrament upon a day stated; it is no proof
of the declarations in the record with respect to the parentage of the child baptized, or of
prior and distinct facts which require separate and concrete evidence. (Adriano vs. De Jesus,
23 Phil. 350).
Same; Same; Same; Same; Same; Judges; Affidavits of sister-in-law of deceased judge
that her family lived closely together with her brother-in-law and his wife, during Japanese
occupation not sufficient proof of filiation.—Discrediting the above certificates (birth and
baptismal) of the illegitimate spurious children which do not constitute proof of filiation
with the deceased Judge Berciles, what remains are the sworn statements of Coronacion
Berciles, Exh.
55
VOL. 128, MARCH 5, 1984 55
Berciles vs. Government Service Insurance System
10 and 31, sister-in-law of the late Judge Berciles wherein she stated that after she
was married to her husband, they lived together with the family of Pascual Berciles and his
wife, Flor Fuentebella; that their two families had lived closely enough during the Japanese
Occupation and even after. These statements, however, does not prove the filiation of the
children to the late Judge Pascual Berciles.
Same; Same; Same; Same; Same; Same; Retirement Law; Family pictures do not
indicate marriage and is not proof of filiation.—Neither are the family pictures, Exhs. 30 to
30-M, which, according to the Committee, do not indicate that the marriage (between Judge
Berciles and Flor Fuentebella) took place and that if at all, the said pictures show the
presence of a family with or without the sanction of marriage. We agree and We add that
said pictures do not constitute proof of filiation.
Same; Same; Same; Same; Same; Same; A typewritten letter signed by the father is not
finding of the Committee that “(t)he letters written by Judge Berciles to her daughters with
Flor Fuentebella especially the one sent to daughter Mercy Berciles (Exh. “22”) wherein he
vigorously affirmed that it’s only her mother, Flor Fuentebella, and no other woman who
was recognized as his wife and loved by her parents deserve scant consideration. Pascual
Berciles could not be expected to admit the existence of his other family. This would be
disastrous to his efforts at preventing one family from knowing the other.” Not only do they
deserve scant consideration but also, there is jurisprudence that a typewritten letter signed
by the father is not an authentic writing. (Decision of the Supreme Court of Spain of Feb.
27, 1923 and Dec. 7, 1927 cited in 3 Castan, 6th ed., 25; see Caguioa, Comments and Cases
on Civil Law, Vol. I, p. 379).
Same; Same; Same; Same; Same; Affidavits are insufficient to show filiation.—As to
the other exhibits of private respondents, We affirm the Committee’s finding that the Flor
Fuentebella Affidavit (Exh. “5”) is self-serving; that the testimony of Concepcion Gonzales the same to the Court of Appeals, now the Intermediate Appellate Court, on questions of
(Exh. “31-A”), being blind, is deficient; and that the affidavit of Judge Rafael Lavente (Exh. law and facts following the procedures for appeals from the Court of First Instance (now
“35”) has been repudiated. Indeed, the above evidence are, to Our view, very insignificant, Regional Trial Court) to the I.A.C. and if the appeal is only on questions of law, the same
insufficient, and unsubstantial to prove the filiation of private respondents to the alleged shall be brought directly to the Supreme Court on certiorari, which abbreviated procedure
father, Judge Pascual Berciles. was designed to facilitate, and not to prolong, the payment of benefits, may be invoked by
56 the petitioners.
5 SUPREME COURT REPORTS ANNOTATED Same; Same; Same; Same; P.D. 1146 is applicable to disputes arising under the
Judiciary Retirement Law.—That P.D. 1146, Sec. 35 is applicable to disputes arising under
6 the Judiciary Retirement Act and all other acts administered by the GSIS may also be
Berciles vs. Government Service Insurance System construed from Sec. 23 of the Decree which provides that the “System shall prescribe such
Retirement Law; Public Officers; Succession; Judges; The GSIS distribution of the rules and regulations to facilitate payment of benefits, proceeds and claims under the Act
retirement pay of deceased judge being without factual and legal basis is erroneous. and any other laws administered by the System.”
Retirement benefits of deceased judge should accrue to his estate to be distributed in
accordance with law to his heirs.—In fine, We hold and rule that the respondent GSIS PETITION to review the order of the Government Service Insurance System.
committed grave abuse of discretion in approving Resolution No. 431 which adopted the
erroneous recommendation of the Committee on Claims Settlement, a recommendation The facts are stated in the opinion of the Court.
which has no legal or factual basis to stand on. Accordingly, the disposition made by
Ramon M. Durano & Associates for petitioners.
respondent GSIS of the retirement benefits due the heirs of the late Judge Pascual G.
Berciles is consequently erroneous and not in accordance with law. Petitioners are the
Luzel D. Demasu-ay and Nicolas Sonalan for Pascual Voltaire, et al.
lawful heirs entitled to the distribution of the benefits which shall accrue to the estate of the private respondents in 57257.
deceased Judge Berciles and will be distributed among the petitioners as his legal heirs in
accordance with the law on intestate succession. (Re: Mario vs. Chanliongco, 79 SCRA 364; GUERRERO, J.:
Vda. de Consuegra vs. GSIS, 37 SCRA 325).
Succession; Retirement Law; Share of surviving spouse and children in intestate
The disposition made by respondent GSIS of the retirement benefits under
estate.—According to Article 996 of the New Civil Code which provides that “If a widow or
widower and legitimate children or descendants are left, the surviving spouse has in the
Republic Act 910, as amended, due the heirs of the late Judge of Court of First
succession the same share as that of each of the children,” and Article 980 which provides Instance Pascual G. Berciles whereby the GSIS considered said retirement
that “The children of the deceased shall always inherit from him in their own right, dividing benefits in the
the inheritance in equal shares,” the retirement benefits shall be distributed equally to the 58
five (5) heirs: Iluminada Ponce Berciles, Ilona Berciles Alvarez, Ellery P. Berciles, England 58 SUPREME COURT REPORTS ANNOTATED
P. Berciles and Ione P. Berciles.
Same; Same; Conjugal Property; Retirement premium forms part of conjugal estate, Berciles vs. Government Service Insurance System
absent proof to contrary.—As to the retirement premiums totaling P9,700.00, the same is total amount of P311,460.00 as partly conjugal and partly exclusive in nature and
presumed conjugal property, there being no proof that the premiums were paid from the thus divided the same in the following proportion:
exclusive funds of the deceased Judge (Article 160, New Civil Code). Such being the case,
77
one-half of the amount belongs to the wife as her property in the conjugal partnership and
the other half shall go to the estate of the deceased Judge which shall in turn be distributed ____ for the surviving spouse, Iluminada Ponce Berciles;
to his legal heirs.
134
Same; Same; Public Officers; Only the heirs are entitled to terminal leave pay, unpaid
salary and allowances of deceased judge.—With respect to the terminal leave pay, unpaid 10 each for the legitimate children, Ilona Berciles
salary and allowances accruing to the deceased, since petitioners are the only
57 ____ Alvarez, Ellery P. Berciles, England P. Berciles and
VOL. 128, MARCH 5, 1984 57 134 Ione P. Berciles;

Berciles vs. Government Service Insurance System 5

for the acknowledged natural child Pascual Voltaire
lawful heirs of the deceased Judge, only they are entitled to share thereto. There is no ____
need to disturb Our Resolution of March 17, 1981. Berciles;
Judges; Retirement Law; Public Officers; Appeal; An aggrieved party may appeal from 134
the decision of the GSIS either to the Court of Appeals or the Supreme Court pursuant to P.D. 4 each for the illegitimate children, namely, Maria
1146 even if the retirement pay involved is that of a judge and which is governed by R.A. 910,
as amended.—Accordingly, We hold and rule that Section 25 of P.D. 1146 specifically laying ____ Luisa Berciles, Mercy Berciles and Rhoda Berciles
down the procedure whereby the party aggrieved by the decision of the GSIS may appeal
134
is erroneous in view of the rule We laid down in Re: Claims for Benefits of the
Heirs of the Late Mario V. Chanliongco, et al., 79 SCRA 364; Vda. de Consuegra,
et al. vs. GSIS, 37 SCRA 315 that retirement benefits shall accrue to his estate
and will be distributed among his legal heirs in accordance with the law on
intestate succession, as in the case of a life insurance if no beneficiary is named in
the insurance policy, and that the money value of the unused vacation and sick
leave, and unpaid salary form part of the conjugal estate of the married employee.
Moreover, We find grave abuse of discretion on the part of respondent GSIS,
acting through its Board of Trustees, in resolving under its Resolution No. 431 to
approve the recommendation of the Committee on Claims Settlement that private
respondent Pascual Voltaire Berciles is an acknowledged natural child and that
the other private respondents Maria Luisa Berciles Villareal, Mercy Berciles
Patacsil and Rhoda Berciles are illegitimate children of the late Judge Pascual G.
Berciles in the absence of substantial evidence through competent and admissible
proof of acknowledgment by and filiation with said deceased parent as required
under the law.
Judge Pascual G. Berciles of the Court of First Instance of Cebu died in office
on August 21, 1979 at the age of sixty-six years, death caused by “cardiac arrest
due to cerebral vascular accident.” Having served the government for more than
59
VOL. 128, MARCH 5, 1984 59
Berciles vs. Government Service Insurance System
thirty-four (34) years, twenty-six (26) years in the judiciary, the late Judge
Berciles was eligible for retirement under Republic Act No. 910, as amended by
Republic Act No. 5095 so that his heirs were entitled to survivors benefits
amounting to P311,460.00 under Section 2 of said Act. Other benefits accruing to
the heirs of the deceased consist of the unpaid salary, the money value of his
terminal leave and representation and transportation allowances, computed at
P60,817.52, all of which are to be paid by this Court as the deceased’s last
employer, and the return of retirement premiums paid by the retiree in the
amount of P9,700.00 to be paid by the GSIS. Such benefits are now being claimed
by two families, both of whom claim to be the deceased’s lawful heirs.
Iluminada Ponce of Tagudin, Ilocos Sur, and her four children, Bona, Ellery,
England and Ione, filed with Us an application for survivors benefits under
Republic Act 910, as amended by R.A. No. 5095 effective August 21, 1979 as the
legal spouse and legitimate children of the late Judge Pascual G. Berciles, duly
supported by the required documents.
The other set of claimants are Flor Fuentebella, and her four children, namely
Pascual Voltaire, Maria Luisa, Mercy and Rhoda, all surnamed Berciles, the
latter filing her family’s claim by means of a letter dated November 10, 1979 and
supporting documents were also submitted with their claim. The matter of these
two (2) conflicting claims was first docketed before this Court as Administrative
Matter No. 1337-Ret. and in a Resolution of the Court En Banc dated April 10,
1980, We resolved to APPROVE the application of Ms. Iluminada P. Berciles for
survivor’s benefits under the above-cited law, effective August 21, 1979, subject to
(a) the proper determination of the rightful beneficiaries and their corresponding
shares in accordance with law, it appearing that there are two claimant families
thereto, and (b) the usual clearance requirements.
In pursuance to the foregoing resolution, the Office of the Court Administrator
recommended in a memorandum report dated November 11, 1980 that (a) the
transmittal to the GSIS of the retirement papers of the late Judge Pascual
Berciles be held in abeyance until the payment to the rightful heirs of the
60
60 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
unpaid salary, money value of terminal leave and representation and
transportation allowances of the deceased Judge, and (b) that an investigator be
designated to determine the respective claims of the supposed heirs of the late
Judge. The aforesaid recommendation was approved by the Chief Justice on
November 27, 1980 and Atty. Reinato G. Quilala of the Office of the Court
Administrator was designated on December 15, 1980 as Court Investigator to
help determine the rightful beneficiaries of the subject benefits.
Thereupon, Atty. Quilala sent on December 22, 1980 to all the alleged heirs a
notice of hearing set for January 26, 1981 and the following days thereafter for
the reception of evidence in support of their respective claims. None of the parties,
however, appeared. Records from the Retirement Section, Administrative Services
Office of this Court show that the claim of Iluminada Ponce and her children was
already approved by the GSIS as of October 9, 1980 and that in fact, the five
years lump sum equivalent to P301,760.00 (gratuity less the retirement
premiums paid under R.A. 910, as amended, which was to be returned to the
retiree by the GSIS) under Check No. 04824308 as retirement gratuity of the
deceased had been remitted by the Budget and Finance Office of this Court to the
GSIS for payment to the heir-beneficiaries on October 15, 1980.
On February 4, 1981, Atty. Cecilia T. Berciles, daughter-in-law of the
deceased Judge, and Mrs. Iluminada Ponce Berciles submitted to the Court
Investigator additional documents in support of the claim of Mrs. Iluminada P.
Berciles and her children, consisting of (A) Evaluation Report, as approved by the
GSIS, under P.D. No. 626 with the following recommendations, to wit:
1. “1.It is recommended that the death benefits under PD 626 due to the
death of the deceased of a compensable contingency, be awarded to
Iluminada Ponce having established her marriage to the deceased and
had been living with the deceased up to the time of the latter’s death.
2. “2.In the same light, the claim of Flor Fuentebella be denied for two
reasons: (a) She has not clearly established her legitimate relationship
with the deceased and, (b) She was not living with the
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VOL. 128, MARCH 5, 1984 61
 Berciles vs. Government Service Insurance System
1. deceased at the time of his death as required by the rules and regulation
of P.D. 626, as amended. (Rule XIV, Section 1(b), No. 1 the legitimate
spouse living with the employee at the time of employee’s death x x x).”
and (B) Certified Xerox copies of the late Judge Berciles’ Income Tax Returns for
1975, 1976 and 1979 where he listed Mrs. Iluminada P. Berciles as his wife or
spouse; also submitted in addition to the foregoing documents, is a certified xerox
copy of the application for optional insurance filed with the GSIS by the late
Judge Berciles, dated November 19, 1956, wherein the deceased listed as his
beneficiaries therein the following persons:
ILONA BERCILES—11 years old—daughter;
ELLERY BERCILES—10 years old—son;
ENGLAND BERCILES—8 years old—son;
IONE BERCILES—1 year old-daughter; and
ILUMINADA P. BERCILES—33 years old—wife.
The above documents were noted in the Memorandum to the Chief Justice dated
March 11, 1981 by the Deputy Court Administrator. And notwithstanding the
telegram sent to them on February 5, 1981 requiring them to submit their
evidence of filiation with the deceased Judge Berciles, no such evidence was
submitted by the Fuentebellas. Accordingly, it was recommended in said
Memorandum that “the alleged marital relationship between the late Judge
Berciles and Ms. Flor Fuentebella Berciles has no leg to stand on. It should be
stated in this connection that there was no marriage contract submitted by Miss
Rhoda F. Berciles in her claim-letter, dated October 29, 1979, nor was there any
certification from the Local Civil Registrar certifying to the fact that the deceased
Judge was actually married to Miss Flor Fuentebella. It can, therefore, be
assumed that Miss Flor Fuentebella was not legally married to the late Judge
Pascual Berciles. Necessarily, it follows that the innocent children that came into
being out of the alleged marital union of the deceased Judge and Ms. Flor
Fuentebella Berciles are spurious and have no established family filiation with
the said Judge. We can, therefore, rule that the attached papers/documents in the
letter of Miss Rhoda F. Berciles, dated October 29, 1979 relative to their
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Berciles vs. Government Service Insurance System
claim as the surviving heirs of the late CFI Judge Pascual Berciles are mere scrap
of papers unworthy of credence, there being no substantiating evidence to
corroborate the same, especially so in the face of the adverse claim of Mrs.
Iluminada Ponce Berciles as the rightful surviving spouse and with whom the
deceased Judge was living with at the time of his untimely demise.”
The same memorandum, therefore, recommended that since “(a)ll the
documents presented amply corroborate and fully substantiate what were
previously submitted to the office by Mrs. Iluminada Ponce Berciles and her
children. We find, therefore, the evidence presented and submitted in favor of
Mrs. Iluminada Ponce Berciles as sufficient to establish the fact that she is the
lawfully wedded wife of the deceased Judge Berciles. This finding is fully
supported by the certification issued by the Local Civil Registrar of Bocaue,
Bulacan, dated August 24, 1977, attesting to the marriage between the deceased
Judge and Iluminada Ponce which took place on January 20, 1941 before the then
Justice of the Peace of the place. This being the case, the four (4) children
(ILONA, ELLERY, ENGLAND and IONE) begotten by the said spouses during
their marital union are all legitimate, x x x that the unpaid salary, money value
of terminal leave and representation and transportation allowances of the late
District Judge Pascual G. Berciles be awarded and correspondingly distributed to
his lawful heirs, namely, MRS. ILUMINADA PONCE BERCILES (surviving
spouse); MRS. ILONA BERCILES ALVAREZ (daughter); ELLERY BERCILES
(son); ENGLAND P. BERCILES (son); and IONE P. BERCILES (daughter).”
As recommended in the said memorandum. We approved the following
Resolution dated March 17, 1981:
“Re: Claim of the heirs of the late Pascual G. Berciles, former District Judge of the Court of
First Instance of Cebu, Cebu City, for the unpaid salary, money value of terminal leave and
representation and transportation allowances of the deceased Judge.—Considering the
memorandum of Deputy Court Administrator Leo D. Medialdea, recommending that the
unpaid salary, money value of terminal leave and representation and transportation
allowances of the late District
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Berciles vs. Government Service Insurance System
Judge Pascual G. Berciles be awarded and correspondingly distributed to his lawful heirs,
the Court Resolved to AWARD and CORRESPONDINGLY DISTRIBUTE aforesaid benefits
to his lawful heirs, namely: Mrs. Iluminada Ponce Berciles, surviving spouse; Mrs. Ilona
Berciles Alvarez, daughter; Ellery Berciles, son; England P. Berciles, son; and Ione P.
Berciles, daughter.”
Pursuant to the above Resolution, the amount of P60,817.52 was paid to
Iluminada Ponce and her four children on April 2, 1981.
On April 23, 1981, Flor Fuentebella and her four children, Pascual Voltaire,
Ma. Luisa, Mercy, and Rhoda, through counsel, filed a Motion for Reconsideration
praying that the resolution of March 17, 1981 be set aside; that they be allowed to
present their evidence; and that, after due hearing, the benefits be awarded and
distributed to them as lawful heirs. In support of their motion, the movants
alleged that they did not receive the Resolution of March 17, 1981 nor the letter
or notice of hearing sent by Atty. Quilala on December 22, 1980, the same having
been sent to their old address at 6069-B, Palma St., Makati; that all of the
movants have left the Philippines to reside in the United States of America and
that the aunts and cousins residing at the old address moved to a new address at
GSIS Village, Project 8, Quezon City; that before they moved to the new address,
these relatives left a forwarding address at the Makati Post Office; and, that they
did not receive the aforementioned mail. The fact of non-receipt was confirmed by
one Domingo P. Raiz, letter carrier of the Post Office of Makati, who executed an
affidavit to that effect, which affidavit We admitted in Our resolution of July 9,
1981. The matter of the Fuentebella Motion for Reconsideration is docketed before
Us as Administrative Matter No. 10468-CFI.
Acting on the aforesaid motion for reconsideration, We adopted the following
resolution dated July 2, 1981, to wit:
“Administrative Matter No. 10468-CFI—Re Terminal Leave Pay, Unpaid Salary and
Allowance of the late CFI Judge Pascual G. Berciles: Flor Fuentebella and her four children,
all surnamed Berciles vs. Iluminada Ponce and her four children, all surnamed
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64 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
Berciles.—Judge Pascual G. Berciles of the Court of First Instance of Cebu died in office on
August 21, 1979 at the age of sixty-six years. He was a native of Lapuz Norte, La Paz, Iloilo
City.
Iluminada Ponce of Tagudin, Ilocos Sur, who claimed to be the decedent’s widow, and
her four children, Ilona, Ellery, England and Ione, filed a claim dated May 2, 1980 for
survivors’ benefits, Iluminada executed an affidavit of heir ship dated September 19, 1979.
On the other hand, Rhoda F. Berciles, 6069-B Palma Street, Makati, Rizal in a verified
statement dated November 19, 1979, claimed that the deceased judge was survived by Flor
Fuentebella, as widow, and their four children named Voltaire, Luisa, Mercy and Rhoda.
Judge Berciles allegedly married Flor Fuentebella on March 28, 1937 in Iloilo City before
City Judge Vicente Mapa.
Rhoda, in a letter to the Judicial Administrator dated October 29, 1979, requested the
Judicial Administrator to hold the processing of the claim filed by Iluminada Ponce and her
four children pending the filing of Rhoda’s formal complaint.
Iluminada Ponce claimed that she was married to Judge Berciles at Bocaue, Bulacan on
January 20, 1941.
This Court in its resolution of April 10, 1980 approved the grant of survivors’ benefits
subject to the proper determination of the rightful beneficiaries and their corresponding
shares in accordance with law, it appearing that there are two claimant families. (Adm.
Matter No. 1337—Ret. re Gratuity of Judge Berciles).
Pursuant to that resolution, the five-year lump sum gratuity amounting to P301,760
due to the heirs of Judge Berciles was remitted to the GSIS on October 15, 1980. The said
amount up to this time has not yet been distributed in view of the controversy between the
families of Flor Fuentebella and Iluminada Ponce as to who are the legal heirs of Judge
Berciles.
In a letter dated October 9, 1980, Ellery P. Berciles requested the Chief Justice for the
payment to Iluminada Ponce of the terminal leave pay of Judge Berciles, which, together
with his unpaid salary and allowance, amounted to P74,884.52, or to P60,817.52 after
deducting the withholding tax of P14,067.
Upon the recommendation of Court Administrator Lorenzo Relova and Deputy Court
Administrator Leo D. Medialdea, the said amount of P60,817.52 was paid to Iluminada
Ponce and her four children on April 2, 1981 pursuant to this Court’s resolution of March
17, 1981. Payment was made to them on the assumption that
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they are the only legal heirs of Judge Berciles.
Atty. Luzel D. Demasu-ay, counsel for Flor Fuentebella and her four children, in his
motion for reconsideration dated April 21, 1981, alleged that his clients were not heard
before that payment was made. He said that the payment was being capitalized upon by
Iluminada Ponce and her children in the GSIS as the basis for the payment to them of the
retirement gratuity of Judge Berciles.
Considering that the issue as to who are the legal heirs of Judge Berciles is still being
litigated in the Social Security Services of the GSIS (according to Atty. Felicisimo
Fernandez of that unit), and the survivors’ benefits have not yet been paid to Iluminada
Ponce and her children, and considering that the children of Flor Fuentebella, even as
illegitimate children of Judge Berciles, would be entitled to a share in his terminal leave
pay, allowance and unpaid salary (In re Chanliongco, Adm. Matter No. 190-Ret., October 18,
1977, 79 SCRA 364), the Court Resolved (1) to require Iluminada Ponce and her children, c/o
Ione P. Berciles, 9 Jersey Street, Toro Hills, Project 8, Quezon City, to COMMENT on the
said motion for reconsideration within ten (10) days from notice and (2) to direct Atty. Juan
P. Enriquez, Jr., Deputy Clerk of Court and Chief of the Administrative Division, to advise
the GSIS that, should Flor Fuentebella and her children be ultimately adjudged as legal
heirs of Judge Berciles, their share in the sum of P60,817.50 (terminal leave pay, etc.) would
be taken from the survivors’ benefits amounting to P301,760, already remitted to the GSIS
and, consequently, the shares of Iluminada Ponce and her children in the said gratuity
would answer for the portions due to Flor Fuentebella, et al. in the terminal leave pay, etc.,
if adjudged entitled thereto.
A copy of this resolution should be furnished the GSIS.”
In a subsequent Resolution dated July 21, 1981, We noted the Comment filed by
Iluminada Ponce and in the same resolution, clarified Our resolution of April 10,
1980 in Administrative Matter No. 1337-Ret., to wit:
“As may be seen from this Court’s resolution of April 10, 1980 in Administrative Matter No.
1337-Ret. regarding the gratuity of Judge Berciles, this Court has not finally and
conclusively decided that the children of Flor Fuentebella are not the heirs of the late Judge
Berciles.
The question of whether the four children of Flor Fuentebella should share in the
gratuity amounting to P301,760.00 is still being
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66 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
litigated in the GSIS. Should it be finally decided by the GSIS that the children of Flor
Fuentebella are entitled to share in that gratuity or survivors’ benefits, then they are also
entitled to share in the terminal leave pay, unpaid salary and allowances and their share
should be deducted from the shares in the said gratuity of Iluminada Ponce and her four
children.
This incident should, therefore, await the outcome of a final decision of competent
authority on who are the heirs of Judge Berciles, as contemplated in this Court’s resolution
of April 10, 1980 in Administrative Matter No. 1337-Ret.”
In the meantime, pursuant to Our Resolution of April 10, 1980, the papers were
transmitted to the GSIS under the advertisement that the approval of the
application of Iluminada Ponce was subject to the proper determination of the
rightful beneficiaries.
The records of this Court, as adverted to earlier, disclose that on October 9,
1980, the GSIS approved the claim of Iluminada Ponce and so, the five (5) years
lump sum retirement gratuity of the deceased Judge, in the net amount of
P301,760.00, was remitted by our Budget and Finance Office to the GSIS on
October 15, 1980 under Check No. 04824308 for payment to Iluminada and her
four children. The GSIS, however, in its Memorandum dated June 25, 1982 in
G.R. No. 57257 denied having approved the claim of Iluminada Ponce Berciles
and her children saying that no such approval was made. The records in G.R. No.
57257 disclose Annex “A” attached to the petition on pp. 14-15 of the Rollo the
following evaluation report evaluated by Carmelo C. Garcia, Legal Evaluator;
reviewed by Lorenzo Sanchez, Legal Evaluator; approved by Felicisimo A.
Fernandez, Manager, Survivorship Benefits Dept.; and confirmed by Juanito S.
Santamaria, Vice President, SSS-II, to wit:
“PASCUAL G. BERCILES ANNEX “A”
Judge, CFI, Branch XV, Cebu City
Died—August 21, 1979, Cause: CVA
Evaluation on compensability under
PD 626, as amended.
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Berciles vs. Government Service Insurance System
1. I—Medical Evaluation—
Medically compensable for payment of such benefits
Medical evaluation dated December 24, 1979.
2. II—Legal Evaluation—
1. A.Documents Submitted:
It appears that there are two claimants—both surviving spouse namely FLOR
FUENTEBELLA and ILUMINADA PONCE, who alleged to have been married to
the deceased.
1. (1.)Documents submitted by Flor Fuentebella:
1. (a)Cert. from Census and Statistics of no record of marriage of Flor
Fuentebella and Pascual Berciles alleged to have been solemnized on
March 28, 1937.
2. (b)Affidavit of Pascual Berciles dated May 22, 1972 that he and Flor were
married by the late Judge J. Vicente Mapa.
3. (c)Affidavit of Coronacion Berciles, sister-in-law of Pascual Berciles as to
the marriage of Flor and Pascual.
4. (d)Affidavit of Judge Rafael Lavente as to his being invited in the
wedding of Flor and Pascual.
5. (e)Birth certificate of Pascual Voltaire Berciles—Aug. 30, 1938; Maria
Luisa, June 27, 1943; Mercy, July 23, 1947; Rhoda, Feb. 7, 1949.
6. (f)Xerox copy of Income Tax Return for 1972 of Pascual showing Flor as
the wife.
1. (2)Documents submitted by Iluminada Ponce—
1. (a)Marriage certificate from Bocaue, Bulacan, showing marriage of
Iluminada and Paquito Berciles on January 20, 1941.
2. (b)Birth certificate of Ilona—May 15, 1945; Ellery—Sept. 21, 1946;
England—Nov. 14, 1948; Ione Ainee—Aug. 25, 1955.
3. (c)GSIS IMI on C-20297 dated Dec. 1, 1956 of Pascual Berciles.
4. (d)IMI on 0-26030 dated Jan. 1, 1957.
5. (e)Affidavit of Pascual Berciles dated April 21, 1978 mentioning Ione and
Iluminada as his daughter and wife respectively.
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Berciles vs. Government Service Insurance System
1. (f)Affidavit of four (4) relatives of Pascual as to their personal knowledge
as per of the marriage of Iluminada and Pascual.
2. (g)Affidavit of Santiago Medina (former Fiscal), denying of having
notarized an affidavit of Pascual the latter’s marriage to Flor.
1. (3.)Clarifying documents—
1. (a)Affidavit dated Feb. 14, 1980, of City Judge Rafael Lavente rectifying
his previous affidavit that he was not present in the wedding of Flor
and Pascual.
2. (b)Certification dated Feb. 4, 1980, from Ministry of Justice that there is
no record of one J. Mapa as Municipal Judge of Iloilo from 1935 to 1945.
B. Findings—
After a careful study and appraisal of the documents above enumerated we cannot find
merit on the claim of Flor Fuentebella because
1. 2.Flor has been living abroad since 1972.
2. 3.Iluminada and the deceased were living together at the time of the
latter’s death (August 21, 1979).
Recommendation—
1. 1.It is recommended that the death benefits under PD 626 due to the
death of the deceased of a compensable contingency, be awarded to
 Iluminada Ponce for having established her marriage to the deceased ____ Berciles. (Arts. 148 (2), 153 (2), 895, 983, 999, New Civil Code)
and had been living with the deceased up to the time of the latter’s
death. 134
2. 2.In the same light, the claim of Flor Fuentebella be denied for two 5
reasons: ____ for the acknowledged natural child Pascual Voltaire Berciles;
134
1. (a)She has not clearly established her legitimate relationship with the
deceased and, 4
each for the legitimate children, Ilona Berciles Alvarez, Ellery P. Berciles, England P.
2. (b)She was not living with the deceased at the time of his death as ____
required by the rules and regulation of PD 626, as amended. (Rule XIV, Berciles and Ione P. Berciles;
134
Section 1(b), No. 1 the legitimate spouse living with the employee at the x x x
time of employee’s death x x x). x x x
x x x”
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EVALUATED BY: REVIEWED BY: 70 SUPREME COURT REPORTS ANNOTATED
S/T CARMELO C. GARCIA S/T LORENZO SANCHEZ Berciles vs. Government Service Insurance System
Legal Evaluator Legal Evaluator Only the above dispositive portion of the aforementioned Resolution was
69 communicated to Iluminada Ponce Berciles by the GSIS in the letter signed by
VOL. 128, MARCH 5, 1984 69 Felicisimo A. Fernandez, Manager, Survivorship Benefits Department, in his
letter dated June 18, 1981 (Annex “D”, Petition in G.R. No. 57257, Rollo, p. 22).
Berciles vs. Government Service Insurance System
Not satisfied with the disposition of their claim, Iluminada Ponce Berciles and her
APPROVED:
S/T FELICISIMO A. FERNANDEZ
four children now come to this Court on appeal by certiorari, citing Section 25 of
Manager, Survivorship Benefits Dept. Presidential Decree No. 1146, otherwise known as the “Revised Government
CONFIRMED: Service Insurance Act of 1977” which took effect on May 31, 1977, which appeal is
S/T JUANITO A. SANTAMARIA docketed as G.R. No. 57257.
Vice-President, SSS-II” As prayed for in the petition, We issued a temporary restraining order on July
In denying the above approval, the GSIS in its Memorandum claims that the 13, 1981 enjoining the respondents from enforcing or executing the GSIS Board of
matter was elevated sometime in October 1980 to the Committee on Claims Trustees Resolution No. 431 dated June 3, 1981 and also required the
Settlement for the proper determination of the legal heirs of the late Judge respondents to file their respective Comments to the Petition. Only the private
Berciles. The two sets of claimants having failed to reach an amicable settlement, respondents filed their Comment. Thereupon, acting on the merits of the
the GSIS advised the parties to submit the necessary documents to prove their pleadings filed, We resolved to give due course to the petition in Our Resolution of
relationship or filiation to the deceased. April 14, 1981. Considering Our Resolution of July 21, 1981, the disposition
Thereafter, based on their respective documents and proofs of filiation, the of Administrative Matter No. 1337-Ret. and Administrative Matter No. 10468-
Board of Trustees approved the findings and recommendations of the Committee CFI rests on Our decision in the present petition.
on Claims Settlement under its Resolution No. 431 adopted on June 3, 1981, the The primary issue raised in the herein petition for certiorari is the validity of
dispositive portion of which states: the GSIS decision contained in its Resolution No. 431 finding private respondent
“After due deliberation, considering the foregoing, the Board RESOLVED TO APPROVE the Pascual Voltaire Berciles as an acknowledged natural child of the late Judge
recommendation of the Committee on Claims Settlement that the retirement benefits under Pascual G. Berciles and the other private respondents namely Maria Luisa
R.A. 910, as amended, due the late Judge Pascual G. Berciles in the total amount of
Berciles Villareal, Mercy Berciles Patacsil and Rhoda Berciles as illegitimate
P311,460.00 which is partly conjugal and partly exclusive in nature, be divided in the
following proportion:
children of the deceased, and thus, upon this finding, disposed the retirement
benefits in the manner and proportion set forth in said resolution after
77 considering said benefits as partly conjugal and partly exclusive. Petitioners
____ for the surviving spouse, Iluminada Ponce Berciles; contend that on the basis of the documents and testimony submitted by private
134 respondents, the conclusion of respondent GSIS is erroneous and unfounded and
that respondent GSIS erred grossly in its resolution. The correctness of the legal
10 each for the illegitimate children, namely, Maria Luisa Berciles, Mercy Berciles, and Rhoda conclusion drawn by the respondent
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Berciles vs. Government Service Insurance System
GSIS or its appreciation of the undisputed state of facts obtaining in the present
controversy is thus squarely raised by petitioners.
We note that private respondents in their Comment dated July 27, 1981 to the
petition herein, while pointing out that the Supreme Court is not the proper
forum for the original determination of the legal heirs of a deceased judge who is
covered by R.A. 910 as amended and that the determination of the question of
heirship can be appropriately considered only in our regular courts of justice
where private respondents actually did file a Special Civil Action No. 13966 for
“Mandamus with Prayer for a Restraining Order” in the Court of First Instance of
Iloilo, Branch III, a copy of which is attached to the Comment as Annex “A”,
raised the same issue of illegality as may be seen clearly in par. 8 of the petition
as follows:
“8. That clearly from the foregoing adjudication rendered by the respondent Board of
Trustees, petitioner Flor Fuentebella Berciles and her children were unlawfully excluded
from their lawful right to the death benefit of the late Judge Pascual G. Berciles as his only
lawful heirs;”
And like the petitioners herein, private respondents contend that the GSIS
patently and gravely abused its discretion in denying the latter’s claim to the
death benefits of the late Judge Pascual Berciles as the legal and lawful heirs as
may also be clearly seen in par. 10 of the Mandamus Petition in the
aforementioned Civil Case No. 13966, which reads thus:
“10. That in denying petitioners claim on the death benefit of the late Judge Pascual
Berciles of whom petitioners are the legal and lawful heirs and in neglecting and refusing to
issue forthwith a resolution adjudicating the death benefit amounting to P311,460.00 in
favor of the petitioners as legal heirs, the respondent Board of Trustees of the GSIS patently
and gravely abused its discretion and unlawfully neglected the performance of an act which
is specifically enjoined upon it by Sec. 5 of R.A. 910, as amended by R.A. 1057, R.A. 1797,
R.A. 2614, R.A. 4627 and R.A. 5095;
In other words, both families, raising grave abuse of
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Berciles vs. Government Service Insurance System
discretion, question the legality of the GSIS Resolution based on the same
undisputed facts, the petitioners herein claiming they are the legal heirs,
whereas, according to private respondents, they are the ones legally entitled to
the retirement benefits. The issue here then is one of law which the contending
parties concede in their respective pleadings and thus correctible by certiorari.
But to set the records straight, We quote hereunder the findings of the
Committee on Claims Settlement which the GSIS Board of Trustees adopted and
approved under its Resolution No. 431:
“A brief summary of the evidence submitted by the contending parties appears necessary for
the proper disposition of this case. As proof of her marriage to Judge Pascual Berciles,
claimant Iluminada Ponce Berciles submitted a certificate of marriage (Exh. “A”) indicating
that she was married to one Paquito Berciles in Bocaue, Bulacan on January 20, 1941 before
Judge Bonifacio Enriquez, Justice of the Peace of the said municipality. The Committee
noted that the husband’s name appearing in the certificate is ‘Paquito Berciles’ and not
‘Pascual Berciles’.
“The discrepancy was explained in the sworn statement of Atty. Fortunato A. Padilla
(Exh. “R”) and in his deposition dated February 27, 1981 taken by Atty. Hilarion Palma,
Branch Attorney of our GSIS Iloilo City Branch Office. In both documents, Atty. Padilla, a
high school classmate and college companion of the late Judge Berciles, stated that Pascual
Gayta Berciles, Paquito Berciles or Paking Berciles all refer to one and the same person who
was the deceased Judge Pascual G. Berciles. In the deposition of Concepcion M. Gonzales
(Exh. “31-A”) who was a witness for Flor Fuentebella. she also declared that Pascual
Berciles was called Paking or Paquito and that a brother Francisco was called Pako.
“Submitted also to the Committee by Iluminada Ponce are the birth certificates of her
children: Ilona Berciles (Exh. “E”); Ellery Berciles (Exh. “C”); England Joseph Berciles (Exh.
“D-1”); Aiene Berciles (Exh. “B”). The other documents submitted such as the Information
for Membership Insurance (Exh. “F” and Exh. “G”), Income Tax Returns for the years 1975
(Exh. “U”) and 1976 (Exh. “V”), individual sworn statements of persons who knew or were
related to the deceased corroborate the filial affinity of Iluminada Ponce and her children to
the late Judge Berciles.
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Berciles vs. Government Service Insurance System
“Based on these documents, there is no question that Iluminada Ponce was married to
Pascual Berciles, alias Paquito, on January 20, 1941 at Bocaue, Bulacan. From this union,
they begot the following children, namely: Ilona, Ellery, England and Ione.
“The evidence for claimant Flor Fuentebella Berciles and her children may also be
briefly described as follows: She claims to have been married to the late Judge Pascual
Berciles on March 28, 1937 in Iloilo City before Justice of the Peace Jose Vicente Mapa. In
other words, she professes to be the first wife of the deceased Judge. Flor Fuentebella was,
however, not able to present her marriage contract or certificate of marriage. Instead she
submitted a certification of the Local Civil Registrar of Iloilo City (Exh. “1”) attesting to the
loss or destruction of the records of marriage for the year 1944 and previous years and
another certification issued by the Office of Civil Registrar General of the National Census
and Statistics Office (Exh. “2”) stating the non-availability of the record of marriage between
Pascual Berciles and Flor Fuentebella.
“In concrete support of her claim of marriage to the late Judge Berciles, Flor
Fuentebella presented to the Committee sworn statements of several persons. Of the several
sworn statements, at least two or three deserve serious consideration. The first is the one
executed by Concepcion M. Gonzales (Exh. “31”) of 46 South Mapa, Philam Homes, Quezon
City, who stated that she knew for a fact that Flor Fuentebella was married to Pascual
Berciles in 1937 at Iloilo City. It was represented to the Committee that she was present as
a guest in the marriage ceremony. Due to importance of her testimony, the Committee
requested her actual presence in the hearing. However, due to her advanced age of 89 years
and her other physical infirmity, her attendance at the hearing was dispensed with instead,
the Committee directed the Manager, Survivorship Department to secure her deposition on
questions prepared in advance by the Committee. In his report to the Committee, the
Manager stated that the old lady is already blind, quite hard of hearing and her memory
already weak. In the Answers (Exh. “31-A”) to the questions written by the Manager,
Survivorship Department, Concepcion Gonzales declared that she was present during the
marriage ceremony of Pascual Berciles and Flor Fuentebella which was held in the
Municipal Hall of Iloilo City. She described the wedding as attended by only the members of
the family and that after the ceremony they went to the house of Pascual’s parents where a
small party was held.
“The Committee finds the testimony of Concepcion Gonzales quite deficient in
important detail. Flor Fuentebella had not been presented in person for the proper
identification of the witness. Was
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74 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
the Flor Fuentebella who allegedly married Pascual Berciles on March 28, 1937 the same
Flor Fuentebella who is cited by Concepcion Gonzales? At any rate, assuming that a
confrontation did occur, Concepcion Gonzales would not be able to properly identify Flor
Fuentebella, by reason of her blindness.
“The other sworn statements which merit particular discussion are those executed by
Coronacion Berciles (Exhs. “10 and 31”) a sister-in-law of the late Judge Berciles.
Coronacion was presented before the Committee as a witness for Flor Fuentebella. In her
testimony, she stated facts and circumstances about the marital relations between Pascual
Berciles and Flor Fuentebella. She declared that her husband was the younger brother of
the late Judge Berciles; that even before Pascual Berciles became a lawyer in 1938, he and
Flor Fuentebella were introduced to her by her husband; that after she was married to her
husband, they lived together with the family of Pascual Berciles and his wife Flor
Fuentebella; that their two families had lived closely enough during the Japanese
Occupation and even after. She further stated that the immediate members of the family
with whom the spouses Pascual Berciles and Flor Fuentebella had lived before and during
the war were his mother Evarista, his two aunts Luisa Berciles and Eusebia Gayta and a
sister Susana Berciles. These testimonial and other declarations were latter transcribed
into a sworn statement which Coronacion executed on December 5, 1980 and submitted to
the Committee. (Exh. “32”)
“At its best, Coronacion Berciles testified on the cohabitation as husband and wife of
Pascual Berciles and Flor Fuentebella. But cohabitation is not solid proof that a marriage
had in fact taken place, especially in this case when such marriage is contested. Coronacion
could not state positively since she was not present in the alleged marriage ceremony.
“The third sworn statement which deserves the Committee’s attention is the one
executed by Judge Rafael Lavente, Presiding Judge of Branch III, City Court of Iloilo, on
February 14, 1980 (Exh. “N” for Iluminada Ponce, Exh. “35” for Flor Fuentebella). In this
document, Judge Lavente denied having been present in the wedding of Pascual Berciles
and Flor Fuentebella; although he declared that the ‘late Judge Berciles was married here
in Iloilo City and that after his marriage he left Iloilo City. x x x.’ (Exh. “35-A”), he did not
state with whom Pascual Berciles was married. “Of course the affidavit of Flor F. Berciles
herself (Exh. “5”) was submitted wherein she stated that she was the legal wife of the late
Pascual G. Berciles and that she was married to him in Iloilo
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Berciles vs. Government Service Insurance System
City on March 28, 1937. The affidavit is nothing more than a self-serving statement. Flor
Fuentebella was not presented to the Committee as a material witness. On the other hand,
the sworn statement of Pascual Berciles (Exh. “4”) commands no evidentiary value at all.
Mr. Santiago Medina, former Provincial Fiscal of Cebu, who appears to have administered
the oath, in a subsequent sworn statement (Exh. “M”) denied his signature on the document
(Exh. “4”).
“The letters written by Judge Berciles to his daughters with Flor Fuentebella especially
the one sent to daughter Mercy Berciles (Exh. “22’) wherein he vigorously affirmed that it’s
only her mother, Flor Fuentebella, and no other woman who was recognized as his wife and
loved by her parents deserve scant consideration. Pascual Berciles could not be expected to
admit the existence of his other family. This would be disastrous to his efforts at preventing
one family from knowing the other.
“Flor Fuentebella likewise submitted to the Committee the birth or baptismal
certificates of her children begotten with the late Judge Berciles; the birth certificates of
Pascual Voltaire Berciles (Exh. “6”); baptismal certificate of Maria Luisa Berciles (Exh. “7-
A”); birth certificate of Mercy Berciles (Exh. “8”); birth certificates of Rhoda Berciles (Exh.
“9”). The other evidence consist of family pictures (Exhs. “30 to 30-M”) which have been
identified by witness Coronacion Berciles both in her oral testimony before the Committee
and in her affidavit. (Exh. “32”, par. 15). The pictures, however, do not indicate that the
marriage took place. If at all, the said pictures show the presence of a family with or without
the sanction of marriage.
“After a careful evaluation of these documents, the Committee believes that there is no
sufficient evidence that Pascual Berciles and Flor Fuentebella were married to each other
on March 28, 1937 in Iloilo City; however, certain relationship did exist and from such
relationship were begotten the following children, namely: Pascual Voltaire Berciles, Maria
Luisa Berciles, Mercy Berciles and Rhoda Berciles.
“Furthermore, the Committee entertains doubt on the authority of the officer who
solemnized the marriage between Pascual Berciles and Flor Fuentebella. It is true that the
Official Roster of Officers and Employees in the Civil Service (Exhs. “3” and “3-A”) include
the name Jose Vicente Mapa, Justice of the Peace for Iloilo. The listings, however, do not
indicate the exact date of employment of any particular employee. The year 1935 indicated
in the cover of the
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76 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
Roster may not be interpreted to mean that all those listed were already in the service in
1935. It is possible that the Roster included those appointed as early as 1935 and those
appointed at much later date. This assumption deserves some degree of validity when
considered in relation with the record of service furnished by the Civil Service Commission
(Exh. “T”) indicating that Jose Vicente Mapa was Acting Municipal Judge of Iloilo City
effective July 16, 1937. It further appears in the service record that he was Acting
Municipal Judge pursuant to a Designation by letter of the Secretary to President, dated
June 30, 1937. If Jose Vicente Mapa was already a Municipal Judge prior to July 16, 1937,
he could have been assigned to a different municipality other than Iloilo, in which case he
did not have the authority to solemnize marriage in Iloilo on March 28, 1937. At any event,
a serious uncertainty did exist as to whether Jose Vicente Mapa was already the Justice of
the Peace of Iloilo on the date the alleged marriage was contracted.
“The Committee therefore concludes that Judge Pascual Berciles was legally married to
Iluminada Ponce. His alleged marriage to Flor Fuentebella was not sufficiently proved and
therefore the children begotten with her are either natural or illegitimate children
depending on whether they have been born before or after the marriage of Iluminada Ponce.
Consequently, the legal heirs of the late Judge Berciles entitled to share in the distribution
of his retirement benefits are the following: Iluminada Ponce, surviving spouse; Ilona
Berciles Alvarez, Ellery Berciles, England P. Berciles and Ione P. Berciles, legitimate
children; Pascual Voltaire Berciles, natural child; Maria Luisa Berciles, Mercy Berciles, and
Rhoda Berciles, illegitimate children.”
From the above recital, We can readily summarize the following three (3)
conclusions therein made and arrived at by the Committee which were approved
and adopted in totoby respondent GSIS through Board of Trustees Resolution No.
431, to wit:
1. 1.“(T)hat Iluminada Ponce was married to Pascual Berciles, alias
Paquito, on January 20, 1941 at Bocaue, Bulacan. From this union,
they begot the following children namely: Ilona, Ellery, England and
Ione.”
2. 2.“(T)hat there is no sufficient evidence that Pascual Berciles and Flor
Fuentebella were married to each other on March 28, 1937 in Iloilo
City.”
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Berciles vs. Government Service Insurance System
1. 3.“(H)owever, certain relationship did exist and from such relationship
were begotten the following children, namely: Pascual Voltaire Berciles,
Maria Luisa Berciles, Mercy Berciles and Rhoda Berciles.” x x x” The
children begotten with her are either natural or illegitimate children
depending on whether they have been born before or after the marriage
of Iluminada Ponce.”
As pointed out earlier, petitioners assail the validity of the third conclusion or
finding that Pascual Voltaire Berciles is an acknowledged natural child and that
Maria Luisa Berciles, Mercy Berciles and Rhoda Berciles are illegitimate children
of the late Judge Pascual Berciles, petitioners being in complete accord and
conformity with the first two conclusions summarized above.
Petitioners contend that the evidence submitted by private respondents with
respect to the status of respondent Pascual Voltaire Berciles show that he was not
acknowledged by the late Judge Pascual Berciles in a birth certificate, in a will, in
a statement before a court of record, or in any authentic writing, as required
under Art. 278, New Civil Code, or much less, in a final judgment as provided in
Art. 283, New Civil Code.
The evidence considered by the Committee on Claims Settlement as basis of
its finding that Pascual Voltaire Berciles is an acknowledged natural child of the
late Judge Pascual Berciles is the birth certificate of said Pascual Voltaire
Berciles marked Exh. “6”. We have examined carefully this birth certificate and
We find that the same is not signed by either the father or the mother; We find no
participation or intervention whatsoever therein by the alleged father, Judge
Pascual Berciles. Under our jurisprudence, if the alleged father did not intervene
in the birth certificate, the putting of his name by the mother or doctor or
registrar is null and void. Such registration would not be evidence of paternity.
(Joaquin P. Roces et al. vs. Local Civil Registrar of Manila, 102 Phil. 1050). The
mere certificate by the registrar without the signature of the father is not proof of
voluntary acknowledgment on his part (Dayrit vs. Piccio, 92 Phil. 729). A birth
certificate does not constitute recognition in a public instrument. (Pareja vs.
Pareja, et al., 95 Phil. 167). A birth certificate, to evidence acknowledgment,
must, under Section
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78 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
5 of Act 3753, bear the signature under oath of the acknowledging parent or
parents. (Vidaurrazaga vs. Court of Appeals and Francisco Ruiz, 91 Phil. 492). In
the case of Mendoza, et al. vs. Mella, 17 SCRA 788, the Supreme Court speaking
through Justice Makalintal who later became chief Justice, said:
“It should be noted, however, that a Civil Registry Law was passed in 1930 (Act No. 3753)
containing provisions for the registration of births, including those of illegitimate parentage;
and the record of birth under such law, if sufficient in contents for the purpose, would meet
the requisites for voluntary recognition even under Article 131. Since Rodolfo was born in
1935, after the registry law was enacted, the question here really is whether or not his birth
certificate (Exhibit 1), which is merely a certified copy of the registry record, may be relied
upon as sufficient proof of his having been voluntarily recognized. No such reliance, in our
judgment, may be placed upon it. While it contains the names of both parents, there is no
showing that they signed the original, let alone swore to its contents as required in Section 5
of Act No. 3753 (Vidaurrazaga vs. Court of Appeals, 91 Phil. 493; In re Adoption of Lydia
Duran, 92 Phil. 729). For all that might have happened, it was not even they or either of
them who furnished the data to be entered in the civil register. Petitioners say that in any
event the birth certificate is in the nature of a public document wherein voluntary
recognition of a natural child may also be made, according to the same Article 131. True
enough, but in such a case there must be a clear statement in the document that the parent
recognizes the child as his or her own (Madridejo vs. De Leon, 55 Phil. 1); and in Exhibit 1
no such statement appears. The claim of voluntary recognition is without basis.”
With respect to the Committee’s finding that the other private respondents are
illegitimate children of the deceased Judge Berciles, We find that the evidentiary
basis of such finding are the baptismal certificate of Maria Luisa Berciles, Exh.
“7-A”; birth certificate of Mercy Berciles, Exh. “8”; and birth certificate of Rhoda
Berciles, Exh. “9”. We have also examined the above exhibits and We find that
Exh. “7” is a mere certification that all the Civil Registry records of birth filed in
the Office of the Local Civil Registrar for the year 1944 and previous years were
either burned, destroyed or lost
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Berciles vs. Government Service Insurance System
during the last war and hence, the office could not furnish the birth certificate of
Maria Luisa Berciles who claims to have been born to the spouses Pascual
Berciles and Flor Fuentebella on June 27, 1943 at Iloilo City. The same is true
with Exh. “7-B” attesting to the non-availability of the Register of Births for Iloilo,
Iloilo in the year 1943 in the files of the National Archives. Exh. “7-A and 7-B”
are, therefore, of no value.
 As to the baptismal certificate, Exh. “7-A”, the rule is that although the
baptismal record of a natural child describes her as a child of the decedent, yet, if
in the preparation of the record the decedent had no intervention, the baptismal
record cannot be held to be a voluntary recognition of parentage. (Canales vs.
Arrogante, et al., 91 Phil. 6; Adriano vs. De Jesus, 23 Phil. 350; Samson vs.
Corrales Tan, 48 Phil. 401; Madridejo vs. De Leon, 55 Phil. 1; Malonda vs. Infante
Vda. de Malonda, 81 Phil. 149). The reason for this rule that canonical records do
not constitute the authentic document prescribed by Arts. 115 and 117 to prove
the legitimate filiation of a child is that such canonical record is simply proof of
the only act to which the priest may certify by reason of his personal knowledge,
an act done by himself or in his presence, like the administration of the
sacrament upon a day stated; it is no proof of the declarations in the record with
respect to the parentage of the child baptized, or of prior and distinct facts which
require separate and concrete evidence. (Adriano vs. De Jesus, 23 Phil. 350).
In the recent case of Republic vs. Workmen’s Compensation Commission, 13
SCRA 272, the Supreme Court speaking again through Justice Makalintal, held:
“This Court, construing the various pertinent provisions of the Civil Code concerning
illegitimate children, has held that an illegitimate (spurious) child, to be entitled to support
and successional rights from his parents, must prove his filiation and that this may be done
by means of voluntary or compulsory recognition of the relationship. For this purpose, the
provisions concerning natural children are held applicable, thus, recognition is voluntary
when made in the record of birth, a will, a statement before a court of record, or in any
authentic writing (Article 278); and compulsory when made by means of a court action in
the cases
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80 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
enumerated in Articles 283 and 284 (Paulino vs. Paulino, L-15091, Dec. 28, 1961).
Discrediting the above certificate (birth and baptismal) of the illegitimate
spurious children which do not constitute proof of filiation with the deceased
Judge Berciles, what remains are the sworn statements of Coronacion Berciles,
Exh. 10 and 31, sister-in-law of the late Judge Berciles wherein she stated that
after she was married to her husband, they lived together with the family of
Pascual Berciles and his wife, Flor Fuentebella; that their two families had lived
closely enough during the Japanese Occupation and even after. These statements,
however, do not prove the filiation of the children to the late Judge Pascual
Berciles.
Neither are the family pictures, Exhs. 30 to 30-M, which, according to the
Committee, do not indicate that the marriage (between Judge Berciles and Flor
Fuentebella) took place and that if at all, the said pictures show the presence of a
family with or without the sanction of marriage. We agree and We add that said
pictures do not constitute proof of filiation.
We also agree with the finding of the Committee that “(t)he letters written by
Judge Berciles to her daughters with Flor Fuentebella especially the one sent to
daughter Mercy Berciles (Exh. “22”) wherein he vigorously affirmed that it’s only
her mother, Flor Fuentebella, and no other woman who was recognized as his
wife and loved by her parents deserve scant consideration. Pascual Berciles could
not be expected to admit the existence of his other family. This would be
disastrous to his efforts at preventing one family from knowing the other.” Not
only do they deserve scant consideration but also, there is jurisprudence that a
typewritten letter signed by the father is not an authentic writing. (Decision of
the Supreme Court of Spain of Feb. 27, 1923 and Dec. 7, 1927 cited in 3 Castan,
6th ed., 25; see Caguioa, Comments and Cases on Civil Law, Vol. I, p. 379).
As to the other exhibits of private respondents, We affirm the Committee’s
finding that the Flor Fuentebella Affidavit (Exh. “5”) is self-serving; that the
testimony of Concepcion Gonzales (Exh. “31-A”), being blind, is deficient; and that
the
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VOL. 128, MARCH 5, 1984 81
Berciles vs. Government Service Insurance System
affidavit of Judge Rafael Lavente (Exh. “35”) has been repudiated. Indeed, the
above evidence are, to Our view, very insignificant, insufficient, and
unsubstantial to prove the filiation of private respondents to the alleged father,
Judge Pascual Berciles.
The records disclose that all the private respondents have left the Philippines
and are now residing in the United States. They have not appeared at the hearing
before the Committee on Claims Settlement to testify in support of their claim of
filiation and acknowledgment. And We find no clear and competent proof, no
positive and substantial evidence presented by private respondents that their
alleged father had admitted or recognized his paternity of the private respondents
Maria Luisa Berciles, Mercy Berciles and Rhoda Berciles.
Under the law, Article 287, New Civil Code, illegitimate children other than
natural in accordance with Art. 269 are entitled to support and such successional
rights as are granted in the Code, but for this Article to be applicable, there must
be admission or recognition of the paternity of the illegitimate child. (Paterno, et
al. vs. Paterno, 20 SCRA 585, citing Noble vs. Noble, G.R. No. L-17742, Dec. 17,
1966, 18 SCRA 1104; Paulino vs. Paulino, G.R. No. L-15091, Dec. 28, 1961, 113
Phil. 697). Article 887, N.C.C., defining who are compulsory heirs, is clear and
specific that “(i)n all cases of illegitimate children, their filiation must be duly
proved.” And in the Noble case, supra, the Supreme Court laid down this ruling:
“The filiation of illegitimate children, other than natural, must not only be proven, but it
must be shown that such filiation was acknowledged by the presumed parent. If the mere
fact of paternity is all that needs to be proven, that interpretation would pave the way to
unscrupulous individuals to take advantage of the death of the presumed parent, who would
no longer be in a position to deny the allegation, to present even fictitious claims and expose
the life of the deceased to inquiries affecting his character.” (italics supplied).
In fine, We hold and rule that the respondent GSIS committed grave abuse of
discretion in approving Resolution No. 431 which adopted the erroneous
recommendation of the
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82 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
Committee on Claims Settlement, a recommendation which has no legal or
factual basis to stand on. Accordingly, the disposition made by respondent GSIS
of the retirement benefits due the heirs of the late Judge Pascual G. Berciles is
consequently erroneous and not in accordance with law. Petitioners are the lawful
heirs entitled to the distribution of the benefits which shall accrue to the estate of
the deceased Judge Berciles and will be distributed among the petitioners as his
legal heirs in accordance with the law on intestate succession. (Re: Mario vs.
Chanliongco, 79 SCRA 364; Vda. de Consuegra vs. GSIS, 37 SCRA 325).
According to Article 996 of the New Civil Code which provides that “If a
widow or widower and legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of each of the children,” and
Article 980 which provides that “The children of the deceased shall always inherit
from him in their own right, dividing the inheritance in equal shares.” the
retirement benefits shall be distributed equally to the five (5) heirs: Iluminada
Ponce Berciles, Ilona Berciles Alvarez, Ellery P. Berciles, England P. Berciles and
Ione P. Berciles.
As to the retirement premiums totaling P9,700.00, the same is presumed
conjugal property, there being no proof that the premiums were paid from the
exclusive funds of the deceased Judge (Article 160, New Civil Code). Such being
the case, one-half of the amount belongs to the wife as her property in the
conjugal partnership and the other half shall go to the estate of the deceased
Judge which shall in turn be distributed to his legal heirs.
With respect to the terminal leave pay, unpaid salary and allowances accruing
to the deceased, since petitioners are the only lawful heirs of the deceased Judge,
only they are entitled to share thereto. There is no need to disturb Our Resolution
of March 17, 1981.
One final point, the issue raised by respondents that Section 25 of P.D. 1146,
otherwise known as “The Revised Government Service Insurance Act of 1977”,
cannot be invoked by petitioners in taking the present appeal for the reason that
the dispute between the parties have arisen under
83
VOL. 128, MARCH 5, 1984 83
Berciles vs. Government Service Insurance System
the Judiciary Retirement Law, Republic Act No. 910, as amended and not under
P.D. 1146, and that the determination of the legal heirs of a deceased judge
covered by Republic Act 910 as amended, is vested in the regular courts of justice.
Section 25 of P.D. 1146 provides:
“Sec. 25. Appeals.—Within fifteen days from receipt of notice of decision or award, the
aggrieved party may appeal the same to the Court of Appeals on questions of law and facts
following the procedures for appeals from the Court of First Instance to the Court of Appeals
as far as practicable and consistent with the purposes of this Act. If the appeal is only on
questions of law, the same shall be brought directly to the Supreme Court on certiorari. No
appeal bond shall be required. The appeal shall take precedence over all other cases except
criminal cases wherein the penalty of life imprisonment or death has been imposed by the
trial court. Appeal shall not stay the decision of the Board unless so ordered by the Board,
by the Court of Appeals, or by the Supreme Court.”
Respondents’ position is untenable. We hold that Sec. 25 of P.D. 1146 quoted
above may be availed of by petitioners.
Republic Act 910, as amended, is a special statute governing and granting
retirement benefits to members of the judiciary. While Section 5 of the Act
provides that the GSIS shall take charge of the enforcement and operation of the
Act, there is no provision therein setting forth the procedure or remedy for the
final determination of the legal heirs of the deceased Judge in case a dispute
arises between the opposing claimants. Even under the old GSIS Act,
Commonwealth Act No. 186 as amended, there is no express provision on appeal
from the award or decisions of the GSIS. In both cases, the decision or the award
made by the GSIS which affects property rights as well as the legitimate or
illegitimate status of the claimants is brought to and assailed in the regular
courts of justice under the general power and jurisdiction of the courts to review
decisions of administrative bodies and this is where the litigation becomes not
only delayed or protracted but also expensive and cumbersome, to the great
prejudice and detriment of the parties.
84
84 SUPREME COURT REPORTS ANNOTATED
Berciles vs. Government Service Insurance System
As may be gleaned from the “whereas clauses” of P.D. 1146 which, among others,
recognize that “provisions of existing laws x x x have prejudiced, rather than
benefited, the government employee; restricted rather than broadened, his
benefits, prolonged, rather than facilitated the payment of benefits, must now
yield to his paramount welfare,” P.D. 1146 is a remedial legislation, which are
“those which afford a remedy, or improve or facilitate remedies already existing
for the enforcement of rights and the redress of injuries, and statutes intended for
the correction of defects, mistakes and omissions in the civil institutions and the
administration of the state.” (Sutherland, Statutory Construction, Vol. III, p. 31).
And being remedial statutes relating to procedure as distinguished from those
relating to substantive rights, they are given a liberal interpretation. (Sutherland,
supra, p. 39).
Accordingly, We hold and rule that Section 25 of P.D. 1146 specifically laying
down the procedure whereby the party aggrieved by the decision of the GSIS may
appeal the same to the Court of Appeals, now the Intermediate Appellate Court,
on questions of law and facts following the procedures for appeals from the Court
of First Instance (now Regional Trial Court) to the I.A.C. and if the appeal is only
on questions of law, the same shall be brought directly to the Supreme Court on
certiorari, which abbreviated procedure was designed to facilitate, and not to
prolong, the payment of benefits, may be invoked by the petitioners.
That P.D. 1146, Sec. 35 is applicable to disputes arising under the Judiciary
Retirement Act and all other acts administered by the GSIS may also be
construed from Sec. 23 of the Decree which provides that the “System shall
prescribe such rules and regulations to facilitate payment of benefits, proceeds
and claims under the Act and any other laws administered by the System.
 WHEREFORE, IN VIEW OF ALL THE FOREGOING, We AFFIRM the 86 SUPREME COURT REPORTS ANNOTATED
finding in Resolution No. 431 that petitioner Iluminada Ponce Berciles is the
surviving spouse of the late Judge Pascual G. Berciles and that petitioners Ilona Berciles vs. Government Service Insurance System
Berciles Alvarez, Ellery P. Berciles, England P. Berciles, and Ione P. Berciles are premiums .................................................... 970.00
the legitimate children of the said deceased Judge.
Total Amount Due Her .............................. P61,322.00
85
The temporary restraining order issued herein per Our Resolution dated July 13,
VOL. 128, MARCH 5, 1984 85 1981 is hereby made permanent.
Berciles vs. Government Service Insurance System SO ORDERED.
We REVERSE and SET ASIDE its finding that Pascual Voltaire Berciles is an Makasiar, (Actg. C.J.), Concepcion, Jr., De Castro,Melencio-
acknowledged natural child and that Maria Luisa Berciles, Mercy Berciles, and Herrera, Plana, Escolin, Relova and Gutierrez, Jr., JJ., concur.
Rhoda Berciles are illegitimate children of the deceased CFI Judge Pascual G. Fernando, C.J., and Teehankee, J., on leave (abroad). Aquino, J., no part.
Berciles. The claims of the petitioners as legal heirs are hereby APPROVED and Abad Santos, J., I reserve my vote.
the GSIS is hereby ordered to pay immediately to each and every petitioner the Finding in Resolution No. 431 affirmed.
various sums hereunder indicated opposite their names, as follows: Notes.—Where a government employee failed to name the beneficiary of his
retirement benefits, the proceeds thereof shall accrue to his estate. (Re: Mario V.
1. ILUMINADA PONCE BERCILES
Chanliongco, 79 SCRA 365.)
A. Her 1/5 share of retirement gratuity ... P60,352.00 In this case, to divide the estate between the surviving spouse and the
B. Her share from the return of the retirement premiums legitimate child would deprive the illegitimate children of their legitimacy. So, the
decedent’s estate is distributed in the proportion of 1/2 for the legitimate child, 1/4
(1) as her conjugal share ............................. 4,850.00
for the widow and 1/8 each for the two illegitimate children. (Re: Mario V.
(2) as a legal heir ........................................ 970.00 Chanliongco, 79 SCRA 365.)
Total Amount Due Her ............................... P66,172.00
2. ILONA BERCILES ALVAREZ ——o0o——
A. Her 1/5 share of retirement gratuity .......................................................... P60,352.00 87
B. Her share from the return of retirement premiums...................................... 970.00 © Copyright 2018 Central Book Supply, Inc. All rights reserved.
Total Amount Due Her ......................... P61,322.00
3. ELLERY P. BERCILES
A. His 1/5 share of retirement gratuity .......................................................... P60,352.00
B. His share from return of retirement premiums 970.00
.......................................................
Total Amount Due Him .............................. P61,322.00
4. ENGLAND P. BERCILES
A. His 1/5 share of retirement gratuity .......................................................... P60,352.00
B. His share from return of retirement premiums 970.00
.......................................................
Total Amount Due Him .............................. P61,322.00
5. IONE P. BERCILES
A. Her 1/5 share of retirement gratuity .......................................................... P60,352.00
B. Her share from return of retirement
86
 [No. 8715. October 24, 1914.]
MARIANO VELOSO, plaintiff and appellant, vs. LUCIA MARTINEZ, personally
and as administratrix of the estate of Domingo Franco, deceased, defendant and
appellee.
HUSBAND AND WlFE; PARAPHERNAL PROPERTYJ RlGHT OF WlFE TO
RECOVER WHEN SOLD BY HUSBAND WITHOUT HER CONSENT.—V claimed that
he had purehased certain jewels from F. M, the wife of F, claimed that such jewels were
her sole and separate property, acquired from her mother; that as such paraphernal
property she exercised dominion over them; that she had the exclusive control and
management of the same; that they had not been delivered to her husband to be
administered or controlled by him; that, inasmuch as they had not been delivered to her
husband to be administered by him, she could not be deprived of them by any act of his,
without her consent, and without a compliance with the provisions of the Civil Code.
(Arts. 1382, 1384.) Held: That M was entitled to recover from V the possession of said
jewels.
APPEAL from a judgment of the Court of First Instance of Cebu. Wislizenus, J.
The facts are stated in the opinion of the court.
Martin M. Levering for appellant.
Pantaleon E. del Rosario for appellee.
JOHNSON, J.:
On the 1st day of July, 1911, the plaintiff commenced an action in the Court of
First Instance of the Province of Cebu to recover of the defendant, personally and
as administratrix of the estate of JDomingo Franco, deceased, the possession of a
certain parcel of land particularly deseribed in the second paragraph of the
complaint, together with the sum of P125 per month, from the 1st day of June,
1911.
The defendant presented a demurrer to said complaint, which was overruled.
No exception was taken to the ruling of the court upon the demurrer. Later the
def6ndant answered, setting up a general denial and a special defense. The
special defense consisted—
First Of a counterclaim in the sum of P18,500 as at-
256
256 PHILIPPINE REPORTS ANNOTATED
Veloso vs. Martinez.
torney's fees for services rendered by the deceased, Domingo Franco, to the
plaintiff; and, second, for the recovery of certain jewelry, of the value of ^6,000,
particularly described in the answer of the defendant, alleged to be in the
possession of the plaintiff.
The first special defense, relating to attorney's fees, was later withdrawn by
the defendant. The only questions left for litigation were:
First. Whether the plaintiff was entitled to the recovery of the parcel of land
in question; and, second, whether the defendant vvas entitled to recover from the
plaintiff the jewelry described in her answer.
After hearing the evidence, the Honorable Adolph Wislizenus, judge, in a
carefully prepared opinion, found that the plaintiff was entitled to recover the
possession of the land in question, together with the sum of ^100 for each month
from the month of June, 1911, until the possession of the land was returned to
him.
The lower court further found that the defendant was entitled to the
possession of said jewelry, and ordered the plaintiff to return the same to her and
in case of the plaintiff's failure to return said jewelry to the defendant, then and
in that case, he shall pay to the defendant, for such failure, the sum of P6,000.
From the judgment of the lower court, each of the parties, plaintiff and
defendant, appealed to this court. Later the defendant withdrew her appeal,
thereby allowing that part of the judgment relating to the plaintiff's right to the
possession of the land in question, together with damages, to become final. The
only question remaining, therefore, for this court to decide is as to the ownersliip
and right of possession of said jewels. It is admitted that the jewels in question,
before the possession of the same was given to the plaintiff, belonged to the
defendant personally and that she had inherited the same from her mother. The
defendant, Lucia Martinez, is the widow of Domingo Franco, and after the death
of her husband she was appointed administratrix of his estate. The record further
shows (Exhibit C)
257
VOL. 28, OCTOBER 24, 1914. 257
Veloso vs. Martinez.
that a short time before the death of Domingo Franco he borrowed from the
plaintiff the sum of f*4,500 and gave as security f or the payment of said sum the
jewelry described in the complaint, The money was borrowed on the 7th day of
April, 1911, under promise to repay the same, with 12 per cent interest, on the
7th day of May, 1911. Itjs not ctear whether or not the jewelry, at the time of the
execution of said document (Exhibit C), was in fact delivered to the plaintiff. Said
exhibit states that the jewelry was contained "dentro de una caja que queda
cerrada despues de demostradas las alhajas a D. Mariano Veloso" (in a box which
remains closed after the jewels were shown to Mariano Veloso). The document
further admits that "la llave quedara en poder de D. Domingo Franco" (the key
shall remain in possession of Domingo Franco). After the death of Domingo
Franco it appears that said jewelry was found in the same "caja" and that the key
was in the possession of the defendant. It is very doubtful, indeed, under the
facts, whether the plaintiff ever obtained the actual possession of the jewelry. His
possession, however, seems to be admitted by the defendant in the present action.
So far as the record shows the jewelry was in the same box where it was f ound at
the time of the execution and delivery of said Exhibit C and that the defendant
still has the key to said box.
During the trial of the cause the plaintiff attempted to show that the jewels in
question were pawned to him by Domingo Franco, with the f ull knowledge and
consent of the defendant. And not only that, the plaintiff further attempts to show
that af ter the death of Domingo Franco, the defendant promised to pay the
amount for which the said jewels were pawned. The defendant positively denies
that she knew that her husband had pawned her jewels or that she promised to
redeem the same by paying the amount due. No explanation is contained in the
record why the jewels were placed in said box (presumably a money safe). In view
of the fact, however, that the record shows that the jewels were the sole and
separate property of the wife,
258

