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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

136803 June 16, 2000

EUSTAQUIO MALLILIN, JR., petitioner, vs. MA. ELVIRA CASTILLO, respondent. MENDOZA, J.: This is a petition for review of the amended decision1 of the Court of Appeals dated May 7, 1998 in CA G.R. CV No. 48443 granting respondent's motion for reconsideration of its decision dated November 7, 1996, and of the resolution dated December 21, 1998 denying petitioner's motion for reconsideration. The factual and procedural antecedents are as follows: On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint2 for "Partition and/or Payment of Co-Ownership Share, Accounting and Damages" against respondent Ma. Elvira Castillo. The complaint, docketed as Civil Case No. 93-656 at the Regional Trial Court in Makati City, alleged that petitioner and respondent, both married and with children, but separated from their respective spouses, cohabited after a brief courtship sometime in 1979 while their respective marriages still subsisted. During their union, they set up the Superfreight Customs Brokerage Corporation, with petitioner as president and chairman of the board of directors, and respondent as vice-president and treasurer. The business flourished and petitioner and respondent acquired real and personal properties which were registered solely in respondent's name. In 1992, due to irreconcilable differences, the couple separated. Petitioner demanded from respondent his share in the subject properties, but respondent refused alleging that said properties had been registered solely in her name.

In her Amended Answer,3 respondent admitted that she engaged in the customs brokerage business with petitioner but alleged that the Superfreight Customs Brokerage Corporation was organized with other individuals and duly registered with the Securities and Exchange Commission in 1987. She denied that she and petitioner lived as husband and wife because the fact was that they were still legally married to their respective spouses. She claimed to be the exclusive owner of all real personal properties involved in petitioner's action for partition on the ground that they were acquired entirely out of her own money and registered solely in her name. On November 25, 1994, respondent filed a Motion for Summary Judgment,4 in accordance with Rule 34 of the Rules of Court.5 She contended that summary judgment was proper, because the issues raised in the pleadings were sham and not genuine, to wit: A. The main issue is Can plaintiff validly claim the partition and/or payment of co-ownership share, accounting and damages, considering that plaintiff and defendant are admittedly both married to their respective spouses under still valid and subsisting marriages, even assuming as claimed by plaintiff, that they lived together as husband and wife without benefit of marriage? In other words, can the parties be considered as co-owners of the properties, under the law, considering the present status of the parties as both married and incapable of marrying each other, even assuming that they lived together as husband and wife (?) B. As a collateral issue, can the plaintiff be considered as an unregistered co-owner of the real properties under the Transfer Certificates of Title duly registered solely in the name of defendant Ma. Elvira Castillo? This issue is also true as far as the motor vehicles in question are concerned which are also registered in the name of defendant.6

On the first point, respondent contended that even if she and petitioner actually cohabited, petitioner could not validly claim a part of the subject real and personal properties because Art. 144 of the Civil Code, which provides that the rules on co-ownership shall govern the properties acquired by a man and a woman living together as husband and wife but not married, or under a marriage which is void ab initio, applies only if the parties are not in any way incapacitated to contract marriage.7 In the parties' case, their union suffered the legal impediment of a prior subsisting marriage. Thus, the question of fact being raised by petitioner, i.e., whether they lived together as husband and wife, was irrelevant as no co-ownership could exist between them. As to the second issue, respondent maintained that petitioner cannot be considered an unregistered co-owner of the subject properties on the ground that, since titles to the land are solely in her name, to grant petitioner's prayer would be to allow a collateral attack on the validity of such titles. Petitioner opposed respondent's Motion for Summary Judgment.8 He contended that the case presented genuine factual issues and that Art. 144 of the Civil Code had been repealed by the Family Code which now allows, under Art. 148, a limited co-ownership even though a man and a woman living together are not capacitated to marry each other. Petitioner also asserted that an implied trust was constituted when he and respondent agreed to register the properties solely in the latter's name although the same were acquired out of the profits made from their brokerage business. Petitioner invoked the following provisions of the Civil Code: Art. 1452. If two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each. Art. 1453. When the property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to another grantor, there is an implied trust in favor of the person whose benefit is contemplated.