258 PHILIPPINE REPORTS ANNOTATED

Viloria vs. Aquino.
acquired from her mother, and in the absence of further proof, we must presume
that they constituted a part of her paraphernal property. As such paraphernal
property she exercised dominion over the same. (Article 1382, Civil Code.) She
had the exclusive control and management of the same, until and unless she had
delivered it to her husband, before a notary public, with the intent that her"
husband might administer it properly. (Article 1384, Civil Code.) There is no proof
in the record that she had ever delivered the same to her husband, in any
manner, or for any purpose. That being true, she couLd not be deprived of the
same by any act of her husband, without her consent, and without compliance
with the provisions of the Givil Gode above cited.
For the foregoing reasons, we find that the defendant is entitled to the
possession of said jewels, or to their value, amounting to P6,000.
The judgment of the lower court is therefore hereby affirmed, with costs.
ArelJano, C. J., Torres, Carson, Moreland, Trent, and Araullo, JJ., concur.
Judgment affirmed.

______________

© Copyright 2018 Central Book Supply, Inc. All rights reserved.

718 SUPREME COURT REPORTS ANNOTATED
Plata vs. Yatco
No. L-20825. December 28, 1964.
AMALIA PLATA, petitioner, vs. HON. NICASIO YATCO, Judge, Court of First
Instance of Rizal, Branch V; BENITO MACROHON, Sheriff of Quezon City and
The Spouses CESAREA E. VILLANUEVA and GREGORIO LEAÑO, respondents.
Husband and wife; Paraphernal property; Conveyance and subsequent reconveyance
does not transform it to conjugal property.—The conveyance of paraphernal property of the
wife to a third person and its reconveyance to her several months afterwards, does not
transform it to conjugal property, in the absence of proof that the money paid in the
reconveyance came from conjugal funds.
Same; Same; Husband’s signing of mortgage deed does not convert paraphernal
property to conjugal.—Where a piece
719
VOL. 12, DECEMBER 28, 1964 719
Plata vs. Yatco
of land is paraphernal in origin, the fact that the husband signed a mortgage deed
thereof as a co-mortgagor does not by itself alone suffice to convert it into conjugal property.
Same; Same; Illegal detainer judgment against husband cannot bind wife’s possession
of her paraphernal.—An illegal detainer judgment against the husband alone over a piece of
land paraphernal in character cannot bind nor affect the wife’s possession thereof.
Contempt of court; Wife’s ignoring judgment of eviction over paraphernal property
against husband alone no contempt.—A wife not made party defendant to an eviction suit
against the husband over possession of land which is paraphernal property of the wife, could
validly ignore the judgment of eviction against her husband, and it was no contempt of court
for her to do so, because the writ of execution was not lawful against her.
ORIGINAL PETITION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Rosales & Montesa for petitioner.
Venida & Demonteverda Law Offices for respondents.
REYES, J.B.L., J.:
Amalia Plata resorts to this Supreme Court for a writ of certiorari against the
Court of First Instance of Rizal, Branch V, Quezon City, to annul and set aside its
order of 4 January 1963, issued in its Civil Case No. Q-6250 (Cesarea Villanueva,
et al. vs. Gaudencio Begosa) finding petitioner Plata in contempt of court for
refusing to vacate certain property, and sentencing her to pay a fine of P100, with
subsidiary imprisonment in case of insolvency, with a warning of more drastic
action should she persist in disobeying the writ issued by said court.
At petitioner’s instance, a writ of preliminary injunction was issued to stay
enforcement of the order complained of, and respondents required to answer.
The pleadings and other papers on record disclose that Amalia Plata, in 1954,
had purchased a parcel of land (Lot 23, Block 4-M, of Subdivision plan PSD-59) in
Caloocan, Rizal, for which the Provincial Register of Deeds issued Torrens
Certificate of Title (Transfer) No. 25855 in the name of Amalia Plata, single,
Filipino citizen. On 13 February 1958, she sold the property to one Celso Sal-
720
720 SUPREME COURT REPORTS ANNOTATED
Plata vs. Yatco
daña, who obtained TCT No. 40459 therefor; but seven months afterwards, on 24
September 1958, Saldaña resold the same property to “Amalia Plata, married to
Gaudencio Begosa,” (Ans. Exh. 3) and a new certificate of Title No. 43520 was
issued to the vendee, Amalia Plata (Exh. 3-a).
On the same date, 24 September 1958, “Amalia Plata of legal age, Filipino,
married to Gaudencio Begosa,” in consideration of a loan of P3,000, mortgaged to
Cesarea Villanueva married to Gregorio Leaño, the identical property and its
improvements “of which the mortgagor declares to be her(s) as the absolute owner
thereof.” The mortgage was also signed by Gaudencio Begosa, as co-mortgagor
(Exh. 4).
For failure to pay the mortgage, the same was extrajudicially foreclosed under
Act 3135, and sold on 12 April 1960 to the mortgagee as the highest bidder; on 13
May 1961, the Sheriff issued a final deed of sale on the strength of which the
Register of Deeds issued the buyer TCT No. 55949 (Exhs. 5, 6, 7). Subsequently,
the respondent, Villanueva, sued Gaudencio Begosa alone for illegal detainer
(Annex C. Petition) in Case No. Q-6250, and obtained judgment against him in
the court of first instance, that became final (Annex D, Petition). A writ of
execution was duly issued, but Amalia Plata resisted all efforts to eject her from
the property, and she filed a third party claim, averring ownership of the property
(Annex E). Upon motion of the judgment creditors, the court below cited both
Begosa and Plata for contempt (Annex H), and, finding her explanation (Annex I)
unsatisfactory, found her guilty and sentenced her, as, stated at the beginning of
this decision.
The issue here is whether the petitioner, Amalia Plata, is bound by the
detainer judgment against Gaudencio Begosa in Civil Case No. Q-6250. Petitioner
denies it, claiming that she was never lawfully married to Begosa, and that she
had acquired the property while still single, and was in possession thereof when
the Sheriff of Rizal attempted to enforce the writ of ejectment. Respondent
Villanueva and her husband maintain, on the other hand,
721
VOL. 12, DECEMBER 28, 1964 721
Plata vs. Yatco
that Plata had repeatedly acknowledged being married to Begosa; that she had
lived with him openly as his wife, and their marriage is presumed; that, therefore,
she is to be deemed as holding under Begosa, and is bound by the judgment
against the latter.
We are constrained to uphold as meritorious the petitioner’s stand. Granting
that the evidence before us against the marriage of petitioner Amalia Plata to
Gaudencio Begosa is weak, considering the admissions of married status in public
documents (Answer, Exhs. 3 and 4); the well-known presumption that persons
openly living together as husband and wif e are legally married to each other, and
that the prior marriage of Begosa to someone else does not necessarily exclude the
possibility of a valid subsequent marriage to herein petitioner; still the
respondents Villanueva could not ignore the paraphernal character of the
property in question, which had been unquestionably acquired by Plata while still
single, as shown by Transfer Certificate of Title No. 25855 of Rizal (Art. 148 of the
New Civil Code). The subsequent conveyance thereof to Celso Saldaña, and the
reconveyance to her several months afterward of the same property, did not
transform it from paraphernal to conjugal property, there being no proof that the
money paid to Saldaña came from common or conjugal funds (Civ. Code, Art 153).
The deed of mortgage in favor of respondents Villanueva actually recites that the
petitioner was the owner of the tenement in question and so does the conveyance
of it by Saldaña to her (Ans., Exhs. 3 and 4).
It is true that Gaudencio Begosa signed the mortgage (Exh. 4) as a co-
mortgagor; but by itself alone that circumstance would not suffice to convert the
land into conjugal property, considering that it was paraphernal in origin. This is
particularly the case where the addition of Begosa as co-mortgagor was clearly an
afterthought, the text of the deed showing that Plata was the sole mortgagor.
Since the property was paraphernal, and the creditors and purchasers were
aware of it, the fact being clearly spread on the land records, it is plain that
Plata’s pos-
722
722 SUPREME COURT REPORTS ANNOTATED
Plata vs. Yatco
session, therefore, was not derived from Gaudencio Begosa. The illegal detainer
judgment against the husband alone cannot bind nor affect the wife’s possession
of her paraphernal, which by law she holds and administers independently, and
which she may even encumber or alienate without his knowledge or consent (Civ.
Code, Arts. 136, 137, 140). Hence, as she was not made party defendant in the
eviction suit, the petitioner-wife could validly ignore the judgment of eviction
against her husband, and it was no contempt of court for her to do so, because the
writ of execution was not lawful against her (Chanco vs. Madrilejos, 9 Phil.
356; A. Jose Realty vs. Galao, et al., 76 Phil. 201; Segarro vs. Maronilla, L-14428,
July 26, 1960; Weigall vs. Shuster, 11 Phil. 340).
We need not decide here whether the property was validly conveyed to
respondents Villanueva, since that issue is the subject of an independent
proceeding in the Court of First Instance of Quezon City, Civ. Case No. Q6510
(Petition, Annex F).
The writ of certiorari prayed for is granted, and the order of the lower court,
dated 4 January 1963, is annulled and set aside. The preliminary injunction is
made permanent, with costs against private respondents Villanueva.
Bengzon, C.J., Bautista
Angelo, Concepcion, Barrera, Paredes, Dizon, Makalintal, Bengzon,
J.P., and Zaldivar, JJ., concur.
Regala, J., took no part.
Writ granted.
A N N O T A T I O N INFORMAL CIVIL PARTNERSHIP
Statement of the codal provision.—When a man and a woman live together as
husband and wife but they are not married, or their marriage is void from the
beginning, the property acquired by either or both of them through their work or
industry or their wages and salaries shall
723
VOL. 12, DECEMBER 28, 1964 723
Plata vs. Yatco
be governed by the rules on co-ownership (Art. 144, New Civil Code).
Early recognition of technical conjugal partnership.—Professor Rosauro
Alvarez once wrote that the provision of Article 144 evidently recognizes in our
jurisdiction what is known as technical conjugal partnership under the conditions
therein prescribed. This is borne out, among others, by the position that Article
144 occupies, or the place where it is found, in relation to the other articles on
conjugal partnership. It is included under Title VI, Chapter 4 of the new Civil
Code. Title VI is entitled PROPERTY RELATIONS BETWEEN HUSBAND AND
WIFE and embraces Article 118 to 215. Chapter 4 of the said title is captioned
“Conjugal Partnership of Gains” and covers Articles 142 to 189, thereby including
Article 144. This is very indicative of the intention of the legislature (MLQ Law
Quarterly, Vol. IV, No. 1, March 1954, p. 17).
Mr. Justice J.B.L. Reyes has another term for technical conjugal
partnership: Informal Civil Partnership. In one of his well-respected decisions, he
said: “x x x though there is no technical marital partnership between persons
living maritally, without being lawfully married, nevertheless there is between
them an informal civil partnership which would entitle the parties to an equal
interest in property acquired by the joint efforts of the deceased and his
widow” (Lesaca, et al. v. Lesaca, et al., L-3605, April 21, 1952; See also the
unpublished decision in Marata v. Dionio, G.R. No. L-24449).
Even before the effectivity of the new Civil Code our Supreme Court had
already held in Pasilbon v. Bejec (77 Phil. 88) that the fact that one of the parties
is legally married to another will not preclude the formation of a co-ownership of
properties acquired through the joint effort, work and industry of the parties.
This Pasilbon decision is therefore an authority for the proposition that although
Article 144 is a new provision in our Civil Code, it is not devoid of an old
jurisprudential basis or support.
724
724 SUPREME COURT REPORTS ANNOTATED
Plata, vs. Yatco
Article 144 legalizes and recognizes acquisitions of properties of common-Iaw
husband and wife.
 Living together as husband and wife.—The first condition for the application
of Article 144 is that: there must be a living together as spouses, i.e., there must
be marital cohabitation provable by the fact of sexual relations combined with a
common household manifestation of’ marital ties before third persons as well as
mutual financial assistance and support, the raising of children together and
other like facts (Colon v. Heirs of Trestani, 44 Porto Rico 163 and 1 Govski 115,
cited in Tolentino, Civil Code, Vol. I, 1960 ed., 360).
Cohabitation then is something more than merely living voluntarily in the
same house or even occupying the same bed, but is the living together of the
parties as husband and wife, and including sexual relations (Sison v. Te Lay
Li, 48 O.G. 3906; Menciano v. San Jose, L-1967, May 28, 1951, cited in 22 SCRA
533).
Neither law nor jurisprudence fixed a definite period for an effective marital
cohabitation. But there is jurisprudence to the effect that mere surreptitious
meetings, trysts, encounters on the sly, as when the man meets the woman at
night and has sexual intercourse with her and then goes away, even if continued
for some period of time, does not establish that it was a living together as
husband and wife (Vasquez v. De Jesus, 65 Porto Rico 846). Similarly, if
immediately after the man had carnal knowledge with the woman, he gave her a f
ew pesos and sent her to her father’s house, such conduct would show that he had
no intention of making her as his wif e; and, under such a circumstance, there
would be no cohabitation to speak of (Cf. People v. Santiago, 51 Phil. 68; and
compare with Castro v. Dabu, 57 O.G. 1050).
Not legally married to each other.—The other condition for the application of
Article 144 is in the clause “but they are not legally married. x x x.” This means
that the man and the woman are not legally married to each other.—But if one is,
or both of them are, married to somebody else, will Article 144 apply?
725
VOL. 12, DECEMBER 28, 1964 725
Plata vs. Yatco
The Supreme Court of Spain, in its Sentencia of February 4, 1930, held that the
union of a man and a woman in a state of concubinage does not give rise either to
the conjugal partnership of gains or to an ordinary partnership.With the advent of
the new provision of Article 144, however, a change of view was advanced: As it is
presently worded, Article 144 applies to persons who are free to marry each other
as well as to those who are barred from doing so by reason of some legal
impediment, as when one or both of the parties is/are married to somebody else.
The reason for this is obvious. If one of the parties is married to somebody else
but this notwithstanding he lives with the other as husband and wife, he, or they,
would, in a proper case, be committing the private crime of adultery or
concubinage, as the case may be. But suppose they went one step further, and
married each other, they would have committed the public crime of bigamy, a
more serious offense than either of the former. But in the latter case their
marriage would be void from the beginning per Article 80 in relation to Article 83.
However, Article 144, by its express terms, would, nevertheless apply to them.
Can it be said now that if they had gone one step further and committed the
public crime of bigamy they would have been better protected by the law than
when they had desisted from committing such offense? That would be
absurd. (MLQ Law Quarterly, Vol. IV, No. 1, March 1954, p. 19).
Tolentino’s Commentary on the Civil Code (Vol. I, 1960 ed., p. 360) speaks of
the same view: Besides the case of void marriages, whether the parties to said
marriage are in good or in bad faith (Ricafrente v. Ventura, 53 O.G. 6617), Article
144 covers the case of a man and a woman, both unmarried, and without
impediment for a legal marriage between them (Valencia v. Rodriguez, et al., 54
O.G. 5526; Malayacan v. Rubi, 52 O.G. 5576) who live together as husband and
wife.
Is voidable bigamous marriage included? Under Article 83 of the new Civil
Code, there are two kinds of bigamous marriages, to wit: first, a bigamous
marriage subsequently contracted in bad faith by any person during the life-
726
726 SUPREME COURT REPORTS ANNOTATED
Plata vs. Yatco
time of the first spouse of such person without the first marriage being annulled
or dissolved (Art. 83, No. 1, new Civil Code; People v. Subano, L-48143, Sept. 30,
1942, 73 Phil. 692; 3 Viada, Codego Penal, 275) ; and, second, a bigamous
marriage contracted in good faith under any of the three circumstances
mentioned under No. 2 of said Article 83 (cf. U.S. v. Enriquez, 32 Phil. 202; Jones
v. Hortiquela, 64 Phil. 179).
The first kind of bigamous marriage is void ab initio and the good faith of the
second wife or husband is immaterial (People v. Concepcion, 40 O.G. 2878;
Capistrano, Civil Code Annotated, 1950; ed., p. 97). In the second, the bigamous
marriage, under any of the three cases mentioned in No. 2 of Article 83, is merely
voidable—“valid until declared null and void by a competent court” (Art. 85, no. 2,
New Civil Code; People v. Mendoza, L-5877, Sept. 28, 1954; Cortez v. Brownell, L-
7554, Aug. 31, 1955; People v. Baluya, CA-G.R. No. 16762-R, Aug. 26, 1956; see
also 22 SCRA 531–532).
As Article 144 covers a case of a marriage “void from the beginning”, there
seems to be no reason for the exclusion therefrom of “a voidable bigamous
marriage contracted in good faith” under any of the three circumstances
mentioned under No. 2 of Article 83.
Property acquired by either or both of them.—The property referred to in
Article 144 is limited to that acquired by either or both of them through their
work or industry, or their wages and salaries (Capistrano, Civil Code Annotated,
Vol. 1, 1950 ed., p. 155). Not within the range or ambit of said article are: (a)
properties acquired by the parties or either of them during their union
by lucrativeor gratuitous title, i.e., donation, inheritance, legacy, etc.;and (b) fruits
from said properties, whether they be natural, industrial, or civil (cf. Art. 153 in
rel. Art. 441 et seq.). Natural fruits are the spontaneous products of the soil, and
the young and other products of animals. Industrial fruits are those produced by
lands of any kind through cultivation or labor. Civil fruits are the rents of is presumed to belong to the conjugal partnership, unless it be proved that it
buildings, the price of leases of lands and other property and the pertains exclusively to the husband or to the wife (Art. 160, N.C.C.; De Reyes v. De
727 Ilamo, 63 Phil. 629). The party who invokes this presumption must first prove
VOL. 12, DECEMBER 28, 1964 727 that the property was acquired during the marriage. In other words, proof of
acquisition during the marriage is a condition sine qua nonfor the operation of the
Plata vs. Yatco
presumption in favor of conjugal ownership (Laperal, Jr., et al. v. Katigbak, et
amount of perpetual or life annuities or other similar income (cf. Art. 442, Civil al., 10 SCRA 493; Cobb-Perez, et al. v. Lantin, et al, 23 SCRA 637). Such proof of
Code). acquisition of the property during cohabitation is also required in the case of an
Is it necessary that both parties should have contributed materially to the
informal civil partnership.—JUDGE DOMINGO LUCENARIO.
acquisition of the properties? The creation of the civil relationship envisaged in
Article 144 is circumscribed by conditions, the existence of which must first be
______________
shown before rights provided thereunder may be deemed to accrue (See Lesaca v.
Lesaca, 91 Phil. 135, 140; Aznar v. Garcia, 102 Phil. 1055, 1068). One such
condition is that there must be a clear showing that the petitioner had, during © Copyright 2018 Central Book Supply, Inc. All rights reserved.
cohabitation, really contributed to the acquisition of the property involved
(Yaptinchay v. Torres, et al, L-26462, June 9, 1969).
Is it necessary for the application of Article 144 that both parties should have
contributed materially to the acquisition of the properties subject of the informal
civil partnership? It would seem that, as in the case of conjugal partnership
proper, the contribution need not be material and that even if, for example, only
the man has been earning and has given material contribution, the woman who
has helped him maritally and has contributed to the prosperity of the union as by
caring for him when sick, rearing the children, etc., is entitled to share in the
common property in proportion to the value of her work and industry (MLQ Law
Quarterly, Ibid, p. 21).
Applicability of the rules on co-ownership.—By express provision of the law,
the property relations of the parties within the contemplation of Article 144 are to
be governed by the rules on co-ownership for the reason that there is no marriage.
These rules are found in Articles 484 to 500, inclusive.
The share of the co-owners, in the benefits as well as in the charges, shall be
proportional to their respective interests (Art. 484, N.C.C.). The portions
belonging- to the co-owners in the co-ownership shall be presumed equal, unless
the contrary is proved (Ibid).
Upon the death of one of the spouses, the community property ceases to
belong to the legal partnership and becomes the property, by operation of law, of
the surviving
728

728 SUPREME COURT REPORTS ANNOTATED

Commissioner of Immigration vs. Reyes
spouse and the heirs of the deceased spouse (Marigsa v. Macabunto, 17 Phil. 107).
Proof of acquisition of property during cohabitation required.—As held in
effect in the Yaptinchay-Torres case, supra, rights provided for under Article 144
may be deemed to accrue only upon a clear showing that the spouse claiming such
right had, during cohabitation, really contributed to the acquisition of the
property of the informal civil partnership. Where a valid marriage existed
between the spouses, however, the rule is that all property of the marriage