On January 30, 1995, the trial court rendered its decision9 granting respondent's motion for summary judgment. It ruled that an examination of the pleadings shows that the issues involved were purely legal. The trial court also sustained respondent's contention that petitioner's action for partition amounted to a collateral attack on the validity of the certificates of title covering the subject properties. It held that even if the parties really had cohabited, the action for partition could not be allowed because an action for partition among co-owners ceases to be so and becomes one for title if the defendant, as in the present case, alleges exclusive ownership of the properties in question. For these reasons, the trial court dismissed Civil Case No. 93-656. On appeals, the Court of Appeals on November 7, 1996, ordered the case remanded to the court of origin for trial on the merits. It cited the decision in Roque v. Intermediate Appellate Court 10 to the effect that an action for partition is at once an action for declaration of coownership and for segregation and conveyance of a determinate portion of the properties involved. If the defendant asserts exclusive title over the property, the action for partition should not be dismissed. Rather, the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner, the court should dismiss the action, not because the wrong remedy was availed of, but because no basis exists for requiring the defendant to submit to partition. Resolving the issue whether petitioner's action for partition was a collateral attack on the validity of the certificates of title, the Court of Appeals held that since petitioner sought to compel respondent to execute documents necessary to effect transfer of what he claimed was his share, petitioner was not actually attacking the validity of the titles but in fact, recognized their validity. Finally, the appellate court upheld petitioner's position that Art. 144 of the Civil Code had been repealed by Art. 148 of the Family Code. Respondent moved for reconsideration of the decision of Court of Appeals. On May 7, 1998, nearly two years after its first decision, the Court of Appeals granted respondent's motion and reconsidered its prior decision. In its decision now challenged in the present petition, it held

Prefatorily, and to better clarify the controversy on whether this suit is a collateral attack on the titles in issue, it must be underscored that plaintiff-appellant alleged in his complaint that all the nine (9) titles are registered in the name of defendant-appellee, Ma. Elvira T. Castillo, except one which appears in the name of Eloisa Castillo (see par. 9, Complaint). However, a verification of the annexes of such initiatory pleading shows some discrepancies, to wit: 1. TCT No. 149046 (Annex A) = Elvira T. Castillo, single 2. TCT No. 168208 (Annex B) = do 3. TCT No. 37046 (Annex C) = do 4. TCT No. 37047 (Annex D) = do 5. TCT No. 37048 (Annex E) = do 6. TCT No. 30368 (Annex F) = Steelhaus Realty & Dev. Corp. 7. TCT No. 30369 (Annex G) = do 8. TCT No. 30371 (Annex F) = do 9. TCT No. (92323) 67881 (Annex I) = Eloisa Castillo In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner of the real properties covered by the above listed titles and eventually for their partition [par. (a), Prayer; p. 4 Records]. Notably, in order to achieve such prayer for a joint co-ownership declaration, it is unavoidable that the individual titles involved be altered, changed, cancelled or modified to include therein the name of the appellee as a registered 1/2 co-owner. Yet, no cause of action or even a prayer is contained filed. Manifestly, absent any cause or prayer for the alteration, cancellation, modification or changing of the titles involved, the desired declaration of co-ownership and eventual partition will utterly be an indirect or collateral attack on the subject titled in this suit.