260 SUPREME COURT REPORTS ANNOTATED
Joaquino vs. Reyes
G.R. No. 154645. July 13, 2004. *
MILAGROS JOAQUINO a.k.a. MILAGROS J. REYES, petitioner, vs. LOURDES
REYES, MERCEDES, MANUEL, MIRIAM and RODOLFO, JR.—all surnamed
REYES, respondents.
Civil Law; Marriages; Property; Conjugal Partnership of Gains; Ownership; Conjugal
properties are by law owned in common by the husband and wife.—Under Article 145 of the
Civil Code, a conjugal partnership of gains (CPG) is created upon marriage and lasts until
the legal union is dissolved by death, annulment, legal separation or judicial separation of
property. Conjugal properties are by law owned in common by the husband and wife. As to
what constitutes such properties are laid out in Article 153 of the Code, which we quote: “(1)
That which is acquired by onerous title during the marriage at the expense of the common
fund, whether the acquisition be for the partnership, or for only one of the spouses; (2) That
which is obtained by the industry, or work, or as salary of the spouses, or of either of them;
(3) The fruits, rents or interests received or due during the marriage, coming from the
common property or from the exclusive property of each spouse.” Moreover, under Article
160 of the Code, all properties of the marriage, unless proven to pertain to the husband or
the wife exclusively, are presumed to belong to the CPG. For the rebuttable presumption to
arise, however, the properties must first be proven to have been acquired during the
existence of the marriage.
Same; Same; Same; Same; Same; For Article 144 to apply, the couple must not be
incapacitated to contract marriage.—On the other hand, Article 144 of the Civil Code
mandates a co-ownership between a man and a woman who are living together but are not
legally married. Prevailing jurisprudence holds, though, that for Article 144 to apply, the
couple must not be incapacitated to contract marriage. It has been held that the Article is
inapplicable to common-law relations amounting to adultery or concubinage, as in this case.
The reason therefor is the absurdity of creating a co-ownership in cases in which there
exists a prior conjugal partnership between the man and his lawful wife.
Same; Same; Same; Same; Same; In default of Article 144 of the Civil Code, Article
148 of the Family Code has been applied.—In default of Article 144 of the Civil Code, Article
148 of the Family Code has been applied. The latter Article provides: “Art. 148. In cases of
cohabitation not falling under the preceding Article, only the properties acquired by both of
the parties through their actual joint contribution of money, property, or in-
_______________
*FIRST DIVISION.
261
VOL. 434, JULY 13, 2004 261
Joaquino vs. Reyes
dustry shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption shall apply to joint
deposits of money and evidence of credit. If one of the parties is validly married to another,
his or her share in the co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party which acted in bad faith is not
validly married to another, his or her share shall be forfeited in the manner provided in the
last paragraph of the preceding Article. The foregoing rules on forfeiture shall likewise
apply even if both parties are in bad faith.” Thus, when a common-law couple have a legal
impediment to marriage, only the property acquired by them—through their actual joint
contribution of money, property or industry—shall be owned by them in common and in
proportion to their respective contributions.
Same; Donations; Prohibition; Spouses; The prohibition against donations between
spouses must likewise apply to donations between persons living together in illicit
relations.—The prohibition against donations between spouses must likewise apply to
donations between persons living together in illicit relations; otherwise, the latter would be
better situated than the former. Article 87 of the Family Code now expressly provides thus:
“Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the
spouses during the marriage shall be void, except moderate gifts which the spouses may
give each other on the occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid marriage.”
Land Titles; Torrens Titles; Ownership; A certificate of title under the Torrens system
aims to protect dominion; it cannot be used as an instrument for the deprivation of
ownership.—A certificate of title under the Torrens system aims to protect dominion; it
cannot be used as an instrument for the deprivation of ownership. It has been held that
property is conjugal if acquired in a common-law relationship during the subsistence of a
preexisting legal marriage, even if it is titled in the name of the common-law wife. In this
case, a constructive trust is deemed created under Article 1456 of the Civil Code.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Public Attorney’s Office for petitioner.
Edgar B. Francisco for respondents.
262
SUPREME COURT REPORTS ANNOTATED 262
Joaquino vs. Reyes
PANGANIBAN, J.:
Though registered in the paramour’s name, property acquired with the salaries
and earnings of a husband belongs to his conjugal partnership with the legal
spouse. The filiation of the paramour’s children must be settled in a probate or
special proceeding instituted for the purpose, not in an action for recovery of
property.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court,
1
seeking to nullify the February 4, 2002 Decision and the August 14, 2002
2
Resolution of the Court of Appeals (CA) in CA-GR CV No. 45883. The CA
3
disposed as follows:
“WHEREFORE, premises considered, the appeal is hereby partially DENIED and
the Decision dated May 30, 1994, of the Regional Trial Court of Pasay City, Branch 111 in
Civil Case No. 9722-P is MODIFIED to read, as follows:
“WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the defendant as follows:
 1. ‘a.Declaring the house and lot registered under Transfer Certificate of
Title No. 90293 (26627-A) of the Registry of Deeds of Metro Manila,
District IV as conjugal partnership property of the late Spouses Rodolfo
and Lourdes Reyes;
2. ‘b.Ordering the [petitioner] to surrender possession of said subject
property, pursuant to the applicable law on succession, to the respective
estates of the late Rodolfo Reyes and Lourdes Reyes and to pay a
reasonable rental of P10,000.00 a month, to the same juridical entities,
upon their failure to do so until possession of the property is delivered;
and
3. ‘c.To pay [respondents] attorney’s fees in the sum of P20,000.00 and to
pay the costs.’ ” 4
The questioned Resolution, on the other hand, denied petitioner’s Motion for
Reconsideration.
_______________
1Rollo, pp. 10-53.
2Id., pp. 119-133. Sixth Division. Penned by Justice Teodoro P. Regino and concurred in by Justices
Eugenio S. Labitoria (Division chairman) and Rebecca de Guia-Salvador (member).
3Id., p. 161.
4CA Decision, pp. 14-15; Rollo, pp. 132-133.
263
VOL. 434, JULY 13, 2004 263
Joaquino vs. Reyes
The Facts
The CA narrated the facts as follows:
“[Respondents] filed a Complaint for reconveyance and damages, dated January 23, 1982,
before the Court of First Instance of Rizal, containing the following allegations:
‘x x x The complaint alleges that [respondent] Lourdes P. Reyes is the widow of Rodolfo A. Reyes who
died on September 12, 1981; that [respondents] Mercedes, Manuel, Miriam and Rodolfo, Jr. are the
legitimate children of [respondent] Lourdes P. Reyes and the deceased Rodolfo A. Reyes; that for years
before his death, Rodolfo A. Reyes had illicit relations with [petitioner] Milagros B. Joaquino; that before
his death, x x x Rodolfo A. Reyes was Vice President and Comptroller of Warner Barnes and Company
with an income of P15,000.00 a month and, after retirement on September 30, 1980, received from said
company benefits and emoluments in the amount of P315,0[1]1.79; that [respondent] wife was not the
recipient of any portion of the said amount.
‘The complaint further alleges that on July 12, 1979, a [D]eed of [S]ale of a property consisting of a
house and lot at BF Homes, Parañaque, Metro Manila was executed by the spouses Ramiro Golez and
Corazon Golez in favor of [petitioner] Milagros B. Joaquino for which Transfer Certificate of Title No.
90293 of the Register of Deeds of Metro Manila, District IV was issued in the name of [petitioner]
Milagros B. Joaquino; that the funds used to purchase this property were conjugal funds and earnings of
the deceased Rodolfo A. Reyes as executive of Warner Barnes and Company as [petitioner] Joaquino was
without the means to pay for the same; that [petitioner] executed a Special Power of Attorney in favor of
Rodolfo A. Reyes to mortgage the property to Commonwealth Insurance Corporation in order to pay the
balance of the purchase price; that said Rodolfo A. Reyes executed a mortgage in favor of Commonwealth
Insurance Corporation for P140,000.00 and to guaranty payment thereof, he secured a life insurance
[policy] with Philam Life Insurance Corporation for the said amount, assigning the proceeds thereof to
Commonwealth Insurance Corporation; that the monthly amortizations of the mortgage were paid by
said Rodolfo A. Reyes before his death and at the time of his death, the outstanding balance of
P110,000.00 was to be paid out of his Philam Life Insurance [p]olicy.
‘The complaint finally alleges that the deceased had two cars in [petitioner’s] possession and that the
real and personal properties in [petitioner’s] possession are conjugal partnership propert[ies] of the
spouses Lourdes P. Reyes and Rodolfo A. Reyes and one-half belongs exclusively to [respondent] Lourdes
P. Reyes and the other half to
264
264 SUPREME COURT REPORTS ANNOTATED
Joaquino vs. Reyes
the estate of Rodolfo A. Reyes to be apportioned among the [other respondents] as his forced heirs.
[Respondents] therefore, pray that the property covered by T.C.T. No. 90293 be declared conjugal
property of the spouses Lourdes P. Reyes and Rodolfo A. Reyes and that [petitioner] be ordered to
reconvey the property in [respondents’] favor; that the two cars in [petitioner’s] possession be delivered to
[respondents] and that [petitioner] be made to pay actual, compensatory and moral damages to
[respondents] as well as attorney’s fees.’
xxx xxx xxx
“[Petitioner] eventually filed her Answer, dated August 1, 1982, the allegations of which
have been summarized by the trial court in the following manner:
‘In her Answer, [petitioner] Milagros B. Joaquino alleges that she purchased the real property in question
with her own exclusive funds and it was only for convenience that the late Rodolfo Reyes facilitated the
mortgage over the same; that although the late Rodolfo Reyes paid the monthly amortization of the
mortgage as attorney-in-fact of [petitioner], the money came exclusively from [her].
‘[Petitioner] further alleges in her answer, by way of special and affirmative defenses, that during all
the nineteen (19) years that [she] lived with Rodolfo Reyes from 1962 continuously up to September 12,
1981 when the latter died, [petitioner] never had knowledge whatsoever that he was married to someone
else, much less to [respondent] Lourdes P. Reyes; that [petitioner] was never the beneficiary of the
emoluments or other pecuniary benefits of the late Rodolfo Reyes during his lifetime or after his death
because [she] had the financial capacity to support herself and her children begotten with the late
Rodolfo Reyes. [Petitioner] prays for a judgment dismissing [respondents’] complaint and for the latter to
pay unto [petitioner] moral and exemplary damages in such amounts as may be determined during the
trial, including atto[r]ney’s fees and the costs of the suit. x x x.’
xxx xxx xxx
“On February 2, 1993, [respondent] Lourdes Reyes died.
“Subsequently, the trial court granted the complaint based on the following factual
findings:
‘Lourdes Reyes was legally married to Rodolfo Reyes on January 3, 1947 in Manila. They have four
children, namely: Mercedes, Manuel, Miriam and Rodolfo Jr., all surnamed Reyes and co-[respondents] in
this case. Rodolfo Reyes died on September 12, 1981. At the time of his death, Rodolfo Reyes was living
with his common-law wife, Milagros Joaquino, x x x with whom she begot
265
VOL. 434, JULY 13, 2004 265
Joaquino vs. Reyes
three (3) children namely: Jose Romillo, Imelda May and Charina, all surnamed Reyes.
‘During his lifetime, Rodolfo Reyes worked with Marsman and Company and later transferred to
Warner Barnes & Co., where he assumed the position of Vice-President [Comptroller] until he retired on
September 30, 1980. His monthly salary at Warner Barnes & Co. was P15,000.00 x x x and upon his
separation or retirement from said company, Rodolfo Reyes received a lump sum of P315,011.79 in full
payment and settlement of his separation and retirement benefits.
‘During the common-law relationship of Rodolfo Reyes and [petitioner] Milagros Joaquino and while
living together, they decided to buy the house and lot situated at No. 12 Baghdad Street, Phase 3, BF
Homes, Parañaque, Metro Manila. A Deed of Absolute Sale dated July 12, 1979 was executed in favor of
[petitioner] Milagros Joaquino and Transfer Certificate of Title No. S-90293 covering the said property
was issued in the name of [petitioner only] on July 20, 1979.
‘To secure the finances with which to pay the purchase price of the property in the amount of
P140,000.00, [petitioner] executed on July 20, 1979, a Special Power of Attorney in favor of Rodolfo A.
Reyes for the latter, as attorney-in-fact, to secure a loan from the Commonwealth Insurance Company.
An application for mortgage loan was filed by Rodolfo Reyes with the Commonwealth Insurance
Company and a Real Estate Mortgage Contract was executed as collateral to the mortgage loan. The loan
was payable in ten (10) years with a monthly amortization of P1,166.67. The monthly amortizations were
paid by Rodolfo Reyes and after his death, the balance of P109,797.64 was paid in full to the
Commonwealth Insurance by the Philam Life Insurance Co. as insurer of the deceased Rodolfo A. Reyes.’
”
5 _______________
On appeal to the CA, petitioner questioned the following findings of the trial
court: 1) that the house and lot had been paid in full from the proceeds of the loan
that Rodolfo Reyes obtained from the Commonwealth Insurance Company; 2) that
his salaries and earnings, which were his and Lourdes’ conjugal funds, paid for
the loan and, hence, the disputed property was conjugal; and 3) that petitioner’s
illegitimate children, not having been recognized or acknowledged by him in any
of the ways provided by law, acquired no successional rights to his estate.
_______________
5Id., pp. 2-9 & 120-127.
266
266 SUPREME COURT REPORTS ANNOTATED
Joaquino vs. Reyes
Ruling of the Court of Appeals
Affirming the RTC, the CA held that the property had been paid out of the
conjugal funds of Rodolfo and Lourdes because the monthly amortizations for the
loan, as well as the premiums for the life insurance policy that paid for the
balance thereof, came from his salaries and earnings. Like the trial court, it found
no sufficient proof that petitioner was financially capable of buying the disputed
property, or that she had actually contributed her own exclusive funds to pay for
it. Hence, it ordered her to surrender possession of the property to the respective
estates of the spouses.
The appellate court, however, held that the trial court should not have
resolved the issue of the filiation and the successional rights of petitioner’s
children. Such issues, it said, were not properly cognizable in an ordinary civil
action for reconveyance and damages and were better ventilated in a probate or
special proceeding instituted for the purpose.
Hence, this Petition. 6
Issues
Petitioner submits the following issues for the Court’s consideration:
“I.
Whether or not it has been indubitably established in a court of law and trier of facts, the
Regional Trial Court, that petitioner’s three [3] illegitimate children are x x x indeed the
children of the late Rodolfo Reyes.
“II.
Whether or not it is legally permissible for [respondents] to make a mockery of the law
by denying [the] filiations of their [two] 2 illegitimate sisters and one [1] illegitimate brother
when in fact the very complaint filed by their mother, the lawful wife, Lourdes[,] shows that
her husband Rodolfo
6 The case was deemed submitted for decision on October 7, 2003, upon the Court’s receipt of respondents’
Memorandum, signed by Atty. Edgar B. Francisco of Francisco & Francisco. Petitioner’s Memorandum, signed by Atty.
Teresita S. de Guzman of the Public Attorney’s Office (PAO), was received on July 30, 2003.
267
VOL. 434, JULY 13, 2004 267
Joaquino vs. Reyes
had illicit relations with the petitioner Milagros and had lived with her in a house and lot at
Baghdad Street.
“III.
Whether or not the fact that the Court of Appeals made a finding that the house and lot
at Baghdad Street are conjugal property of lawfully wedded Rodolfo and Lourdes including
the insurance proceeds which was used to pay the final bill for the house and lot, this will
prevail over Articles 19 and 21 of the Civil Code.
“IV.
Whether or not the Supreme Court should enforce the rule that the parties to a lawsuit
should only tell the truth at the trial and in [their] pleadings x x x.
“V.
Whether or not the legitimate children of the late Rodolfo Reyes should respect their
father’s desire that his illegitimate children should have a home or a roof over their heads in
consonance with his duty to love, care and provide for his children even after his death.” 7
The issues boil down to the following: 1) the nature of the house and lot on
Baghdad Street (BF Homes Parañaque, Metro Manila); and 2) the propriety of
ruling on the filiation and the successional rights of petitioner’s children.
The Court’s Ruling
The Petition is devoid of merit.
First Issue:
The Conjugal Nature of the Disputed Property
Before tackling the merits, we must first point out some undisputed facts and
guiding principles.
As to the facts, it is undisputed that the deceased Rodolfo Reyes was legally
married to Respondent Lourdes Reyes on January 3, 1947. It is also admitted 8
that for 19 years or so, and while their marriage was subsisting, he was actually
living with petitioner. It
_______________ dence —evidence that has greater weight or is more convincing than that which is
14

offered to oppose it. 15

7Petitioner’s Memorandum, pp. 19-20; Rollo, pp. 250-251. On the other hand, Article 144 of the Civil Code mandates a co-ownership
16

8Exhibit “A”, Marriage Contract between Rodolfo and Lourdes Reyes.

268 between a man and a woman who are living together but are not legally married.
Prevailing jurisprudence holds, though, that for Article 144 to apply, the couple
268 SUPREME COURT REPORTS ANNOTATED
must not be incapacitated to contract marriage. It has been held that the Article 17

Joaquino vs. Reyes is inapplicable to common-law relations amounting to adultery or concubinage, as

was during this time, in 1979, that the disputed house and lot was purchased and in this case. The reason therefor is the absurdity of creating a co-ownership in
registered in petitioner’s name. cases in which there exists a prior conjugal partnership between the man and his
Plainly, therefore, the applicable law is the Civil Code of the Philippines. lawful wife. 18

Under Article 145 thereof, a conjugal partnership of gains (CPG) is created upon In default of Article 144 of the Civil Code, Article 148 of the Family Code has
marriage and lasts until the legal union is dissolved by death, annulment, legal
9 been applied. The latter Article provides:
19

separation or judicial separation of property. Conjugal properties are by law

10
owned in common by the husband and wife. As to what constitutes such 11
properties are laid out in Article 153 of the Code, which we quote:
1. “(1)That which is acquired by onerous title during the marriage at the
expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;
2. (2)That which is obtained by the industry, or work, or as salary of the
spouses, or of either of them;
3. (3)The fruits, rents or interests received or due during the marriage,
coming from the common property or from the exclusive property of
each spouse.”
“Art. 148. In cases of cohabitation not falling under the preceding Article, only the
properties acquired by both of the parties through their actual joint contribution of money,
property, or industry shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption shall apply to joint
deposits of money and evidence of credit.
“If one of the parties is validly married to another, his or her share in the co-ownership
shall accrue to the absolute community or conjugal partnership existing in such valid
marriage. If the party which acted in bad faith is not validly married to another, his or her
share shall be for-
_______________
14 §1, Rule 133 of the Rules of Court.
15 Jison v. Court of Appeals, 350 Phil. 138, 173; 286 SCRA 495, 532, February 24, 1998.
16 Article 144 of the Civil Code reads in full:

Moreover, under Article 160 of the Code, all properties of the marriage, unless “ART. 144. When a man and a woman live together as husband and wife, but they are not married, or their marriage is void from the beginning, the
property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-
proven to pertain to the husband or the wife exclusively, are presumed to belong ownership.”
17 Tumlos v. Spouses Fernandez, 386 Phil. 936, 950; 330 SCRA 718, 732; Valdes v. Regional Trial Court, Br. 102,

to the CPG. For the rebuttable presumption to arise, however, the properties Quezon City, 328 Phil.1289, 1296; 260 SCRA 221, 226, July 31, 1996; Juaniza v. Jose, 89 SCRA 306, 308, March 30, 1979.
must first be proven to have been acquired during the existence of the marriage. 12
18 Tumlos v. Spouses Fernandez, supra.

19 Agapay v. Palang, 342 Phil. 302, 310; 276 SCRA 340, 348, July 28, 1997.

The law places the burden of proof on the plaintiffs (respondents herein) to
13

270
establish their claim by a preponderance of evi-
270 SUPREME COURT REPORTS ANNOTATED
_______________ Joaquino vs. Reyes
feited in the manner provided in the last paragraph of the preceding Article.
In the absence of a marriage settlement, the conjugal partnership of gains (CPG) is ordained.
9
“The foregoing rules on forfeiture shall likewise apply even if both parties are in bad
Article 175 of the Civil Code.
10
faith.”
Article 143 of the Civil Code.
Thus, when a common-law couple have a legal impediment to marriage, only the
11

Diancin v. Court of Appeals, 345 SCRA 117, 122, November 20, 2000; Francisco v. Court of
12

Appeals, 359 Phil. 519, 526; 299 SCRA 188, 194, November 25, 1998; Tan v. Court of Appeals, 339 Phil. property acquired by them—through their actual joint contribution of money,
423, 430-431; 273 SCRA 229, 236, June 10, 1997. property or industry—shall be owned by them in common and in proportion to
This is defined under §1 of Rule 131 of the Rules of Court as follows:
13
their respective contributions.
“Section 1. Burden of Proof.—Burden of proof is the duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law.” With these facts and principles firmly settled, we now proceed to the merits of
269 the first issue.
VOL. 434, JULY 13, 2004 269 The present controversy hinges on the source of the funds paid for the house
and lot in question. Upon the resolution of this issue depends the determination
Joaquino vs. Reyes
of whether the property is conjugal (owned by Rodolfo and Lourdes) or exclusive
(owned by Milagros) or co-owned by Rodolfo and Milagros.
 The above issue, which is clearly factual, has been passed upon by both the _______________
trial and the appellate courts, with similar results in favor of respondents. Such
finding is generally conclusive; it is not the function of this Court to review This was released by Warner Barnes & Co., Inc.; Exhibit “C”, Records, p. 15; Rollo, p. 62.
22

See Exhibit “F”, Deed of Absolute Sale dated July 12, 1979.
23

questions of fact. 20
See Exhibit “I”, Application for Mortgage Loan.
24

Moreover, it is well-settled that only errors of law and not of facts are Exhibit “I-1”.
25

reviewable by this Court in cases brought to it from the Court of Appeals or under See Exhibit “H”. The mortgage was executed by Milagros Joaquino to secure the loan of Rodolfo
26

Reyes, whom she had appointed as her attorney-in-fact, also on July 12, 1979. See also Exhibit “G”,
Rule 45 of the Rules of Court. This principle applies with greater force herein,
21

Special Power of Attorney.

because the CA came up with the same factual findings as those of the RTC. See Exhibit “J”, Ledger of Payments re Account of Rodolfo Reyes.
27

Even then, heeding petitioner’s plea, we have gone through the pleadings and Ibid.
28

the evidence presented by the parties to find out if there is any circumstance that See Exhibit “K”, Certification dated August 18, 1982 from Commonwealth Insurance Company,
29

which confirmed that Philam Life Insurance Company had paid the balance of the mortgage loan account
might warrant a reversal of the factual findings. Unfortunately for petitioner, we of Rodolfo Reyes.
have found none. 272

272 SUPREME COURT REPORTS ANNOTATED

_______________
Joaquino vs. Reyes
20Twin Towers Condominium Corporation v. Court of Appeals, 398 SCRA 203, 222, February 27, Indeed, it does not appear that she was gainfully employed at any time after
2003; Yu Bun Guan v. Ong, 419 Phil 845, 854; 367 SCRA 559, 566, October 18, 2001; Boneng v. 1961 when the property was purchased. Hearsay are the Affidavits and the
30 31

People, 363 Phil. 594, 600; 304 SCRA 252, March 4, 1999.
21Ninoy Aquino International Airport Authority v. Court of Appeals, 398 SCRA 703, 710, March 10,
undated Certification she had presented to prove that she borrowed money from
32

2003; Spouses Calvo v. Spouses Vergara, 423 Phil. 939, 947; 372 SCRA 650, December 19, 2001; Sps. Uy her siblings and had earnings from a jewelry business. Respondents had not been
Tansipek v. Philippine Bank of Communications, 423 Phil. 727, 733; 372 SCRA 456, December 14, 2001. given any opportunity to cross-examine the affiants, who had not testified on
271 these matters. Based on the rules of evidence, the Affidavits and the Certification
VOL. 434, JULY 13, 2004 271 have to be rejected. In fact, they have no probative value. The CA was also 33

Joaquino vs. Reyes correct in disregarding petitioner’s allegation that part of the purchase money
had come from the sale of a drugstore four years earlier.
Indeed, a preponderance of evidence has duly established that the disputed house
34

Under the circumstances, therefore, the purchase and the subsequent

and lot was paid by Rodolfo Reyes, using his salaries and earnings. By substantial
registration of the realty in petitioner’s name was tantamount to a donation by
evidence, respondents showed the following facts: 1) that Rodolfo was gainfully
Rodolfo to Milagros. By express provision of Article 739(1) of the Civil Code, such
employed as comptroller at Warner, Barnes and Co., Inc. until his retirement on
donation was void, because it was “made between persons who were guilty of
September 30, 1980, upon which he received a sizeable retirement package; 2) 22

adultery or concubinage at the time of the donation.”

that at exactly the same time the property was allegedly purchased, he applied 23

The prohibition against donations between spouses must likewise apply to

for a mortgage loan intended for “housing” from the Commonwealth Insurance
35

24 25

donations between persons living together in illicit relations; otherwise, the latter
Company; 3) that he secured the loan with a real estate mortgage over the same 26

would be better situated than the former. Article 87 of the Family Code now
property; 4) that he paid the monthly amortizations for the loan as well as the
36

27

expressly provides thus:

semi-annual premiums for a Philam Life insurance policy, which he was required
28

“Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the
to take as additional security; and 5) that with the proceeds of his life insurance spouses during the marriage shall be void, except moderate gifts which the spouses may
policy, the balance of the loan was paid to Commonwealth by Philam Life give each other on the occasion of
Insurance Company. 29

All told, respondents have shown that the property was bought during the _______________
marriage of Rodolfo and Lourdes, a fact that gives rise to the presumption that it
is conjugal. More important, they have established that the proceeds of the loan 30 Her Service Record, Exhibit “4”, showed that she was employed only until July 19, 1961, as clerk at the Office of the

Governor of Cebu.
obtained by Rodolfo were used to pay for the property; and that the loan was, in 31 Exhibits “10” and “40”. These Affidavits, dated April 7, 1986 and November 27, 1987, were executed by Teresa

turn, paid from his salaries and earnings, which were conjugal funds under the Joaquino-Bermejo and Jesus B. Joaquino—petitioner’s sister and brother, respectively.
32 See Exhibit “39.”

Civil Code. 33 De la Torre v. Court of Appeals, 381 Phil. 819, 829; 325 SCRA 11, 19-20, February 8, 2000; Midas Touch Food

In contrast, petitioner has failed to substantiate either of her claims—that she Corporation v. National Labor Relations, 328 Phil. 1033, 1044; 259 SCRA 652, 661, July 29, 1996.
34 The Absolute Deed of Sale over the drugstore was executed on February 14, 1975. Exhibit “3”, Folder of Exhibits.

was financially capable of buying the house and lot, or that she actually 35 Article 133 of the Civil Code.

contributed to the payments therefor. 36 Arcaba v. Vda. de Batocael, 370 SCRA 414, 422, November 22, 2001; Matabuena v. Cervantes, 148 Phil. 295, 298-

299; 38 SCRA 284, 288, March 31, 1971.

273
 VOL. 434, JULY 13, 2004
Joaquino vs. Reyes
any family rejoicing. The prohibition shall also apply to persons living together as husband
and wife without a valid marriage.” (Italics supplied)
Regarding the registration of the property in petitioner’s name, it is enough to
stress that a certificate of title under the Torrens system aims to protect
dominion; it cannot be used as an instrument for the deprivation of ownership. It
has been held that property is conjugal if acquired in a common-law relationship
during the subsistence of a preexisting legal marriage, even if it is titled in the
name of the common-law wife. In this case, a constructive trust is deemed
38
created under Article 1456 of the Civil Code, which we quote:
“Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from whom
the property comes.”
The registration of the property in petitioner’s name was clearly designed to
deprive Rodolfo’s legal spouse and compulsory heirs of ownership. By operation of
law, petitioner is deemed to hold the property in trust for them. Therefore, she
cannot rely on the registration in repudiation of the trust, for this case is a well-
known exception to the principle of conclusiveness of a certificate of title.
Second
Ruling on Illegitimate Filiation Not Proper
It is petitioner’s alternative submission that her children are entitled to a share
in the disputed property, because they were voluntarily acknowledged by Rodolfo
as his children. Claiming that the issue of her children’s illegitimate filiation was
duly established in the trial court, she faults the CA for ruling that the issue was
improper in the instant case.
Her position is untenable.
_______________
Adriano v. Court of Appeals, 385 Phil. 474, 485-486; 328 SCRA 738, 747, March 27, 2000
37
(citing Padilla v. Padilla, 74 Phil. 377, 383, October 4, 1943).
Belcodero v. Court of Appeals, 227 SCRA 303, 307-308, October 20, 1993 (cited in Adriano v. Court
38
of Appeals, supra).
Adriano v. Court of Appeals, supra; Padilla v. Padilla, supra.
39
274
274 SUPREME COURT REPORTS ANNOTATED
Joaquino vs. Reyes
Indeed, it has been ruled that matters relating to the rights of filiation and
heirship must be ventilated in the proper probate court in a special proceeding
instituted precisely for the purpose of determining such rights. Sustaining the 40
appellate court in Agapay v. Palang, this Court held that the status of an
41
illegitimate child who claimed to be an heir to a decedent’s estate could not be
adjudicated in an ordinary civil action which, as in this case, was for the recovery
of property.
273 Considerations of due process should have likewise deterred the RTC from
ruling on the status of petitioner’s children. It is evident from the pleadings of the
parties that this issue was not presented in either the original or the 42
Supplemental Complaint for reconveyance of property and damages; that it was
43
not pleaded and specifically prayed for by petitioner in her Answers thereto; and 44
that it was not traversed by respondents’ Reply to the Supplemental
Complaint. Neither did petitioner’s Memorandum, which was submitted to the
45 46
trial court, raise and discuss this issue. In view thereof, the illegitimate filiation
37
of her children could not have been duly established by the proceedings as
required by Article 887 of the Civil Code. 47
In view of the foregoing reasons, the CA cannot be faulted for tackling the
propriety of the RTC’s ruling on the status of the children of petitioner, though
she did not assign this matter as an error. The general rule—that only errors
assigned may be passed upon by an appellate court—admits of exceptions. Even
unassigned errors may be taken up by such court if the consideration of those
errors would be necessary for arriving at a just decision or for serving the interest
of justice.48
_______________
39
Issue: 40Agapay v. Palang, supra, p. 313.
41Supra.
42Records, pp. 7-11.
43Id., pp. 115-117.
44Id., pp. 27-19 and pp. 113-115, respectively.
45Id., pp. 124-125.
Id., pp. 206-219.
46
47The Article requires that all cases of illegitimate filiation must be duly proved.
48De Vera, Jr. v. Court of Appeals, 419 Phil. 820, 834; 367 SCRA 534, 548, October 18,
2001; Diamonon v. Department of Labor and Employment, 384 Phil. 19, 23; 327 SCRA 283, 288, March 7,
2000.
275
VOL. 434, JULY 13, 2004 275
Joaquino vs. Reyes
The invocation by petitioner of Articles 19 and 21 of the Civil Code is also
49 50
unmeritorious. Clearly, the illegitimate filiation of her children was not the
subject of inquiry and was in fact not duly established in this case. Thus, she
could not have shown that respondents had acted in bad faith or with intent to
prejudice her children. These are conditions necessary to show that an act
constitutes an abuse of rights under Article 19. She also failed to show that
51
respondents—in violation of the provisions of Article 21 of the Civil Code—had
acted in a manner contrary to morals, good customs or public policy.
Moreover, we note that the issue concerning the applicability of Articles 19
and 21 was not raised by petitioner in the trial court or even in the CA. Hence,
she should not be permitted to raise it now. Basic is the rule that parties may not
bring up on appeal issues that have not been raised on trial. 52
WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and
Resolution of the Court of Appeals AFFIRMED. Costs against petitioner.
 SO ORDERED.
Davide, Jr. (C.J., Chairman), Ynares-Santiago, Carpio and Azcuna,
JJ., concur.
Petition denied, assailed decision and resolution affirmed.

_______________

49 Article 19 of the Civil Code, which embodies the principle of abuse of rights, provides:
“Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.”
50 Article 21 of the Civil Code reads as follows:
“Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.”
Barons Marketing Corp. v. Court of Appeals, 286 SCRA 96, 105, February 9, 1998.
51

Lazaro v. Court of Appeals, 423 Phil. 554, 558; 372 SCRA 308, 311, December 14, 2001; Magellan
52

Capital Management Corporation v. Zosa, 355 SCRA 157, 170, March 26, 2001; Sumbad v. Court of
Appeals, 308 SCRA 575, 596, June 21, 1999.
276

276 SUPREME COURT REPORTS ANNOTATED

People vs. Casolocan
Note.—Considering that the two marriages are void ab initio, the applicable
property regime would not be absolute community or conjugal partnership of
property, but rather, be governed by the provisions of Articles 147 and 148 of the
Family Code on “Property Regime of Unions without Marriage.” (Cariño vs.
Cariño, 351 SCRA 127 [2001])

——o0o——

© Copyright 2018 Central Book Supply, Inc. All rights reserved.

 [No. 9984. March 23, 1916.]
PETRONA JAVIER, plaintiff and appellee, vs. LAZARO OSMEÑA, as
administrator of the estate of the deceased Tomas Osmeña, defendant and
appellant.
1. 1.HUSBAND AND WlFE; COMMUNITY PROPERTY; LlABILITY FOR THE
HUSBAND'S DEBTS.—Pursuant to article 1401 of the Civil Code, the fruits,
revenue, or interest collected or accrued during the marriage relation, coming
from the partnership property or from that which belongs to either one of the
spouses, are community property; and, according to article 1385 of the same
code, the fruits of the paraphernal property form a part of the assets of the
conjugal partnership and are liable for the payment of the expenses of the
married couple.
1. 2.ID.; ID.; ID.—The conjugal partnership shall be liable for all the debts and
obligations contracted during the marriage by the husband for the support of the
family (art. 1408, Civ. Code). The husband's creditor may bring his action not, as
a general rule, against the paraphernal property, but against the fruits and
income of such property of the wife.
1. 3.ID.; ID.; ID.—The debts contracted by the husband during the marriage relation,
for and in the exercise of the industry or profession by which he contributes
toward the support of his family, are not his personal and private debts, and the
products or income from the wife's own property, which, like those of her
husband's, are liable for the payment of the marriage expenses, cannot be
excepted from the payment of such debts.
APPEAL from a judgment of the Court of First Instance of Manila. Crossfield, J.
The facts are stated in the opinion of the court.
Haussermann, Cohn & Fisher for appellant.
Southworth, Hargis, Adams & Jordain for appellee.
337
VOL. 34, MARCH 23, 1916. 337
Javier vs. Osmeña.
ARELLANO, C. J.:
Florentino Collantes, husband of Petrona Javier, became indebted to the estate of
Tomas Osmeña in the sum of P26,467.94. On June 15, 1913, judgment for this
amount was rendered in behalf of the estate and the sheriff executed it by selling
at public auction all the right, title, interest or share which the judgment debtor,
Collantes, had or might have in two parcels of improved real estate situated in
this city of Manila, and especially the usufructuary interest therein of Pascuala
Santos, the surviving widow of Felix Javier y Sanchez, which interest was
acquired by Petrona Javier, Collantes' wife, on March 20, 1911.
Petrona Javier, Collantes' wife, was the only daughter of Felix Javier and
Matea Corunan, the latter of whom died in 1901, and the former in 1908. Felix
Javier, after the death of his wife Matea Corunan, married Pascuala Santos. It
was in the year 1890 that Florentino Collantes and Petrona Javier had contracted
marriage. Felix Javier and his wife Matea Corunan left at their death, as an
inheritance to their only daughter Petrona Javier, two urban properties situated
one on Calle Carriedo, and the other on Calle San Sebastian. For the purpose of
consolidating her full ownership in and to both properties, Petrona Javier
acquired from her father's second wife, Pascuala Santos, the latter's usufructuary
right in her deceased husband's estate for the sum of P3,000, which amount, it
appears, Javier was obliged to borrow, giving as security for the loan a mortgage
on the property she had inherited.
These properties that were inherited by Petrona Javier from. her parents
were those levied upon by the sheriff in the execution of the judgment against
Florentino Collantes, and notwithstanding her protests the sale was carried out.
The successful bidder therein was the Osmeña estate itself which paid P500 for
each parcel of property, that is, P1,000 for Collantes' right in both parcels and in
the usufructuary interest acquired by his wife from Pascuala Santos.
Inasmuch as Petrona Javier claimed that her husband Collantes had no rights
whatever in said two pieces of
338
338 PHILIPPINE REPORTS ANNOTATED
Javier vs. Osmeña.
property or in the usufructuary interest acquired by her, she filed claim of
intervention in order to recover her ownership of the properties and her right of
usufruct after the sheriff's sale should be annulled.
The defendant Osmeña estate, in answer to the complaint, admitted plaintiff's
exclusive right of ownership in the said two aforementioned parcels of real estate,
subject to the usufructuary right of the second wife of plaintiff's father, and also
admitted the purchase of this right by plaintiff. Defendant claimed, however, that
the money with. which said usufructuary interest was purchased belonged to the
conjugal partnership and therefore that the right of usufruct so acquired belonged
to the said conjugal partnership. Defendant concluded by praying that the court
render judgment holding that the revenues from both properties are conjugal
partnership property of the married couple Collantes and Javier; that said
revenues be made liable for the payment of the judgment rendered in behalf of
the Osmeña estate; that for this purpose a receiver be appointed to take charge of
said two properties and manage them with the object of applying the revenues
obtained therefrom to the payment of the judgment obtained by the Osmeña
estate against Collantes.
The Court of First Instance of Manila rendered judgment annulling only the
sale of the two properties and ordering the cancellation of their registration in the
property registry, with the costs of the suit.
Defendant appealed.
 The question raised in this appeal is whether the sum owed by the husband to
the Osmeña estate can and should be paid out of the fruits and revenues of the
two aforementioned parcels of real estate that exclusively belong to the wife, the
herein plaintiff, as prayed for by the appellant in his written answer.
To decide this question the nature of the debt must be inquired into and
defined. The appellee herself, in this instance, describes it thus:
"A short while prior to 1892, Collantes was employed by
339
VOL. 34, MARCH 23, 1916. 339
Javier vs. Osmeña
appellee's father, Felix Javier, in a commission business which the latter
conducted in Manila. In 1902, Felix Javier retired from the business and was
succeeded therein by Collantes who, as a consequence, changed his commercial
status as an employee of his father-in-law to that of an independent commission
merchant, and continued that business for six years, or until 1908. One of the
chief clients (principals) both of Javier and Collantes, was Tomas Osmeña, a
merchant of Cebu, whom Javier, and later Collantes, had represented as his
agents in Manila for the sale of tobacco consigned to them by Osmeña from Cebu
and for the investment of the profits, in Osmeña's name and as his agents in
Manila, in merchandise which these agents consigned to him at Cebu (record, p.
2), When Javier retired from the commission business in 1902, it appears that he
was indebted to Tomas Osmeña in the sum of four or five thousand pesos, and
that this debt was assumed by his successor Collantes. How this debt originated,
the record does not show. In 1908, Collantes rendered a statement (they probably
were accounts) to Osmeña which showed that his debt to the latter amounted to
fourteen or fifteen thousand pesos. No steps were taken by Osmeña during his
lifetime to collect this debt, but after his death a judgment for the same was
obtained by the administrator of his estate in June, 1913. This judgment was
founded on the statement made by Collantes in 1908 in which he admitted his
debt, together with interest thereon at the rate of 12 per centum per annum.
"Although the appellee admits that the debt arose out of the business
conducted by her father and subsequently by her husband, there is no evidence
that throws any light on the particular transaction which was the cause of the
indebtedness * * *. It must be observed that there is the natural presumption of
fact that whatever he (Collantes) may have contributed toward defraying the
expenses of his family, was contributed by him out of what he earned by the
commission paid him for the services he rendered to his clients as a broker (as
commission merchant). It
340
340 PHILIPPINE REPORTS ANNOTATED
Javier vs. Osmeña
has not been proven or alleged that any part of the debt to Osmeña was
originated by Collantes' having paid the family expenses as they are defined in
paragraph 5 of article 1408 of the Civil Code." (Appellee's brief, pp. 3 and 4.)
The appellee herself having set forth the origin of the debt, which is none
other than the balance against Collantes resulting from the accounts rendered by
him as commissionmerchant to his principal Osmeña; and the appellee also
having set forth that "there is the natural presumption of fact that whatever
Collantes contributed towards defraying the family expenses was contributed by
him out of what he earned by the commission paid him for the services he
rendered to his clients as commission merchant," it is decisive and conclusive that
the debt must be paid out of the community property of the marriage, since, as
article 1408 of the Civil Code provides:
"The conjugal partnership shall be liable for:
"1. All the -debts and obligations contracted during the marriage by the
husband, * * *.
* * * * * * *
"5. The support of the family * * *."
And inasmuch as "the f ruits, revenue, or interest collected or accrued during
the marriage coming from the partnership property, or from that which belongs to
either one of the spouses," is community property, according to article 1401; and,
furthermore, as the law expressly provides that "the fruits of the paraphernal
property form a part of the assets of the conjugal partnership, and are liable for
the payment of the marriage expenses" (art. 1385), hence it follows that the
creditor of the husband may bring his action, not against the paraphernal
property, but against the fruits and revenues of this private property of the wife.
This conclusion is not barred by the provision of article 1386, to wit, that "the
personal obligation of the husband cannot be paid out of the fruits of the
paraphernal property unless it be proven that they were incurred for the benefit
341
VOL. 34, MARCH 23, 1916. 341
Javier vs. Osmeña.
of the f amily." It is chiefly upon this article that appellee's whole brief is based.
The antecedents of this article of the Civil Code are not only the laws
embraced in some of the codes enacted prior thereto, but principally the
numerous cases decided by the supreme court of Spain which interpret
the old law which the appellee says is identical with article 1386 of the present
Civil Code. Among the various decisions which might be cited, the most important
is that of June 9, 1883, because it covers the entire question at issue in this case:
Quirico Casanovas was a creditor of Jose Gimiso for the value of certain drafts
protested for nonpayment; he brought suit to recover and attached various
properties belonging to the marriage partnership, for Gimiso was married, and
also several parcels of real estate that belonged to the debtor's wife, Antonia
Carruana. The latter filed a third party claim and alleged that this real estate
was her paraphernal property and that the fruits thereof were subject to the
payment of the marriage expenses; that the husband could dispose of such fruits
only after the payment of such expenses, among which his personal debts were
not included; that this doctrine was sanctioned by the decisions of the supreme
court of March 1, 1867, and June 20, 1879, which hold that the rights in the
dowry and paraphernal fruits or revenue, granted by law to the husband as the
head of the family and manager of the conjugal partnership, are understood to be
subordinate to the preferred obligation of paying the marriage partnership
expenses with such fruits or revenue. Casanovas answered the complaint
alleging, among other reasons, that Gimiso's debt arose from shipments of paper
and other articles connected with the business in which he was engaged, and that
the supreme court itself, in its decisions of October 26, 1863, November 25, 1864,
October 8, 1866, and March 1 and October 27, 1867, had laid down the rule that,
although the management of the wife's paraphernal property pertains to her, it is
understood to be without prejudice to the husband's collecting
342
342 PHILIPPINE REPORTS ANNOTATED
Javier vs. Osmeña.
and disposing of the products of such property, as the head of the family and for
the purpose of attending to its needs. The Audiencia of Valencia decided the suit
in favor of Casanovas. But Carruana took it in cassation to the supreme court,
alleging that it violated (second assignment of error) "the well-established rule
reaffirmed by the supreme court in its decision of February 21,1881, and several
others, to the effect that in order that a creditor may secure preference over the
rights of the wife with respect to the products and revenue of the paraphernal
property, he must prove at trial that the debt, the payment of which he demands,
was contracted by the husband to meet obligations of the conjugal partnership;
that this was not proven in the case at bar, and it is insufficient to say, as it is
said in the judgment appealed from, that among the resources declared by the
husband and those for which the revenue from the wife's property is liable, should
be included the credit, that is, the debts, for, according to well-settled
jurisprudence of that supreme court, any money or sums borrowed by the
husband must be invested in business of the conjugal partnership."
The decision of the supreme court did not sustain the appeal in cassation:
"Considering that the debts contracted by the husband during the marriage, f
r and in the exercise of the industry or prof ession by which he contributes toward
the support of his family, cannot be deemed his personal and private debts, nor
consequently, can they be excepted f rom payment out of the products or revenue
of the wife's own property which are liable, like those of her husband's, for the
discharge of the liabilities of the married couple; and considering that the debt
claimed by Don Quirico Casanovas, for the payment of which attachment has
been levied on certain property belonging to the petitioner, is
of this nature, inasmuch as it was contracted in the exercise of the industry or
business carried on by her husband; therefore, the doc-trine cited in
the second assignment of error of the appeal, is
343
VOL, 34, MARCH 23, 1916. 343
Javier vs. Osmeña.
inapplicable, and has not been violated by the judgment appealed from, in
holding, as it does, that intervention prayed for by the wife, cannot be allowed."
The appellee herself established the presumption that whatever the husband
contributed toward the support of his family, he gave out of what he earned from
his commissions and profession. In conformity, then, with the aforecited decision
on cassation, the debts contracted for and in the exercise of such industry or
profession cannot be considered as his personal and private debts, nor can they be
excepted from payment out of the products or revenue of the wife's own property,
which, like that of her husband's, is liable for the discharge of the marriage
liabilities. So far were they from being personal debts of the husband, that the
wife herself avers that the payment to Osmeña of four or five thousand pesos of
the twenty-six and odd thousand pesos of the total debt, had been assumed by her
husband, relieving her father therefrom. He would not have assumed the
payment for private purposes of his own, for his purely personal satisfaction, and
in the eyes of the law, notwithstanding his having assumed payment, relieving
her father-in-law therefrom, he was a perfect creditor of the latter's heir in the
settlement of her father's estate and could have deducted the amount of that
credit of four or five thousand pesos from her entire inheritance, that is, f rom
that same property, subsequently called paraphernal, that his wife inherited
intact.
"Subrogation transf ers to the subrogated the credit, with the corresponding
rights, either against the debtor or against third persons, be they sureties or
holders of mortgages." (Art. 1212, Civ. Code.)
It is undeniable that if in the same manner as the 26,000 and odd pesos were
a loss, they had been a gain, the husband would not have been permitted to call
the amount his personal and private gain; in the same way, the debts or losses
resulting f rom the business cannot be called his personal and private debts or
losses.
344
344 PHILIPPINE REPORTS ANNOTATED
Javier vs. Osmeña.
The petition of the defendant in his answer to the complaint, to wit, that the sum
owed by the husband to the Osmeña estate can and ought to be paid out of the
fruits or revenue of the two parcels of real estate mentioned, which belong
exclusively to the wife, now the plaintiff, is proper and in accordance with the
law.
Defendant also prayed in his answer that a receiver be appointed to take
charge of the management of the said two properties and apply their revenue to
the payment of the judgment rendered in behalf of the Osmeña estate against
Collantes.
According to article 1384, the wife shall have the management of her
paraphernal property. Pursuant to article 1412, the husband is the administrator
of the community property of the conjugal partnership and of the conjugal capital
in general, and we have already said that the fruits of the paraphernal property
form a part of the assets of the conjugal partnership (art. 1385). To confide the
management of the property and of its revenue to a receiver would be to deprive
the husband and the wife of their respective rights. In the case at bar, the wife
has given no cause for being deprived, nor has any reason whatever been
advanced for depriving her, of her right to manage her own property. The same
may be said of the husband with respect to the community property of the
marriage. There is no reason to change the present status of affairs. Neither has
any sufficient reason been offered for the appointment of a receiver, nor has any
of the cases enumerated in section 174 of the Code of Civil Procedure, been
invoked.
Therefore, the appellant's petition for the appointment of a receiver must be
denied.
The lower court having failed to make any ruling on the declaration and the
appointment prayed for by appellant, the judgment appealed from is reversed in
so far as regards this omission, and we hold that the fruits and revenue from the
two properties belonging to the wife, described in the judgment appealed from,
are liable for the payment of the debt owing by the husband, the judgment debtor,
and that
345
VOL. 34, MARCH 23, 1916. 345
Melliza vs. Towle and Mueller.
there is no need for the appointment of a receiver. Without special finding as to
costs, it is so ordered.
Torres, Trent, and Araullo, JJ., concur.
Moreland, J., concurs in the result.
Judgment modified.