It is here that We fell into error, such that, if not rectified will surely lead to a procedural lapse and a possible injustice. Well settled is the rules that a certificate of title cannot be altered, modified or cancelled except in a direct proceeding in accordance with law. In this jurisdiction, the remedy of the landowner whose property has been wrongfully or erroneously registered in another name is, after one year from the date of the decree, not to set aside the decree, but respecting it as incontrovertible and no longer open to review, to bring an action for reconveyance or, if the property had passed into the hands of an innocent purchaser for value, for damages. Verily, plaintiff-appellant should have first pursued such remedy or any other relief directly attacking the subject titles before instituting the present partition suit. Apropos, the case at bench appears to have been prematurely filed. Lastly, to grant the partition prayed for by the appellant will in effect rule and decide against the properties registered in the names of Steelhouse Realty and Development Corporation and Eloisa Castillo, who are not parties in the case. To allow this to happen will surely result to injustice and denial of due process of law. . . . 11 Petitioner moved for reconsideration but his motion was denied by the Court of Appeals in its resolution dated December 21, 1998. Hence this petition. Petitioner contends that: (1) the Court of Appeals, in its first decision of November 7, 1996, was correct in applying the Roque ruling and in rejecting respondent's claim that she was the sole owner of the subject properties and that the partition suit was a collateral attack on the titles; (2) the Court of Appeals correctly rules in its first decision that Art. 148 of the Family Code governs the co-ownership between the parties, hence, the complaint for partition is proper; (3) with respect to the properties registered in the name of Steelhouse Realty, respondent admitted ownership thereof and, at the very least, these properties could simply be excluded and the partition limited to the remaining real and personal properties; and (4) the Court of Appeals erred in not holding that under the Civil Code, there is an implied trust in his favor.
12

The issue in this case is really whether summary judgment, in accordance with Rule 35 of the Rules of Court, is proper. We rule in the negative. First. Rule 35, 3 of the Rules of Court provides that summary judgment is proper only when, based on the pleadings, depositions, and admissions on file, and after summary hearing, it is shown that except as to the amount of damages, there is no veritable issue regarding any material fact in the action and the movant is entitled to judgment as a matter of law. 1 Conversely, where the pleadings tender a genuine issue, i.e., an issue of fact the resolution of which calls for the presentation of evidence, as distinguished from an issue which is sham, fictitious, contrived, set-up in bad faith, or patently unsubstantial, summary judgment is not proper. 14 In the present case, we are convinced that genuine issues exist. Petitioner anchors his claim of co-ownership on two factual grounds: first, that said properties were acquired by him and respondent during their union from 1979 to 1992 from profits derived from their brokerage business; and second, that said properties were registered solely in respondent's name only because they agreed to that arrangement, thereby giving rise to an implied trust in accordance with Art. 1452 and Art. 1453 of the Civil Code. These allegations are denied by respondent. She denies that she and petitioner lived together as husband and wife. She also claims that the properties in question were acquired solely by her with her own money and resources. With such conflicting positions, the only way to ascertain the truth is obviously through the presentation of evidence by the parties. The trial court ruled that it is immaterial whether the parties actually lived together as husband and wife because Art. 144 of the Civil Code can not be made to apply to them as they were both incapacitated to marry each other. Hence, it was impossible for a co-ownership to exist between them. We disagree. Art. 144 of the Civil Code provides:

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-ownership. This provision of the Civil Code, applies only to cases in which a man and a woman live together as husband and wife without the benefit of marriage provided they are not incapacitated or are without impediment to marry each other, 15 or in which the marriage is void ab initio, provided it is not bigamous. Art. 144, therefore, does not cover parties living in an adulterous relationship. However, Art. 148 of the Family Code now provides for a limited co-ownership in cases where the parties in union are incapacitated to marry each other. It states: In cases of cohabitation not falling under the preceding article, 16 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 evidences of credits. 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 who 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. It was error for the trial court to rule that, because the parties in this case were not capacitated to marry each other at the time that they were alleged to have been living together, they could not have owned properties in common. The Family Code, in addition to providing that a co-ownership exists between a man and a woman who live together

as husband and wife without the benefit of marriage, likewise provides that, if the parties are incapacitated to marry each other, properties acquired by them through their joint contribution of money, property or industry shall be owned by them in common in proportion to their contributions which, in the absence of proof to the contrary, is presumed to be equal. There is thus co-ownership eventhough the couple are not capacitated to marry each other. In this case, there may be a co-ownership between the parties herein. Consequently, whether petitioner and respondent cohabited and whether the properties involved in the case are part of the alleged coownership are genuine and material. All but one of the properties involved were alleged to have been acquired after the Family Code took effect on August 3, 1988. With respect to the property acquired before the Family Code took effect if it is shown that it was really acquired under the regime of the Civil Code, then it should be excluded. Petitioner also alleged in paragraph 7 of his complaint that: Due to the effective management, hardwork and enterprise of plaintiff assisted by defendant, their customs brokerage business grew and out of the profits therefrom, the parties acquired real and personal properties which were, upon agreement of the parties, listed and registered in defendant's name with plaintiff as the unregistered co-owner of all said properties. 17 On the basis of this, he contends that an implied trust existed pursuant to Art. 1452 of the Civil Code which provides that "(I)f two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each." We do not think this is correct. The legal relation of the parties is already specifically covered by Art. 148 of the Family Code under which all the properties acquired by the parties out of their actual joint contributions of money, property or industry shall constitute a co-ownership. Co-ownership is a form of trust and every co-owner is a trustee for the other. 18 The provisions of Art. 1452 and