_______________

© Copyright 2018 Central Book Supply, Inc. All rights reserved.


330 SUPREME COURT REPORTS ANNOTATED
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
No. L-56479. November 15, 1982. *
SOCORRO L. VDA. DE STA. ROMANA, petitioner, vs.PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK and HON. SANCHO Y. INSERTO, as
Judge of Branch I, COURT OF FIRST INSTANCE OF ILOILO, respondents.
Civil Law; Conjugal Partnership; Unpaid purchase price of lot bought by the deceased
husband in behalf of the conjugal partnership chargeable against the partnership assets as
the obligation was contracted for the benefit of the conjugal partnership.—The action filed by
private respondent against the petitioner Ramon Sta. Romana was clearly a suit to enforce
an obligation of the conjugal partnership. Civil Case No. 7678 arose out of the failure of
Ramon Sta. Romana to pay the purchase price of a lot he bought from C.N. Hodges
presumably in behalf of the conjugal partnership. Petitioner does not deny the conjugal
nature of both Lots Nos. 1258-G and 1258-F. Indeed she bases her contention on the claim
that at least Lot No. 1258-F, together with its improvements existing thereon, constitutes
property of the conjugal partnership. It may not be denied, therefore, that the liability
incurred by Ramon Sta. Romana is chargeable against the conjugal partnership assets, it
being undisputed that the said obligation was contracted by the husband for the benefit of
the conjugal partnership. (Art. 161 [1], Civil Code.)
Same; Same; Same; Parties; Inclusion of wife as party defendant in a suit against the
husband to enforce an obligation either pertaining to him alone or one chargeable against the
conjugal partnership in order to bind the conjugal partnership property, not necessary;
Reasons.—The non-inclusion of the herein petitioner as a party-defendant in Civil Case No.
7678 is immaterial. There is no rule or law requiring that in a suit against the husband to
enforce an obligation, either pertaining to him alone or one chargeable against the conjugal
partnership, the defendant husband must be joined by his wife. The contrary rule is
prescribed in Section 4, Rule 3, of the Rules of Court
________________
*FIRST DIVISION.
331
VOL. 118, NOVEMBER 15, 1982 331
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
and Article 113 of the Civil Code, but not the other way around, obviously in
recognition of the legal status of the husband as the administrator of the conjugal
partnership. (Art. 112, Civil Code.) There was, therefore, no need of including the petitioner
as a party in Civil Case No. 7678 for the purpose of binding the conjugal partnership
properties for the satisfaction of the judgment that could be rendered therein.
Same; Same; Same; Remedial Law; Civil Procedure; Res Judicata; Conclusiveness of
judgment; Issues raised in one case and which were squarely placed before and ruled upon by
a court in connection with the execution proceeding in another case, barred by res judicata or
conclusiveness of judgment—We likewise agree with the view that the issues raised by the
petitioner in Civil Case No. 13533 may not be litigated anew, if not by the principle of res
judicata but at least by conclusiveness of judgment. The record reveals that the contentions
being raised by the petitioner in Civil Case No. 13533 were squarely placed before and ruled
upon by the respondent court in connection with the execution proceedings in Civil Case No.
7678. After the writ of execution was issued on October 5, 1979 (Annex E, Petition), herein
petitioner filed a motion to quash the said writ of execution (Annex F, Petition).
Same; Same; Same; Same; Same; Same; Requisites of res judicata present; Underlying
philosophy of the doctrine of res judicata.—It is Our considered opinion that such
circumstance does not militate against the existence of res judicata if all the requisites for
its application are otherwise present. The order denying the petitioner’s motion to quash the
writ of execution issued in Civil Case No. 7678 is not merely an interlocutory order. It
attained finality due to the failure of the petitioner to appeal or seek a review of the same. It
is not questioned that the trial court had jurisdiction to take cognizance of the motion to
quash the writ of execution and over the parties litigating the same. The order of denial is
on the merits of the motion. There was also identity of parties involved in the motion to
quash the writ of execution, identity of subject-matter and identity of causes of action. The
requisites of res judicata being all present in the incident concerning the issuance of the
writ of execution, We feel no hesitancy in declaring that the filing of Civil Case No. 13533 is
barred by the principle of res judicata. The underlying philosophy of this doctrine is: “x x x
that parties ought not to be permitted to litigate the same issue more than once; that, when
a right or fact has been judicially tried and determined by a court of competent jurisdiction,
or an opportunity for such trial has been given the judgment of
332
3 SUPREME COURT REPORTS ANNOTATED
32
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
the court, so long as it remains unreversed, should be conclusive upon the parties and
those in privity with them in law or estate. x x x x x x.” (2 Moran Rules of Court, p. 362,
citing Sta.Ana v. Narvades,L-24390, Nov. 28, 1969, 30 SCRA 454, 463.)
Same; Same; Same; Same; Same; Same; Principle of conclusiveness of judgment.—In
any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment which appears upon its face to have
been so adjudged, or which was actually and necessarily included therein or necessary
thereto. (SEC. 49, Rule 39, New Rules of Court.)
PETITION for review by certiorari the Order of the Court of First Instance of
Iloilo, Br. I. Inserto, J.
The facts are stated in the opinion of the Court.
German M. Lopez for petitioner.
Tirol & Tirol Law Offices for private respondent.
VASQUEZ, J.:
In this petition for review by certiorari, petitioner seeks to annul and set aside an
Order of the respondent Judge of the Court of First Instance of Iloilo, Branch I,
which dismissed Civil Case No. 13533, entitled “Socorro L. Vda. de Sta. Romana,
Plaintiff, versus The Philippine Commercial and Industrial Bank, et al.,
Defendants.” The petition was given due course in the Resolution dated July 29,
1981 and the parties have submitted their respective memoranda.
Civil Case No. 13533 is an offshoot of Civil Case No. 7678, entitled “PCIB, et
al. versus Ramon Sta. Romana” which was filed way back on August 6, 1968, Civil
Case No. 7678 was an action for rescission with damages filed by herein private
respondent PCIB as Administrator of the estate of the deceased C. N. Hodges, and
for the recovery of a parcel of land known as Lot No. 1258-G which Ramon Sta.
Romana purchased from the late C. N. Hodges under a Contract to Sell. On
motion of private respondent PCIB, a writ of preliminary attachment
333
VOL. 118, NOVEMBER 15, 1982 333
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
was issued in said case by virtue of which the Sheriff levied on August 23, 1968 on
the rights and interests of Ramon Sta. Romana over Lot No. 1258-F and the
improvements existing thereon, which lot Ramon Sta. Romana also purchased
from C. N. Hodges under another Contract to Sell. A third party claim was filed
by a certain Emilio Sta. Romana who claimed that Lot No. 1258-F and its
improvements had been sold to him by Ramon Sta. Romana on August 16, 1963.
The trial court rendered its decision in Civil Case No. 7678 on June 16, 1975
rescinding the Contract to Sell and ordering Ramon Sta. Romana to return the
possession of Lot No. 1258-G to the herein private respondent, as well as to pay
rentals or damages for use and occupation thereof. The decision was appealed to
the Court of Appeals which affirmed the same and further ordered Ramon Sta.
Romana to pay the land taxes and the interest thereon.
On October 5, 1979, the trial judge issued a writ of execution by virtue of
which the Sheriff issued a notice of sale at public auction of the rights and
interests of Ramon Sta. Romana as defendant in the case over Lot No. 1258-F and
its improvements for the satisfaction of the damages awarded in the decision.
Ramon Sta. Romana died intestate on October 21, 1979. On November 26,
1979, herein petitioner Socorro L. Vda. de Sta. Romana, the surviving spouse of
Ramon Sta. Romana, filed a motion to quash the writ of execution alleging
principally that the proceedings in Civil Case No. 7678 did not affect her rights
and interests over Lot No. 1258-G and Lot No. 1258-F inasmuch as she was not a
party in said action. The trial court denied the said motion to quash the writ of
execution. The public auction sale was held and the private respondent was
issued the corresponding certificate of sale. A Motion for Reconsideration filed by
the herein petitioner was likewise denied in the Order dated May 15, 1980.
On September 1, 1980, herein petitioner instituted Civil Case No. 13533
praying therein that the writ of execution and the levy on execution made on Lot
No. 1258-F and the improvements existing thereon be annulled insofar as her
ONEHALF (1/2) share in the said properties is concerned, and that
334
334 SUPREME COURT REPORTS ANNOTATED
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
she be declared the lawful and absolute owner of said ONEHALF (1/2) share of
the said properties. Private respondent filed a motion to dismiss the complaint in
Civil Case No. 13533 on the ground of res judicata. After the petitioner filed her
opposition to the motion to dismiss, the respondent court, in its Order dated
November 30, 1980, granted the motion to dismiss on the grounds of res
judicata and laches. This is the order that the petitioner seeks to annul in the
present proceeding.
Petitioner assails the pronouncement by the respondent court that Civil Case
No. 13533 is barred by res judicata on the principal ground that, not being a party
in Civil Case No. 7678, she could not be bound by the judgment rendered in said
case and, consequently, the writ of attachment and the consequent writ of
execution which levied on Lot No. 1258-F, together with its existing
improvements, are null and void insofar as her ONE-HALF (1/2) interest in said
properties is concerned.
We find no merit in this contention of the petitioner.
The action filed by private respondent against the petitioner Ramon Sta.
Romana was clearly a suit to enforce an obligation of the conjugal partnership.
Civil Case No. 7678 arose out of the failure of Ramon Sta. Romana to pay the
purchase price of a lot he bought from C. N. Hodges presumably in behalf of the
conjugal partnership. Petitioner does not deny the conjugal nature of both Lots
Nos. 1258-G and 1258-F. Indeed, she bases her contention on the claim that at
least Lot No. 1258-F, together with its improvements existing thereon, constitutes
property of the conjugal partnership. It may not be denied, therefore, that the
liability incurred by Ramon Sta. Romana is chargeable against the conjugal
partnership assets, it being undisputed that the said obligation was contracted by
the husband for the benefit of the conjugal partnership. (Art. 161 [1], Civil Code.)
The non-inclusion of the herein petitioner as a party-defendant in Civil Case
No. 7678 is immaterial. There is no rule or law requiring that in a suit against the
husband to enforce an obligation, either pertaining to him alone or one chargeable
against the conjugal partnership, the defendant husband must be joined by his
wife. The contrary rule is prescribed in Section
335
VOL. 118, NOVEMBER 15, 1982 335
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
4, Rule 3, of the Rules of Court and Article 113 of the Civil Code, but not the other
way around, obviously in recognition of the legal status of the husband as the
administrator of the conjugal partnership. (Art. 112, Civil Code.) There was,
therefore, no need of including the petitioner as a party in Civil Case No. 7678 for
the purpose of binding the conjugal partnership properties for the satisfaction of
the judgment that could be rendered therein.
We likewise agree with the view that the issues raised by the petitioner in
Civil Case No. 13533 may not be litigated anew, if not by the principle of res
judicata but at least by conclusiveness of judgment. The record reveals that the
contentions being raised by the petitioner in Civil Case No. 13533 were squarely
placed before and ruled upon by the respondent court in connection with the
execution proceedings in Civil Case No. 7678. After the writ of execution was
issued on October 5, 1979 (Annex E, Petition), herein petitioner filed a motion to
quash the said writ of execution (Annex F, Petition).In said motion, the petitioner
raised the following issues:
“x x x xxx
3. That as will be noted from the records, the herein movant as spouse of the defendant was
not impleaded as a defendant in the above entitled case;
4. That on the other hand, it would appear from Exh. A, contract to sell dated October 6,
1956, that the property in question, having been transacted and/or bought by the defendant
during his marriage life with the herein movant is a sort of a conjugal property or asset of
the defendant and the herein movant:
5. That accordingly, the herein movant would have been an indispensable party in the
case at bar; specially when the aforesaid transaction was perfected at the time the Civil
Code of the Philippines had already taken effect;
6. That the herein movant having been not impleaded in the case at bar; no jurisdiction
over his person had been vested in the proceedings; therefore whatever acts of levy on the
property of which she is or presumed to be a co-owner and which has never been liquidated
yet is an ultra vires following a well-known principle that a person who is not a party in a
given case cannot be reached by any process or order of the given court;
336
336 SUPREME COURT REPORTS ANNOTATED
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
7. Thus, the rule is well-settled in this jurisdiction that “on the contention that at least one-
half of the conjugal partnership belongs to the husband, and therefore could be validly
levied upon to satisfy the money judgment against said husband, it must be said that as
long as the conjugal partnership subsists, there can be no one-half share ofthe husband or
the wife. Only when the conjugal partnership is dissolved and liquidated between husband
and wife. In the meantime, the interest of each in the conjugal partnership property is
inchoate and is a mere expectancy. Therefore, any levy on the conjugal partnership property
to satisfy the money judgment against the husband is null and void.(Quintos Ansaldo vs.
Sheriff of Manila, 64 Phil. 116). Conformably to the foregoing doctrine, it is therefore
respectfully submitted that the writ of execution, notice of levy if one has been made and the
notice of sale in public auction are null and void.” (Rollo, pp. 38-39.)
The respondent court ruled on this motion by issuing the Order dated March 5,
1980 denying the same for lack of merit. (Annex B, Petition, Rollo, p. 41.) The
petitioner did not seek a further review of the said order of denial either in the
respondent court or in any other tribunal; instead, she resorted to the remedy of
filing on June 10, 1980 Civil Case No. 13533.
Technically speaking, if may be said that the judgment rendered in the main
action Civil Case No. 7678 does not constitute res judicata with respect to Civil
Case No. 13533. The causes of action in the two (2) cases are not the same;
neither is there identity of the subject-matter involved. Civil Case No. 7678 was
essentially an action to rescind the Contract to Sell Lot No. 1258-G and to recover
possession thereof plus damages. Civil Case No. 13533, on the other hand, is to
annul the levy and execution sale of Lot No. 1258-F and the improvements
existing thereon with respect to the ONE-HALF (1/2) interest claimed by the
petitioner.
However, it may not be denied that the issues raised by the petitioner in Civil
Case No. 13533 had already been litigated and finally decided in the subsequent
proceedings taken to enforce the judgment in Civil Case No. 7678. The parties
involved in said proceedings are the same, and so are the subject-matter involved
and the cause of action relied upon by the petitioner in Civil Case No. 13533. The
only possible doubt as to whether res judicata may be utilized as a bar to the
filing of
337
VOL. 118, NOVEMBER 15, 1982 337
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
Civil Case No. 13533 is that the pronouncement constituting the bar to a new
action was not in the main judgment in Civil Case No. 7678 but only in a
subsequent incident therein.
It is Our considered opinion that such circumstance does not militate against
the existence of res judicata if all the requisites for its application are otherwise
present. The order denying the petitioner’s motion to quash the writ of execution
issued in Civil Case No. 7678 is not merely an interlocutory order. It attained
finality due to the failure of the petitioner to appeal or seek a review of the same.
It is not questioned that the trial court had jurisdiction to take cognizance of the
motion to quash the writ of execution and over the parties litigating the same.
The order of denial is on the merits of the motion. There was also identity of
parties involved in the motion to quash the writ of execution, identity of subject-
matter and identity of causes of action. The requisites of res judicata being all
present in the incident concerning the issuance of the writ of execution, We feel
no hesitancy in declaring that the filing of Civil Case No. 13533 is barred by the
principle of res judicata. The underlying philosophy of this doctrine is:
“x x x that parties ought not to be permitted to litigate the same issue more than once; that,
when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, or an opportunity for such trial has been given the judgment of the court, so
long as it remains unreversed, should be conclusive upon the parties and those in privity
with them in law or estate. x x x x x x.” (2 Moran Rules of Court, p. 362, citing Sta. Ana v.
Nar-vades,L-24390, Nov. 28, 1969, 30 SCRA 454, 463.)
To sanction the filing of Civil Case No. 13533 is to nullify altogether the
proceedings had in connection with the petitioner’s motion to quash the writ of
execution and the ruling made by the respondent court thereon which had already
attained the status of finality.
In the least, the institution of Civil Case No. 13533 may be deemed barred by
the principle of conclusiveness of judgment which is expressed in the Rules in the
following terms:
“Effect of judgments.—The effect of a judgment or final order
338
338 SUPREME COURT REPORTS ANNOTATED
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
rendered by a court or judge of the Philippines, having jurisdiction to pronounce the
judgment or order, may be as follows:
xxx xxx xxx
(c) In any other litigation between the same parties or their successors in interest, that
only is deemed to have been adjudged in a former judgment which appears upon its face to
have been so adjudged, or which was actually and necessarily included therein or necessary ineffective acts already done in the performance of their part of the illegal
thereto.” (SEC. 49; Rule 39, New Rules of Court.) bargain. (De Raquiza vs. Castellvi,77 SCRA 88.)
Even assuming, therefore, that Civil Case No. 13533 is on a different cause of Party invoking the presumption that property is conjugal must first prove
action than that involved in Civil Case No. 7678, the ruling in the latter on the that the same was acquired during the marriage. (Reyes vs. Ines-Luciano,91
motion for the quashing of the levy on execution made on Lot 1258-F which SCRA 612.)
involved the same subject-matter and parties litigating Civil Case No. 13533 is
rendered conclusive under the doctrine of conclusiveness of judgment. ——o0o——
Petitioner has further argued that her having filed the motion to quash the
writ of execution in Civil Case No. 7678 to assert her claim over ONE-HALF (1/2) 340
interest in Lot No. 1258-F and its improvements does not preclude her from filing © Copyright 2018 Central Book Supply, Inc. All rights reserved.
a separate civil action to pursue the same claim. She cites the case of Manila
Fidelity and Surety Company vs. Teodoro, et al., 20 SCRA 463, which holds that “
‘a third party claim is not an exclusive remedy; the same rule (Section 17, Rule
29), provides that nothing therein shall prevent such third person from
vindicating his claim to the property by any proper action.’ ”
We find no merit in this argument. The petitioner did not merely file a third
party claim on the property levied upon in connection with the writ of execution
issued in Civil Case No. 7678. Instead of a third party claim which, under the
rules, must be filed with the “officer making the levy and a copy thereof upon the
judgment creditor” (Sec. 17, Rule 39, Rules of Court), the petitioner filed a
“Motion to Quash Writ of Execution and All Subsequent Proceedings” (Record on
Appeal, p. 17) to which private respondent filed its Opposition (Ibid., pp. 20-24),
and to which in turn the petitioner filed her Reply to Opposition (Ibid., pp. 25-31).
When the respondent court issued its Order dated May 5, 1980 denying the
aforesaid Motion to Quash Execution for lack of merit (Ibid., p. 32), the
339
VOL. 118, NOVEMBER 15, 1982 339
Vda. de Sta. Romana vs. Phil. Commercial and Industrial Bank
petitioner filed a Motion for Reconsideration (Ibid., pp. 33-34) which was opposed
by the private respondent in writing (Ibid., pp. 35-35-B) and which in turn a
Reply to Opposition was filed by the petitioner (Ibid., pp. 36-38). In said motions,
oppositions and replies repeatedly filed by the parties, the same issues sought to
be reopened by the petitioner in Civil Case No. 13533 had been fully and
exhaustively ventilated. It was on the basis of such exposure of those issues that
the respondent court issued its Order denying the motion to quash the writ of
execution, and also the Order denying a motion for a reconsideration of the same.
WHEREFORE, the Petition is DENIED, and the Orders of the respondent
Judge issued in Civil Case No. 13533 dated March 5, 1980 and May 15, 1980 are
hereby AFFIRMED. With costs against the petitioner.
SO ORDERED.
Teehankee (Chairman), Melencio-
Herrera, Plana, Relova and Gutierrez,JJ., concur.
Petition denied.
Notes.—Parties who voluntarily entered into a compromise agreement
expressly prohibited or declared void by law cannot withdraw or recall or render
192 SUPREME COURT REPORTS ANNOTATED
G-Tractors, Inc. vs. Court of Appeals
No. L-57402. February 28, 1985. *
G-TRACTORS, INC., petitioner, vs. HONORABLE COURT OF APPEALS and
LUIS R. NARCISO AND JOSEFINA SALAK NARCISO, respondents.
Conjugal Partnership; Property; The conjugal partnership must equally bear the
indebtedness of the husband in pursuit of his career or profession and his losses from a
legitimate business.—The husband is the administrator of the conjugal partnership and as
long as he believes he is doing right to his family, he should not be made to suffer and
answer alone. So that, if he incurs an indebtedness in the legitimate pursuit of his career or
profession or suffers losses in a legitimate business, the conjugal partnership must equally
bear the indebtedness and the losses, unless he deliberately acted to the prejudice of his
family. Such is the nature of the judgment debt of private respondent Luis R. Narciso to
petitioner. Consequently, the conjugal partnership of gains of private respondents Narcisos,
must answer for the same. Necessarily the sale at public auction by the Sheriff of Quezon
City of TCT No. 120923 belonging to the conjugal partnership of gains of the private
respondents Narcisos in order to satisfy the judgment debt of the private respondent Luis R.
Narciso with petitioner, was validly and legally made in accordance with law and not legally
assailable as held in the analogous case of Vda. de Sta. Romana vs. Philippine Commercial
and Industrial Bank.
Same; Actions; There is no need to include the name of the wife where husband is sued
in order to bind the conjugal partnership.—The non-inclusion of the herein petitioner as a
partydefendant in Civil Case No. 7678 is immaterial. There is no rule or law requiring that
in a suit against the husband to enforce an obligation, either pertaining to him alone or one
chargeable against the conjugal partnership, the defendant husband must be joined by his
wife. The contrary rule is prescribed in Sec. 4, Rule 3, of the Rules of Court and Article 113
of the Civil Code, but not the other way around, obviously in recognition of the legal status
of the husband as the administrator of the conjugal partnership (Art, 112, Civil Code) There
was, therefore, no need of including the petitioner as a party in Civil Case No. 7678 for the
purpose of binding the conjugal partnership proper ties for the satisfaction of the judgment
that could be rendered thereon.
_______________
*SECOND DIVISION.
193
VOL. 135, FEBRUARY 28, 1985 193
G-Tractors, Inc. vs. Court of Appeals
PETITION for review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court
Francisco, De Castro, Zulueta & Reyes Law Office for petitioner.
Fernando F. Villoria for private respondents.
CUEVAS, J.:
Assailed and challenged in this Petition for Review is the Decision dated April 29,
1977 of the them Court of Appeals in its CA-G.R. No. SP-05920, the dispositive
portion of which reads as follows—
“WHEREFORE, the petition is hereby granted. The levy on execution dated February 11,
1976, the sheriff s certificate of sale dated March 25, 1975 and final deed of sale, and the
orders of the respondent judge dated April 26, 1976, July 12, 1976 and August 26, 1976, are
set aside and declared null and void, The writ of preliminary injunction heretofore in
force is made permanent, Costs against private respondent.
SO ORDERED."
Private respondent Luis R. Narciso is a businessman. He is engaged in business
as a producer and exporter of Philippine mahogany logs and operates a logging
concession at del Gallego, Camarines Sur. He is legally married to the other
private respondent Josefina Salak Narciso.
Petitioner G-Tractors, Inc. upon the other hand, is a domestic corporation
engaged primarily in the business of leasing heavy equipments such as tractors,
bulldozers, and the like.
Sometime in February 28, 1973, private respondent Luis R. Narciso entered
into a Contract of Hire of Heavy Equipment with petitioner G-Tractors under the
terms of which the latter leased to the former tractors for the purpose of
constructing switchroads and hauling felled trees at the jobsite of Narciso’s
logging concession at del Gallego, Camarines Sur. The contract provided for
payment of rental for the use of said tractors.
194
194 SUPREME COURT REPORTS ANNOTATED
G-Tractors, Inc. vs. Court of Appeals
Luis R. Narciso defaulted in his rental payments. Hence, on August 15, 1974, G-
Tractors instituted an action against him to collect the total amount of
P155,410.25 with legal interest thereon, representing unpaid rentals for the
leased tractors, 25% thereof as liquidated damages, P30,000.00 as and for
attorney’s fees, and the costs of suit, before the then Court of First Instance of
Rizal, Quezon City, Branch IX. The case was docketed thereat as Civil Case No.
Q-19173.
Luis R. Narciso was declared in default. On his representations, however, G-
Tractors accepted his offer for a compromise agreement. A compromise agreement
was thereupon signed by G-Tractors and Luis R. Narciso and on the basis thereof,
judgment thereon was rendered on October 10, 1974,
The compromise agreement stipulated for payment by Luis R. Narciso of the
total claim of G-Tractors on an installment plan. Luis R. Narciso failed to comply
and so on November 29, 1974, G-Tractors filed a motion for execution. This was
opposed by Luis R. Narciso who asked for the suspension of the issuance of a writ
of execution on the ground that he allegedly has a pending loan with a banking
institution. The lower court, finding the allegation without legal basis, denied the
request for suspension and ordered the issuance of a writ of execution to enforce
the judgment based on the compromise agreement. The writ of execution was
issued on February 7, 1975. Levy was accordingly made on February 19, 1975 by
1
the City Sheriff of Quezon City on certain personal properties of private
respondents—at their residence at 208 Retiro Street, Quezon City. Auction sale
was held on March 1, 1975, and G-Tractors, being the highest bidder, was
awarded the sale by the City Sheriff of Quezon City of all the personal properties
listed under the levy, for the total amount of P4,090.00.
On March 5, 1975, Luis R. Narciso offered to redeem and/or buy back all the
personal properties sold to G-Tractors for the same amount of P4,090.00 which
the latter agreed and for which a Deed of Reconveyance was executed by G-
Tractors.
Likewise, on February 12, 1975, the Sheriff of Quezon City made a levy on “all
rights, interest, title, participation which
_______________
1Annex “A", page 28, Records.
195
VOL. 135, FEBRUARY 28, 1985 195
G-Tractors, Inc. vs. Court of Appeals
the defendant Luis R. Narciso” may have over a parcel of residential land covered
by TCT No. 120923 of the Registry of Deeds of Quezon City which parcel of land
2
is allegedly the conjugal property of the spouses Luis R. Narciso and Josefina
Salak Narciso.
On February 22, 1975, the Sheriff notified the general public, in his Notice of
Sheriff’s sale, that on March 25, 1975 he would sell at public auction to the
highest bidder for cash “the rights, interest and participation of the
aforementioned defendant Luis R. Narciso in the aforesaid real estate property
covered by Transfer Certificate of Title No. 120923, together with all the
improvements existing thereon” to satisfy the aforementioned writ of execution.
3
On March 25, 1975, a “Certificate of Sale” was issued to the effect that “on
said date (March 25, 1975) by virtue of the writ of execution issued by the
Honorable Ulpiano Sarmiento in Civil Case No. Q-19173, the ex-oficio Sheriff of
Quezon City sold at public auction to the highest bidder (plaintiff GTractors, Inc.)
for P180,000.00 the real estate property covered by TCT No. 120923, Quezon City,
and levied upon on February 12, 1975, together with all the improvements
thereon." At that time, however, TCT No. 120923 was mortgaged to Mercantile
4
Financing Corporation to guarantee an outstanding unpaid account of Luis R.
Narciso and his wife in the amount of P74,327.52.
Soon after the issuance of the aforesaid Certificate of Sale, Luis R. Narciso
and G-Tractors, Inc. executed a contract of lease over the aforesaid property
whereby the former obligated himself to pay a monthly rental of P1,000.00 and by
virtue of the said contract of lease, Luis R. Narciso actually paid to GTractors,
Inc. the amount of P12,000.00 as rental for one year,
On March 31, 1976, Josefina Salak Narciso and her husband Luis R. Narciso
filed a complaint in the same Court of First Instance of Quezon City for
“declaration of nullity of levy on execution and auction sale of plaintiff ’s conjugal
property with
_______________
2Annex “B", page 29, Records.
3Annex “C", pages 30–31, Records.
4Annex “D", page 32, Records.
196
196 SUPREME COURT REPORTS ANNOTATED
G-Tractors, Inc. vs. Court of Appeals
damages and injunction,” docketed as Civil Case No. Q-21267. Among other
things, the complaint alleged that whatever transpired in Civil Case No. Q-19173
could be binding only on the husband Luis R. Narciso and could not affect or bind
the plaintiff-wife Josefina Salak Narciso who was not a party to that case; that
the nature of the Sheriff’ s sale clearly stated that only the property of the
husband may be sold to satisfy the money judgment against him; that the
conjugal property of the plaintiffs-spouses could not be made liable for the
satisfaction of the judgment in Civil Case No. Q-19173 considering that the
subject matter of said case was never used for the benefit of the conjugal
partnership or of the family; and that the levy of the wife’s share in the conjugal
property to satisfy the money judgment against her husband is null and void.
5
On April 5, 1976, the President of G-Tractors, Inc. executed an affidavit of
consolidation of ownership and on the next day, April 6, 1976, the sheriff issued a
Sheriff’s Final Deed of Sale. On April 12, 1976, G-Tractors, Inc. filed in Civil Case
6
No. Q19173, a “Motion for Entry and Issuance of New Torrens Certificate of Title”
asking the Court to direct the Register of Deeds of Quezon City to cancel TCT No.
120923 and to allow the entry and issuance of a new torrens title in the name of
GTractors, Inc.
On April 22, 1976, Luis R. Narciso filed an opposition to the aforesaid motion
calling attention to the fact that he and his wife had filed a complaint which was
docketed as Civil Case No. Q-21267 and pointing out that the Sheriff s final deed
of sale and affidavit of consolidation of ownership would have no ef fect should the
levy on execution and the subsequent auction sale of the conjugal property be
nullified. 7
Civil Case No. Q-21267 was subsequently transferred to Branch IX of the
same Court of First Instance which tried Civil Case No. Q-19173.
_______________
5Annex “E", pages 34–38, Records.
6Annex “F", page 39, Records.
7Annex “G", pages 41–42, Records.
197
VOL. 135, FEBRUARY 28, 1985 197
G-Tractors, Inc. vs. Court of Appeals
On April 28, 1976, Judge Sarmiento issued an Order cancelled TCT No. 120923
and directing the Register of Deeds of Quezon City to issue in lieu thereof a new
title in the name of G-Tractors, Inc. 8
 Luis R. Narciso moved to reconsider the aforesaid order of April 26, 1976. This
was followed by a motion filed by the Narciso spouses for a preliminary injunction
in Civil Case No. Q21267. Meanwhile, immediately after receiving a copy of the
order of April 26, 1976, G-Tractors, Inc. caused the cancellation of TCT No.
120923 and the issuance of TCT No. 218552 in its name.
On May 21, 1976, the lower court enjoined G-Tractors, Inc. from transferring,
conveying or in any manner alienating the property covered by TCT No. 218552
until the motion for reconsideration of the order of April 26, 1976 has been
resolved.
On July 12, 1976, two (2) orders were issued by the lower court, one denying
the motion for reconsideration and the other denying the motion for preliminary
injunction. A motion to reconsider the order denying the preliminary injunction
was likewise denied,
Hence, on October 2, 1976, the spouses Luis R. Narciso and Josefina Salak
Narciso filed before the then Court of Appeals, a petition for certiorari with
Preliminary Injunction, docketed in the said court as C A-G.R. No. SP-05920,
seeking—
1. A—To annul, set aside and declare null and void the following:
1. (1)Levy on execution dated February 11, 1976;
2. (2)Sheriff s Certificate of Sale dated March 25, 1975;
3. (3)Sheriff’s Final Deed of Sale dated April 6, 1976;
4. (4)Order of respondent Judge dated April 26, 1976;
5. (5)Orders of the respondent Judge both dated July 12, 1976; and
6. (6)Order of the respondent Judge dated August 26,1976.
_______________
8Annex “I", page 52, Records.
198
198 SUPREME COURT REPORTS ANNOTATED
G-Tractors, Inc. vs. Court of Appeals
1. B—To restrain and enjoin the respondent from further giving force and
effect to the levy and sale on execution and to the disputed orders; the
private respondent G-Tractors, Inc. from alienating the Lot covered by
TCT No. 218552 and from dispossessing the petitioners of said Lot and
the house standing thereon; the respondent Judge from further
proceeding in Civil Case Nos. Q-19173 and Q21267; and
2. C—To direct the Register of Deeds of Quezon City to cancel TCT No.
218552 in the name of G-Tractors, Inc. and to issue a new one in the
name of petitioners-spouses.
On April 29, 1977, the then Court of Appeals rendered its now assailed Decision,
annulling the levy on execution dated February 11, 1975, the sheriff s certificate
of sale dated March 25, 1975, as well as the sheriff’s final deed of sale; and the
Orders dated April 26, July 12 and August 26, 1976.
G-Tractors, Inc.'s motion for reconsideration having been denied, the instant
petition for Review on Certiorari was filed before this Court, petitioner
contending that respondent Court of Appeals erred—
1. “1.In holding that a levy on a residential land does not include the
residential house or any improvement erected and existing thereon;
2. 2.In holding that the judgment debt of private respondent Luis R.
Narciso, subject of Civil Case No, Q-19173, entitled GTractors, Inc. vs.
Luis R. Narciso,” Court of First Instance of Rizal, Quezon City, Branch
IX was not the conjugal debt of private respondents—spouses Luis R.
Narciso and Josefina Salak Narciso;
3. 3.in not holding that there was laches and delay in the filing by private
respondents-spouses of CA-G.R. No. 05920-SP with the respondent
Court of Appeals.
4. 4.In granting the writs applied for by private respondentsspouses in CA-
G.R. No. 05920, the petition itself not being the proper remedy,”
The crucial issue that poses itself for our resolution in the instant petition is—
whether or not the judgment debt of private respondent Luis R. Narciso is a
conjugal debt for which the conjugal partnership property can be held answerable.
199
VOL. 135, FEBRUARY 28, 1985 199
G-Tractors, Inc. vs. Court of Appeals
Article 161 of the New Civil Code provides that the conjugal partnership shall be
liable for:
"(1) All the debts and obligations contracted by the husband for the benefit of the conjugal
partnership, and those contracted by the wife, also for the same purpose, in the cases where
she may legally bind the partnership.''
There is no question that private respondent Luis R. Narciso is engage in
business as a producer and exporter of Philippine mahogany logs. He operates a
logging concession at del Gallego, Camarines Sur and holds office right in the
conjugal dwelling at 208 Retiro Street, Talayan Village, Quezon City, Metro
Manila, where he and his family reside. His account with petitioner G-Tractors,
Inc. represents rentals for the use of petitioner’s tractors which he leased for the
purpose of constructing switchroads and hauling felled trees at the jobsite of the
logging concession at del Gallego, Camarines Sur which is not his exclusive
property but that of his family, There is no doubt then that his account with the
petitioner was brought about in order to enhance the productivity of said logging
business, a commercial enterprise for gain which he had the right to embark the
conjugal partnership.
 This is the finding of the trial court and we find no cogent reason to deviate
therefrom. It held:
“Lastly, the contention that the conjugal partnership is not liable because the obligation
contracted by the husband is personal in nature is not applicable in this case, The record
shows that Luis R. Narciso is a producer and exporter of Philippine mahogany logs and that
the bulldozers leased to him was used for the construction of switchroads for logging. It is
very clear, therefore, that the obligations were contracted in connection with his Iegitimate
business as a producer and exporter in mahogany logs and certainly benefited the conjugal
partnership. Justice J.B.L. Reyes is very liberal in interpreting Art. 161 of the Civil Code
when he declared in Luzon Surety Co., Inc. versus de Garcia, 130 SCRA 1181 that the words
in said article “all debts and obligations contracted by the husband for the benefit of the
conjugal partnership “do not require that actual profit or benefit must accrue to the conjugal
partnership from the husband’s transaction”, but it suffices that the transaction should be
200
200 SUPREME COURT REPORTS ANNOTATED
G-Tractors, Inc. vs. Court of Appeals
one that normally would produce such benefit for the partnership." 9
In the case of Cobb-Perez vs. Lantin, citing the case of Abella de Diaz vs.
10
Erlanger and Galinger, and Javier vs. Osmeña, this court ruled—
11 12
“The aforesaid obligation was contracted in the purchase of leather used in the shoe
manufacturing business of the petitioner husband. Said business is an ordinary commercial
enterprise for gain, in the pursuit of which Damaso Perez had the right to embark the
partnership. It is well settled that the debts contracted by the husband for and in the exercise
of the industry or profession by which he contributes to the support of the family cannot be
deemed to be his exclusive and private debts.” (Italics supplied)
The husband is the administrator of the conjugal partnership and as long as he
believes he is doing right to his family, he should not be made to suffer and
answer alone. So that, if he incurs an indebtedness in the legitimate pursuit of
13
his career or profession or suffers losses in a legitimate business, the conjugal
partnership must equally bear the indebtedness and the losses, unless he
deliberately acted to the prejudice of his family. Such is the nature of the
judgment debt of private respondent Luis R. Narciso to petitioner. Consequently,
the conjugal partnership of gains of private respondents Narcisos, must answer
for the same. Necessarily the sale at public auction by the Sheriff of Quezon City
14
of TCT No. 120923 belonging to the conjugal partnership of gains of the private
respondents Narcisos in order to satisfy the judgment debt of the private
respondent Luis R. Narciso with petitioner, was validly and legally made in
accordance with law and not legally assailable as held in the analogous case of
Vda. de Sta. Romana vs. Philippine Commercial and Industrial Bank where We 15
laid down the following dictum:
_______________
9 Order of Aug, 21, 1976, p. 181, Records
10 23 SCRA 637.
11 56 Phil. 336.
12 34 Phil. 336.
13 Tintigan vs. Tintigan, Sr., 100 SCRA 619.
14 Gelano vs. Hon. CA, 103 SCRA 90.
118 SCRA 330–339.
15
201
VOL. 135, FEBRUARY 28, 1985 201
G-Tractors, Inc. vs. Court of Appeals
“Petitioner assails the pronouncement by the respondent court that Civil Case No. 13553 is
barred by res judicata on the principal ground that, not being a party in Civil Case No.
7678, she could not be bound by the judgment rendered in said case and, consequently, the
writ of attachment and the consequent writ of execution which levied on Lot No. 1258-F,
together with its existing improvements, are null and void insofar as her ONE-HALF (1/2)
interest in said properties is concerned.
We find no merit in this contention of the petitioner, The action filed by private
respondent against the petitioner Ramon Sta. Romana was clearly a suit to enforce an
obligation of the conjugal partnership. Civil Case No. 7678 arose out of the failure of Ramon
Sta. Romana to pay the purchase price of a lot he bought from C.N. Hodges presumably in
behalf of the conjugal partnership. Petitioner does not deny the conjugal nature of both Lots
Nos. 1258G and 1258-F. Indeed, she bases her contention on the claim that at least Lot No.
1258-F, together with its improvements existing thereon, constitutes property of the
conjugal partnership, It may not be denied, therefore, that the liability incurred by Ramon
Sta. Romana is chargeable against the conjugal partnership assets, it being undisputed that
the said obligation was contracted by the husband for the benefit of the conjugal
partnership, (Art. 161(1), Civil Code)
The non-inclusion of the herein petitioner as a party-defendant in Civil Case No. 7678 is
immaterial. There is no rule or law requiring that in a suit against the husband to enforce
an obligation, either pertaining to him alone or one chargeable against the conjugal
partnership, the defendant husband must be joined by his wife, The contrary rule is
prescribed in Sec. 4, Rule 3, of the Rules of Court and Article 113 of the Civil Code, but not
the other way around, obviously in recognition of the legal status of the husband as the
administrator of the conjugal partnership. (Art. 112, Civil Code) There was, therefore, no
need of including the petitioner as a party in Civil Case No. 7678 for the purpose of binding
the conjugal partnership properties for the satisfaction of the judgment that could be
rendered thereon.” (Italics supplied)
WHEREFORE, the Decision of the then Court of Appeals sought to be reviewed is
hereby REVERSED and SET ASIDE. No pronouncement as to costs.
SO ORDERED.
202
202 SUPREME COURT REPORTS ANNOTATED
People vs. Itlanas
Makasiar, Aquino, Concepcion, Jr., Abad Santosand Escolin, JJ., concur.
Decision reversed and set aside.
Notes.—Debts and obligations contracted by the husband must accrue to the
benefit of the spouses. (Luzon Surety Company, Inc. vs. De Garcia, 30 SCRA 111.)
Husband is the sole administrator of the conjugal partnership. (Ysasi vs.
Fernandez, 23 SCRA 1079.)
Debt contracted by a wife is considered as a debt of the conjugal partnership
where the husband was negligent in allowing his wife to incur debts. (Garcia vs.
Cruz, 25 SCRA 224.)