Art. 1453 of the Civil Code, then are no longer material since a trust relation already inheres in a co-ownership which is governed under Title III, Book II of the Civil Code. Second. The trial court likewise dismissed petitioner's action on the ground that the same amounted to a collateral attack on the certificates of title involved. As already noted, at first, the Court of Appeals ruled that petitioner's action does not challenge the validity of respondent's titles. However, on reconsideration, it reversed itself and affirmed the trial court. It noted that petitioner's complaint failed to include a prayer for the alteration, cancellation, modification, or changing of the titles involved. Absent such prayer, the appellate court ruled that a declaration of co-ownership and eventual partition would involve an indirect or collateral attack on the titles. We disagree. A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D. No. 1529, 19 48 provides that a certificate of title shall not be subject to collateral attack and can not be altered, modified, or canceled except in a direct proceeding. When is an action an attack on a title? It is when the object of the action or proceeding is to nullify the title, and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of an action or proceeding is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. 20 In his complaint for partition, consistent with our ruling in Roque regarding the nature of an action for partition, petitioner seeks first, a declaration that he is a co-owner of the subject properties; and second, the conveyance of his lawful shares. He does not attack respondent's titles. Petitioner alleges no fraud, mistake, or any other irregularity that would justify a review of the registration decree in respondent's favor. His theory is that although the subject properties were registered solely in respondent's name, but since by agreement between them as well as under the Family Code, he is co-owner of these properties and as such is entitled to the conveyance of his shares. On the premise that he is a co-owner, he can validly seek the partition of the properties in coownership and the conveyance to him of his share.

Thus, in Guevara v. Guevara, 21 in which a parcel of land bequeathed in a last will and testament was registered in the name of only one of the heirs, with the understanding that he would deliver to the others their shares after the debts of the original owner had been paid, this Court ruled that notwithstanding the registration of the land in the name of only one of the heirs, the other heirs can claim their shares in "such action, judicial or extrajudicial, as may be necessary to partition the estate of the testator." 22 Third. The Court of Appeals also reversed its first decision on the ground that to order partition will, in effect, rule and decide against Steelhouse Realty Development Corporation and Eloisa Castillo, both strangers to the present case, as to the properties registered in their names. This reasoning, however, ignores the fact that the majority of the properties involved in the present case are registered in respondent's name, over which petitioner claims rights as a co-owner. Besides, other than the real properties, petitioner also seeks partition of a substantial amount of personal properties consisting of motor vehicles and several pieces of jewelry. By dismissing petitioner's complaint for partition on grounds of due process and equity, the appellate court unwittingly denied petitioner his right to prove ownership over the claimed real and personal properties. The dismissal of petitioner's complaint is unjustified since both ends may be amply served by simply excluding from the action for partition the properties registered in the name of Steelhouse Realty and Eloisa Castillo. WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is REVERSED and the case is REMANDED to the Regional Trial Court, Branch 59, Makati City for further proceedings on the merits. SO ORDERED. Bellosillo, Quisumbing and De Leon, Jr., JJ., concur. Buena, J., took no part.

Per Justice Conrado M. Vasquez, Jr., and concurred in by Justice (now Supreme Court Justice) Arturo B. Buena and Justice Angelina Sandoval Gutierrez.
2

Annex "C"; Id., p. 44. Annex "D"; Id., p. 49. Annex "E"; Id., p. 60. Now Rule 35 after the 1997 amendments. Rollo, p. 66. (Emphasis in the original.)