VOL. 161, MAY 11, 1988 307
Development Bank of the Philippines (DBP) vs. Adil
No. L-48889. May 11, 1988. *
DEVELOPMENT BANK OF THE PHILIPPINES (DBP), petitioner, vs. THE
HONORABLE MIDPANTAO L. ADIL, Judge of the Second Branch of the Court of
First Instance of Iloilo and SPOUSES PATRICIO CONFESOR and JOVITA
VILLAFUERTE, respondents.
Civil Law; Prescription; Waiver of right to prescription; Case at bar.—The right to
prescription may be waived or renounced. Article 1112 of Civil Code provides: “Art. 1112.
Persons with capacity to alienate property may renounce prescription already obtained, but
not the right to prescribe in the future. Prescription is deemed to have been tacitly
renounced when the renunciation results from acts which imply the abandonment of the
right acquired.” There is no doubt that prescription has set in as to the first promissory note
of February 10, 1940. However, when respondent Confesor executed the second promissory
note on April 11,1961 whereby he promised to pay the amount covered by the previous
promissory note on or before June 15, 1961, and upon failure to do so, agreed to the
foreclosure of the mortgage, said respondent thereby effectively and expressly renounced
and waived his right to the prescription of the action covering the first promissory note. This
Court had ruled in a similar case that— x x x when a debt is already barred by prescription,
"
it cannot be enforced by the creditor. But a new contract recognizing and assuming the
prescribed debt would be valid and enforceable x x x.” Thus, it has been held—“Where,
therefore, a party acknowledges the correctness of a debt and promises to pay it after the
same has prescribed and with full knowledge of the prescription he thereby waives the
benefit of prescription.”
Same; Same; Same; Effects of a new express promise to pay a debt.—This is not a
mere case of acknowledgment of a debt that has prescribed but a new promise to pay the
debt. The consideration of the new promissory note is the pre-existing obligation under the
first promissory note. The statutory limitation bars the remedy but does not discharge the
debt. “A new express promise to pay a debt barred xxx will take the case from the operation
of the statute of limitations as this proceeds upon the ground that as a statutory limitation
merely bars the remedy and does not discharge the debt, there is something more than a
mere moral obligation to support a promise, to wit—a preexisting debt which is a sufficient
consideration for the new promise; the new promise upon this sufficient consideration
constitutes, in fact,
_______________
* FIRST DIVISION.
308
3 SUPREME COURT REPORTS ANNOTATED
08
Development Bank of the Philippines (DBP) vs. Adil
a new cause of action.” “x x x x x It is this new promise, either made in express terms
or deduced from an acknowledgment as a legal implication, which is to be regarded as
reanimating the old promise, or as imparting vitality to the remedy (which by lapse of time
had become extinct) and thus enabling the creditor to recover upon his original contract.”
Same; Same; Same; Conjugal Partnership; Husband as administrator of the conjugal
partnership under Art. 165 of the Civil Code.—WE disagree. Under Article 165 of the Civil
Code, the husband is the administrator of the conjugal partnership. As such administrator,
all debts and obligations contracted by the husband for the benefit of the conjugal
partnership, are chargeable to the conjugal partnership. No doubt, in this case, respondent
Confesor signed the second promissory note for the benefit of the conjugal partnership.
Hence the conjugal partnership is liable for this obligation.
PETITION for certiorari to review the decision of the Court of First Instance of
Iloilo, Br. II. Adil, J.
The facts are stated in the opinion of the Court.
GANCAYCO, J.:
The issue posed in this petition for review on certiorari is the validity of a
promissory note which was executed in consideration of a previous promissory
note the enforcement of which had been barred by prescription.
On February 10,1940 spouses Patricio Confesor and Jovita Villafuerte
obtained an agricultural loan from the Agricultural and Industrial Bank (AIB),
now the Development Bank of the Philippines (DBP), in the sum of P2,000.00,
Philippine Currency, as evidenced by a promissory note of said date whereby they
bound themselves jointly and severally to pay the account in ten (10) equal yearly
amortizations. As the obligation remained outstanding and unpaid even after the
lapse of the aforesaid ten-year period, Confesor, who was by then a member of the
Congress of the Philippines, executed a second promissory note on April 11,1961
expressly acknowledging said loan and promising to pay the same on or before
June 15, 1961. The new promissory note reads as follows—
“I hereby promise to pay the amount covered by my promissory note on or before June 15,
1961. Upon my failure to do so, I hereby agree to the foreclosure of my mortgage. It is
understood that if I can
309
VOL. 161, MAY 11, 1988 309
Development Bank of the Philippines (DBP) vs. Adil
secure a certificate of indebtedness from the government of my back pay I will be allowed to
pay the amount out of it.”
Said spouses not having paid the obligation on the specified date, the DBP filed a
complaint dated September 11, 1970 in the City Court of Iloilo City against the
spouses for the payment of the loan.
After trial on the merits a decision was rendered by the inferior court on
December 27, 1976, the dispositive part of which reads as follows:
“WHEREFORE, premises considered, this Court renders judgment, ordering the defendants
Patricio Confesor and Jovita Villafuerte Confesor to pay the plaintiff Development Bank of
the Philippines, jointly and severally, (a) the sum of P5,760.96 plus additional daily interest
of P1.04 from September 17, 1970, the date Complaint was filed, until said amount is paid;
(b) the sum of P576.00 equivalent to ten (10%) of the total claim by way of attorney’s fees
and incidental expenses plus interest at the legal rate as of September 17, 1970, until fully
paid; and (c) the costs of the suit.”
Defendants-spouses appealed therefrom to the Court of First Instance of lloilo
wherein in due course a decision was rendered on April 28, 1978 reversing the
appealed decision and dismissing the complaint and counter-claim with costs
against the plaintiff.
A motion for reconsideration of said decision filed by plaintiff was denied in an
order of August 10, 1978.
Hence this petition wherein petitioner alleges that the decision of respondent
judge is contrary to law and runs counter to decisions of this Court when
respondent judge (a) refused to recognize the law that the right to prescription
may be renounced or waived; and (b) that in signing the second promissory note
respondent Patricio Confesor can bind the conjugal partnership; or otherwise said
respondent became liable in his personal capacity.
The petition is impressed with merit.
The right to prescription may be waived or renounced. Article 1112 of Civil
Code provides:
“Art 1112. Persons with capacity to alienate property may renounce prescription already
obtained, but not the right to prescribe in the future.
310
310 SUPREME COURT REPORTS ANNOTATED
Development Bank of the Philippines (DBP) vs. Adil
Prescription is deemed to have been tacitly renounced when the renunciation results from
acts which imply the abandonment of the right acquired.”
There is no doubt that prescription has set in as to the first promissory note of
February 10,1940. However, when respondent Confesor executed the second
promissory note on April 11, 1961 whereby he promised to pay the amount
covered by the previous promissory note on or before June 15, 1961, and upon
failure to do so, agreed to the foreclosure of the mortgage, said respondent thereby
effectively and expressly renounced and waived his right to the prescription of the
action covering the first promissory note.
This Court had ruled in a similar case that—
“x x x when a debt is already barred by prescription, it cannot be enforced by the creditor.
But a new contract recognizing and assuming the prescribed debt would be valid and
enforceable x x x."
1
Thus, it has been held—
“Where, therefore, a party acknowledges the correctness of a debt and promises to pay it
after the same has prescribed and with full knowledge of the prescription he thereby waives
the benefit of prescription."
2
This is not a mere case of acknowledgment of a debt that has prescribed but a
new promise to pay the debt. Theconsideration of the new promissory note is the
pre-existing obligation under the first promissory note. The statutory limitation
bars the remedy but does not discharge the debt.
“A new express promise to pay a debt barred x x x will take the case from the operation of
the statute of limitations as this proceeds upon the ground that as a statutory limitation
merely bars the remedy and does not discharge the debt, there is something more than a
mere moral obligation to support a promise, to wit—a pre-existing debt which is a sufficient
consideration for the new promise; the new promise upon this sufficient consideration
constitutes, in fact, a new cause of action."
3
_______________
1 Villaroel vs. Estrada, 71 Phil. 140.
2 Tauch vs. Gondram, 20 La. Ann. 156, cited on page 7, Vol. 4, Tolentino’s New Civil Code of the
Philippines.
3Johnson vs. Evans, 50 Am. Dec. 669.
311
“x x x x x It is this new promise, either made in express terms or deduced from an
acknowledgment as a legal implication, which is to be regarded as reanimating the old
promise, or as imparting vitality to the remedy (which by lapse of time had become extinct)
and thus enabling the creditor to recover upon his original contract." 4
However, the court a quo held that in signing the promissory note alone,
respondent Confesor cannot thereby bind his wife, respondent Jovita Villafuerte,
citing Article 166 of the New Civil Code which provides:
“Art 166. Unless the wife has been declared a non compos mentisor a spendthrift, or is under
civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber
any real property of the conjugal partnership without the wife’s consent. If she refuses
unreasonably to give her consent, the court may compel her to grant the same.”
We disagree. Under Article 165 of the Civil Code, the husband is the
administrator of the conjugal partnership. As such administrator, all debts and
obligations contracted by the husband for the benefit of the conjugal partnership,
are chargeable to the conjugal partnership. No doubt, in this case, respondent
5
Confesor signed the second promissory note for the benefit of the conjugal
partnership. Hence the conjugal partnership is liable for this obligation.
WHEREFORE, the decision subject of the petition is reversed and set aside
and another decision is hereby rendered reinstating the decision of the City Court
of Iloilo City of December 27, 1976, without pronouncement as to costs in this
instance. This decision is immediately executory and no motion for extension of
time to file motion for reconsideration shall be granted.
SO ORDERED.
Narvasa and Cruz, JJ., concur.
Griño-Aquino, J., no part. The Confesors are my relatives.
Decision reversed and set aside.
_______________
4 Mattingly vs. Boyd, 20 How (US) 128, 15 Led 845; St. John vs. Garrow,4 Port. (Ala) 223, 29 Am.
Dec. 280. American Jurisprudence—Vol. 34, page 233 (Statute of Limitations).
Article 161(1), Civil Code.
5
312
Note.—Prescription is rightly regarded as a statute of repose whose subject is
to suppress fraudulent and state claims from springing up at great distances of
time and surprising the parties or their representatives when the facts have
become obscure from the lapse of time or death or removal of witnesses. (Peñales
vs. Intermediate Appellate Court, 145 SCRA 223).

VOL. 174, JUNE 7, 1989 59
Mariano vs. Court of Appeals
G.R. No. 51283. June 7, 1989. *
LOURDES MARIANO, petitioner, vs. COURT OF APPEALS, and DANIEL
SANCHEZ, respondents.
Civil Law; Persons and Family Relations; Conjugal Partnership; When the conjugal
partnership is liable for the debts and obligations contracted by the wife in her business.—
There is no dispute about the fact that Esther Sanchez was engaged in business not only
without objection on the part of her husband, Daniel, but in truth with his consent and
approval. It is also established that, as expressly ac-
_______________
*FIRST DIVISION.
60
6 SUPREME COURT REPORTS ANNOTATED
0 NARVASA, J .:
Mariano vs. Court of Appeals
knowledged by Esther herself and never denied by Daniel, the profits from the
business had been used to meet, in part at least, expenses for the support of her family, i.e.,
the schooling of the children, food and other household expenses. Under the circumstances,
Lourdes Mariano’s action against Esther Sanchez was justified, the litigation being
“incidental to the x x business in which she is engaged,” and consequently the conjugal
partnership of Daniel and Esther Sanchez was liable for the debts and obligations
contracted by Esther in her business since the income derived therefrom, having been used
to defray some of the expenses for the maintenance of the family and the education of the
children, had redounded to the benefit of the partnership. It was therefore error for the
Court of Appeals to have ruled otherwise.
Civil Procedure; Execution of Judgments; Jurisdiction of Courts; A trial court has no
power to restrain by injunction the execution of a judgment of another judge of concurrent
jurisdiction.—It was also error for the Court of Appeals to have held that there was no
interference by the Quezon City Court of First Instance with the execution process of the
Caloocan Court. The rule, one of great importance in the administration of justice, is that a
Court of First Instance has no power to restrain by means of injunction the execution of a
judgment or decree of another judge of concurrent or coordinate jurisdiction. But this is
precisely what was done by the Quezon City Court of First Instance: it enjoined the
execution of a judgment authorized and directed by a co-equal and coordinate court, the
Caloocan City Court of First Instance. It did so on the claim of Daniel Sanchez that the
property being levied on belonged to the conjugal partnership and could not be made liable
for the wife’s obligations.
Same; Same; Same; Levy on Execution; Husband of the judgment debtor cannot be
deemed a “stranger” or third person for purposes of bringing a proper action under Sec. 17(2),
Rule 39 of the Rules of Court.—To be sure, Section 17, Rule 39 of the Rules of Court,
authorizes a “third person,” i.e., “any other person than the judgment debtor or his agent,”
to vindicate “his claim to the property by any proper action.” xxx The “proper action”
referred to in the section “is and should be an entirely separate and distinct action from that
in which execution has issued, if instituted by a stranger to the latter suit:” and in “such
separate action, the court may issue a writ of preliminary injunction against the sheriff
enjoining him from proceeding with the execution sale.” “Upon the other hand, if the claim
of impropriety on the part of the sheriff in the execution proceedings is made by a party
61
VOL. 174, JUNE 7, 1989 61
Mariano vs. Court of Appeals
to the action, not a stranger thereto, any relief there from may be applied for with,
and obtained from, only the executing court; and this is true even if a new party has been
imp leaded in the suit.” In the case at bar, the husband of the judgment debtor cannot be
deemed a “stranger” to the case prosecuted and adjudged against his wife.
PETITION to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Jose V. Antiviral & Associates for petitioner.
Arturo S. Santos for respondents.
The proceedings at bar concern (1) an attempt by a married man to prevent
execution against conjugal property of a judgment rendered against his wife, for
obligations incurred by the latter while engaged in a business that had
admittedly redounded to the benefit of the family, and (2) the interference by a
court with the proceedings on execution of a co-equal or coordinate court. Both
acts being proscribed by law, correction is called for and will hereby be effected.
The proceedings originated from a suit filed by Esther Sanchez against
Lourdes Mariano in the Court of First Instance at Caloocan City, for recovery of
1
the value of ladies’ ready made dresses allegedly purchased by and delivered to
the latter. 2
A writ of preliminary attachment issued at Esther Sanchez’ instance, upon a
bond posted by Veritas Insurance Company in the amount of P11,000.00, and
resulted in the seizure of Lourdes Mariano’s property worth P15,000.00 or so. Her 3
motion for the discharge of the attachment having been denied, Lourdes Mariano
4
went up to the Court of Appeals on certiorari. That Court ordered the Trial Court
5
to receive evidence on whether or not the attachment had been improvidently or
irregularly
_______________
Docketed as Civil Case No. C-3038, assigned to Branch XXXIII.
1
2Rollo, pp. 92-94.
3Id., p. 98.
4Id., p.54.
5Ibid.
62
62 SUPREME COURT REPORTS ANNOTATED
Mariano vs. Court of Appeals
issued. The Trial Court did so, came to the conclusion that the attachment had
6 conjugal assets could not validly be made to answer for obligations exclusively
indeed been improperly issued, and consequently dissolved it. 7 contracted by his wife, and that, moreover, some of the personal property levied
Trial then ensued upon the issues arising from the complaint as well as on, such as household appliances and utensils necessarily used in the conjugal
Lourdes Mariano’s answer with counterclaim—which included a claim for dwelling, were exempt from execution. He also applied for a preliminary
damages resulting from wrongful attachment. Thereafter judgment was rendered injunction pending adjudication of the case on the merits. 13

in favor of defendant Lourdes Mariano and against plaintiff Esther Sanchez The Quezon City Court issued an order setting the matter of the injunction for
containing the following dispositions, to wit: 8 hearing, and commanding the sheriff, in the meantime, to desist from proceeding
with the auction sale of the property subject of Daniel Sanchez’ claim. Lourdes 14

1. 1.On the complaint, defendant is ordered to pay unto the plaintiff for the value of Mariano filed a motion to dismiss the action; this, the Court denied. She then 15

the dishonored check (Exhs. G-1, H and I) in the total amount of Pl,512.00. instituted a special civil action of certiorari in the Court of Appeals, where she 16

2. 2.On the counterclaim, the plaintiff is ordered to pay unto defendant the following, initially enjoyed some measure of success: her petition was given due course, and
as follows: the Quezon City Court was restrained by the Appellate Court’s Seventh
Division from further proceeding with the case. Eventually, how-
17 18

1. a)P7,500.00 for loss of income of the defendant for 75 days;

2. b)P16,000.00 for the value of attached goods; _______________
3. c)P25,000.00 for moral and exemplary damages;
4. d)P5,000.00 as attorney’s fees plus costs of suit. 11 Rollo, pp. 99-106.
12 Docketed as Civil Case No. 26415 entitled “Daniel P. Sanchez v. Deputy Sheriff Marino V. Cachero,
et al.,” and assigned to the salapresided over by Hon. Augusto L. Valencia.
The Veritas Insurance Company which issued the attachment bond is ordered to pay unto 13 Rollo, pp. 126-138.
the defendant the full insurance coverage of P11,000.00 to answer for the total liability of 14 Id., p. 125.
the plaintiff thereof. 15 Id., pp. 141-152,155.
Esther Sanchez sought to perfect an appeal by filing a notice of appeal, an appeal 16 Docketed as CA-G.R. No. SP-08893.
Messrs. Justices Serrano, Jimenez and Borromeo.
bond and a record on appeal.
17
9
18 Id., pp. 52, 82.
Pending approval of the record on appeal, Lourdes Mariano filed a motion for 64
the immediate execution of the judgment which the Court granted. In virtue of 10

64 SUPREME COURT REPORTS ANNOTATED

the writ of execution which afterwards issued in due course, the sheriff garnished
the sum of P11,000.00 from Veritas Insurance Company, and Mariano vs. Court of Appeals
ever, the Eighth Division came to the conclusion that there was no merit in her
19

_______________ cause and dismissed her petition. It ruled that the Quezon City Court had not
20

interfered with the execution process of the Caloocan Court because Daniel
6SEC. 13, Rule 57, Rules of Court, authorizes the discharge of a preliminary attachment upon a Sanchez’s action in the former court raised an issue—the validity of the sheriffs
showing that the same had been improperly or irregularly issued.
levy on the conjugal partnership assets of the Sanchez Spouses—different from
7Rollo, p. 55.
8Id., pp. 88 et seq. those adjudicated in the Caloocan Court, and Sanchez was not a party to the case
9Id., p 56. tried by the latter.
10Ibid. From this verdict Lourdes Mariano has appealed to this Court, contending
63
that the Appellate Court committed reversible error—
VOL. 174, JUNE 7, 1989 63
Mariano vs. Court of Appeals 1. 1)in ruling that the conjugal partnership of Daniel and Esther Sanchez
levied on real and personal property belonging to the conjugal partnership of could not be made liable for Esther’s judgment obligation arising from
Esther Sanchez and her husband, Daniel Sanchez. Esther Sanchez then filed a the spouses’ joint business with Lourdes Mariano;
petition for certiorari with the Court of Appeals, praying for the annulment of the 2. 2)in ruling that the Quezon City Court of First Instance had not
execution pending appeal authorized by the Trial Court; but her petition was interfered with the execution process of the Caloocan Court of First
adjudged to be without merit and was accordingly dismissed. 11 Instance; and
Daniel Sanchez, Esther’s husband, now made his move. He filed a complaint 3. 3)when its Eighth Division decided the petition of Lourdes Mariano
for annulment of the execution in the Court of First Instance at Quezon City in although the case had been raffled to the Seventh Division and the
his capacity as administrator of the conjugal partnership. He alleged that the
12 latter had in fact given due course to the petition.
1. There is no dispute about the fact that Esther Sanchez was engaged in business
not only without objection on the part of her husband, Daniel, but in truth with
his consent and approval. It is also established that, as expressly acknowledged
21
by Esther herself and never denied by Daniel, the profits from the business had
been used to meet, in part at least, expenses for the support of her family, i.e., the
schooling of the children, food and other household expenses. Under the 22
circumstances, Lourdes Mariano’s action against Esther Sanchez was justified,
the litigation being “incidental to the x x business in which she is engaged,” and
23
consequently, the conjugal partnership of
_______________
Borromeo, J., ponente, with whom concurred Gopengco and Busran, JJ.
19
Id., pp. 87-91.
20
SEE ART. 117, Civil Code.
21
Rollo, pp. 120-121.
22
ART. 113 (8), Civil Code.
23
65
VOL. 174, JUNE 7, 1989 65
Mariano vs. Court of Appeals
Daniel and Esther Sanchez was liable for the debts and obligations contracted by
Esther in her business since the income derived therefrom, having been used to
defray some of the expenses for the maintenance of the family and the education
of the children, had redounded to the benefit of the partnership. It was therefore
24
error for the Court of Appeals to have ruled otherwise.
2. It was also error for the Court of Appeals to have held that there was no
interference by the Quezon City Court of First Instance with the execution
process of the Caloocan Court.
The rule, one of great importance in the administration of justice, is that a
Court of First Instance has no power to restrain by means of injunction the
execution of a judgment or decree of another judge of concurrent or coordinate
jurisdiction. But this is precisely what was done by the Quezon City Court of
25
First Instance: it enjoined the execution of a judgment authorized and directed by
a co-equal and coordinate court, the Caloocan City Court of First Instance. It did
so on the claim of Daniel Sanchez that the property being levied on belonged to
the conjugal partnership and could not be made liable for the wife’s obligations.
The question that arises is whether such a claim—that property levied on in
execution of a judgment is not property of the judgment debtor, Daniel Sanchez’s
wife, but of the conjugal partnership of the Sanchez Spouses—is properly
cognizable by a Court other than that which rendered judgment adversely to the
wife.
To be sure, Section 17, Rule 39 of the Rules of Court, authorizes a “third
person,” i.e., “any other person than the judgment debtor or his agent,” to
vindicate “his claim to the property by
_______________
24ART. 161 (1) and (5), Civil Code.
SEE Hacbang v. Diez, 8 SCRA 103 (1963); Paper Industries Corporation of the Philippines v.
25
I.A.C., 151 SCRA 161 (1987); Republic v. Reyes, 155 SCRA 237 (1987); Cabigao v. Rosario, 44 Phil.
182; Araneta & Uy v. Commonwealth Insurance Co., 55 O.G. 431; Ngo Bun Tiong v. Judge Sayo, G.R. No.
L-45825, June 30, 1988, citing Cabigao v. del Rosario, supra.
66
66 SUPREME COURT REPORTS ANNOTATED
Mariano vs. Court of Appeals
any proper action.” The section reads as follows:
26
SEC. 17. Proceedings where property claimed by third person.—If property levied on be
claimed by any other person than the judgment debtor or his agent, and such person make
an affidavit of his title thereto or right to the possession thereof, stating the grounds of such
right or title, and serve the same upon the officer making the levy, and a copy thereof upon
the judgment creditor, the officer shall not be bound to keep the property, unless such
judgment creditor or his agent, on demand of the officer, indemnify the officer against such
claim by a bond in a sum not greater than the value of the property levied on. In case of
disagreement as to such value, the same shall be determined by the court issuing the writ of
execution.
The officer is not liable for damages, for the taking or keeping of the property, to any
third-party claimant, unless a claim is made by the latter and unless an action for damages
is brought by him against the officer within one hundred twenty (120) days from the date of
the filing of the bond. But nothing herein contained shall prevent such claimant or any third
person from vindicating his claim to the property by any proper action.
The “proper action” referred to in the section “is and should be an entirely
separate and distinct action from that in which execution has issued, if instituted
by a stranger to the latter suit:” and in “such separate action, the court may issue
27
a writ of preliminary injunction against the sheriff enjoining him from proceeding
with the execution sale.” “Upon the other hand, if the claim of impropriety on the
28
part of the sheriff in the execution proceedings is made by a party to the
action, not a stranger thereto, any relief therefrom may be applied for with, and
obtained from, only the executing court; and this is true even if
_______________
Emphasis supplied.
26
Ong v. Tating, 149 SCRA 265, 277, italics supplied, citing Bayer Phil. v. Agana, 63 SCRA 355 (in
27
turn citing Manila Herald Publishing, etc. v. Ramos, 88 Phil. 94); Polaris Marketing Corp. v. Plan, 69
SCRA 93; Lorenzana v. Cayetano, 78 SCRA 485; Arabay v. Salvador, 82 SCRA 138; Roque v. CA, 93
SCRA 540.
Ong v. Tating, supra, at pp. 278-279.
28
67
VOL. 174, JUNE 7, 1989 67
Mariano vs. Court of Appeals
a new party has been impleaded in the suit.” 29
In the case at bar, the husband of the judgment debtor cannot be deemed a
“stranger” to the case prosecuted and adjudged against his wife. A strikingly
similar situation was presented in a case decided by this Court as early as
1976, Rejuso v. Estipona. There, the sheriff tried to evict petitioner Rejuso and
30
his family from their house and lot which had been sold in execution of a money
judgment rendered by the Court of First Instance of Davao against Rejuso. What
Rejuso did was to institute, together with his wife, Felisa, a separate suit in the
same court against the sheriff and the judgment creditor, Estipona, for the
purpose of annulling the levy, execution sale, and writ of possession issued in the
first action in respect of their residential house and lot, on the theory that that
property was conjugal in character and “hence, not subject to such proceedings
considering that Felisa was not a party to the previous case.” The action was
however dismissed by the court on the ground that it had “no jurisdiction over the
subject matter of the action or the nature of the action and of the relief
sought.” The dismissal was had on motion of Estipona who argued that the court
31
had no jurisdiction to “vacate or annul and/or enjoin the enforcement of the
process issued by another branch in another case,” and since Rejuso had already
raised the same issues in the first case, without success, he should not be allowed
to “get from another branch x x what he failed to get x x (from) Branch 1.” This
Court affirmed that judgment of dismissal, holding that Rejuso’s action was
32
barred by res adjudicata;and “(a)s regards Felisa Rejuso, who is a new party
in Civil Case No. 5102” (the second action) it was ruled that—x x her remedy, if it
has not yet been barred by the statute of limitations or become stale in some other
way, is within Civil Case No.
_______________
Ong v. Tating, supra, at p. 279, italics supplied, citing Rejuso v. Estipona, 72 SCRA 509; National
29
Power Corp. v. De Veyra, 3 SCRA 646.
72 SCRA 509, supra, 511.
30
Id., p. 512.
31
Id., p. 513, parenthetical insertions, supplied.
32
68
68 SUPREME COURT REPORTS ANNOTATED
Mariano vs. Court of Appeals
4435 (the first suit). Indeed, it is superfluous to start a new action on a matter
which can be more simply and conveniently litigated within a former proceeding
of which it is more logically and legally an integral part. (Ipekdjian
Merchandising Co., Inc. v. CTA, 8 SCRA 59 [1963]). Actually, the court in which
the former proceeding was pending has exclusive jurisdiction thereof (De Leon vs.
Salvador, 36 SCRA 567), the fact that the two cases are in the same Branch of the
same Court of First Instance and presided over by the same Judge
notwithstanding. After all, it is simpler and more convenient to observe such
practice, which insures also consistency in the resolutions of related questions
because they are to be determined in most if not all instances by the same judge.”
In any case, whether by intervention in the court issuing the writ, or by
separate action, it is unavailing for either Esther Sanchez or her husband, Daniel,
to seek preclusion of the enforcement of the writ of possession against their
conjugal assets. For it being established, as aforestated, that Esther had engaged
in business with her husband’s consent, and the income derived therefrom had
been expended, in part at least, for the support of her family, the liability of the
conjugal assets to respond for the wife’s obligations in the premises cannot be
disputed.
The petitioner’s appeal must therefore be sustained.
However, the petitioner’s theory that the Eighth Division of the Appellate
Court had improperly taken cognizance of the case which had been raffled to the
Seventh Division, must be rejected. It is without foundation, and was evidently
made without attempt to ascertain the relevant facts and applicable rules. The
case had originally been assigned to Mr. Justice Isidro C. Borromeo for study and
report while he was still a member of the Seventh Division. The case was brought
by him to the Eighth Division when he was subsequently transferred thereto; and
he had ultimately written the opinion for the division after due deliberation with
his colleagues. All of this took place in accordance with the Rules of the Court of
Appeals.
WHEREFORE, the Decision of the Court of Appeals subject of the petition is
REVERSED AND SET ASIDE, and the Regional Trial Court (formerly Court of
First Instance) at Quezon City is
69
VOL. 174, JUNE 7, 1989 69
Mariano vs. Court of Appeals
ORDERED to dismiss Civil Case No. 20415 entitled “Daniel P. Sanchez v. Deputy
Sheriff Mariano V. Cachero, et al,” with prejudice. Costs against private
respondents.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ.,concur.
Decision reversed and set aside.
Notes.—The status of a case pending litigation cannot be affected by a
compromise entered into by the wife, without the husband’s consent, where it is
the conjugal partnership that is involved, except in cases provided by law.
(Zulueta vs. Pan American World Airways, Inc., 43 SCRA 397.)
It is sufficient to prove that the property was acquired during the marriage in
order that the same be deemed conjugal property. (Mendoza vs. Reyes, 124 SCRA
154.)
Unpaid purchase price of lot brought by the deceased husband in behalf of the
conjugal partnership against the partnership assets as the obligation was
contracted for the benefit of the conjugal partnership. (Vda. de Sta. Romana vs.
Philippine Commercial and Industrial Bank, 118 SCRA 330).
——o0o——
70
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

VOL. 30, OCTOBER 31, 1969 111
Luzon Surety Co., Inc. vs. De Garcia
No. L-25659. October 31, 1969.
LUZON SURETY Co., INC., petitioner, vs. JOSEFA AGUIRRE DE GARClA,
VlCENTE GARCIA and the FOURTH DlVISION OF THE COURT OF APPEALS,
respondents.
Civil Iaw; Persons; Property relations between husband and wife; Conjugal
partnership of gains; Charges upon and obligations of the conjugal partnership; Debts and
Obligations contracted by the husband must accrue to the benefit of spouses.—In the most
categorical language, a conjugal partnership under Article 161 of the new Civil Code is
liable only for such "debts and obligations contracted by the husband for the benefit of the
conjugal partnership/' There must be the requisite showing then of some advantage which
clearly accrued to the welfare of the spouses. Certainly, to make a conjugal partnership
respond for a liability that should appertain to the husband alone is to defeat and frustrate
the avowed objective of the new Civil Code to show the utmost concern for the solidarity and
well-being of the family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal parthership.
Same; Same; Same; Same; Same; Same; Conjugal partner-ship is not liable an an
indemnity agreement executed by he husband to accomodate a third party in favor of a surety
company.—The husband in acting as guarantor or surety for another in an indemnity
agreement does not act for the benefit of the conjugal partnership considering that the
benefit is clearly intended for the third party. While the husband by thus signing the
indemnity agreement may be said to have added to his rep-
112
1 SUPREME COURT REPORTS ANNOTATED
12
Luzon Surety Co., Inc. vs. De Garcia
utation or esteem and to have earned the confidence of the business community, such
benefit even if hypothetically accepted, is too remote and fanciful to come within the express
terms of Article 161 of the new Civil Code.
Statubory construction; Where provisions of law are clear; Duty of courts.—No process
of interpretation or construction need be resorted to where a provision of law peremptorily
calls for application. Where a requirement is made in explicit and unambiguous terms, no
discretion is left to the judiciary. It must see to it that its mandate is obeyed.
Remedial law; Appeals; Procedure in Court of Appeals;Questions that may be raised
on appeal; Effect of failure to raise question of jurisdiction of lower court to entertain case;
Case at bar.—Where the question of jurisdiction of the lower court to entertain the petition
in question was not raised before the lower court and only raised for the first time on
appeal, laches may be held to have intervened as in this case as held in Tijam v.
Sibonghanoy, 23 SCRA 29 (1968), as to preclude the petitioner from now attempting to
interpose it in the Supreme Court.
REYES, J.B.L., J., concurring:
Civil law; Persons; Property relations between husband and wife; Conjugal
partnership of gains; Charges upon and obligations of the conjugal partnership of gains;
Article 161 of Civil Code does not require actual profit or benefit to accrue to the conjugal
partnership from the husband's transactions.—The words "all debts and obligations
contracted by the husband for the benefit of the conjugal partnership" used in Article 161 of
the Civil Code of the Philippines in describing the charges and obligations for which the
conjugal partnership is liable, do not require that actual profit or benefit must accrue to the
conjugal partnership from the husband's transactions; but that it suffices that the
transaction should be one that normally would produce such benefit for the partnership.
PETITION for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Tolentino & Garcia and D. R. Cruz for petitioner.
Rodolfo J. Herman for respondents.
FERNANDO, J,:
The crucial question in this petition for the review of a decision of the Court of
Appeals, to be passed upon for
113
VOL. 30, OCTOBER 31, 1969 113
Luzon Surety Co., Inc. vs. De Garcia
the first time, is whether or not a conjugal partnership, in the absence of any
showing of benefits received, could be held liable on an indemnity agreement
executed by the husband to accommodate a third party in favor of a surety
company. The Court of Appeals held that it could not. Petitioner Luzon Surety
Co., Inc., dissatisfied with such a judgment, which was an affirmance of a lower
court decision, would have us reverse. We do not see it that way. The Court of
Appeals adjudicated the matter in accordance with law. We affirm what it did.
As noted in the brief of petitioner Luzon Surety Co., Inc., on October 18, 1960,
a suit for injunction was filed in the Court of First Instance of Negros Occidental
against its Provincial Sheriff by respondents-spouses, Josefa Aguirre de Garcia
and Vicente Garcia "to enjoin [such Sheriff] from selling the sugar allegedly
owned by their conjugal partnership, pursuant to a writ of garnishment issued by
virtue of a writ of execution issued in Civil Case No. 3893 of the same Court of
First Instance x x x against the respondent Vicente Garcia x x x." 1
There was a stipulation of facts submitted. There is no question as to one
Ladislao Chavez, as principal, and petitioner Luzon Surety Co., Inc., executing a
surety bond in favor of the Philippine National Bank, Victorias Branch, to
guaranty a crop loan granted by the latter to Ladislao Chavez in the sum of
P9,000.00. On or' about the same date, Vicente Garcia, together with the said
Ladislao Chavez and one Ramon B. Lacson, as guarantors, signed an indemnity
agreement wherein they bound themselves, jointly and severally, to indemnify
now petitioner Luzon Surety Co., Inc. against any and all damages, losses, costs,
stamps, taxes, penalties, charges and expenses of whatsoever kind and nature
which the petitioner may at any time sustain or incur in consequence of having
become guarantor upon said bond, to pay interest at the rate of 12% per annum,
computed and compounded quarterly until fully paid; and to pay 15% of the
amount involved
________________
1Brief for Petitioner, p. 3.
114
114 SUPREME COURT REPORTS ANNOTATED
Luzon Surety Co., Inc. vs. De Garcia
in any litigation or other matters growing out of or connected therewith for
attorney's fees.
It was likewise stipulated that on or about April 27, 1956, the Philippine
National Bank filed a complaint before the Court of First Instance of Negros
Occidental, docketed as its Civil Case No. 3893. against Ladislao Chavez and
Luzon Surety Co.. Inc. to recover the amount of P4,577.95, in interest, attorney's
fees, and costs of the suit. On or about August 8, 1957, in turn, a third-party
complaint against Ladislao Chavez. Ramon 8. Lacson and Vicente Garcia, based
on the indemnity agreement, was instituted by Luzon Surety Co., Inc.
Then, as set forth by the parties, on September 17, 1958, the lower court
rendered a decision condemning Ladislao Chavez and Luzon Surety Co., Inc., to
pay the plaintiff jointly and severally the amount of P4,577.95 representing the
principal and accrued interest of the obligation at the rate of 6% per annum as of
January 6, 1956, with a daily interest of P0,7119 on P4.330.91 from January 6.
1956, until fully paid, plus the sum of P100.00 as attorney's fees, and to pay the
costs. The same decision likewise ordered the third party defendants, Ladislao
Chavez, Vicente Garcia, and Ramon B, Lacson, to pay Luzon Surety Co., Inc., the
total amount to be paid by it to the plaintiff Philippine National Bank.
On July 30, 1960, pursuant to the aforesaid decision, the Court of First
Instance of Negros Occidental issued a writ of execution against Vicente Garcia
for the satisfaction of the claim of petitioner in the sum of P8,839.97. There-af ter,
a writ of garnishment was issued by the Provincial Sheriff of Negros Occidental
dated August 9, 1960, levying and garnishing the sugar quedans of the now
respondent-spouses, the Garcias, from their sugar plantation, registered in the
names of both of them. The suit for Injunction filed by the Garcia spouses was the
2
result.
As noted, the lower court found in their favor. In its decision of April 30, 1962,
it declared that the garnish-
________________
2Ibid., Appendix, pp. 39-42.
115
VOL. 30, OCTOBER 31, 1969 115
Luzon Surety Co., Inc. vs. De Garcia
ment in question was contrary to Article 161 of the Civil Code and granted their
petition, making the writ of preliminary injunction permanent Luzon Surety, Inc.
elevated the matter to the Court of Appeals, which, as mentioned at the outset,
likewise reached the same result. Hence this petition for review.
We reiterate what was set forth at the opening of this opinion. There is no
reason for a reversal of the judgment. The decision sought to be reviewed is in
accordance with law.
As explained in the decision now under review: "It is true that the husband is
the administrator of the conjugal property pursuant to the provisions of Art. 163
of the new Civil Code. However, as such administrator the only obligations
incurred by the husband that are chargeable against the conjugal property are
those incurred in the legitimate pursuit of his career, profession or business with
the honest belief that he is doing right for the benefit of the family. This is not
true in the case at bar for we believe that the husband in acting as guarantor or
surety for another in an indemnity agreement as that involved in this case did not
act for the benefit of the conjugal partnership. Such inference is more emphatic in
this case, when no proof is presented that Vicente Garcia in acting as surety or
quarantor received consideration therefor, which may redound to the benefit of
the conjugal partnership." 3
In the decision before us, the principal error assigned is the above holding of
the Court of Appeals that under Article 161 of the Civil Code no liability was
incurred by the conjugal partnership. While fully conscious of the express
language of Article 161 of the Civil Code, petitioner, in its well-written brief
submitted by its counsel, would impress on us that in this case it could not be said
that no benefit was received by the conjugal partnership; It sought to lend some
semblance of plausibility to this view thus: "The present case involves a contract
of sure-
________________
Ibid., pp. 46-47
3
116
116 SUPREME COURT REPORTS ANNOTATED
Luzon Surety Co., Inc. vs. De Garcia
tyship entered into by the husband, the respondent Vicente Garcia, in behalf of a
third person. A transaction based on credit through which, by our given
definitions, respondent Vicente Garcia, by acting as guarantor and making good
his guaranty, acquires the capacity of being trusted, adds to his reputation or
esteem, enhances his standing as a citizen in the community in which he lives,
and earns the confidence of the business community. He can thus secure money
with which to carry on the purposes of their conjugal partnership." 4
While not entirely without basis, such an argument does not carry conviction.
Its acceptance would negate the plain meaning of what is expressly provided for
in Article 161. In the most categorical language, a conjugal partnership under
that provision is liable only for such "debts and obligations contracted by the
husband for the benefit of the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued to the welfare of the
spouses. There is none in this case. Nor could there be, considering that the benef
it was clearly intended for a third party, one Ladislao Chavez. While the husband
by thus signing the indemnity agreement may be said to have added to his
reputation or esteem and to have earned the confidence of the business 6Article 165, New Civil Code.
Ct Report of the Code Commission, p. 17 (1948).
community, such benefit, even if hypothetically accepted, is too remote and
7

fanciful to come within the express terms of the provision.
Its language is clear; it does not admit of doubt. No process of interpretation
or construction need be resorted to. It peremptorily calls f or application. Where a
requirement is made in explicit and unambiguous terms, no discretion is left to
the judiciary. It must see to it that its mandate is obeyed. So it is in this case.
That is how the Court of Appeals acted, and what it did cannot be impugned for
being contrary to law. 5
________________
Ibid., pp. 24-25.
4
118
118 SUPREME COURT REPORTS ANNOTATED
Luzon Surety Co., Inc. vs. De Garcia
sider a question raised for the first time on appeal. Now as to the question of
jurisdiction of the lower court to entertain this petition for injunction against the
Provincial Sheriff, to which our attention is invited, neither the Court of Appeals
nor the lower court having been asked to pass upon it Of course, if raised earlier,
it ought to have been seriously inquired into. We feel, however, that under all the
circumstances of the case, substantial justice would be served if petitioner be held
as precluded from now attempting to interpose such a barrier. The conclusion
that thereby laches had intervened is not unreasonable. Such a response on our

Cf. People v. Mapa, 20 SCRA 1164 (1967); Pacific Oxygen & Acetylene Co. v. Central Bank, 22
5

SCRA 917 (1968); Dequito v. Lopez, 22 SCRA 1352 (1968); Padilla v, City of Pasay, 23 part can be predicated on the authoritative holding in Tijam v. Sibonghanoy. 8

117 WHEREFORE, the decision of the Court of Appeals of December 17, 1965,
VOL. 30, OCTOBER 31, 1969 117 now under review, is affirmed with costs against petitioner Luzon Surety Co., Inc.
Concepcion,
Luzon Surety Co., Inc. vs. De Garcia C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Teehankee and Barredo,
Moreover, it would negate the plain object of the additional requirement in the JJ., concur.
present Civil Code that a debt contracted by the husband to bind a conjugal
partnership must redound to its benefit. That is still another provision indicative REYES, J., concurring:
of the solicitude and tender regard that the law manifests for the family as a unit.
Its interest is paramount; its welfare uppermost in the minds of the codifiers and
I concur in the result, but would like to make of record that, in my opinion, the
legislators.
words "all debts and obligations contracted by the husband for the benefit of the
This particular codal provision in question rightfully emphasizes the
conjugal partnership" used in Article 161 of the Civil Code of the Philippines in
responsibility of the husband as administrator, He is supposed to conserve and, if
describing the charges and obligations for which the conjugal partnership is
6

possible, augment the funds of the conjugal partnership, not dissipate them. If out
liable, do not require that actual profit or benefit must accrue to the conjugal
of friendship or misplaced generosity on his part the conjugal partnership would
partnership from the husband's transactions; but that it suffices that the
be saddled with financial burden, then the family stands to suffer. No objection
transaction should be one that normallywould produce such benefit for the
need arise if the obligation thus contracted by him could be shown to be for the
partnership, This is the ratio behind our ruling in Javier vs. Osmeña, 34 Phil.
benefit of the wife and the progeny if any there be. That is but fair and just.
336, that obligations incurred by the husband in the practice of his profession are
Certainly, however. to make a conjugal partnership respond for a liability that
collectible from the conjugal partnership.
should appertain to the husband alone is to defeat and frustrate the avowed
Decision affirmed.
objective of the new Civil Code to show the utmost concern for the solidarity and
Notes.—Laches.—See the annotation in 5 SCRA 57-65.
well-being of the family as a unit. The husband, therefore, as is wisely thus made
7

certain, is denied the power to assume unnecessary and unwarranted risks to the ________________
financial stability of the conjugal partnership.
No useful purpose would be served by petitioner assigning as one of the errors 823 SCRA 29 (1968). Cf. Carillo v. Allied Workers' Association, 24 SCRA 566 (1968).
the observation made by the Court of Appeals as to the husband's interest in the 119
conjugal property being merely inchoate or a mere expectancy in view of the © Copyright 2018 Central Book Supply, Inc. All rights reserved.
conclusion thus reached as to the absence of any liability on the part of the
conjugal partnership. Nor was it error for the Court of Appeals to refuse to con-

________________

SCRA 1349 (1968); Garcia v. Vasquez, 27 SCRA 505 (1969); La Perla Cigar & Cigarette Factory v.
Capapas, L-27948 & 28001-11, July 31, 1969; Mobil Oil Philippines v. Diocares, L26371, Sept. 30, 1969.

608 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation us. Court of Appeals
No. L-61464. May 28, 1988, *
BA FINANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF
APPEALS, AUGUSTO YULO, LILY YULO (doing business under the name and
style of A & L INDUSTRIES), respondents.
Civil Law; Obligations; Property; Conjugal partnership property, not a case of; Where
there is strong preponderant evidence that the single proprietorship business belongs
exclusively to the wife, said property cannot form part of the partnership answerable to the
spouses’ obligations.—As to the petitioner’s contention that even if the signature of Lily Yulo
was forged or even if the attached properties were her exclusive property, the same can be
made answerable to the obligation because the said properties form part of the conjugal
partnership of the spouses Yulo, the appellate court held that these contentions are without
merit because there is strong preponderant evidence to show that A & L Industries belongs
exclusively to respondent Lily Yulo, namely: a) The Certificate of Registration of A & L
Industries, issued by the Bureau of Commerce, showing that said business is a single
proprietorship, and that the registered owner thereof is only Lily Yulo; b) The Mayor’s
Permit issued in favor of A & L Industries, by the Caloocan City Mayor’s Office showing
compliance by said single proprietorship company with the City Ordinance governing
business establishments; and c) The Special Power of Attorney itself, assuming but without
admitting its due execution, is tangible proof that Augusto Yulo has no interest whatsoever
in the A & L Industries, otherwise, there would have been no necessity for the Special
Power of Attorney if he is a part owner of said single proprietorship.
Same; Same; Same; Remedial Law; Evidence; Handwriting; How genuineness of a
standard writing established.—The records show that
_______________
THIRD DIVISION.
*
609
VOL. 161, MAY 28, 1988 609
BA Finance Corporation vs. Court of Appeals
the signatures which were used as “standards” for comparison with the alleged
signature of the private respondent in the Special Power of Attorney were those from the
latter’s residence certificates in the years 1973, 1974 and 1975, her income tax returns for
the years 1973 and 1975 and from a document on long bond paper dated May 18, 1977. Not
only were the signatures in the foregoing documents admitted by the private respondent as
hers but most of the said documents were used by the private respondent in her
transactions with the government. As was held in the case of Plymouth Saving & Loan
Ass’n. No. 2 v. Kassing (125 N.E. 488, 494): “We believe the true rule deduced from the
authorities to be that the genuineness of a ‘standard’ writing may be established (1) by the
admission of the person sought to be charged with the disputed writing made at or for the
purposes of the trial or by his testimony; (2) by witnesses who saw the standards written or
to whom or in whose hearing the person sought to be charged acknowledged the writing
thereof; (3) by evidence showing that the reputed writer of the standard has acquiesced in or
recognized the same, or that it has been adopted and acted upon by him in his business
transactions or other concerns. x x x.”
Same; Same; Same; Same; Same; Same; Sufficiency of signatures of respondent in
certain documents as standards; Testimonies of expert witnesses, credible.—We cannot find
any error on the part of the trial judge in using the above documents as standards and also
in giving credence to the expert witness presented by the private respondent whose
testimony .the petitioner failed to rebut and whose credibility it likewise failed to impeach.
But more important is the fact that the unrebutted handwriting expert’s testimony noted
twelve (12) glaring and material differences in the alleged signature of the private
respondent in the Special Power of Attorney as compared with the specimen signatures,
something which the appellate court also took into account.
Same; Same; Same; Presumption that the single proprietorship established during the
marriage is conjugal, and even if it is registered in the name of only one of the
spouses; Exception.—There is no dispute that A & L Industries was established during the
marriage of Augusto and Lily Yulo and therefore the same is presumed conjugal and the
fact that it was registered in the name of only one of the spouses does not destroy its
conjugal nature (See Mendoza v. Reyes, 124 SCRA 161, 165). However, for the said property
to be held liable, the obligation contracted by the husband must have redounded to the
benefit of the conjugal partnership under Article 161 of the Civil Code. In the present case,
the obligation which the petitioner is seeking to enforce against the conjugal property
managed by the private respondent Lily
610
6 SUPREME COURT REPORTS ANNOTATED
10
BA Finance Corporation vs. Court of Appeals
Yulo was undoubtedly contracted by Augusto Yulo for his own benefit because at the
time he incurred the obligation he had already abandoned his family and had left their
conjugal home. Worse, he made it appear that he was duly authorized by his wife in behalf
of A & L Industries, to procure such loan from the petitioner. Clearly, to make A & L
Industries liable now for the said loan would be unjust and contrary to the express provision
of the Civil Code.
Same; Same; Same; Damages; Attachment; When is an attachment said to be
wrongful.—Both the trial and appellate courts found that there was bad faith on the part of
the petitioner in securing the writ of attachment. We do not think so. “An attachment may
be said to be wrongful when, for instance, the plaintiff has no cause of action, or that there
is no true ground therefor, or that the plaintiff has a sufficient security other than the
property attached, which is tantamount to saying that the plaintiff is not entitled to
attachment because the requirements of entitling him to the writ are wanting (7 C.J.S.,
664)" (p. 48, Section 4, Rule 57, Francisco, Revised Rules of Court).
Same; Same; Same; Same; Same; Failure of petitioner to prove the ground relied upon
for issuance of the writ of attachment cannot be equated with bad faith or malicious intent.—
Although the petitioner failed to prove the ground relied upon for the issuance of the writ of
attachment, this failure cannot be equated with bad faith or malicious intent. The steps
which were taken by the petitioner to ensure the security of its claim were premised on the
firm belief that the properties involved could be made answerable for the unpaid obligation
due it. There is no question that a loan in the amount of P591,003.59 was borrowed from the
bank.
Same; Same; Same; Same; Same; Private respondent wife entitled to actual damages
based on the value of the attached property as proven in court.—We, thus, find that the
petitioner is liable only for actual damages and not for exemplary damages and attorney’s
fees. Respondent Lily Yulo has manifested before this Court that she no longer desires the
return of the attached properties since the said attachment caused her to close down the
business. From that time she has become a mere employee of the new owner of the
premises. She has grave doubts as to the running condition of the attached machineries and
equipments considering that the attachment was effected way back in 1975. She states as a
matter of fact that the petitioner has already caused the sale of the machineries for fear that
they might be destroyed due to prolonged litigation. We, therefore, deem it just and
equitable to allow private respondent Lily Yulo to recover actual
611
VOL. 161, MAY 28, 1988 611
BA Finance Corporation vs. Court of Appeals
damages based on the value of the attached properties as proven in the trial court, in
the amount of P660,000.00. In turn, if there are any remaining attached properties, they
should be permanently released to herein petitioner.
Same; Same; Same; Same; Same; Award for unrealized profits, not proved or justified
before the trial court.—We cannot, however, sustain the award of P500,000.00 representing
unrealized profits because this amount was not proved or justified before the trial court. The
basis of the alleged unearned profits is too speculative and conjectural to show actual
damages for a future period. The private respondent failed to present reports on the average
actual profits earned by her business and other evidence of profitability which are necessary
to prove her claim for the said amount (See G.A. Machineries, Inc. v. Yaptinchay, 126 SCRA
78, 88).
PETITION to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
GUTIERREZ, JR., J.:
This is a petition for review seeking to set aside the decision of the Court of
Appeals which affirmed the decision of the then Court of First Instance of Manila,
dismissing the complaint instituted by the petitioner and ordering it to pay
damages on the basis of the private respondent’s counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured a loan from the
petitioner in the amount of P591,003.59 as evidenced by a promissory note he
signed in his own behalf and as representative of the A & L Industries.
Respondent Yulo presented an alleged special power of attorney executed by his
wife, respondent Lily Yulo, who manages A & L Industries and under whose
name the said business is registered, purportedly authorizing Augusto Yulo to
procure the loan and sign the promissory note. About two months prior to the
loan, however, Augusto Yulo had already left Lily Yulo and their children and had
abandoned their conjugal home. When the obligation became due and
demandable, Augusto Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended complaint against the
spouses Augusto and Lily Yulo on the basis of the promissory note. It also prayed
for the issuance of a writ of attachment alleging that the said spouses were guilty
of fraud
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612 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation vs. Court of Appeals
in contracting the debt upon which the action was brought and that the fraud
consisted of the spouses’ inducing the petitioner to enter into a contract with them
by executing a Deed of Assignment in favor of the petitioner, assigning all their
rights, titles and interests over a construction contract executed by and between
the spouses and A. Soriano Corporation on June 19, 1974 for a consideration of
P615,732.50 when, in truth, the spouses did not have any intention of remitting
the proceeds of the said construction contract to the petitioner because despite the
provisions in the Deed of Assignment that the spouses shall, without
compensation or costs, collect and receive in trust for the petitioner all payments
made upon the construction contract and shall remit to the petitioner all
collections therefrom, the said spouses failed and refused to remit the collections
and instead, misappropriated the proceeds for their own use and benefit, without
the knowledge or consent of the petitioner.
The trial court issued the writ of attachment prayed for thereby enabling the
petitioner to attach the properties of A & L Industries. Apparently not contented
with the order, the petitioner filed another motion for the examination of
attachment debtor, alleging that the properties attached by the sheriff were not
sufficient to secure the satisfaction of any judgment that may be recovered by it in
the case. This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with counter-claim, alleging
that although. Augusto Yulo and she are husband and wife, the former had
abandoned her and their children five (5) months before the filing of the
complaint; that they were already separated when the promissory note was
executed; that her signature in the special power of attorney was forged because
she had never authorized Augusto Yulo in any capacity to transact any business
for and in behalf of A & L Industries, which is owned by her as a single
proprietor, that she never got a single centavo from the proceeds of the loan
mentioned in the promissory note; and that as a result of the illegal attachment of
her properties, which constituted the assets of the A & L Industries, the latter
closed its business and was taken over by the new owner.
After hearing, the trial court rendered judgment dismissing
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VOL. 161, MAY 28, 1988 613
BA Finance Corporation vs. Court of Appeals
the petitioner’s complaint against the private respondent Lily Yulo and A & L
Industries and ordering the petitioner to pay the respondent Lily Yulo
P660,000.00 as actual damages; P500,000.00 as unrealized profits; P300,000.00 as
exemplary damages; P30,000.00 as and for attorney’s fees; and to pay the costs.
The petitioner appealed. The Court of Appeals affirmed the trial court’s
decision except for the exemplary damages which it reduced from P300,000.00 to
P150,000.00 and the attorney’s fees which were reduced from P30,000.00 to
P20,000.00.
In resolving the question of whether or not the trial court erred in holding
that the signature of respondent Lily Yulo in the special power of attorney was
forged, the Court of Appeals said:
“The crucial issue to be determined is whether or not the signatures of the appellee Lily
Yulo in Exhibits B and B-1 are forged, Atty. Crispin Ordoña, the Notary Public, admitted in
open court that the parties in the subject documents did not sign their signatures in his
presence. The same were already signed by the supposed parties and their supposed
witnesses at the time they were brought to him for ratification. We quote from the records
the pertinent testimony of Atty. Ordoña, thus:
“Q This document marked as Exhibit B-1, when this was presented to you by that common friend,
June Enriquez, it was already typewritten, it was already accomplished, all typew ritten?
“
A Yes, sir.
“Q And the parties had already affixed their signatures in this document?
“A Yes, sir.
“Q In this document marked as Exhibit B although it appears here that this is an acknowledgment,
you have not stated here that the principal actually acknowledged this docum ent to be her
voluntary act and deed?
“A This is one of those things that escaped my attention. Actually I have not gone over the second
page. I believed it was in order I signed it. (TSN., pp. 13–14, Hearing of Nov. 26, 1976).
“The glaring admission by the Notary Public that he failed to state in the acknowledgment
portion of Exhibit B-1 that the appellee Lily Yulo acknowledged the said document to be her
own voluntary act and deed, is a very strong and commanding circumstance to show that
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614 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation vs. Court of Appeals
she did not appear personally before the said Notary Public and did not sign the document.
“Additionally, the Notary Public admitted that, while June Enriquez is admittedly a
mutual friend of his and the defendant Augusto Yulo, and who is also an instrumental
witness in said Exhibit B-1, he could not recognize or tell which of the two signatures
appearing therein, was the signature of this June Enriquez.
“Furthermore, as the issue is one of credibility of a witness, the findings and conclusions
of the trial court before whom said witness, Atty. Crispin Ordoña, the Notary Public before
whom the questioned document was supposedly ratified and acknowledged, deserve great
respect and are seldom disturbed on appeal by appellate tribunals, since it is in the best and
peculiar advantage of determining and observing the conduct, demeanor and deportment of
a particular witness while he is testifying in court, an opportunity not enjoyed by the
appellate courts who merely have to rely on the recorded proceedings which transpired in
the court below, and the records are bare of any circumstance of weight, which the trial
court had overlooked and which, if duly considered, may radically affect the outcome of the
case.
“On the other hand, the appellee Lily Yulo, to back up her claim of forgery of her
signature in Exhibit B-1, presented in court a handwriting expert witness in the person of
Police Captain Yakal Giron of the Integrated National Police Training Command, and who
is also a Document Examiner of the same Command’s Crime Laboratory at Fort Bonifacio,
Metro Manila. His experience as an examiner of questioned and disputed documents, in our
mind, is quite impressive, To qualify him as a handwriting expert, he declared that he
underwent extensive and actual studies and examination of disputed or questioned
document, both at the National Bureau of Investigation Academy and National Bureau of
Investigation Questioned Document Laboratory, respectively, from July 1964, up to his
appointment as Document Examiner in June, 1975, and, to further his experience along this
line, he attended the 297th Annual Conference of the American Society of Questioned
Document Examiners held at Seattle, Washington, in August 1971, as a representative of
the Philippines, and likewise conducted an observation of the present and modern trends of
crime laboratories in the West Coast, U.S.A., in 1971; that he likewise had conducted actual
tests and examination of about 100,000 documents, as requested by the different courts,
administrative, and governmental agencies of the Government, substantial portions of
which relate to actual court cases.
“In concluding that the signatures of the appellee Lily Yulo, in the disputed document
in question (Exh. B-1), were all forgeries, and not her genuine signatures, the expert
witness categorically recited and
615
VOL. 161, MAY 28, 1988 615
BA Finance Corporation vs. Court of Appeals
specified in open court what he observed to be about twelve (12) glaring and material
significant differences, in his comparison of the signatures appearing in the genuine
specimen signatures of the said appellee and with those appearing in the questioned
document (Exhibit B-1). Indeed, we have likewise seen the supposed notable differences,
found in the standard or genuine signatures of the appellee which were lifted and obtained
in the official files of the government, such as the Bureau of Internal Revenue on her income
tax returns, as compared to the pretended signature of the appellee appearing in Exhibits B,
B-1. It is also noteworthy to mention that the appellant did not even bother to conduct a
cross-examination of the handwriting expert witness, Capt. Giron, neither did the appellant
present another handwriting expert, at least to counter-act or balance the appellee’s
handwriting expert.
“Prescinding from the foregoing facts, we subscribe fully to the lower court’s
observations that the signatures of the appellee Lily Yulo in the questioned document (Exh.
B-1) were forged. Hence, we find no factual basis to disagree.” (pp. 28–30, Rollo)
As to the petitioner’s contention that even if the signature of Lily Yulo was forged
or even if the attached properties were her exclusive property, the same can be
made answerable to the obligation because the said properties form part of the
conjugal partnership of the spouses Yulo, the appellate court held that these
contentions are without merit because there is strong preponderant evidence to
show that A & L Industries belongs exclusively to respondent Lily Yulo, namely:
a) The Certificate of Registration of A & L Industries, issued by the Bureau of
Commerce, showing that said business is a single proprietorship, and that the
registered owner thereof is only Lily Yulo; b) The Mayor’s Permit issued in favor
of A & L Industries, by the Caloocan City Mayor’s Office showing compliance by
said single proprietorship company with the City Ordinance governing business
establishments; and c) The Special Power of Attorney itself, assuming but without
admitting its due execution, is tangible proof that Augusto Yulo has no interest
whatsoever in the A & L Industries, otherwise, there would have been no
necessity for the Special Power of Attorney if he is a part owner of said’ single
proprietorship.
With regard to the award of damages, the Court of Appeals affirmed the
findings of the trial court that there was bad faith on the part of the petitioner as
to entitle the private respondent
616
616 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation vs. Court of Appeals
to damages as shown not only by the fact that the petitioner did not present the
Deed of Assignment or the construction agreement or any evidence whatsoever to
support its claim of fraud on the part of the private respondent and to justify the
issuance of a preliminary attachment, but also by the following findings:
“Continuing and elaborating further on the appellant’s mala fideactuations in securing the
writ of attachment, the lower court stated as follows;
“‘Plaintiff not satisfied with the instant case where an order for attachment has already been issued and
enforced, on the strength of the same Promissory Note (Exhibit ‘A'), utilizing the Deed of Chattel
Mortgage (Exhibit ‘4'), filed a foreclosure proceedings before the Office of the Sheriff of Caloocan (Exhibit
‘6') foreclosing the remaining properties found inside the premises formerly occupied by the A & L
Industries. A minute examination of Exhibit ‘4' will show that the contracting.parties thereto. as
appearing in par. 1 thereof, are Augusto Yulo, doing business under the style of A & L Industries (should
be A & L Glass Industries Corporation), as mortgagor and BA Finance Corporation as mortgagee, thus
the enforcement of the Chattel Mortgage against the property of A & L Industries exclusively owned by
Lily T. Yulo appears to be without any factual or legal basis whatsoever. The chattel mortgage, Exhibit ‘4'
and the Promissory Note, Exhibit ‘A/ are based on one and the same obligation. Plaintiff tried to enforce
as it did enforce its claim into two different modes a single obligation.
“‘Aware that defendant Lily Yulo, filed a Motion to Suspend Proceedings by virtue of a complaint she
filed with the Court of First Instance of Caloocan, seeking annulment of the Promissory Note, the very
basis of the plaintiff in filing this complaint, immediately after the day it filed a Motion for the Issuance
of an Alias Writ of Preliminary Attachment x x x. Yet, inspite of the knowledge and the filing of this
Motion to Suspend Proceedings. the Plaintiff still filed a Motion for the Issuance of a Writ of Attachment
dated February 6, 1976 before this court. To add insult to injury, plaintiff even filed a Motion for
Examination of the Attachment Debtor, although aware that Lily Yulo had already denied participation
in the execution of Exhibits “A" and “B." These incidents and actions taken by plaintiff, to the thinking of
the court, are sufficient to prove and establish the element of bad faith and malice on the part of plaintiff
which may warrant the award of damages in favor of defendant Lily Yulo. (Ibid., pp. 102–103).'
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VOL. 161, MAY 28, 1988 617
BA Finance Corporation vs. Court of Appeals
“Indeed, the existence of evident bad faith on the appellant’s part in proceeding against the
appellee Lily Yulo in the present case, may likewise be buttressed on the fact that its officer
Mr. Abraham Co, did not even bother to demand the production of at least the duplicate
original of the Special Power of Attorney (Exhibit B) and merely contended himself with a
mere xerox copy thereof,- neither did he require a more specific authority from the A & L
Industries to contract the loan in question, since from the very content and recitals of the
disputed document, no authority, express or implied, has been delegated or granted to
August Yulo to contract a loan, especially with the appellant.” (pp. 33–34, Rollo)
Concerning the actual damages, the appellate court ruled that the petitioner
should have presented evidence to disprove or rebut the private respondent’s
claim but it remained quiet and chose not to disturb the testimony and the
evidence presented by the private respondent to prove her claim.
In this petition for certiorari, the petitioner raises three issues. The first issue
deals with the appellate court’s affirmance of the trial court’s findings that the
signature of the private respondent on the Special Power of Attorney was forged.
According to the petitioner, the Court of Appeals disregarded the direct mandate
of Section 23, Rule 132 of the Rules of Court which states in part that evidence of
handwriting by comparison may be made “with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved to be
genuine to the satisfaction of the judge,” and that there is no evidence on record
which proves or tends to prove the genuineness of the standards used.
There is no merit in this contention.
The records show that the signatures which were used as “standards” for
comparison with the alleged signature of the private respondent in the Special
Power of Attorney were those from the latter’s residence certificates in the years
1973, 1974 and 1975, her income tax returns for the years 1973 and 1975 and
from a document on long bond paper dated May 18, 1977. Not only were the
signatures in the foregoing documents admitted by the private respondent as hers
but most of the said documents were used by the private respondent in her
transactions with the government. As was held in the case of Plymouth Saving &
Loan Ass’n. No. 2 v. Kassing (125 N.E. 488, 494):
618
618 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation vs. Court of Appeals
‘We believe the true rule deduced from the authorities to be that the genuineness of &
‘standard’ writing may be established (1) by the admission of the person sought to be
charged with the disputed writing made at or for the purposes of the trial or by his
testimony; (2) by witnesses who saw the standards written or to whom or in whose hearing
the person sought to be charged acknowledged the writing thereof; (3) by evidence showing
that the reputed writer of the standard has acquiesced in or recognized the same, or that it
has been adopted and acted upon by him his business transactions or other concerns. x x x.”
Furthermore, the judge found such signatures to be sufficient as standards. In the
case of Taylor-Wharton Iron & Steel Co. v. Earnshaw (156 N.E. 855, 856), it was
held:
“When a writing is offered as a standard of comparison it is for the presiding judge to decide
whether it is the handwriting of the party to be charged. ‘Unless his finding is founded upon
error of law, or upon evidence which is, as matter of law, insufficient to justify the finding,
this court will not revise it upon exceptions.’ (Costelo v. Crowell, 139 Mass. 588, 590, 2 N.E.
648; Nuñez v. Perry, 113 Mass, 274, 276.)"
We cannot find any error on the part of the trial judge in using the above
documents as standards and also in giving credence to the expert witness
presented by the private respondent whose testimony the petitioner failed to
rebut and whose credibility it likewise failed to impeach. But more important is
the fact that the unrebutted handwriting expert’s testimony noted twelve (12)
glaring and material differences in the alleged signature of the private
respondent in the Special Power of Attorney as compared with the specimen
signatures, something which the appellate court also took into account. In Cesar
v. Sandiganbayan (134 SCRA 105, 132), we ruled:
“Mr. Maniwang pointed to other significant divergences and distinctive characteristics
between the sample signatures and the signatures on the questioned checks in his report
which the court’s Presiding Justice kept mentioning during Maniwang’s testimony.
“ln the course of his cross-examination, NBI expert Tabayoyong admitted that he saw
the difference the questioned signatures but he dismissed the differences because he did not
consider them fundamental. We rule that significant differences are more fundamental than
a few similarities. A forger always strives to master some similarities.”
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VOL. 161, MAY 28, 1988 619
BA Finance Corporation vs. Court of Appeals
The second issue raised by the petitioner is that while it is true that A & L
Industries is a single proprietorship and the registered owner thereof is private
respondent Lily Yulo, the said proprietorship was established during the
marriage and its assets were also acquired during the same. Therefore, it is
presumed that this property forms part of the conjugal partnership of the spouses
Augusto and Lily Yulo and thus, could be held liable for the obligations contracted
by Augusto Yulo, as administrator of the partnership.
There is no dispute that A & L Industries was established during the
marriage of Augusto and Lily Yulo and therefore the same is presumed conjugal
and the fact that it was registered in the name of only one of the spouses does not
destroy its conjugal nature (See Mendoza v. Reyes, 124 SCRA 161, 165). However,
for the said property to be held liable, the obligation contracted by the husband
must have redounded to the benefit of the conjugal partnership under Article 161
of the Civil Code. In the present case, the obligation which the petitioner is
seeking to enforce against the conjugal property managed by the private
respondent Lily Yulo was undoubtedly contracted by Augusto Yulo for his own
benefit because at the time he incurred the obligation he had already abandoned
his family and had left their conjugal home. Worse, he made it appear that he was
duly authorized by his wife in behalf of A & L Industries, to procure such loan
from the petitioner. Clearly, to make A & L Industries liable now for the said loan
would be unjust and contrary to the express provision of the Civil Code. As we
have ruled in Luzon Surety Co., Inc. v. De Garcia (30 SCRA 111, 115–117):
“As explained in the decision now under review: ‘lt is true that the husband is the
administrator of the conjugal property pursuant to the provisions of Art. 163 of the new
Civil Code. However, as such administrator the only obligations incurred by the husband
that are chargeable against the conjugal property are those incurred in the legitimate
pursuit of his career, profession or business with the honest belief that he is doing right for
the benefit of the family. This is not true in the case at bar for we believe that the husband
in acting as guarantor or surety for another in an indemnity agreement as that involved in
this case did not act for the benefit of the conjugal partnership. Such inference is more
emphatic in this case, when no proof is presented that Vicente Garcia in acting as surety or
guarantor received consid
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620 SUPREME COURT REPORTS ANNOTATED
BA Finance Corporation vs. Court of Appeals
eration therefor. which may redound to the benefit of the conjugal partnership.’ (Ibid, pp.
46–47).
xxx xxx xxx
xxx xxx xxx
“x x x In the most categorical language, a conjugal partnership under that provision is
liable only for such ‘debts and obligations contracted by the husband for the benefit of the
conjugal partnership.’ There must be the requisite showing then of some advantage which
clearly accrued to the welfare of the spouses. There is none in this case. x x x.
xxx xxx xxx
“Moreover, it would negate the plain object of the additional requirement in the present
Civil Code that a debt contracted by the husband to bind a conjugal partnership must
redound to its benefit. That is still another provision indicative of the solicitude and tender
regard that the law manifests for the family as a unit. Its interest is paramount; its welfare
uppermost in the minds of the codifiers and legislators.”
We, therefore, rule that the petitioner cannot enforce the obligation contracted by
Augusto Yulo against his conjugal properties with respondent Lily Yulo. Thus, it
follows that the writ of attachment cannot issue against the said properties.
Finally, the third issue assails the award of actual damages. According to the
petitioner, both the lower court and the appellate court overlooked the fact that
the properties referred to are still subject to a levy on attachment. They are,
therefore, still under custodia legisand thus, the assailed decision should have
included a declaration as to who is entitled to the attached properties and that
assuming arguendo that the attachment was erroneous, the lower court should
have ordered the sheriff to return to the private respondent the attached
properties instead of condemning the petitioner to pay the value thereof by way of
actual damages.
In the case of Lazatin v. Twaño (2 SCRA 842, 847), we ruled;
xxx xxx xxx
“x x x It should be observed that See. 4 of Rule 59, does not prescribe the remedies
available to the attachment defendant in case of a wrongful attachment, but merely
provides an action for recovery upon the bond, based on the undertaking therein made and
not upon the liability arising from a tortious act, like the malicious suing out of an
attachment. Under the first, where malice is not essential, the attachment defendant, is
entitled to recover only the actual damages sustained by him by reason of the attachment.
Under the second, where
621
VOL. 161, MAY 28, 1988 621
BA Finance Corporation vs. Court of Appeals
the attachment is maliciously sued out, the damages recoverable may include a
compensation for every injury to his credit, business or feelings (Tyler v. Mahoney, 168 NC
237, 84 SE-362; Pittsburg etc. 5 Wakefield, etc,, 135 NC 73, 47 SE 234), x x x.”
The question before us, therefore, is whether the attachment of the properties of
A & L Industries was wrongful so as to entitle the petitioner to actual damages
only or whether the said attachment was made in bad faith and with malice to
warrant the award of other kinds of damages. Moreover, if the private respondent
is entitled only to actual damages, was the court justified in ordering the
petitioner to pay for the value of the attached properties instead of ordering the
return of the said properties to the private respondent Lily Yulo?
Both the trial and appellate courts found that there was bad faith on the part
of the petitioner in securing the writ of attachment. We do not think so. “An
attachment may be said to be wrongful when, for instance, the plaintiff has no
cause of action, or that there is no true ground therefor, or that the plaintiff has a
sufficient security other than the property attached, which is tantamout to saying
that the plaintiff is not entitled to attachment because the requirements of
entitling him to the writ are wanting. (7 C.J.S., 664)" (p. 48, Section 4, Rule 57,
Francisco, Revised Rules of Court).
Although the petitioner failed to prove the ground relied upon for the issuance
of the writ of attachment, this failure cannot be equated with bad faith or
malicious intent. The steps which were taken by the petitioner to ensure the
security of its claim were premised on the firm belief that the properties involved 623
could be made answerable for the unpaid obligation due it. There is no question © Copyright 2018 Central Book Supply, Inc. All rights reserved.
that a loan in the amount of P591,003.59 was borrowed from the bank,
We, thus, find that the petitioner is liable only for actual damages and not for
exemplary damages and attorney’s fees. Respondent Lily Yulo has manifested
before this Court that she no longer desires the return of the attached properties
since the said attachment caused her to close down the business, From that time
she has become a mere employee of the new owner of the premises. She has grave
doubts as to the running condition of the attached machineries and equipments
considering that the attachment was effected way back in 1975. She states as a
622

622 SUPREME COURT REPORTS ANNOTATED

BA Finance Corporation vs. Court of Appeals
matter of fact that the petitioner has already caused the sale of the machineries
for fear that they might be destroyed due to prolonged litigation. We, therefore,
deem it just and equitable to allow private respondent Lily Yulo to recover actual
damages based on the value of the attached properties as proven in the trial
court, in the amount of P660,000.00. In turn, if there are any remaining attached
properties, they should be permanently released to herein petitioner.
We cannot, however, sustain the award of P500,000.00 representing
unrealized profits because this amount was not proved or justified before the trial
court. The basis of the alleged unearned profits is too speculative and conjectural
to show actual damages for a future period. The private respondent failed to
present reports on the average actual profits earned by her business and other
evidence of profitability which are necessary to prove her claim for the said
amount (See G.A. Machineries, Inc. v. Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the petitioner liable for
P500,000.00 actual damages representing unrealized profits, P150,000.00 for
exemplary damages and P20,000.00 for attorney’s fees. As stated earlier, the
attached properties, should be released in favor of the petitioner.
WHEREFORE, the decision of the Court of Appeals is hereby SET ASIDE and
the petitioner is ordered to pay the private respondent Lily Yulo the amount of
SIX HUNDRED SIXTY THOUSAND PESOS (P660,000.00) as actual damages.
The remaining properties subject of the attachment are ordered released in favor
of the petitioner.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortés. JJ., concur.
Decision set aside.
Note.—Admission by adverse counsel during direct testimony of signature on
certain documents is an admission only of said signature thereon not the truth of
the documents as regards which the adverse party is still entitled to cross-
examine the witness. (Bachrach Motor Co., Inc. vs. Court of lndustrial
Relations, 86 SCRA 27.)

——o0o——
 VOL. 29, AUGUST 28, 1969 153
People vs. Lagrimas
No. L-25355. August 28, 1969.
THE PEOPLE OF THE PHILIPPINES, plaintiff, vs.FROILAN LAGRIMAS,
accused, HEIRS OF PELAGIO CAGRO, heirsappellants, MERCEDES AGUIRRE
DE LAGRIMAS, movantappellee.
Civil law; Persons and family relations; Conjugal partnership of gains; Charges upon
and obligations of the conjugal partnership; Fines and pecuniary indemnities imposed upon
spouses may be charged against the partnership assets even before the liquidation of the
partnership.—Fines and indemnities imposed upon either husband or wife "may be enforced
against the partnership assets after the responsibilities enumerated in article 161 have
been covered, if the spouse who is bound should have no exclusive property or if it should be
insufficient." It is quite plain, therefore, that the period during which such a liability may be
enforced presupposes that the conjugal partnership is still existing. The termination of the
conjugal partnership is not contemplated as a prerequisite. Whatever doubt may still
remain should be erased by the concluding portion of Article 163 of the Civil Code which
provides that "at the time of the liquidation of the partnership such spouse shall be charged
for what has been paid for the purposes above-mentioned."
Same; Same; Same; Same; Reason for Article 163 of Civil Code.—The reason for
Article 163 of the Civil Code is in accord with the principle that every person criminally
liable for felony is also civilly liable. If the fines and indemnities imposed upon either
husband or wife were to be allowed only after liquidation of the conjugal partnership, the
effect would be to exempt the accused from civil liability and the heirs of the offended party
would be made to suffer still further. Article 163 of the Civil Code minimizes the possibility
that such additional liability of an accused would be rendered nugatory. In doing justice to
the heirs of the victim, no injustice is committed against the family of the offender because
it is
154
1 SUPREME COURT REPORTS ANNOTATED
54
People vs. Lagrimas
made a condition under this article of the Civil Code that the responsibilities
enumerated in Article 161 covering primarily the maintenance of the family and the
education of the children of the spouses as well as other obligations of a preferential
character are first satisfied.
Same; Same; Same; Same; Proof of requisites for applicability.—Considering that the
obligations mentioned in Article 161 of the Civil Code are peculiarly within the knowledge of
the husband or of the wife whose conjugal partnership is- made liable, the proof required of
the beneficiaries of the indemnity to show that the requisites for the imposition and
enforcement of the fines and indemnities against the conjugal partnership are obtaining,
should not be most exacting, ordinary credibility sufficing. Otherwise, the husband or the
wife, as the case may be, representing the conjugal partnership, may find the temptation to
magnify its obligation irresistible so as to defeat the right of recovery of the family of the
offended party,
APPEAL from an order of the Court of First Instance of Samar. Mangosing, J.
The facts are stated in the opinion of the Court.
Socrates G. Desales for heirs-appellants.
Marciano Chitongco for movant-appellee.
FERNANDO, J.:
The Civil Code, under the conditions therein specified, recognizes the liability 01
the conjugal partnership for fines and indemnities imposed upon either husband
or wife "after the responsibilities enumerated in article 161 have been covered," in
the absence of any separate property of the offending spouse or its
insufficiency. How such an
1
________________
1 According to Article 163 of the Civil Code: "The payment of debts contracted by the husband or the
wife before the marriage shall not be charged to the conjugal partnership. Neither shall the fines and
pecuniary indemnities imposed upon them be charged to the partnership. However, the payment of debts
contracted by the husband or the wife before the marriage, and that of fines and indemnities imposed
upon them, may be enforced against the partnership assets after the responsibilities enumerated in
article 161 have been covered, if the spouse who is bound should have no exclusive property or if it should
be insufficient; but at the time of the liquidation
155
VOL. 29, AUGUST 28, 1969 155
People vs. Lagrimas
obligation "may be enforced against the partnership assets" is the question, one of
first impression, raised in this appeal from a lower court order, based on the
assumption of the total exemption of the conjugal partnership from the liability
thus incurred, prior to the stage of liquidation. The result was to set aside the
preliminary attachment and thereafter the writ of execution in favor of the heirs
of the murdered victim, appellants before us, the judgment against the accused
imposing not only the penalty of reclusión perpetua but also the indemnification
to such heirs having attained the status of finality. In view of the failure,
apparent on the face of the appealed order, to respect what the Civil Code
ordains, we reverse and remand the case for further proceedings.
The brief of appellants, the heirs of Pelagio Cagro, the murdered victim,
discloses that on February 19, 1960 an information was filed against the accused,
Froilan Lagrimas, for the above murder committed on February 15, 1960 in
Pambujan, Samar. Thereafter, appellants as such heirs, filed on February 27,
1960 a motion for the issuance of a writ of preliminary attachment on the
property of the accused, such motion being granted in an order of March 5, 1960.
After trial, the lower court found the accused guilty of the crime charged and
sentenced him
________________
of the partnership such spouse shall be charged for what has been paid for the purposes above-
mentioned." Article 161 in turn provides: "The conjugal partnership shall be liable for: (1) All debts and
obligations contracted by the husband for the benefit of the conjugal partnership,, and those contracted
by the wife, also for the same purpose, in the cases where she may legally bind the partnership; (2)
Arrears or income due, during the marriage, from obligations which constitute a charge upon property of
either spouse or of the partnership; (3) Minor repairs or for mere preservation made during the marriage
upon the separate property of either the husband or the wife; major repairs shall not be charged to the
partnership; (4) Major or minor repairs upon the conjugal partnership property; (5) The maintenance of
the family and the education of the children of both husband and wife, and of legitimate children of one of
the spouses; (6) Expenses to permit the spouses to complete a professional, vocational or other course."
156
156 SUPREME COURT REPORTS ANNOTATED
People vs. Lagrimas
to suffer the penalty of reclusión perpetua and to indemnify the appellants as such
heirs in the sum of P6,000.00 plus the additional sum of P10,000.00 in the con
cept of damages, attorney's fees and burial expenses, An appeal from the
judgment was elevated to this Court by the accused but thereafter withdrawn, the
judgment, therefore, becoming final on October 11, 1962.
A writ of execution to cover the civil Indemnity was issued by the Iower court
upon motion of appellants, A levy was had on eleven parcels of land in the
province declared for tax purposes in the name of the accused. The sale thereof at
public auction was scheduled on January 5, 1965 but on December 29, 1964 the
wife of the accused, Mercedes Aguirre de Lagrimas, filed a motion to quash the
writ of attachment as well as the writ of execution with the allegation that the
property levied upon belonged to the conjugal partnership and, therefore, could
not be held liable for the pecuniary indemnity the husband was required to pay.
The then judge of the lower court granted such motion declaring null and void the
order of attachment and the writ of execution, in accordance with Article 1.61 of
the new Civil Code. Another judge of the same lower court set aside the above
order, sustaining the legality of the preliminary attachment as well as the writ of
execution. Thereafter, upon appellee filing a motion for the reconsideration of the
above order giving due course to the writ of execution, a third judge, then
presiding over such court, the Hon. Ignacio Mangosing, revived the orig inal order
of March 5, 1960, declaring such attachment and the writ of execution thereafter
issued as null and void.
This order of August 7, 1965, now on appeal, was premised on the following
considerations: "It can be readily seen from the above-quoted provisions of law
that only debts contracted by the husband or the wife before the marriage, and
those of f ines and indemnities imposed upon them, may be enforced against the
partnership assets after the charges enumerated in article 161 have been covered.
So that, as long as the obligation'? mentioned in said ar-
157
VOL. 29, AUGUST 28, 1969 157
People vs. Lagrimas
ticle 161 have not been paid, the assets of the partnership cannot be made to
answer for indemnities like the one being sought to be enforced in the instant
case. And, before the obligations enumerated in said article 161 can be paid, the
conjugal partnership properties should first, by necessity, be liquidated, and
liquidation can take place only after the dissolution of the partnership thru the
occurrence of any of the causes mentioned in article 175 of the same Code, one of
which is death of one of the spouses. Since both are still living there cannot be
any dissolution, imprisonment for life of the husband notwithstanding, in the
absence of a judicial separation of property properly decreed in accordance with
the provisions of article 191 thereof. Moreover, the fines and indemnities sought
to be charged against the ganancial properties of the accused and his wife are not
such debts and obligations contracted by said accused for the benefit, of the
conjugal partnership." 2
The conclusion, arrived at by Judge Mangosing follows: "We sympathize with
the predicament of the widow and other heirs of the deceased Pelagio Cagro, but
the law is clear on the matter. The indemnities adjudged by the Court in their
favor may only be charged against the exclusive properties of the accused if he
has any, or against his share in the partnership assets after liquidation thereof if
any still remains after the payment of' all the items enumerated in article 161 of
the said Civil Code." 3
Hence, this appeal, the heirs of Pelagio Cagro assigning as sole error the
quashing and annulling of the writs of attachment and execution aforesaid. As
stated at the outset, we find the appeal meritorious.
The applicable Civil Code provision is not lacking in explicitness. Fines and
4
indemnities imposed upon either husband or wife "may be enforced against the
partnership
________________
Record on Appeal, pp. 72-73.
2
3Ibid., pp. 73-74,
4Article 163, Civil Code.
158
158 SUPREME COURT REPORTS ANNOTATED
People vs. Lagrimas
assets after the responsibilities enumerated in article 161 have been covered, if
the spouse who is bound should have no exclusive property or if it should be
insufficient; x x x." It is quite plain, therefore, that the period during which such a
liability may be enforced presupposes that the conjugal partnership is still
existing. The law speaks of "partnership assets." It contemplates that the
responsibilities to which enumerated in Article. 161, chargeable against such
assets, must be complied with first. It is thus obvious that the termination of the
conjugal partnership is not contemplated as a prerequisite. Whatever doubt may
still remain should be erased by the concluding portion of this article which
provides that "at the time of the liquidation of the partnership such spouse shall
be charged for what has been paid for the purposes above-mentioned."
What other conclusion can there be than that the interpretation placed upon
this provision in the challenged order is at war with the plain terms thereof ? It
cannot elicit OUT acceptance, Nor is the reason for such a codal provision difficult
to discern. It is a fundamental postulate of our law that every person criminally
liable for felony is also civilly liable, The accused, Froilan Lagrimas, was, as
5
noted. found guilty of the crime of murder and sentenced to reclusión perpetua, as
well as to pay the indemnification to satisfy the civil liability incumbent upon 6L-19346, May 31, 1965.
160
him. If the appealed order were to be upheld, he would be in effect exempt
therefrom, the heirs of the offended party being made to suffer still further. 160 SUPREME COURT REPORTS ANNOTATED
It would follow, therefore, that the Civil Code provision, as thus worded, Miranda vs. Reyes
precisely minimizes the possibility that such additional liability of an accused dence may be offered to assure compliance with this codal provision.
would be rendered nugatory, In doing justice to the heirs of the murdered victim, WHEREFORE, the appealed order of August 7, 1965 is set aside and the case
no injustice is committed against the family of the offender, It is made a condition remanded to the court of origin for the reception of evidence in accordance with
under this article of the Civil Code that the responsibilities enumerated in Article this opinion. With costs against appellee Mercedes Aguirre de Lagrimas.
161, covering" primarily the maintenance of the family Concepcion,
C.J., Dizon, Makalintal, Sanchez, Castro, Capistrano, Teehankee and Barredo,
________________
JJ., concur.
Reyes, J.B.L. and Zaldivar, JJ., are on official leave.
5Article 100, Revised Penal Code.
159 Order set aside and case remanded to court of origin for reception of evidence.
VOL. 29, AUGUST 28, 1969 159
_____________
People vs. Lagrimas
and the education of the children of the spouses or the legitimate children of one © Copyright 2018 Central Book Supply, Inc. All rights reserved.
of them as well as other obligations of a preferential character, are first satisfied.
It is thus apparent that the legal scheme cannot be susceptible to the charge that
for a transgression of the law by either husband or wife, the rest of the family
may be made to bear burdens of an extremely onerous character.
The next question is how practical effect would be given this particular
liability of the conjugal partnership for the payment of fines and indemnities
imposed upon either husband or wife? In the brief for appellants, the heirs of
Pelagio Cagro, they seek the opportunity to present evidence as to how the
partnership assets could be made to respond, this on the assumption that the
property levied upon does not belong .exclusively to the convicted spouse.
In Lacson v. Diaz, which deals with the satisfaction 01 the debt contracted by
6

husband or wife before marriage by the conjugal partnership. likewise included in

this particular article, it was held: "Considering that the enforceability of the
personal obligations of the husband or wife, against the conjugal assets, forms the
exception to the general rule, it is incumbent upon the one who invokes this
provision or the creditor to show that the requisites for its applicability are
obtaining."
Without departing from the principle thus announced, we make this further
observation. Considering that the obligations mentioned in Article 161 are
peculiarly within the knowledge of the husband or of the wife whose conjugal
partnership is made liable, the proof required of the beneficiaries of the indemnity
should not be of the most exacting kind, ordinary credibility sufficing. Otherwise,
the husband or the wife, as the case may be, representing the conjugal
partnership, may find the temptation to magnify its obligation irresistible so as to
defeat the right of recovery of the family of the offended party. That result is to be
avoided. The lower court should be on the alert, therefore, in the appraisal of
whatever evi-

________________
 VOL. 508, NOVEMBER 29, 2006 419
Security Bank and Trust Company vs. Mar Tierra Corporation
G.R. No. 143382. November 29, 2006. * Pacis & Reyes Attorneys for petitioner.
SECURITY BANK and TRUST COMPANY, petitioner, vs. MAR TIERRA
CORPORATION, WILFRIDO C. MARTINEZ, MIGUEL J. LACSON and
RICARDO A. LOPA, respondents.
Husband and Wife; Conjugal Partnerships; Guaranty; Where the husband contracts
an obligation on behalf of the family business, there is a legal presumption that such
obligation redounds to the benefit of the conjugal partnership, but if the money or services are
given to another person or entity and the husband acted only as a surety or guarantor, the
transaction cannot by itself be deemed an obligation for the benefit of the conjugal
partnership.—In Ayala Investment and Development Corporation v. Court of Appeals, 286
SCRA 272 (1998), we ruled that, if the husband himself is the principal obligor in the
contract, i.e., the direct recipient of the money and services to be used in or for his own
business or profession, the transaction falls within the term “obligations for the benefit of
the
_______________
SECOND DIVISION.
*
420
4 SUPREME COURT REPORTS ANNOTATED
20
Security Bank and Trust Company vs. Mar Tierra Corporation
conjugal partnership.” In other words, where the husband contracts an obligation on
behalf of the family business, there is a legal presumption that such obligation redounds to
the benefit of the conjugal partnership. On the other hand, if the money or services are
given to another person or entity and the husband acted only as a surety or guarantor, the
transaction cannot by itself be deemed an obligation for the benefit of the conjugal
partnership. It is for the benefit of the principal debtor and not for the surety or his family.
No presumption is raised that, when a husband enters into a contract of surety or
accommodation agreement, it is for the benefit of the conjugal partnership. Proof must be
presented to establish the benefit redounding to the conjugal partnership. In the absence of
any showing of benefit received by it, the conjugal partnership cannot be held liable on an
indemnity agreement executed by the husband to accommodate a third party.
Same; Same; Same; To hold the conjugal partnership liable for an obligation
pertaining to the husband alone defeats the objective of the Civil Code to protect the solidarity
and well-being of the family as a unit.—In this case, the principal contract, the credit line
agreement between petitioner and respondent corporation, was solely for the benefit of the
latter. The accessory contract (the indemnity agreement) under which individual respondent
Martinez assumed the obligation of a surety for respondent corporation was similarly for the
latter’s benefit. Petitioner had the burden of proving that the conjugal partnership of the
spouses Martinez benefited from the transaction. It failed to discharge that burden. To hold
the conjugal partnership liable for an obligation pertaining to the husband alone defeats the
objective of the Civil Code to protect the solidarity and well being of the family as a unit.
The underlying concern of the law is the conservation of the conjugal partnership. Hence, it
limits the liability of the conjugal partnership only to debts and obligations contracted by
the husband for the benefit of the conjugal partnership.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
421
VOL. 508, NOVEMBER 29, 2006 421
Security Bank and Trust Company vs. Mar Tierra Corporation
Cabochan, Reyes & Capones Law Offices for respondents.
CORONA, J.:
May the conjugal partnership be held liable for an indemnity agreement entered
into by the husband to accommodate a third party?
This issue confronts us in this petition for review on certiorari assailing the
November 9, 1999 decision of the Court of Appeals (CA) in CA-G.R. CV No.
1
48107.
On May 7, 1980, respondent Mar Tierra Corporation, through its president,
Wilfrido C. Martinez, applied for a P12,000,000 credit accommodation with
petitioner Security Bank and Trust Company. Petitioner approved the application
and entered into a credit line agreement with respondent corporation. It was
secured by an indemnity agreement executed by individual respondents Wilfrido
C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound themselves jointly
and severally with respondent corporation for the payment of the loan.
On July 2, 1980, the credit line agreement was amended and increased to
P14,000,000. Individual respondents correspondingly executed a new indemnity
agreement in favor of the bank to secure the increased credit line.
On September 25, 1981, respondent corporation availed of its credit line and
received the sum of P9,952,000 which it undertook to pay on or before November
30, 1981. It was able to pay P4,648,000 for the principal loan and P2,729,195.56
for the interest and other charges. However, respondent corpora-
_______________
Penned by Associate Justice Conrado M. Vasquez, Jr. and concurred in by Associate Justices
1
Salome A. Montoya (retired) and Teodoro P. Regino (retired) of the Second Division of the Court of
Appeals; Rollo, pp. 34–42.
422
422 SUPREME COURT REPORTS ANNOTATED
Security Bank and Trust Company vs. Mar Tierra Corporation
tion was not able to pay the balance as it suffered business reversals, eventually
ceasing operations in 1984.
Unable to collect the balance of the loan, petitioner filed a complaint for a sum
of money with a prayer for preliminary attachment against respondent
corporation and individual respondents in the Regional Trial Court (RTC) of
Makati, Branch 66. It was docketed as Civil Case No. 3947.
 Subsequently, however, petitioner had the case dismissed with respect to power of judicial review under Rule 45 of the Rules of Court which is concerned
individual respondents Lacson and Lopa, leaving Martinez as the remaining
2 solely with questions of law. 7

individual respondent. We now move on to the principal issue in this case. Under Article 161(1) of the
On August 10, 1982, the RTC issued a writ of attachment on all real and Civil Code, the conjugal partnership is liable for “all debts and obligations
8

personal properties of respondent corporation and individual respondent contracted by the husband for the benefit of the conjugal partnership.” But when
Martinez. As a consequence, the conjugal house and lot of the spouses Wilfrido are debts and obligations contracted by the husband
and Josefina Martinez in Barrio Calaanan, Caloocan City covered by Transfer
Certificate of Title (TCT) No. 49158 was levied on. _______________
The RTC rendered its decision on June 20, 1994. It held respondent
3

corporation and individual respondent Martinez jointly and severally liable to Aboitiz International Forwarders, Inc. vs. Court of Appeals, G.R. No. 156978, 02 May 2006, 488
4

SCRA 492.
petitioner for P5,304,000 plus 12% interest per annum and 5% penalty Id.
5

commencing on June 21, 1982 until fully paid, plus P10,000 as attorney’s fees. It, CA Records, p. 3; Rollo, p. 39.
6

however, found that the obligation contracted by individual respondent Martinez Philippine National Bank v. Campos, G.R. No. 167270, 30 June 2006, 494 SCRA 370.
7

did not redound to the benefit of his family, hence, it ordered the lifting of the Now Article 121(2) of the Family Code.
8

424
attachment on the conjugal house and lot of the spouses Martinez.
Dissatisfied with the RTC decision, petitioner appealed to the CA but the 424 SUPREME COURT REPORTS ANNOTATED
appellate court affirmed the trial court’s decision in toto. Petitioner sought Security Bank and Trust Company vs. Mar Tierra Corporation
reconsideration but it was denied. Hence, this petition. alone considered for the benefit of and therefore chargeable against the conjugal
Petitioner makes two basic assertions: (1) the RTC and CA erred in finding partnership? Is a surety agreement or an accommodation contract entered into by
that respondent corporation availed of P9,952,000 only from its credit line and not the husband in favor of his employer within the contemplation of the said
the entire provision?
We ruled as early as 1969 in Luzon Surety Co., Inc. v. de Garcia that, in 9

_______________
acting as a guarantor or surety for another, the husband does not act for the
benefit of the conjugal partnership as the benefit is clearly intended for a third
Petition for Review, p. 5; Id., p. 15. The reason for the dismissal, however, was not mentioned.
party.
2

3Penned by Judge Eriberto Rosario.