Citing Lesaca v. Lesaca, 91 Phil. 135 (1952) and Marata v. Dionisio, G.R. No. 24449, unpublished.
8

Annex "E-1"; Id., p. 74. Annex "F"; Id., p. 80. 165 SCRA 118 (1988).

10

11

Amended Decision of the Court of Appeals, pp. 2-4; Rollo, pp. 38-40 (Citations omitted and emphasis added.)
12

Petition, pp. 12-25; Id., pp. 18-31. See Tarnate v. Gatchalian, 241 SCRA 254 (1995).

13

14

Galicia v. Polo, 179 SCRA 371 (1989); Garcia v. Court of Appeals, 167 SCRA 815 (1988).
15

See Juaniza v. Jose, 89 SCRA 306 (1979).

16

Referring to Art. 147 of the Family Code which provides that Footnotes

When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriages or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership. (Emphasis added)
17

Complaint, p. 2; Rollo, p. 45 (Emphasis added.)

18

Castillo v. Court of Appeals, 10 SCRA 549 (1964); Sotto v. Teves, 86 SCRA 154 (1978).
19

THE PROPERTY REGISTRATION DECREE. See Co v. Court of Appeals, 196 SCRA 705 (1991). 74 Phil 479 (1943). Id., at p. 495.

20

21

22

FIRST DIVISION [G.R. No. 122749. July 31, 1996] ANTONIO A. S. VALDES, petitioner, vs. REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and CONSUELO M. GOMEZ-VALDES, respondents. DECISION VITUG, J.: The petition for review bewails, purely on a question of law, an alleged error committed by the Regional Trial Court in Civil Case No. Q-92-12539. Petitioner avers that the court a quo has failed to apply the correct law that should govern the disposition of a family dwelling in a situation where a marriage is declared void ab initio because of psychological incapacity on the part of either or both of the parties to the contract. The pertinent facts giving rise to this incident are, by and large, not in dispute. Antonio Valdes and Consuelo Gomez were married on 05 January 1971. Begotten during the marriage were five children. In a petition, dated 22 June 1992, Valdes sought the declaration of nullity of the marriage pursuant to Article 36 of the Family Code (docketed Civil Case No. Q-92-12539, Regional Trial Court of Quezon City, Branch 102). After hearing the parties following the joinder of issues, the trial court,i[1] in its decision of 29 July 1994, granted the petition; viz: "WHEREFORE, judgment is hereby rendered as follows: "(1) The marriage of petitioner Antonio Valdes and respondent Consuelo Gomez-Valdes is hereby declared null and void under Article 36 of the Family Code on the ground of their mutual psychological incapacity to comply with their essential marital obligations;

"(2) The three older children, Carlos Enrique III, Antonio Quintin and Angela Rosario shall choose which parent they would want to stay with. "Stella Eloisa and Joaquin Pedro shall be placed in the custody of their mother, herein respondent Consuelo Gomez-Valdes. "The petitioner and respondent shall have visitation rights over the children who are in the custody of the other. "(3) The petitioner and respondent are directed to start proceedings on the liquidation of their common properties as defined by Article 147 of the Family Code, and to comply with the provisions of Articles 50, 51 and 52 of the same code, within thirty (30) days from notice of this decision. "Let a copy of this decision be furnished the Local Civil Registrar of Mandaluyong, Metro Manila, for proper recording in the registry of marriages."ii[2] (Italics ours) Consuelo Gomez sought a clarification of that portion of the decision directing compliance with Articles 50, 51 and 52 of the Family Code. She asserted that the Family Code contained no provisions on the procedure for the liquidation of common property in "unions without marriage." Parenthetically, during the hearing on the motion, the children filed a joint affidavit expressing their desire to remain with their father, Antonio Valdes, herein petitioner. In an Order, dated 05 May 1995, the trial court made the following clarification: "Consequently, considering that Article 147 of the Family Code explicitly provides that the property acquired by both parties during their union, in the absence of proof to the contrary, are presumed to have been obtained through the joint efforts of the parties and will be owned by them in equal shares, plaintiff and defendant will own their 'family home' and all their other properties for that matter in equal shares.