423 In Ayala Investment and Development Corporation v. Court of Appeals, we 10

VOL. 508, NOVEMBER 29, 2006 423

Security Bank and Trust Company vs. Mar Tierra Corporation
P14,000,000 and (2) the RTC and CA were wrong in ruling that the conjugal
partnership of the Martinez spouses could not be held liable for the obligation
incurred by individual respondent Martinez.
ruled that, if the husband himself is the principal obligor in the contract, i.e., the
direct recipient of the money and services to be used in or for his own business or
profession, the transaction falls within the term “obligations for the benefit of the
conjugal partnership.” In other words, where the husband contracts an obligation
on behalf of the family business, there is a legal presumption that such obligation
redounds to the benefit of the conjugal partnership. 11

We uphold the CA.
Factual findings of the CA, affirming those of the trial court, will not be
disturbed on appeal but must be accorded great weight. These findings are
conclusive not only on the parties but on this Court as well. 5
On the other hand, if the money or services are given to another person or
entity and the husband acted only as a surety or guarantor, the transaction
4
cannot by itself be deemed an obligation for the benefit of the conjugal
partnership. It is for the benefit of the principal debtor and not for the surety or
12

The CA affirmed the finding of the RTC that the amount availed of by
respondent corporation from its credit line with petitioner was only P9,952,000.
Both courts correctly pointed out that petitioner itself admitted this amount when
it alleged in paragraph seven of its complaint that respondent corporation
his family. No presumption is raised that, when a husband enters into a contract
of surety or accommodation agreement, it is for the benefit of the conjugal
partnership. Proof must be presented to establish the benefit redounding to the
conjugal partnership. In the absence of any showing of benefit received by it, the
13

“borrowed and received the principal sum of P9,952,000.” Petitioner was therefore
6
conjugal partnership cannot be held
bound by the factual finding of the appellate and trial courts, as well as by its own
judicial admission, on this particular point. _______________
At any rate, the issue of the amount actually availed of by respondent
corporation is factual. It is not within the ambit of this Court’s discretionary 9 140 Phil. 509; 30 SCRA 111 (1969).
10 349 Phil. 942; 286 SCRA 272 (1998).
11 Id.
 Id.
12

Id.
13

425

VOL. 508, NOVEMBER 29, 2006 425

Security Bank and Trust Company vs. Mar Tierra Corporation
liable on an indemnity agreement executed by the husband to accommodate a
third party. 14

In this case, the principal contract, the credit line agreement between
petitioner and respondent corporation, was solely for the benefit of the latter. The
accessory contract (the indemnity agreement) under which individual respondent
Martinez assumed the obligation of a surety for respondent corporation was
similarly for the latter’s benefit. Petitioner had the burden of proving that the
conjugal partnership of the spouses Martinez benefited from the transaction. It
failed to discharge that burden.
To hold the conjugal partnership liable for an obligation pertaining to the
husband alone defeats the objective of the Civil Code to protect the solidarity and
well being of the family as a unit. The underlying concern of the law is the
15

conservation of the conjugal partnership. Hence, it limits the liability of the

16

conjugal partnership only to debts and obligations contracted by the husband for
the benefit of the conjugal partnership.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED.
Puno (Chairperson), Sandoval-Gutierrez, Azcunaand Garcia, JJ., concur.
Petition denied.
Notes.—The absence of the consent of one spouse in the sale of a conjugal
property renders the sale null and void,

_______________

Luzon Surety Co., Inc. v. de Garcia, supra.

14

Ching v. Court of Appeals, G.R. No. 124642, 23 February 2004, 423 SCRA 356.
15

Ayala Investment and Development Corporation v. Court of Appeals, supra.

16

426

426 SUPREME COURT REPORTS ANNOTATED

Dumlao, Jr. vs. Ponferrada
while the vitiation thereof makes it merely voidable. (Guiang vs. Court of
Appeals, 291 SCRA 372 [1998])
There is no co-ownership between the spouses in the properties of the conjugal
partnership of gains. (San Juan Structural and Steel Fabricators, Inc. vs. Court of
Appeals, 296 SCRA 631 [1998])

——o0o——

© Copyright 2018 Central Book Supply, Inc. All rights reserved.


628 SUPREME COURT REPORTS ANNOTATED
Felipe vs. Heirs of Maximo Aldon
No. L-60174. February 16, 1983.
not improve the situation of Gimena. What she could not do during the marriage, she could
not do thereafter. The case of Sofia and Salvador Aldon is different. After the death of
Maximo they acquired the right to question the defective contract insofar as it deprived
them of their hereditary rights in their father’s share in the lands. The father’s share is one-
*

EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE V. FELIPE,
petitioners, vs. HEIRS OF MAXIMO ALDON, NAMELY: GIMENA ALMOSARA,
SOFIA ALDON, SALVADOR ALDON, AND THE HONORABLE COURT OF
APPEALS, respondents.
Appeal; Factual issues are not as a rule passed upon by the Supreme Court in an
appeal by way of petition for review under Rule 45.—The defendants are now the appellants
in this petition for review. They invoke several grounds in seeking the reversal of the
decision of the Court of Appeals. One of the grounds is factual in nature; petitioners claim
that “respondent Court of Appeals has found as a fact that the ‘Deed of Purchase and Sale’
executed by respondent Gimena Almosara is not a forgery and therefore its authenticity and
due execution is already beyond question.” We cannot consider this ground because as a rule
only questions of law are reviewed in proceedings under Rule 45 of the Rules of Court
subject to well-defined exceptions not present in the instant case.
Contracts; Words and Phrases; Judgment the term used by the court below, that the
contract is “invalid” is imprecise.—In the instant case, Gimena, the wife, sold lands
belonging to the conjugal
_____________
*SECOND DIVISION.
629
VOL. 120, FEBRUARY 16, 1983 629
Felipe vs. Heirs of Maximo Aldon
partnership without the consent of the husband and the sale is not covered by the
phrase “except in cases provided by law.” The Court of Appeals described the sale as
“invalid”—a term which is imprecise when used in relation to contracts because the Civil
Code uses specific names in designating defective contracts, namely: rescissible (Arts.
1380 et seg.), voidable (Arts. 1390 et seq.), unenforceable (Arts. 1403, et seq.), and void or
inexistent(Arts. 1409 et seq.) The sale made by Gimena is certainly a defective contract but
of what category? The answer: it is a voidable contract.
Same; Sale; A contract of sale of land made by the wife without the husband’s consent
is voidable.—The view that the contract made by Gimena is a voidable contract is supported
by the legal provision that contracts entered by the husband without the consent of the wife
when such consent is required, are annullable at her instance during the marriage and
within ten years from the transaction questioned. (Art. 173, Civil Code.)
Same; Same; Wife’s contract of sale can be annulled by the husband during the
marriage, but not by the wife nor their children.—The voidable contract of Gimena was
subject to annulment by her husband only during the marriage because he was the victim
who had an interest in the contract. Gimena, who was the party responsible for the defect,
could not ask for its annulment. Their children could not likewise seek the annulment of the
contract while the marriage subsisted because they merely had an inchoate right to the
lands sold.
Same; Same; Actions; Succession; The wife who sold conjugal lands without her
husband’s consent cannot bring action for annulment of the sale even after her husband’s
death, but their childrenheirs can with respect to their shares.—The termination of the
marriage and the dissolution of the conjugal partnership by the death of Maximo Aldon did
half (1/2) of the lands and their share is two-thirds (2/3) thereof, one-third (1/3) pertaining to
the widow.
Same; Prescription; Evidence; Fact that son of supposed vendee still went to the
supposed vendors for the latter to sign a deed of sale
630
6 SUPREME COURT REPORTS ANNOTATED
30
Felipe vs. Heirs of Maximo Aldon
of the land shows that the former knew that the defect in the sale of the land made by
the wife alone. Prescription in such case is 30 years.—This actuation clearly indicated that
the appellees knew the lots did not still belong to them, otherwise, why were they interested
in a document of sale in their favor? Again why did Vicente V. Felipe tell Gimena that the
purpose of the document was to obtain Gimena’s consent to the construction of an irrigation
pump on the lots in question? The only possible reason for purporting to obtain such consent
is that the appellees knew the lots were not theirs. Why was there an attempted improvement
(the irrigation tank) only in 1970? Why was the declaration of property made only in 1974?
Why were no attempts made to obtain the husband’s signature, despite the fact that
Gimena and Hermogena were close relatives? All these indicate the bad faith of the
appellees. Now then, even if we were to consider appellees’ possession in bad faith as a
possession in the concept of owners, this possession at the earliest started in 1951, hence the
period for extraordinary prescription (30 years) had not yet lapsed when the present action
was instituted on April 26, 1976.
Same; Same; Prescriptive period to file action is counted from death of the father
whose consent was not obtained by his wife in the sale of conjugal lands, with respect to their
heirs.—As to the second question, the children’s cause of action accrued from the death of
their father in 1959 and they had thirty (30) years to institute it (Art. 1141, Civil Code.)
They filed action in 1976 which is well within the period.
Aquino. J., concurring:
Prescription; Contracts; An action to declare void a sale of conjugal land by the wife
does not prescribe.—With more reason, the wife cannot make such a disposition without the
husband’s consent since the husband is the administrator of the conjugal assets. In the
instant case, the Court of Appeals did not err in voiding the wife’s sale of the conjugal land
without the husband’s consent. As that sale is contrary to law, the action to have it declared
void or inexistent does not prescribe. Moreover, there are indications that the contract
between the parties was an antichresis, a transaction which is very common in rural areas.
PETITION for review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
631
VOL. 120, FEBRUARY 16, 1983 631
Felipe vs. Heirs of Maximo Aldon
 Romulo D. San Juan for petitioner.
Gerundino Castillejo for private respondent.
ABAD SANTOS, J.:
Maximo Aldon married Gimena Almosara in 1936. The spouses bought several
pieces of land sometime between 1948 and 1950. In 1960-62, the lands were
divided into three lots, 1370, 1371 and 1415 of the San Jacinto Public Land
Subdivision, San Jacinto, Masbate.
In 1951, Gimena Almosara sold the lots to the spouses Eduardo Felipe and
Hermogena V. Felipe. The sale was made without the consent of her husband,
Maximo.
On April 26, 1976, the heirs of Maximo Aldon, namely his widow Gimena and
their children Sofia and Salvador Aldon, filed a complaint in the Court of First
Instance of Masbate against the Felipes. The complaint which was docketed
as Civil Case No. 2372 alleged that the plaintiffs were the owners of Lots 1370,
1371 and 1415; that they had orally mortgaged the same to the defendants; and
an offer to redeem the mortgage had been refused so they filed the complaint in
order to recover the three parcels of land.
The defendants asserted that they had acquired the lots from the plaintiffs by
purchase and subsequent delivery to them. The trial court sustained the claim of
the defendants and rendered the following judgment:
1. “a.declaring the defendants to be the lawful owners of the property
subject of the present litigation;
2. b.declaring the complaint in the present action to be without merit and is
therefore hereby ordered dismissed;
3. c.ordering the plaintiffs to pay to the defendants the amount of P2,000.00
as reasonable attorney’s fees and to pay the costs of the suit.”
The plaintiffs appealed the decision to the Court of Appeals which rendered the
following judgment:
“PREMISES CONSIDERED, the decision appealed from is
632
632 SUPREME COURT REPORTS ANNOTATED
Felipe vs. Heirs of Maximo Aldon
hereby REVERSED and SET ASIDE, and a new one is hereby RENDERED, ordering the
defendants-appellees to surrender the lots in question as well as the plaintiffs’-appellants’
muniments of title thereof to said plaintiffs-appellants, to make an accounting of the
produce derived from the lands including expenses incurred since 1951, and to solidarily
turn over to the plaintiffs-appellants the NET monetary value of the profits, after deducting
the sum of P1,800.00. No attorney’s fees nor moral damages are awarded for lack of any
legal justification therefor. No costs.”
The ratio of the judgment is stated in the following paragraphs of the decision
penned by Justice Edgardo L. Paras with the concurrence of Justices Venicio
Escolin and Mariano A. Zosa:
“One of the principal issues in the case involves the nature of the aforementioned
conveyance or transaction, with appellants claiming the same to be an oral contract of
mortgage or antichresis, the redemption of which could be done anytime upon repayment of
the P1,800.00 involved (incidentally the only thing written about the transaction is the
aforementioned receipt re the P1,800). Upon the other hand, appellees claim that the
transaction was one of sale, accordingly, redemption was improper. The appellees claim that
plaintiffs never conveyed the property because of a loan or mortgage or antichresis and that
what really transpired was the execution of a contract of sale thru a private document
designated as a ‘Deed of Purchase and Sale’ (Exhibit 1), the execution having been made by
Gimena Almosara in favor of appellee Hermogena V. Felipe.
“After a study of this case, we have come to the conclusion that the appellants are
entitled to recover the ownership of the lots in question. We so hold because although Exh. 1
concerning the sale made in 1951 of the disputed lots is, in Our opinion, not a forgery the
fact is that the sale made by Gimena Almosara is invalid, having been executed without the
needed consent of her husband, the lots being conjugal. Appellees’ argument that this was
an issue not raised in the pleadings is baseless, considering the fact that the complaint
alleges that the parcels ‘were purchased by plaintiff Gimena Almosara and her late husband
Maximo Aldon’ (the lots having been purchased during the existence of the marriage, the
same are presumed conjugal) and inferentially, by force of law, could not, be disposed of by a
wife without her husband’s consent.”
633
VOL. 120, FEBRUARY 16, 1983 633
Felipe vs. Heirs of Maximo Aldon
The defendants are now the appellants in this petition for review. They invoke
several grounds in seeking the reversal of the decision of the Court of Appeals.
One of the grounds is factual in nature; petitioners claim that “respondent Court
of Appeals has found as a fact that the ‘Deed of Purchase and Sale’ executed by
respondent Gimena Almosara is not a forgery and therefore its authenticity and
due execution is already beyond question.” We cannot consider this ground
because as a rule only questions of law are reviewed in proceedings under Rule 45
of the Rules of Court subject to well-defined exceptions not present in the instant
case.
The legal ground which deserves attention is the legal effect of a sale of lands
belonging to the conjugal partnership made by the wife without the consent of the
husband.
It is useful at this point to re-state some elementary rules: The husband is the
administrator of the conjugal partnership. (Art. 165, Civil Code.) Subject to
certain exceptions, the husband cannot alienate or encumber any real property of
the conjugal partnership without the wife’s consent. (Art. 166, Idem.) And the
wife cannot bind the conjugal partnership without the husband’s consent, except
in cases provided by law. (Art. 172, Idem.)
In the instant case, Gimena, the wife, sold lands belonging to the conjugal
partnership without the consent of the husband and the sale is not covered by the
phrase “except in cases provided by law.” The Court of Appeals described the sale
as “invalid”—a term which is imprecise when used in relation to contracts
because the Civil Code uses specific names in designating defective contracts,
namely: rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et
seq.), unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et seq.)
 The sale made by Gimena is certainly a defective contract but of what
category? The answer: it is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable contracts are
“[T]hose where one of the parties is incapable of giving consent to the contract.”
(Par. 1.) In the instant case Gimena had no capacity to give consent to the
contract of sale. The capacity to give consent belonged not even to the husband
alone but to both spouses.
634
634 SUPREME COURT REPORTS ANNOTATED
Felipe vs. Heirs of Maximo Aldon
The view that the contract made by Gimena is a voidable contract is supported by
the legal provision that contracts entered by the husband without the consent of
the wife when such consent is required, are annullable at her instance during the
marriage and within ten years from the transaction questioned. (Art. 173, Civil
Code.)
Gimena’s contract is not rescissible for in such contract all the essential
elements are untainted but Gimena’s consent was tainted. Neither can the
contract be classified as unenforceable because it does not fit any of those
described in Art. 1403 of the Civil Code. And finally, the contract cannot be void
or inexistent because it is not one of those mentioned in Art. 1409 of the Civil
Code. By process of elimination, it must perforce be a voidable contract.
The voidable contract of Gimena was subject to annulment by her husband
only during the marriage because he was the victim who had an interest in the
contract. Gimena, who was the party responsible for the defect, could not ask for
its annulment. Their children could not likewise seek the annulment of the
contract while the marriage subsisted because they merely had an inchoate right
to the lands sold.
The termination of the marriage and the dissolution of the conjugal
partnership by the death of Maximo Aldon did not improve the situation of
Gimena. What she could not do during the marriage, she could not do thereafter.
The case of Sofia and Salvador Aldon is different. After the death of Maximo
they acquired the right to question the defective contract insofar as it deprived
them of their hereditary rights in their father’s share in the lands. The father’s
share is one-half (1/2) of the lands and their share is two-thirds (2/3) thereof, one-
third (1/3) pertaining to the widow.
The petitioners have been in possession of the lands since 1951. It was only in
1976 when the respondents filed action to recover the lands. In the meantime,
Maximo Aldon died.
Two questions come to mind, namely: (1) Have the petitioners acquired the
lands by acquisitive prescription? (2) Is the right of action of Sofia and Salvador
Aldon barred by the statute of limitations?
635
VOL. 120, FEBRUARY 16, 1983 635
Felipe vs. Heirs of Maximo Aldon
Anent the first question, We quote with approval the following statement of the
Court of Appeals:
“We would like to state further that appellees [petitioners herein] could not have acquired
ownership of the lots by prescription in view of what we regard as their bad faith. This bad
faith is revealed by testimony to the effect that defendant-appellee Vicente V. Felipe (son of
appellees Eduardo Felipe and Hermogena V. Felipe) attempted in December 1970 to have
Gimena Almosara sign a ready-made document purporting to sell the disputed lots to the
appellees. This actuation clearly indicated that the appellees knew the lots did not still
belong to them,otherwise, why were they interested in a document of sale in their favor?
Again why did Vicente V. Felipe tell Gimena that the purpose of the document was to obtain
Gimena’s consent to the construction of an irrigation pump on the lots in question? The only
possible reason for purporting to obtain such consent is that the appellees knew the lots were
not theirs. Why was there an attempted improvement (the irrigation tank) only in 1970?
Why was the declaration of property made only in 1974? Why were no attempts made to
obtain the husband’s signature, despite the fact that Gimena and Hermogena were close
relatives? All these indicate the bad faith of the appellees. Now then, even if we were to
consider appellees’ possession in bad faith as a possession in the concept of owners, this
possession at the earliest started in 1951, hence the period for extraordinary prescription
(30 years) had not yet lapsed when the present action was instituted on April 26, 1976.
As to the second question, the children’s cause of action accrued from the death of
their father in 1959 and they had thirty (30) years to institute it (Art. 1141, Civil
Code.) They filed action in 1976 which is well within the period.
WHEREFORE, the decision of the Court of Appeals is hereby modified.
Judgment is entered awarding to Sofia and Salvador Aldon their shares of the
lands as stated in the body of this decision; and the petitioners as possessors in
bad faith shall make an accounting of the fruits corresponding to the share
aforementioned from 1959 and solidarity pay their value to Sofia and Salvador
Aldon; costs against the petitioners.
SO ORDERED.
Concepcion, Jr., Guerrero and De Castro, JJ., concur.
636
6 SUPREME COURT REPORTS ANNOTATED
36
Felipe vs. Heirs of Maximo Aldon
Makasiar, (Chairman), J., In the result.
Aquino, J., See concurrence.
Escolin, J., (No part.)
AQUINO, J., concurring:
I concur in the result. The issue is whether the wife’s sale in 1951 of an
unregistered sixteen-hectare conjugal land, without the consent of her husband
(he died in 1959), can be annulled in 1976 by the wife and her two children.
As a rule, the husband cannot dispose of the conjugal realty without the wife’s
consent (Art. 166, Civil Code). Thus, a sale by the husband of the conjugal realty
without the wife’s consent was declared void (Tolentino vs. Cardenas, 123 Phil.
517; Villocino vs. Doyon, L-19797, December 17, 1966, 18 SCRA 1094 and L-
28871, April 25, 1975, 63 SCRA 460; Reyes vs. De Leon, L-22331, June 6, 1967, 20
SCRA 369; Bucoy vs. Paulino, L-25775, April 26, 1968, 23 SCRA 248; Tinitigan
vs. Tinitigan, L-45418, October 30, 1980, 100 SCRA 619).
With more reason, the wife cannot make such a disposition without the
husband’s consent since the husband is the administrator of the conjugal assets.
In the instant case, the Court of Appeals did not err in voiding the wife’s sale
of the conjugal land without the husband’s consent. As that sale is contrary to
law, the action to have it declared void or inexistent does not prescribe. Moreover,
there are indications that the contract between the parties was an antichresis, a
transaction which is very common in rural areas.
Decision modified.
Notes.—Husband may dispose conjugal land without wife’s consent for a big
conjugal liability which might endanger the family’s economic standing.
(Tinitigan vs. Tinitigan, Sr., 100 SCRA 619).
A pacto de retro sale of conjugal real property, effected by the husband
without the wife’s consent, was considered
637

VOL. 120, FEBRUARY 18, 1983 637

People vs. Disney
ratified by her when she gave her conformity to the extension of the period of
redemption by signing the annotation on the margin of the deed. (Reyes vs. De
Leon,20 SCRA 369).
The contract of sale of conjugal property, in its entirety, executed by the
husband without the wife’s consent may be annulled by the wife. (Bucoy vs.
Paulino, 23 SCRA 248).
Averment of mistake in the complaint is not essential where fraud was
alleged and the latter was found to be the cause of the mutual mistake of both
contracting parties, vis-a-vis, a third person who committed the fraudulent act.
(Rural Bank of Caloocan, Inc. vs. Court of Appeals, 104 SCRA 151).
Article 1191 of the new Civil Code applies in cases of rescission of a contract to
sell realty. (Roque vs. Lapuz, 96 SCRA 741).

——o0o——

© Copyright 2018 Central Book Supply, Inc. All rights reserved.


VOL. 198, JUNE 26, 1991
Roxas vs. Court of Appeals
VOL. 198, JUNE 26, 1991
Roxas vs. Court of Appeals
G.R. No. 92245. June 26, 1991.
MELANIA A. ROXAS, petitioner, vs. THE HON. COURT OF APPEALS and
ANTONIO M. CAYETANO, respondents.
in the contract of deposit holds the property in trust, he is not granted by law the right to
541
make use of the property in deposit.
Same; Same; Same; Lease is a burden on the land, it is an encumbrance on the land.–
–In the contract of lease, the lessor transfers his right of use in favor of the lessee. The
541 lessor’s right of use is impaired, therein. He may even be ejected by the lessee if the lessor
uses the leased realty. Therefore, lease is a burden on the land, it is an encumbrance on the
land.
*
Same; Same; Same; Lease is not only an encumbrance but also a qualified alienation.–
–Moreover, lease is not only an encumbrance but
543

Civil Law; Property; Conjugal Partnership; The husband is the administrator of the
conjugal partnership.––Under the New Civil Code (NCC) “Art. 165. The husband is the
administrator of the conjugal partnership,” in view of the fact that the husband is
principally responsible for the support of the wife and the rest of the family. If the conjugal
partnership does not have enough assets, it is the husband’s capital that is responsible for
such support, not the paraphernal property. Responsibility should carry authority with it.
Same; Same; Same; Husband is not an ordinary administrator.–– The husband is not
an ordinary administrator, for while a mere administrator has no right to dispose of, sell, or
otherwise alienate the property being administered, the husband can do so in certain cases
_______________
*SECOND DIVISION.
Appellee’s Brief, p. 18.
24
542
5 SUPREME COURT REPORTS ANNOTATED
42
Roxas vs. Court of Appeals
allowed by law. He is not required by law to render an accounting. Acts done under
administration do not need the prior consent of the wife.
Same; Same; Same; Administration does not include acts of ownership.––However,
administration does not include acts of ownership. For while the husband can administer
the conjugal assets unhampered, he cannot alienate or encumber the conjugal realty. Thus,
under Art. 166 of NCC, “unless the wife has been declared a non-compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot
alienate or encumber any real property of the conjugal partnership without the wife’s
consent. If she refuses unreasonably to give her consent, the court may compel her to grant
the same.” x x x Contracts entered into by the husband in violation of this prohibition are
voidable and subject to annulment at the instance of the aggrieved wife.
Same; Same; Lease; Alienation and encumbrance defined.––As stated in Black’s Law
Dictionary, the word “alienation” means “the transfer of the property and possession of
lands, tenements, or other things from one person to another x x x. The act by which the
title to real estate is voluntarily assigned by one person to another and accepted by the
latter, in the form prescribed by law. Cf. In re Enrhardt, U.S.D.C., 19F. 2d 406, 407 x x x x.”
While encumbrance “has been defined to be every right to, or interest in, the land which
may subsist in third persons, to the diminution of the value of the land, but consistent with
the passing of the fee by the conveyance; any (act) that impairs the use or transfer of
property or real estate x x x.”
Same; Same; Same; Lease is a grant of use and possession.––Under the law, lease is a
grant of use and possession: it is not only a grant of possession as opined by the Court of
VOL. 198, JUNE 26, 1991 543
Roxas vs. Court of Appeals
also a “qualified alienation, with the lessee becoming, for all legal intents and
purposes, and subject to its terms, the owner of the thing affected by the lease.”
Same; Same; Same; Same; Joinder of the wife required in a lease of conjugal realty for
a period of more than one year.––Thus, the joinder of the wife, although unnecessary for an
oral lease of conjugal realty which does not exceed one year in duration, is required in a
lease of conjugal realty for a period of more than one year, such a lease being considered a
conveyance and encumbrance within the provisions of the Civil Code requiring the joinder of
the wife in the instrument by which real property is conveyed or encumbered (See also 41
C.J.S., p. 1149). In case the wife’s consent is not secured by the husband as required by law,
the wife has the remedy of filing an action for the annulment of the contract.
Same; Same; Same; Same; Same; Petitioner has a cause of action under Art. 173 to file
a case for annulment of the contract of lease entered into without her consent; Case at bar.––
In the case at bar, the allegation in paragraph 2 of the complaint indicates that petitioner’s
estranged husband, defendant Antonio S. Roxas had entered into a contract of lease with
defendant Antonio M. Cayateno without her marital consent being secured as required by
law under Art. 166 of the Civil Code. Petitioner, therefore, has a cause of action under Art.
173 to file a case for annulment of the contract of lease entered into without her consent.
Petitioner has a cause of action not only against her husband but also against the lessee,
Antonio M. Cayetano, who is a party to the contract of lease.
PETITION for review of a decision of the Court of Appeals. Imperial, J.
The facts are stated in the opinion of the Court.
Agustin V. Velante for petitioner.
Manuel M. Katapang for private respondent.
PARAS, J.:
The only issue before Us is whether or not a husband, as the administrator of the
conjugal partnership, may legally enter into a contract of lease involving conjugal
real property without the knowledge and consent of the wife.
544
544 SUPREME COURT REPORTS ANNOTATED
Roxas vs. Court of Appeals
According to the Decision rendered by the respondent Court of Appeals, the
**

Appeals. The right to possess does not always include the right to use. For while the bailee pertinent facts of the case as alleged in plaintiff-petitioner’s complaint indicate:
 1. “1.That plaintiff is of legal age, married but living separately from
husband, one of the defendants herein and presently residing at No. 4
Ambrocia St., Quezon City; while defendant Antonio S. Roxas is
likewise of legal age and living separately from his wife, plaintiff
herein, with residence at No. 950 Quirino Highway, Novaliches, Quezon
City where he may be served with summons; and defendant Antonio M.
Cayetano is of legal age and residing at No. 28 Mariano Olondriz Street,
BF Homes, Parañaque, Metro Manila where he may be served with
summons;
2. “2.That only recently, plaintiff discovered that her estranged husband,
defendant Antonio S. Roxas, had entered into a contract of lease with
defendant Antonio M. Cayetano sometime on March 30, 1987 covering a
portion of their conjugal lot situated at 854 Quirino Highway,
Novaliches, Quezon City, described in T.C.T. No. 378197 (formerly
T.C.T. No. 23881) of the Land Registry for Quezon City without her
previous knowledge, much less her marital consent; xerox copy of which
lease contract is hereto attached as Annex ‘A’, and made an integral
part hereof.
3. “3.That on the same lot, plaintiff had planned to put up her flea market
with at least twenty (20) stalls and mini-mart for grocery and dry goods
items for which she had filed an application for the corresponding
Mayor’s Permit and Municipal License which had been approved since
1986, but when she attempted to renew it for 1986, the same was
disapproved last month due to the complaint lodged by defendant
Antonio M. Cayetano whose application for renewal of Mayor’s Permit
and License for the same business of putting up a flea market, had been
allegedly earlier approved;
4. “4.That for the planning and initial construction of plaintiff’s project to
put up her own business of flea market and mini-mart grocery and wet
and dry stores which she had intended to operate partly by herself and
lease the rest of the twenty (20) stalls thereon, she had spent some
P135,000.00 for the said construction, including materials and labor,
where she had expected to earn as daily net income in the minimum
amount of P500.00 daily;
5. “5.That due to the illegal lease contract entered into between
_______________
Penned by Justice Jorge S. Imperial, and concurred in by Justices Reynato S. Puno and Artemon
**
D. Luna.
545
VOL. 198, JUNE 26, 1991
Roxas vs. Court of Appeals
1. the herein defendants and the resultant unlawful deprivation of plaintiff
from operating her own legitimate business on the same lot of which
she is a conjugal owner, plaintiff has been compelled to seek redress
and ventilate her grievance to the court for which she has to engage the
services of counsel with whom she agreed to pay as and for attorney’s
fees the sum of P10,000.00; plus the amount equivalent to 20% of
whatever damages may be awarded to her in addition to the sum of
P500.00 per appearance in court.
xxx xxx xxx
xxx xxx xxx
“Dated July 31, 1989 defendant Antonio M. Cayetano moved to dismiss the complaint
on the sole ground that the complaint states no cause of action, to which an Opposition was
filed by plaintiff (now petitioner herein), while defendant Antonio S. Roxas, estranged
husband of plaintiff-petitioner, filed an answer.
“Confronted with the private respondent’s Motion to Dismiss, on August 16, 1989,
respondent Judge resolved said Motion by dismissing plaintiff-petitioner’s complaint in its
Order dated August 16, 1989, the dispositive portion of which reads, as follows:
‘It is said that the test of sufficiency of the cause of action is whether admitting the facts alleged to be
true, the court could render a valid judgment in accordance with the prayer in the complaint. After
examining the material allegations in the complaint, the Court finds that the complaint failed to satisfy
the test of sufficiency.
‘WHEREFORE, the complaint is dismissed for failure to state a sufficient cause of action.
‘IT IS SO ORDERED.’ (p. 2 Order, dated August 16, 1989).
“Plaintiff-petitioner filed a Motion for Reconsideration, which was denied by respondent
Judge in its Order dated September 29, 1989.” (Decision of Court of Appeals, pp. 1-4; Rollo,
Annex ‘A’, pp. 26-29)
Petitioner directly appealed the Decision of the lower court to the Supreme Court.
On November 27, 1989, the Second Division of this Court referred this case to
the Court of Appeals for “proper determination and disposition.”
Respondent Court of Appeals rendered judgment affirming in toto the Order
of the trial court.
Hence, this petition.
Under the New Civil Code (NCC), “Art. 165. The husband is
546
546 SUPREME COURT REPORTS ANNOTATED
Roxas vs. Court of Appeals
the administrator of the conjugal partnership,” in view of the fact that the
husband is principally responsible for the support of the wife and the rest of the
family. If the conjugal partnership does not have enough assets, it is the
husband’s capital that is responsible for such support, not the paraphernal
property. Responsibility should carry authority with it.
The husband is not an ordinary administrator, for while a mere administrator
54 has no right to dispose of, sell, or otherwise alienate the property being
administered, the husband can do so in certain cases allowed by law. He is not
required by law to render an accounting. Acts done under administration do not
need the prior consent of the wife.
 However, administration does not include acts of ownership. For while the
husband can administer the conjugal assets unhampered, he cannot alienate or
encumber the conjugal realty. Thus, under Art. 166 of NCC, “unless the wife has
been declared a non-compos mentis or a spendthrift, or is under civil interdiction
or is confined in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership the wife’s consent. If she refuses
unreasonably to give her consent, the court may compel her to grant the same.”
This rule prevents abuse on the part of the husband, and guarantees the rights of
the wife, who is partly responsible for the acquisition of the property, particularly
the real property. Contracts entered into by the husband in violation of this
prohibition are voidable and subject to annulment at the instance of the aggrieved
wife. (Art. 173 of the Civil Code)
As stated in Black’s Law Dictionary, the word “alienation” means “the
transfer of the property and possession of lands, tenements, or other things from
one person to another x x x. The act by which the title to real estate is voluntarily
assigned by one person to another and accepted by the latter, in the form
prescribed by law. Cf. In re Enrhardt, U.S.D.C., 19F. 2d 406, 407 x x x x.” While
encumbrance “has been defined to be every right to, or interest in, the land which
may subsist in third persons, to the diminution of the value of the land, but
consistent with the passing of the fee by the conveyance; any (act) that impairs
the use or transfer of property or real estate x x x.” (42 C.J.S., p. 549).
The pivotal issue in this case is whether or not a lease is an
547
VOL. 198, JUNE 26, 1991 547
Roxas vs. Court of Appeals
encumbrance and/or alienation within the scope of Art. 166 of the New Civil Code.
Under Art. 1643 of the New Civil Code “In the lease of things, one of the
parties binds himself to give to another the enjoyment or use of a thing for a price
certain, and for a period which may be definite or indefinite. However, no lease for
more than ninety-nine years shall be valid.” Under the law, lease is a grant of use
and possession: it is not only a grant of possession as opined by the Court of
Appeals. The right to possess does not always include the right to use. For while
the bailee in the contract of deposit holds the property in trust, he is not granted
by law the right to make use of the property in deposit.
In the contract of lease, the lessor transfers his right of use in favor of the
lessee. The lessor’s right of use is impaired, therein. He may even be ejected by
the lessee if the lessor uses the leased realty. Therefore, lease is a burden on the
land, it is an encumbrance on the land. The opinion of the Court of Appeals that
lease is not an encumbrance is not supported by law. The concept of encumbrance
includes lease, thus “an encumbrance is sometimes construed broadly to include
not only liens such as mortgages and taxes, but also attachment, LEASES,
inchoate dower rights, water rights, easements, and other RESTRICTIONS on
USE.” (Capitalization is Ours) (533 Pacific Reporter [second series] 9, 12).
Moreover, lease is not only an encumbrance but also a “qualified alienation,
with the lessee becoming, for all legal intents and purposes, and subject to its
terms, the owner of the thing affected by the lease.” (51 C C.J.S., p. 522)
Thus, the joinder of the wife, although unnecessary for an oral lease of
conjugal realty which does not exceed one year in duration, is required in a lease
of conjugal realty for a period of more than one year, such a lease being
considered a conveyance and encumbrance within the provisions of the Civil Code
requiring the joinder of the wife in the instrument by which real property is
conveyed or encumbered (See also 41 C.J.S., p. 1149). In case the wife’s consent is
not secured by the husband as required by law, the wife has the remedy of filing
an action for the annulment of the contract. Art. 173 of the Civil Code states “the
wife may, during the marriage and within ten years from the transaction
questioned, ask the courts for the annul-
548
548 SUPREME COURT REPORTS ANNOTATED
Roxas vs. Court of Appeals
ment of any contract of the husband entered into without her consent, when such
consent is required. x x x.”
In the case at bar, the allegation in paragraph 2 of the complaint indicates
that petitioner’s estranged husband, defendant Antonio S. Roxas had entered into
a contract of lease with defendant Antonio M. Cayetano without her marital
consent being secured as required by law under Art. 166 of the Civil Code.
Petititoner, therefore, has a cause of action under Art. 173 to file a case for
annulment of the contract of lease entered into without her consent. Petitioner
has a cause of action not only against her husband but also against the lessee,
Antonio M. Cayetano, who is a party to the contract of lease.
PREMISES CONSIDERED, the decision of the Court of Appeals is hereby
SET ASIDE and this case is hereby REMANDED to the Regional Trial court for
further proceedings.
SO ORDERED.
Melencio-Herrera (Chairman), Padilla, Sarmientoand Regalado,
JJ., concur.
Judgment set aside. Case remanded to the Regional Trial Court for further
proceedings.
Note.––Proof of acquisition during the converture is a condition sine qua
non for the operation of the presumption in favor of conjugal ownership. (Jocson
vs. Court of Appeals, 170 SCRA 333.)
–––––o0o––––
549
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302 SUPREME COURT REPORTS ANNOTATED
Opena vs. Court of Appeals
G.R. No. 96227. February 1, 1993. * evidenced by Transfer Certificate of Title No. 61957 duly issued by the Register of
TELESFORO OPENA, petitioner, vs. HONORABLE COURT OF APPEALS AND
PEOPLE OF THE PHILIPPINES, respondents.
Criminal Law; Falsification of public document by private individual.—Petitioner
contends that the crime of falsification of public documents has not been committed in this
case, considering that the thumbmark of Julian Gotgotao on the Absolute Deed of Sale was
declared to be genuine and not a forgery by Questioned Document Expert Arturo B.
Marasigan of the P.C. Crime Laboratory who issued a dactyloscopy report thereon. But
while this may be true with respect to Julian Gotgotao's thumbmark on the Deed of Sale,
the fact remains that Guillerma Gotgotao's signature on the same document was
indubitably confirmed to be counterfeit and forged, both by the testimony of Guillerma
herself and by the testimony of the handwriting expert Jovito R. Gutierrez of the P.C. Crime
Laboratory who examined the same.
Civil Law; Disposition of conjugal partnership property under the Civil Code.—Even
assuming arguendo that Julian Gotgotao's thumbmark on the subject document is genuine,
still the counterfeit signature of Guillerma Gotgotao invalidates the whole instrument, since
her signature thereon is essential to the validity of the alleged deed of sale, as warranted by
Article 165 and 166 of the Civil Code which provides: "Article 165—The husband is the
administrator of the conjugal partnership." Article 166—Unless the wife has been declared
a non compos mentis or a spendthrift, or is under civil
________________
SECOND DIVISION.
*
303
VOL. 218, FEBRUARY 1, 1993 303
Opena vs. Court of Appeals
interdiction or is confined in a leprosarium, the husband cannot alienate or encumber
any real property of the conjugal partnership without the wife's consent. If she refuses
unreasonably to give her consent, the court may compel her to grant the same."
PETITION for review by certiorari of the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Simplicio M. Sevilleja for petitioner.
NOCON, J.:
This is a Petition for Review by certiorari of the decision rendered by the Court of
Appeals dated January 2,1989 in CAG.R. CR No. 06576, affirming in toto the
judgment of conviction rendered by Branch 48 of the Regional Trial Court of
Pangasinan in Criminal Case No. U-3011, entitled "People of the Philippines vs.
Telesforo Opena" for falsification of public document by a private individual. In
the same light, petitioner seeks to annul the order of the Court of Appeals dated
November 5, 1990 issued in the same case denying their motion for
reconsideration.
The facts of the case are as follows:
Spouses Julian Gotgotao and Guillerma Opena are the registered owners of
Lot No. 1584-B located at Barangay Cayambanan, Urdaneta, Pangasinan, as
Deeds of Pangasinan, which property they mortgaged to the Rural Bank of 1
Mangaldan, Inc., for the sum of Two Thousand (P2,000.00) Pesos and which
mortgage was annotated on the second page of the title. 2
However, when spouses Gotgotao went to the Bank to check on their
Certificate of Title, they got the shock of their life when the bank employees said
that Telesforo Opena, the half brother of Guillerma Opena, withdrew the said
Certificate of Title from the bank by presenting a Special Power of Attorney
purported-
_________________
1Exhibit "D", Records, p. 241.
2Exhibit "A-1", Records, p. 74.
304
304 SUPREME COURT REPORTS ANNOTATED
Opena vs. Court of Appeals
ly executed by the Gotgotao spouses in favor of Telesforo Opena.
Upon verification with the Register of Deeds of Pangasinan in Lingayen to
check on their title, they were informed that Telesforo Opena had caused the
transfer of the title in his name by presenting a Deed of Absolute Sale allegedly
executed by them. They also discovered that their Transfer Certificate of Title No.
61957 had been cancelled and a new one, Transfer Certificate of Title No. 131474
had been issued in the name of Telesforo Opena, married to Carolina Sanidad. 3
Consequently, a complaint for falsification of public documents was filed
against Telesforo Opena resulting in his conviction of said crime. On appeal to the
Court of Appeals, accused-appellant's conviction was affirmed in toto.
Hence, this appeal.
The errors presented by herein petitioner are the following:
1. 1.That the appellate court and the trial court erred in not acquitting
petitioner when they found him not to have forged the thumbmark of
Julian Gotgotao nor is there solid evidence that petitioner forged the
signature of Guillerma Opena Gotgotao.
2. 2.That both the appellate court and the trial court erred in finding that
the defense is guilty of suppression of evidence.
3. 3.That said courts erred in not finding that spouses Julian Gotgotao and
Guillerma Opena validly conveyed the land in question in favor of
petitioner; and
 4. 4.In annulling the Deed of Sale dated April 10, 1978 executed by spouses
Julian Gotgotao and Guillerma Opena in favor of petitioner and his
wife.
We find no merit in the instant petition.
Petitioner contends that the crime of falsification of public documents has not
been committed in this case, considering that the thumbmark of Julian Gotgotao
on the Absolute Deed of Sale was declared to be genuine and not a forgery by
Questioned Document Expert Arturo B. Marasigan of the P.C. Crime Laboratory
who issued a dactyloscopy report thereon. 4
________________
3Exhibit "C", Records, pp. 76-77.
4Exhibit "6", Records, p. 260.
305
VOL. 218, FEBRUARY 1, 1993 305
Opena vs. Court of Appeals
But while this may be true with respect to Julian Gotgotao's thumbmark on the
Deed of Sale, the fact remains that Guillerma Gotgotao's signature on the same
document was indubitably confirmed to be counterfeit and forged, both by the
testimony of Guillerma herself and by the testimony of the handwriting expert
Jovito R. Gutierrez of the P.C. Crime Laboratory who examined the same. 5
We agree with the trial court when it said:
"With respect to the questioned signature of complaining witness Guillerma Opena, (sic) the
Court believes that accused Telesforo Opena (sic) either forged the signature himself or
caused it to be forged on the questioned deed of absolute sale dated April 10, 1978 (Exh. "B"
and "2").
"The said belief of the Court is based on the findings that the questioned signature of
complaining witness Guillerma Opena (sic) appearing in the questioned deed of absolute
sale dated April 10, 1978 is nothing but a forgery (Questioned Document Report No. 12582,
Exh. "E"). The Court relied on the aforesaid findings of the examining handwriting expert
from the Philippine Constabulary Crime Laboratory, Camp Crame, Quezon City in the light
of accused Telesforo Opeña's (sic) and former Barangay Captain Esteban Valdez's
testimonies that both did not see the complaining witness Guillerma Opena (sic) sign her
name on the aforesaid deed of absolute sale because she was not present during the
preparation and execution of the said deed of absolute sale at the law office of Atty. Caoayan
in Poblacion, Urdaneta, Pangasinan. Further, said complaining witness denied having
executed a deed of absolute sale in favor of the herein accused."
Even assummg arguendo that Julian Gotgotao's thumbmark on the subject
document is genuine, still the counterfeit signature of Guillerma Gotgotao
invalidates the whole instrument, since her signature thereon is essential to the
validity of the alleged deed of sale, as warranted by Article 165 and 166 of the
Civil Code which provides:
"Article 165—The husband is the administrator of the conjugal partnership."
_______________
5Exhibit "E", Records, p. 243.
306
306 SUPREME COURT REPORTS ANNOTATED
Opena vs. Court of Appeals
Article 166—Unless the wife has been declared a non compos mentis or a spendthrift, or is
under civil interdiction or is confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership without the wife's consent. If she
refuses unreasonably to give her consent, the court may compel her to grant the same."
Petitioner's argument that the prosecution failed to establish the counterfeit
nature of Guillerma Gotgotao's signature in the Deed of Absolute Sale, because
she "could not identify and recognize her signature in said exhibit because she
could not read and she had a poor and defective eyesight" had already been
disposed off correctly by the trial court, as follows:
"The Court finds the said objection bereft of merit. There is no need for the complaining
witness Guillerma Opena (sic) to identify her forged signature appearing in the questioned
deed of absolute sale because her denial of not having executed the said deed of absolute
sale in favor of Telesforo Opena (sic) goes to show that she did not affix her signature in the
said document." 6
As aptly found by the Court of Appeals:
"The signature used as 'standards' are compared with the questioned signature of appellee
Guillerma Opena (sic) in the Deed of Absolute Sale were her voter's I.D. Card, Promissory
Note to the Letter of the Land Bank, Discount and Computation Slip issued by the Rural
Bank of Mangaldan, Residence Certificate, and a long bond paper containing her signatures
1 to 25. These signatures are admitted by appellee as hers and were used by her in her
business transactions and her transactions with the government. This case thus falls
squarely within the third method referred to by the High Tribunal.
"Appellant, moreover, did not rebut the testimony of expert witness Jovito Gutierrez
and likewise did not impeach him. In fact, appellant and his witnesses hewed their
testimonies to his findings by admitting that they did not see appellee Guillerma Opena
(sic) sign the questioned document. Hence, the trial court correctly gave credence to the
expert witness and his findings that the signature of Guillerma Opena (sic) is a forgery."7
____________________
6RTC Decision, p. 8.
7Court of Appeals Decision, p. 12; Rollo, p. 69.
307
VOL. 218, FEBRUARY 1, 1993 307
Opena vs. Court of Appeals
As to the claim that the trial court and the Court of Appeals erred in stating that
his counsel suppressed evidence which would otherwise have been material to his
defense, We find nothing in the records to justify the same.
The trial court ruled:
"Noteworthy is the dispensation by the defense of the testimony of Atty. Anastacio Caoayan,
the Notary Public of the questioned deed of absolute sale dated April 10, 1978 despite the
issuance of several subpoena duces tecum issued upon him, on November 4, 1983, December
12, 1983, December 21, 1983, February 15, 1984, April 10,1984, May 28, 1984, July 18,1984
and August 8,1984. The unexplained facts leads to the presumption that the defense's
counsel suppressed evidence which is detrimental to his client's cause." 8
Atty. Caoayan's testimony could have weighed heavily in favor of the petitioner's "Court:
defense, if petitioner is to be believed, since Atty. Caoayan was ostensibly the
lawyer who notarized the alleged deed of absolute sale, and could therefore have You will present Atty. Caoayan? He is here finally.
validated petitioner's claim that Guillerma Gotgotao's signature on the said "Atty. Sevilleja:
document was genuine. Thus, petitioner's failure to present this material witness We will present the other witness from Villasis, Emilio Latore, Your Honor.
creates the presumption that if such testimony had been given, it would have
been adverse to the petitioner's claim. "Court:
Likewise, the Court of Appeals concurred with the trial court's assessment of Latore?
the situation, to wit: "Atty. Sevilleja:
"The trial court was justified in holding the appellant as having suppressed evidence when
it dispensed with the testimony of the notary public who notarized the questioned Deed of Yes, Your Honor.
Sale (Exh. "2", "B"). It appears that Atty. Anastacio Caoayan was subpoenaed no less than "Court:
eight times (November 14, 1983; December 12, 1983; December 21, 1983; February 15, 1984;
April 10, 1984; May 28, 1984; July 18, 1984 and August 8, 1984). At the hearing on April 5, You are dispensing with the testimony of Atty. Caoayan? He is finally here because this is in a
1984, indications that the defense was not really interested in presenting Atty. Caoayan coincidence he has a case.
was shown, thus:
"Atty. Sevilleja:
"Atty. Sevilleja:
I will talk with him first, Your Honor.
Yes, Your Honor. Your Honor, may we request that a subpoena be issued to Emilio Latore of
"Court:
Poblacion, Villasis,
The court has issued several subpoena duces tecum. Now he is here, take the chance.
_________________ xxx xxx xxx
8 RTC Decision, p. 9.
_________________
308