"In the liquidation and partition of the properties owned in common by the plaintiff and defendant, the provisions on co-ownership found in the Civil Code shall apply."iii[3] (Italics supplied) In addressing specifically the issue regarding the disposition of the family dwelling, the trial court said: "Considering that this Court has already declared the marriage between petitioner and respondent as null and void ab initio, pursuant to Art. 147, the property regime of petitioner and respondent shall be governed by the rules on co-ownership. "The provisions of Articles 102 and 129 of the Family Code finds no application since Article 102 refers to the procedure for the liquidation of the conjugal partnership property and Article 129 refers to the procedure for the liquidation of the absolute community of property."iv[4] Petitioner moved for a reconsideration of the order. The motion was denied on 30 October 1995. In his recourse to this Court, petitioner submits that Articles 50, 51 and 52 of the Family Code should be held controlling; he argues that: "I "Article 147 of the Family Code does not apply to cases where the parties are psychological incapacitated. "II "Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code govern the disposition of the family dwelling in cases where a marriage is declared void ab initio, including a marriage declared void by reason of the psychological incapacity of the spouses. "III

"Assuming arguendo that Article 147 applies to marriages declared void ab initio on the ground of the psychological incapacity of a spouse, the same may be read consistently with Article 129. "IV "It is necessary to determine the parent with whom majority of the children wish to stay."v[5] The trial court correctly applied the law. In a void marriage, regardless of the cause thereof, the property relations of the parties during the period of cohabitation is governed by the provisions of Article 147 or Article 148, such as the case may be, of the Family Code. Article 147 is a remake of Article 144 of the Civil Code as interpreted and so applied in previous cases;vi[6] it provides: "ART. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership. "In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household. "Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. "When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in

favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation." This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term "capacitated" in the provision (in the first paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any "male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 37 and 38"vii[7] of the Code. Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal coownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as having contributed thereto jointly if said party's "efforts consisted in the care and maintenance of the family household."viii[8] Unlike the conjugal partnership of gains, the fruits of the couple's separate property are not included in the co-ownership. Article 147 of the Family Code, in substance and to the above extent, has clarified Article 144 of the Civil Code; in addition, the law now expressly provides that (a) Neither party can dispose or encumber by act inter vivos his or her share in co-ownership property, without the consent of the other, during the period of cohabitation; and (b) In the case of a void marriage, any party in bad faith shall forfeit his or her share in the co-ownership in favor of their common children; in default thereof or waiver by any or all of the common children, each vacant share shall belong to the respective surviving descendants, or still in default thereof, to the innocent party. The

forfeiture shall take place upon the termination of the cohabitationix[9] or declaration of nullity of the marriage.x[10] When the common-law spouses suffer from a legal impediment to marry or when they do not live exclusively with each other (as husband and wife ),only the property acquired by both of them through their actual joint contribution of money, property or industry shall be owned in common and in proportion to their respective contributions. Such contributions and corresponding shares, however, are prima facie presumed to be equal. The share of any party who is married to another shall accrue to the absolute community or conjugal partnership, as the case may be, if so existing under a valid marriage. If the party who has acted in bad faith is not validly married to another, his or her share shall be forfeited in the manner already heretofore expressed.xi[11] In deciding to take further cognizance of the issue on the settlement of the parties' common property, the trial court acted neither imprudently nor precipitately; a court which has jurisdiction to declare the marriage a nullity must be deemed likewise clothed with authority to resolve incidental and consequential matters. Nor did it commit a reversible error in ruling that petitioner and private respondent own the "family home" and all their common property in equal shares, as well as in concluding that, in the liquidation and partition of the property owned in common by them, the provisions on co-ownership under the Civil Code, not Articles 50, 51 and 52, in relation to Articles 102 and 129,xii[12] of the Family Code, should aptly prevail. The rules set up to govern the liquidation of either the absolute community or the conjugal partnership of gains, the property regimes recognized for valid and voidable marriages (in the latter case until the contract is annulled ),are irrelevant to the liquidation of the co-ownership that exists between common-law spouses. The first paragraph of Article 50 of the Family Code, applying paragraphs (2 ),(3 ),(4) and (5) of Article 43,xiii[13] relates only, by its explicit terms, to voidable marriages and, exceptionally, to void marriages under Article 40xiv[14] of the Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a prior void marriage before the latter is judicially declared void. The latter is a special rule that somehow recognizes the philosophy and an old doctrine that void marriages are inexistent from