308 SUPREME COURT REPORTS ANNOTATED 9 Court of Appeals Decision, pp. 14-15; Rollo, pp. 71-72.
309
Opena vs. Court of Appeals
VOL. 218, 309
pangasinan?
FEBRUARY 1,
"Court:
1993
What about Atty. Caoayan. There as a subpoena issued to him. He comes here every now and
Opena vs. Court of Appeals
then. He should be punished for contempt of court for his failure to come despite subpoena duly
"Atty. Sevilleja:
served to him.
Your Honor, after minutely studying the case and our documentary evidence
"Atty. Sevilleja:
which are voluminous, we can prove the innocence of the accused without the
We just subpoena him in the next hearing. In fact I talked with him only this morning.
testimony of Atty. Caoayan, Your Honor.
"Court:
"Court:
As if you do not want to present him anymore. It is up to you.
So you are now dispensing his testimony?
"Atty. Sevilleja:
"Atty. Sevilleja:
No. Your honor, We will just subpoena him, Your Honor." 9

However, on August 7, 1984, when by coincidence, Atty. Caoayan happened to be We are now dispensing the testimony of Atty. Caoayan, Your Honor." 10

in the sala of the judge hearing the falsification case and the judge called the Furthermore, the Court of Appeals likewise correctly concluded that even Julian
attention of appellant's counsel to present him as a witness, the latter refused. Gotgotao's admittedly genuine thumbmark appearing on the questioned Deed is
Thus: questionable, thus:
"[E]ven granting hypothetically, that Julian Gotgotao may have had some knowledge of the
"Court: forgery, we do not believe he has the required cunning to, by himself and without
appellant's instigation and active participation, develop the idea and proceed to have his Note.—The lack of consent on the part of the wife will not
wife's signature forged, considering the level of his intelligence as demonstrated in his
testimony at the trial. (T.S.N., August 13, 1987, September 15, 1987) We are convinced, as ________________
was the trial court, that it was appellant himself, the one who used, took advantage, and
profited by the forged signature who authored the same. Besides, while the finding is that Ibid.
12

Julian Gotgotao's thumbmark is genuine, he denied having knowingly thumbmarked any 311
document selling their land." 11

The Court of Appeals observed further: VOL. 218, FEBRUARY 1, 1993 311
"It is likewise alleged that the appellee did not dispute or deny the contract of sale dated Heirs of Nicolas Y. Orosa vs. Migrino
November 5, 1976 (Exh. "11") allegedly thumbmarked by Julian Gotgotao and the receipt make the alienation or encumbrance of real property of the conjugal property by
dated June 20, 1977 (Exh. "12"). In fact, the prosecution witnesses have denied these
the husband void, but merely voidable (Rojas vs. Bautista, 192 SCRA 388).
documents when appellees and their witnesses asserted that they never borrowed money
from the accused-appellant in 1976 or in 1977 (T.S.N., April 11, 1983, p. 10; October
22,1986, pp. 15-18; December 9, 1987, pp. 21-23; June 25, 1987, pp. 3-5; August 13, 1987, p. ——o0o——
4), when Julian Gotgotao denied that there ever was a time he agreed to sell the land to
accused (T.S.N., August 13, 1987, p. 12) or that he © Copyright 2018 Central Book Supply, Inc. All rights reserved.
________________

10 Court of Appeals Decision, pp. 15-16; Rollo, pp. 72-73.

11 Court of Appeals Decision, p. 13, Rollo, p. 70.
310
310 SUPREME COURT REPORTS ANNOTATED
Opena vs. Court of Appeals
delivered a deed of sale on April 11, 1978 to appellant in his house for which the alleged
borrowings were part of the consideration (T.S.N., September 15, 1978, p. 2); and when
appellee Guillerma Opena testified that appellant had no right and had no authority to take
the owner's copy of the title to the land in question from the bank (T.S.N., April 11, 1983,
pp. 7-8)." 12

Finally, petitioner's claim that spouses Gotgotao conveyed the subject property in
his favor in view of previous loans extended to them has been resolved by the trial
court in this wise, to which We concur:
"In an effort to justify the due execution of the deed of sale dated April 10, 1978, the accused
Telesforo Opena (sic) claimed that the consideration in the amount of P18,000.00 represents
the total borrowings of the Gotgotao family from him. However, the aggregate amount
shelled out by the herein accused (P6,370.00, Exh. 11; P12,300.00, Exh. 12; P4,700.00 given
after the execution of the said deed of absolute sale and P2,138.10, Exh. 13 or a total of
P25,508.10) is more than what the herein accused bargained with the Gotgotao family at
P3.00 per square meter of the said lot in dispute containing an area of 6,190 square meters
and 6,190 multiplied by P3.00 amounts to P18,570.00. The conflicting amounts of money
testified to by the herein accused gives truth to the saying that 'No falsification is perfect in
all its parts'. Further, 'defense evidence which is replete with inconsistencies does not
inspire belief (People vs. Radomes, 141 SCRA 548) 'Contradictory and inconsistent on
material points render testimonies doubtful.' (People vs. Quison, 142 SCRA 362).
WHEREFORE, there being no reversible error in the decision appealed herefrom,
the same is hereby AFFIRMED in toto. Costs against appellant.
SO ORDERED.
Narvasa, (C.J., Chairman), Feliciano, Regalado and Campos, Jr.,
JJ., concur.
Decision affirmed.

72 SUPREME COURT REPORTS ANNOTATED
Garcia vs.. Gonzales
G.R. No. 48184. March 12, 1990.
Same; Same; Remedial Law; Evidence; There is no valid ground on petitioners’ claim
to parcels Nos. 3 and 4 as they failed to attack the validity of the transfer of the said
properties to Fr. Eamiguel, the predecessor-in-interest of private respondents Ramon
Eamiguel and Nicasio Parilla.—With regard to parcels Nos. 3 and 4, both the trial court
*

PAULA GARCIA, FRANCISCO GARCIA, JUSTO GARCIA, CLAUDIA GARCIA,
CRISPINA GARCIA, CATALINA GARCIA, BASILISA GARCIA, ZACARIAS
GARCIA, AGUSTIN GARCIA, CANDIDA GARCIA, PABLEO PACULAN,
ANECITA PACULAN, AGAPITO PACULAN, MARCOSA PACULAN, and
ILUMINADO SOLITE, petitioners, vs. ANDRES GONZALES, RAMON
EAMIGUEL, NICASIO PARILLA and COURT OF APPEALS, respondents.
Remedial Law; Evidence; Although petitioners attempted to question the validity and
due execution of the deed of sale through oral testimony, they were unable to buttress it with
other evidence which might obviate the apparent biased nature of the testimony.—As to
parcel No. 2, we disagree with the Court of Appeals that Gonzales is entitled to only one-
half thereof. The deed of sale was personally acknowledged before Pedro Mate, then justice
of the peace, as Quintina’s free act and deed. Although the petitioners attempted to question
the validity and due execution of said deed of sale through oral testimony, they were unable
to buttress it with other evidence which might obviate the apparent biased nature of the
testimony.
Civil Law; Sale; The sale to Andres Gonzales may be considered valid only with
respect to one-half portion of parcel No. 2 belonging to Quintina pursuant to the last sentence
of Section 685 of the Code of Civil Procedure, as there was no liquidation of conjugal
partnership
________________
*THIRD DIVISION.
73
VOL. 183, MARCH 12, 1990 73
and the Court of Appeals found that the controverted sale of said parcels of land was
embodied in a public document, executed with all the formalities and solemnities of law. The
evidence therefore that is required to overthrow it must be clear, convincing and beyond
mere preponderance of evidence. Such evidence is not obtaining in the case at bar and there
is no valid ground on which petitioners’ claim to said parcels of land could stand. They failed
to successfully attack the validity of the transfer of said properties to Father Eamiguel, the
predecessor-in-interest of Ramon Eamiguel and Nicasio Parilla. Additionally, the
transaction was executed by both Fructuoso and Quintina, and therefore must be respected.
More importantly, as correctly found by the Court of Appeals, prescription has set in. It was
only after more
74
7 SUPREME COURT REPORTS ANNOTATED
4
Garcia vs.. Gonzales
than 45 years after the sale on December 4, 1921 that this case was filed by the
petitioners on June 15, 1967.
Same; Damages; The adverse result of an action does not per se make the act wrongful
and subject the actor to the payment of moral damages.—Lastly, we make no award of
damages to any of the parties. In this regard, we quote with approval the following portion
of the Court of Appeals decision: x x x The adverse result of an action does not per se make
the act wrongful and subject the actor to the payment of moral damages. The law could not
have meant to impose a penalty on the right to litigate, such right is so precious that moral
damages may not be charged on those who may even exercise it erroneously. (Ramos v.
Ramos, 61 SCRA 284, 305-306). And an adverse decision does not ipso facto justify the
award of attorney’s fee to the winning party.”

Garcia vs.. Gonzales

made in accordance with Arts. 1418 and 1431 of the Civil Code.—Inasmuch as no
liquidation of the conjugal partnership had been made in accordance with Articles 1418 and
1431 of the Civil Code, the last sentence of Section 685 may be applied. More so because
there is no proof that the sale of parcel No. 2 was necessary to pay the partnership debts
and obligations. Pursuant to said law, therefore, the sale to Andres Gonzales may be
considered as valid only with respect to the one-half portion of parcel No. 2 rightfully
belonging to Quintina.
Same; Same; Laches; Trust; Granting that there was mistake or fraud in the execution
of the deed of sale so that an implied or constructive trust was constituted in favor of
petitioners, still, laches barred them from filing the complaint for recovery of parcel No. 2.—
Notwithstanding this, petitioners may not validly lay claim to the other half portion of the
property corresponding to their share as heirs of Fructuoso considering that for forty-five
(45) years after Fructuoso’s death and twenty-two (22) from the execution of the deed of
sale, petitioners slept on their rights. Granting that there was a mistake or fraud in the
execution of the deed of sale so much so that under Article 1456 of the Civil Code an implied
or constructive trust was constituted in favor of the petitioners, still, laches barred them
from filing the complaint for the recovery of parcel No. 2. Although the records do not show
that Gonzales had been issued a Torrens title to parcel No. 2 and hence, the 10-year
prescriptive period may not be invoked against petitioners, their inordinate and undue
delay in asserting their claim to said parcel of land led to their undoing.
PETITION for certiorari to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Antonio R. Rabago for petitioners.
Federico V. Noel for Andres Gonzales.
Francisco E. F. Remorigue for Eamiguel and Parilla.
FERNAN, C.J.:
In this petition for review on certiorari, petitioners seek the reversal of the May 5,
1977 decision of the Court of Appeals in C.A.-G.R. No. 48032-R entitled “Paula
Garcia, et al. v. Andres Gonzales, et al.” modifying the decision of the Court of
First Instance of Leyte in Civil Case No. B-0134 which among others adjudicated
the whole parcel No. 2 in favor of Andres Gonzales and ordered the plaintiffs
therein jointly and severally to pay moral damages and attorney’s fees.
This case arose from the complaint for recovery of real properties, partition
and accounting filed by the nephews and nieces of a deceased childless couple
against the transferees of two parcels of land which said couple had sold during
their lifetime and another parcel of land which the wife sold to her own nephew
after her husband’s death.
The record shows that on July 3, 1911, Agustin Manco Garcia donated to the
spouses Fructuoso Garcia and Quintina Gonzales
75
VOL. 183, MARCH 12, 1990 75
Garcia vs.. Gonzales
two parcels of land. One parcel, with an area of more than three hectares, is
located in barrio Caraycaray in Naval, Leyte (parcel No. 3) and the other lot, with
an area of more than two hectares, is located in sitio Calumpang, also in barrio
Caraycaray (parcel No. 4). On December 4, 1921, Fructuoso and his wife executed
an “escritura de venta” over said two parcels of land in favor of Sergio Eamiguel, a
parish priest, in consideration of the amount of P2,500. The following year, 1922,
1
Fructuoso died.
In 1930, Father Eamiguel declared as his own parcel No. 3 under tax
declaration No. 7370 and parcel No. 4 under tax declaration No. 7389. On June 5,
2 3
1937, he executed an “escritura de donacion” bestowing ownership over said
property to his nephews, Pedro and Ramon Eamiguel. 4
Pedro later exchanged his share over parcel No. 3 with another parcel owned
by his brother Rosendo thereby making the latter a co-owner of said
property. While thus in possession of parcel No. 3, the Eamiguel brothers,
5
through Ramon, executed deeds of sale with right to repurchase over portions of
the property in favor of different persons.
6
On October 24, 1954, after the properties had been repur-chased, Rosendo
sold a one-half portion of parcel No. 3 to the spouses Nicasio Parilla and
Purificacion Manco for P3,200. On October 31, 1954, Ramon also sold his one-half
7
portion of the property to the Parilla spouses for P3,500. Since then, the Parilla
8
spouses have been in possession of the 3-hectare property paying taxes thereon.
On the other hand, parcel No. 4 remained in the possession of Ramon.
Fructuoso Garcia also owned a 1.7 hectare lot in Anas, Antipolo, also in the
municipality of Naval (parcel No. 1) and a n other 2.3-hectare land in the same
municipality (parcel No. 2). On January 26, 1945, Fructuoso’s widow, Quintina
Gonzales
________________
1Exhibit 5.
2Exhibit 6-A.
3Exhibit 7-A.
4Exhibit 8.
5TSN, April 1, 1970, pp. 53-54.
6Exhibits 14, 15 & 16.
7Exhibit 12.
8Exhibit 11.
76
76 SUPREME COURT REPORTS ANNOTATED
Garcia vs.. Gonzales
Garcia, who was then a centenarian, sold parcel No. 2 to her nephew, Andres
Gonzales, in consideration of the amount of P400. Since then, Gonzales has
9
declared said property as his own and paid taxes thereon. 10
On June 15, 1967, the herein petitioners, nephews and nieces of Fructuoso,
filed the aforementioned complaint against Andres Gonzales for the recovery of
parcels Nos. 1 and 2, on the premise that under Article 995 of the New Civil Code,
as such relatives of Fructuoso, they are entitled to one-half of the intestate estate
of Quintina who allegedly misrepresented in the deed of sale in favor of Gonzales
that parcels Nos. 1 and 2 were her paraphernal properties. The complaint was
later amended to include parcels Nos. 3 and 4 as subjects of the complaint and to
include Ramon Eamiguel and Nicasio Parilla as defendants. With regard to these
two defendants, the complaint alleged that Eamiguel, a grandnephew of
Quintina, took possession of parcel No. 4 after Quintina’s death on March 16,
1945 and that Parilla was also unlawfully in possession of parcel No. 3.
The trial court ruled that since nobody claimed parcel No. 1, “the same has
remained the property of the plaintiffs.” In holding that parcel No. 2 rightfully
11
belongs to Andres Gonzales, the court stated that except for their oral
testimonies, the plaintiffs failed to successfully assail the validity and due
execution of the deed of sale in favor of Gonzales. The trial court also ruled that
the plaintiffs may no longer question the validity of the sale to Father Eamiguel
of parcels Nos. 3 and 4 because after a copy of the December 4, 1921 deed of sale
was furnished the plaintiffs, “nothing has been done thereabout” and that said
document, being more than 47 years old and a public instrument, is in full force
and effect unless impugned by strong, complete and conclusive proof. The
12
dispositive portion of the trial court’s June 1970 decision reads:
13
________________
9Exhibit 1-Gonzales.
Exhibits 2 to 3-W Gonzales.
10
Record on Appeal, p. 66.
11
Record on Appeal, pp. 78-79.
12
Penned by Judge Numeriano G. Estenzo.
13
77
VOL. 183, MARCH 12, 1990 77
Garcia vs.. Gonzales
“WHEREFORE, decision is hereby rendered in favor of the defendants and against the
plaintiffs, hereby declaring and adjudicating Parcel No. 2 in favor of defendant Andres
Gonzales; Parcel No. 3 in favor of Nicasio Parilla; Parcel No. 4 in favor of defendant Ramon
Eamiguel; further ordering the plaintiffs jointly and severally to pay each of the defendants
the sum of P1,000.00 for and as moral damages, plus the sum of P500.00 for and as
attorney’s fees, with costs against the plaintiffs.
SO ORDERED.” 14
The plaintiffs appealed to the Court of Appeals. In its decision of May 5,
1977, said appellate court ruled that as to parcels Nos. 3 and 4, prescription has
15
set in to herein petitioners’ prejudice. As to parcel No. 2, the Court of Appeals
held that since Article 837 of the Spanish Civil Code entitled the surviving spouse
to inherit only one-half of the estate, the sale of parcel No. 2 to Andres Gonzales
was valid only with respect to Quintina’a one-half (1/2) share thereof. The
dispositive portion of the decision states:
“WHEREFORE, the appealed decision is hereby modified, as follows:
1. 1.Declaring Andres Gonzales as owner of one-half portion of Parcel No. 2 and
plaintiffs herein as the owners of the other half;
2. 2.Ordering Andres Gonzales to deliver and convey the one-half portion of Parcel
No. 2 to the plaintiffs; and
3. 3.Eliminating the award of moral damages as well as attorney’s fees.
The rest of the judgment appealed from is affirmed. Without costs.
SO ORDERED.” 16
Their motion for reconsideration praying for the amendment of the said decision
and the award of damages having been denied, the plaintiffs interposed the
instant petition for review on certiorari alleging that the Court of Appeals: (a)
“hastily en-
________________
Record on Appeal, p. 93; Rollo, p. 26.
14
Penned by Justice Crisolito Pascual and concurred in by Justices Pacifico P. de Castro and Lorenzo
15
Relova.
Rollo, pp. 45-46.
16
78
78 SUPREME COURT REPORTS ANNOTATED
Garcia vs.. Gonzales
tered its judgment” without adjudicating in their favor one-half of the equivalent
of the fruits of parcel No. 2 since January 26, 1945; (b) “gravely failed to give
justice” to them by depriving them of the “chance to own and possess” one-half of
parcels Nos. 3 and 4 and their fruits; and (c) “gravely failed to give clearance” as
to their absolute ownership over parcel No. 1. 17
The failure to make a declaration as to the ownership of parcel No. 1 is
attributable to the trial court rather than to the appellate court. In their brief
submitted before the latter, herein petitioners as appellants therein categorically
stated that “originally four parcels were involved but defendants in their answer
later waived any claim over parcel 1 x x x.” Since the ownership of parcel 1 was
18
not an issue in the appeal, the appellate court could not be expected to, and
should not, in fact, make any declaration pertaining to parcel 1.
It was the trial court which should have included in the dispositive portion of
its decision a declaration as to the ownership of parcel 1 consistent with the
statement in its decision that “it appears from the evidence presented that nobody
is claiming parcel 1 so that the same has remained the property of the plaintiffs”
(herein petitioners). 19
Be that as it may, no prejudicial error resulted from this inadvertence on the
part of the trial court, no claim adverse to petitioners’ over said parcel 1 having
been presented by any party.
As to parcel No. 2, we disagree with the Court of Appeals that Gonzales is
entitled to only one-half thereof. The deed of sale was personally acknowledged
before Pedro Mate, then justice of the peace, as Quintina’s free act and deed.
Although the petitioners attempted to question the validity and due execution of
said deed of sale through oral testimony, they were unable to buttress it with
other evidence which might obviate the apparent biased nature of the testimony.
The deed of sale having been executed before the effectivity of the New Civil
Code, the law governing the transaction was the Code of Civil Procedure, which
specifically provides:
________________
Rollo, pp. 17, 20 & 23.
17
Appellants’ Brief, p. 1; Rollo, p. 27.
18
Record on Appeal, p. 66; Rollo, p. 26.
19
79
VOL. 183, MARCH 12, 1990 79
Garcia vs.. Gonzales
“Sec. 685. Community Property.—When the marriage is dissolved by the death of the
husband or wife, the community property shall be inventoried, administered, and
liquidated, and the debts thereof shall be paid, in the testamentary or intestate proceedings
of the deceased spouse, in accordance with the provisions of this Code relative to the
administration and liquidation of the estates of deceased persons, unless the parties being
all of age and legally capacitated, avail themselves of the right granted them by this Code
for proceeding to an extrajudicial partition and liquidation of said property.
In case it is necessary to sell any portion of said community property in order to pay the
outstanding debts and obligations of the same, such sale shall be made in the manner and
with the formalities established by this Code for the sale of the property of deceased
persons. Any sale, transfer, alienation or disposition of said property effected without said
formalities shall be null and void, except as regards the portion that belonged to the vendor
at the time the liquidation and partition was made” (Italics supplied).
Inasmuch as no liquidation of the conjugal partnership had been made in
accordance with Articles 1418 and 1481 of the Civil Code, the last sentence of
20
Section 685 maybe applied. More so because there is no proof that the sale of
parcel No. 2 was necessary to pay the partnership debts and obligations.
Pursuant to said law, therefore, the sale to Andres Gonzales may be considered as
valid only with respect to the one-half portion of parcel No. 2 rightfully belonging
to Quintina.
Notwithstanding this, petitioners may not validly lay claim to the other half
portion of the property corresponding to their share as heirs of Fructuoso
considering that for forty-five (45) years after Fructuoso’s death and twenty-two
(22) from the execution of the deed of sale, petitioners slept on their rights.
Granting that there was a mistake or fraud in the execution of
**
________________
20 Tabotabo v. Molero, 22 Phil. 418.
 **Petitioners tried to prove in the lower court that Quintina Gonzales’ consent to the sale was it erroneously. (Ramos v. Ramos, 61 SCRA 284, 305-306). And an adverse decision does not
vitiated because even during the Japanese occupation, she was old, sightless and with childish manners ipso facto justify the award of attorney’s fee to the winning party.”
23

(TSN, April 1, 1970, p. 4). Even Andres Gonzales’ witness, Pedro Mate who notarized the deed of sale,
admitted that Quintana was “quite old” as she must have been “around one hundred years old at that
WHEREFORE, the decision of the Court of Appeals is hereby affirmed insofar as
time” (TSN, April 29, 1970, pp. 18-20). it eliminates the award of moral damages as well as attorney’s fees. It is modified
80 as follows: (a) parcel No. 1 is hereby declared as absolutely owned by petitioners
80 SUPREME COURT REPORTS ANNOTATED in their respective capacities as heirs of Fructuoso Garcia; (b) parcel No. 2 shall
exclusively belong to Andres Gonzales; and (c) parcels Nos. 3 and 4 shall be under
Garcia vs.. Gonzales
the absolute ownership of Nicasio Parilla and Ramon Eamiguel, respectively. No
the deed of sale so much so that under Article 1456 of the Civil Code an implied or costs.
constructive trust was constituted in favor of the petitioners, still, laches barred SO ORDERED.
them from filing the complaint for the recovery of parcel No. 2. Although the 21

Gutierrez, Jr., Feliciano, Bidin and Cortés, JJ., concur.

records do not show that Gonzales had been issued a Torrens title to parcel No. 2
and hence, the 10-year prescriptive period may not be invoked against petitioners,
their inordinate and undue delay in asserting their claim to said parcel of land led
to their undoing.
With regard to parcels Nos. 3 and 4, both the trial court and the Court of
Appeals found that the controverted sale of said parcels of land was embodied in a
public document, executed with all the formalities and solemnities of law. The
evidence therefore that is required to overthrow it must be clear, convincing and
beyond mere preponderance of evidence. Such evidence is not obtaining in the
22
Decision affirmed with modifications.
Note.—Laches is the failure or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due diligence, could or should have
been done earlier. The negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it. (Coro vs. Lising, 137 SCRA 541.)
———o0o———

case at bar and there is no valid ground on which petitioners’ claim to said parcels ________________
of land could stand. They failed to successfully attack the validity of the transfer
of said properties to Father Eamiguel, the predecessor-in-interest of Ramon Rollo, p. 45.
23

Eamiguel and Nicasio Parilla. Additionally, the transaction was executed by both 82
Fructuoso and Quintina, and therefore must be respected. More importantly, as © Copyright 2018 Central Book Supply, Inc. All rights reserved.
correctly found by the Court of Appeals, prescription has set in. It was only after
more than 45 years after the sale on December 4, 1921 that this case was filed by
the petitioners on June 15, 1967.
Lastly, we make no award of damages to any of the parties. In this regard, we
quote with approval the following portion of the Court of Appeals decision:
“As to the award of damages, we find that the evidence on record does not justify the same.
It appears that appellants have tenaciously fought for their cause in order to protect their
rights. Moreover, their case is partially meritorious. The anxiety claimed by the defendant-
appellee was not due to a case which was maliciously instituted by the

________________

21 Ramos v. Ramos, L-19872, December 3, 1974, 61 SCRA 284; Diaz v. Gorricho & Aguado, 103 Phil. 261.
22 Mendezona v. Phil. Sugar Estates Des. Co., 41 Phil. 475, 497 (1921).
81

VOL. 183, MARCH 12, 1990 81

Garcia vs.. Gonzales
appellants. They are not, therefore, the moral damages contemplated by law (Ramos v.
Ramos, 61 SCRA 284, 405 citing Solis v. Salvador, 14 SCRA 887). The adverse result of an
action does not per se make the act wrongful and subject the actor to the payment of moral
damages. The law could not have meant to impose a penalty on the right to litigate, such
right is so precious that moral damages may not be charged on those who may even exercise

VOL. 453, MARCH 11, 2005 283
Homeowners Savings & Loan Bank vs. Dailo
G.R. No. 153802. March 11, 2005. *
HOMEOWNERS SAVINGS & LOAN BANK, petitioner, vs. MIGUELA C. DAILO,
respondent.
Civil Law; Family Code; Property; The sale of a conjugal property requires the consent
of both the husband and wife; Applying Article 124 of the Family Code, the Supreme Court
declared that the absence of the consent of one renders the entire sale null and void,
including the portion of the conjugal property pertaining to the husband who contracted the
sale.—In Guiang v. Court of Appeals, it was held that the sale of a conjugal property
requires the consent of both the husband and wife. In applying Article 124 of the Family
Code, this Court declared that the absence of the consent of one renders the entire sale null
and void, including the portion of the conjugal property pertaining to the husband who
contracted the sale. The same principle in Guiangsquarely applies to the instant case. As
shall be discussed next, there is no legal basis to construe Article 493 of the Civil Code as an
exception to Article 124 of the Family Code.
Same; Same; Same; Conjugal Partnership; Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory manner, the conjugal partnership
shall be governed by the rules on contract of partnership in all that is not in conflict with
what
_______________
*SECOND DIVISION.
284
2 SUPREME COURT REPORTS ANNOTATED
84
Homeowners Savings & Loan Bank vs. Dailo
is expressly determined in the chapter (on conjugal partnership of gains) or by the
spouses in their marriage settlements.—The regime of conjugal partnership of gains is a
special type of partnership, where the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate properties and those acquired by
either or both spouses through their efforts or by chance. Unlike the absolute community of
property wherein the rules on co-ownership apply in a suppletory manner, the conjugal
partnership shall be governed by the rules on contract of partnership in all that is not in
conflict with what is expressly determined in the chapter (on conjugal partnership of gains)
or by the spouses in their marriage settlements. Thus, the property relations of respondent
and her late husband shall be governed, foremost, by Chapter 4 on Conjugal Partnership of
Gains of the Family Code and, suppletorily, by the rules on partnership under the Civil
Code. In case of conflict, the former prevails because the Civil Code provisions on
partnership apply only when the Family Code is silent on the matter.
Same; Same; Same; Same; The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the creditor-party litigant claiming as
such; Other than petitioner’s bare allegation, there is nothing from the records of the case to
compel a finding that the loan obtained by the late Marcelino Dailo, Jr. redounded to the
benefit of the family; Conjugal partnership cannot be held liable for the payment of the
principal obligation.—The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains lies with the creditor-party litigant claiming as such. Ei
incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies, must prove).
Petitioner’s sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to
finance the construction of housing units without a doubt redounded to the benefit of his
family, without adducing adequate proof, does not persuade this Court. Other than
petitioner’s bare allegation, there is nothing from the records of the case to compel a finding
that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the benefit of
the family. Consequently, the conjugal partnership cannot be held liable for the payment of
the principal obligation.
PETITION for review on certiorari of a decision of the Court of Appeals.
285
VOL. 453, MARCH 11, 2005 285
Homeowners Savings & Loan Bank vs. Dailo
The facts are stated in the opinion of the Court.
Edgardo R. Marilim for respondent Miguela Dailo.
TINGA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court, assailing the Decision of the Court of Appeals in CA-G.R. CV No.
1
59986 rendered on June 3, 2002, which affirmed with modification the October
18, 1997 Decision of the Regional Trial Court, Branch 29, San Pablo City, Laguna
2
in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on
August 8, 1967. During their marriage, the spouses purchased a house and lot
situated at Barangay San Francisco, San Pablo City from a certain Sandra
Dalida. The subject property was declared for tax assessment purposes under
Assessment of Real Property No. 94-051-2802. The Deed of Absolute Sale,
however, was executed only in favor of the late Marcelino Dailo, Jr. as vendee
thereof to the exclusion of his wife. 3
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of
Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the latter to obtain
a loan from petitioner Homeowners Savings and Loan Bank to be secured by the
spouses Dailo’s house and lot in San Pablo City. Pursuant to the SPA, Gesmundo
obtained a loan in the amount of P300,000.00 from petitioner. As security
therefor, Gesmundo executed on the same day a Real Estate Mortgage constituted
on the subject property in favor of petitioner. The abovemen-
_______________
Penned by J. Juan Q. Enriquez and concurred in by JJ. Eugenio S. Labitoria, Chairman, and
1
Teodoro P. Regino; Rollo, p. 34.
Penned by Judge Bienvenido Reyes.
2
Decision of the Court of Appeals dated June 3, 2002, p. 3; Rollo, p. 36.
3
286
286 SUPREME COURT REPORTS ANNOTATED

Homeowners Savings & Loan Bank vs. Dailo
tioned transactions, including the execution of the SPA in favor of Gesmundo,
took place without the knowledge and consent of respondent. 4
Upon maturity, the loan remained outstanding. As a result, petitioner
instituted extrajudicial foreclosure proceedings on the mortgaged property. After
the extrajudicial sale thereof, a Certificate of Sale was issued in favor of
petitioner as the highest bidder. After the lapse of one year without the property
being redeemed, petitioner, through its vice-president, consolidated the ownership
thereof by executing on June 6, 1996 an Affidavit of Consolidation of Ownership
and a Deed of Absolute Sale. 5
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of
her visits to the subject property, respondent learned that petitioner had already
employed a certain Roldan Brion to clean its premises and that her car, a Ford
sedan, was razed because Brion allowed a boy to play with fire within the
premises.
Claiming that she had no knowledge of the mortgage constituted on the
subject property, which was conjugal in nature, respondent instituted with the
Regional Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222(97)
for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of
Consolidation of Ownership, Deed of Sale, Reconveyance with Prayer for
Preliminary Injunction and Damages against petitioner. In the latter’s Answer
with Counterclaim, petitioner prayed for the dismissal of the complaint on the
ground that the property in question was the exclusive property of the late
Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision on October 18,
1997. The dispositive portion thereof reads as follows:
_______________
4Ibid.
Ibid.
5
287
VOL. 453, MARCH 11, 2005
Homeowners Savings & Loan Bank vs. Dailo
“WHEREFORE, the plaintiff having proved by the preponderance of evidence the
allegations of the Complaint, the Court finds for the plaintiff and hereby orders:
ON THE FIRST CAUSE OF ACTION:
1. 1.The declaration of the following documents as null and void:
1. (a)The Deed of Real Estate Mortgage dated December 1, 1993 executed before
Notary Public Romulo Urrea and his notarial register entered as Doc. No. 212;
Page No. 44, Book No. XXI, Series of 1993.
2. (b)The Certificate of Sale executed by Notary Public Reynaldo Alcantara on April
20, 1995.
3. (c)The Affidavit of Consolidation of Ownership executed by the defendant
4. (c)The Affidavit of Consolidation of Ownership executed by the defendant over the
residential lot located at Brgy. San Francisco, San Pablo City, covered by ARP
No. 95-091-1236 entered as Doc. No. 406; Page No. 83, Book No. III, Series of
1996 of Notary Public Octavio M. Zayas.
5. (d)The assessment of real property No. 95-051-1236.
1. 2.The defendant is ordered to reconvey the property subject of this complaint to
the plaintiff.
ON THE SECOND CAUSE OF ACTION:
1. 1.The defendant to pay the plaintiff the sum of P40,000.00 representing the value
of the car which was burned.
ON BOTH CAUSES OF ACTION:
1. 1.The defendant to pay the plaintiff the sum of P25,000.00 as attorney’s fees;
2. 2.The defendant to pay plaintiff P25,000.00 as moral damages;
3. 3.The defendant to pay the plaintiff the sum of P10,000.00 as exemplary damages;
4. 4.To pay the cost of the suit.
The counterclaim is dismissed.
288
288 SUPREME COURT REPORTS ANNOTATED
Homeowners Savings & Loan Bank vs. Dailo
SO ORDERED.” 6
Upon elevation of the case to the Court of Appeals, the appellate court affirmed
the trial court’s finding that the subject property was conjugal in nature, in the
absence of clear and convincing evidence to rebut the presumption that the
subject property acquired during the marriage of spouses Dailo belongs to their
conjugal partnership. The appellate court declared as void the mortgage on the
7
subject property because it was constituted without the knowledge and consent of
287
respondent, in accordance with Article 124 of the Family Code. Thus, it upheld
the trial court’s order to reconvey the subject property to respondent. With 8
respect to the damage to respondent’s car, the appellate court found petitioner to
be liable therefor because it is responsible for the consequences of the acts or
omissions of the person it hired to accomplish the assigned task. All told, the
9
appellate court affirmed the trial court’s Decision, but deleted the award for
damages and attorney’s fees for lack of basis. 10
Hence, this petition, raising the following issues for this Court’s consideration:
1. 1.WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE
LATE MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS
CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
 2. 2.WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE 290 SUPREME COURT REPORTS ANNOTATED
FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE
MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED TO Homeowners Savings & Loan Bank vs. Dailo
THE BENEFIT OF THE FAMILY. 11
and wife. In applying Article 124 of the Family Code, this Court declared that the
14

absence of the consent of one renders the entire sale null and void, including the
_______________ portion of the conjugal property pertaining to the husband who contracted the
sale. The same principle in Guiang squarely applies to the instant case. As shall
6As quoted in the Decision of the Court of Appeals, pp. 1-2; Rollo, pp. 34-35. be discussed next, there is no legal basis to construe Article 493 of the Civil Code
7Decision of the Court of Appeals, p. 5; Rollo, p. 38. as an exception to Article 124 of the Family Code.
8Id., at p. 6; Rollo, p. 39. Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967.
Ibid.
In the absence of a marriage settlement, the system of relative community or
9

10Id., at p. 7; Rollo, p. 40.

11Rollo, p. 24. conjugal partnership of gains governed the property relations between respondent
289 and her late husband. With the effectivity of the Family Code on August 3, 1988,
15

VOL. 453, MARCH 11, 2005
Homeowners Savings & Loan Bank vs. Dailo
First, petitioner takes issue with the legal provision applicable to the factual
289 Chapter 4 on Conjugal Partnership of Gains in the Family Code was made
applicable to conjugal partnership of gains already established before its
effectivity unless vested rights have already been acquired under the Civil Code
or other laws. 16

milieu of this case. It contends that Article 124 of the Family Code should be
construed in relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But
the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to
the portion which may be allotted to him in the division upon the termination of the co-
The rules on co-ownership do not even apply to the property relations of
respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The
regime of conjugal partnership of gains is a special type of partnership, where the
husband and wife place in a common fund the proceeds, products, fruits and
income from their separate properties and those acquired by either or both
spouses through their efforts or by chance. Unlike the absolute community of
17

ownership. property wherein the rules on co-ownership apply in a suppletory manner, the 18

Article 124 of the Family Code provides in part: conjugal partnership shall be governed by the rules on contract of partnership in
ART. 124. The administration and enjoyment of the conjugal partnership property shall all that is not in conflict with what is expressly determined in the chapter (on
belong to both spouses jointly. . . . conjugal partnership
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of _______________
administration. These powers do not include the powers of disposition or encumbrance
which must have the authority of the court or the written consent of the other spouse. In the
Id., at p. 374.
absence of such authority or consent, the disposition or encumbrance shall be void. . . .
14

Article 119, The New Civil Code.

15

Petitioner argues that although Article 124 of the Family Code requires the Article 105, Family Code.
16

consent of the other spouse to the mortgage of conjugal properties, the framers of Article 106, Family Code.
17

the law could not have intended to curtail the right of a spouse from exercising Article 90, Family Code.
18

291
full ownership over the portion of the conjugal property pertaining to him under
the concept of co-ownership. Thus, petitioner would have this Court uphold the
12
VOL. 453, MARCH 11, 2005 291
validity of the mortgage to the extent of the late Marcelino Dailo, Jr.’s share in Homeowners Savings & Loan Bank vs. Dailo
the conjugal partnership. of gains) or by the spouses in their marriage settlements. Thus, the property
19

In Guiang v. Court of Appeals, it was held that the sale of a conjugal property
13

relations of respondent and her late husband shall be governed, foremost, by

requires the consent of both the husband Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily,
by the rules on partnership under the Civil Code. In case of conflict, the former
_______________
prevails because the Civil Code provisions on partnership apply only when the
Family Code is silent on the matter.
Rollo, p. 26.
The basic and established fact is that during his lifetime, without the
12

353 Phil. 578; 291 SCRA 372 (1998).

13

290 knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a real estate
mortgage on the subject property, which formed part of their conjugal
partnership. By express provision of Article 124 of the Family Code, in the trial court was it alleged that the proceeds of the loan redounded to the benefit of
absence of (court) authority or written consent of the other spouse, any disposition the family. Even on appeal, petitioner never
or encumbrance of the conjugal property shall be void.
The aforequoted provision does not qualify with respect to the share of the _______________
spouse who makes the disposition or encumbrance in the same manner that the
rule on co-ownership under Article 493 of the Civil Code does. Where the law does 22Ayala Investment & Development Corp. v. Court of Appeals, 349 Phil. 942, 952; 286 SCRA 272, 282
(1998), citing Luzon Surety Co., Inc. v. De Garcia, 30 SCRA 111 (1969).
not distinguish, courts should not distinguish. Thus, both the trial court and the
20
23Id., at p. 954, 286 SCRA 272, 283 (1998).
appellate court are correct in declaring the nullity of the real estate mortgage on 24Castilex Industrial Corporation v. Vasquez, Jr., 378 Phil. 1009; 321 SCRA 393 (1999).
the subject property for lack of respondent’s consent. 293
Second, petitioner imposes the liability for the payment of the principal VOL. 453, MARCH 11, 2005 293
obligation obtained by the late Marcelino Dailo, Jr. on the conjugal partnership to
Homeowners Savings & Loan Bank vs. Dailo
the extent that it redounded to the benefit of the family. 21

Under Article 121 of the Family Code, “[T]he conjugal partnership shall be
liable for: . . . (3) Debts and obligations contracted by either spouse without the
consent of the other
_______________
claimed that the family benefited from the proceeds of the loan. When a party
adopts a certain theory in the court below, he will not be permitted to change his
theory on appeal, for to permit him to do so would not only be unfair to the other
party but it would also be offensive to the basic rules of fair play, justice and due
process. A party may change his legal theory on appeal only when the factual
25

bases thereof would not require presentation of any further evidence by the
Article 108, Family Code.
19 adverse party in order to enable it to properly meet the issue raised in the new
Recaña, Jr. v. Court of Appeals, G.R. No. 123850, January 5, 2001, 349 SCRA 24, 33.
20
theory. 26

Rollo, p. 27.
WHEREFORE, the petition is DENIED. Costs against petitioner.
21

292
SO ORDERED.
292 SUPREME COURT REPORTS ANNOTATED Puno (Chairman), Austria-Martinez, Callejo, Sr.and Chico-Nazario,
Homeowners Savings & Loan Bank vs. Dailo JJ., concur.
to the extent that the family may have been benefited; . . . .” For the subject Petition denied.
property to be held liable, the obligation contracted by the late Marcelino Dailo, Note.—Under the Spanish Civil Code, the wife’s consent to the sale of
Jr. must have redounded to the benefit of the conjugal partnership. There must be conjugal property is not required. Fact that Nieves Tolentino’s signature in the
the requisite showing then of some advantage which clearly accrued to the deed of sale is a forgery does not render the deed of sale void. (Isabela Colleges,
welfare of the spouses. Certainly, to make a conjugal partnership respond for a Inc. vs. Heirs of Nieves Tolentino-Rivera, 344 SCRA 95 [2000])
liability that should appertain to the husband alone is to defeat and frustrate the
avowed objective of the new Civil Code to show the utmost concern for the ——o0o——
solidarity and well-being of the family as a unit. 22

The burden of proof that the debt was contracted for the benefit of the _______________
conjugal partnership of gains lies with the creditor-party litigant claiming as
such. Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who
23
Drilon v. Court of Appeals, 336 Phil. 949; 270 SCRA 211 (1997).
25

Heirs of Enrique Zambales v. Court of Appeals, 205 Phil. 789; 120 SCRA 897 (1983).
26

denies, must prove). Petitioner’s sweeping conclusion that the loan obtained by
24
294
the late Marcelino Dailo, Jr. to finance the construction of housing units without a © Copyright 2018 Central Book Supply, Inc. All rights reserved
doubt redounded to the benefit of his family, without adducing adequate proof,
does not persuade this Court. Other than petitioner’s bare allegation, there is
nothing from the records of the case to compel a finding that, indeed, the loan
obtained by the late Marcelino Dailo, Jr. redounded to the benefit of the family.
Consequently, the conjugal partnership cannot be held liable for the payment of
the principal obligation.
In addition, a perusal of the records of the case reveals that during the trial,
petitioner vigorously asserted that the subject property was the exclusive
property of the late Marcelino Dailo, Jr. Nowhere in the answer filed with the