the very beginning and no judicial decree is necessary to establish their nullity. In now requiring for purposes of remarriage, the declaration of nullity by final judgment of the previously contracted void marriage, the present law aims to do away with any continuing uncertainty on the status of the second marriage. It is not then illogical for the provisions of Article 43, in relation to Articles 41xv[15] and 42,xvi[16] of the Family Code, on the effects of the termination of a subsequent marriage contracted during the subsistence of a previous marriage to be made applicable pro hac vice. In all other cases, it is not to be assumed that the law has also meant to have coincident property relations, on the one hand, between spouses in valid and voidable marriages (before annulment) and, on the other, between common-law spouses or spouses of void marriages, leaving to ordain, in the latter case, the ordinary rules on co-ownership subject to the provision of Article 147 and Article 148 of the Family Code. It must be stressed, nevertheless, even as it may merely state the obvious, that the provisions of the Family Code on the "family home," i.e., the provisions found in Title V, Chapter 2, of the Family Code, remain in force and effect regardless of the property regime of the spouses. WHEREFORE, the questioned orders, dated 05 May 1995 and 30 October 1995, of the trial court are AFFIRMED. No costs. SO ORDERED. Padilla, Kapunan, and Hermosisima, Jr., JJ., concur. Bellosillo, J., on leave.

iii[3] Rollo, p. 42. iv[4] Rollo, pp. 38-39. v[5] Rollo, pp. 24-25. vi[6] See Margaret Maxey vs. Court of Appeals, 129 SCRA 187; Aznar, et al. vs. Garcia, et al., 102 Phil. 1055. vii[7] Art. 5.Any male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 37 and 38, may contract marriage. Art. 37.Marriages between the following are incestuous and void from the beginning, whether the relationship between the parties be legitimate or illegitimate: and (1) Between ascendants and descendants of any degree;

(2) Between brothers and sisters, whether of the full or half-blood. Art. 38. The following marriages shall be void from the beginning for reasons of public policy: (1) Between collateral blood relatives; whether legitimate or illegitimate, up to the fourth civil degree; (2) Between step-parents and stepchildren; (3) Between parents-in-law and children-in-law; (4) Between the adopting parent and the adopted child;

i[1] Hon. Perlita Tria Tirona, presiding. ii[2] Rollo, p. 22. (5) Between the surviving spouse of the adopting parent and the adopted child;

(6) Between the surviving spouse of the adopted child and the adopter; (7) Between an adopted child and a legitimate child of the adopter; (8) Between adopted children of the same adopter; and (9) Between parties where one, with the intention to marry the other, killed that other person's spouse or his or her own spouse. viii[8] Article 147, Family Code. ix[9] Article 147, Family Code. x[10] Articles 43, 50 and 51, Family Code. xi[11] Article 148, Family Code. xii[12] Art. 50. The effects provided for in paragraphs (2 ),(3 ),(4) and (5) of Article 43 and in Article 44 shall also apply in proper cases to marriages which are declared void ab initio or annulled by final judgment under Articles 40 and 45. The final judgment in such case shall provide for the liquidation, partition and distribution of the properties of the spouses, the custody and support of the common children, and the delivery of their presumptive legitimes, unless such matters had been adjudicated in previous judicial proceedings. All creditors of the spouses as well as of the absolute community or the conjugal partnership shall be notified of the proceedings for liquidation. In the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated in accordance with the provisions of Articles 102 and 129.

Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, unless the parties, by mutual agreement judicially approved, had already provided for such matters. The children or their guardian, or the trustee of their property, may ask for the enforcement of the judgment. The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate successional rights of the children accruing upon the death of either or both of the parents; but the value of the properties already received under the decree of annulment or absolute nullity shall be considered as advances on their legitime. Art. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the children's presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect third persons. Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply: (1) An inventory shall be prepared, listing separately all the properties of the absolute community and the exclusive properties of each spouse. (2) The debts and obligations of the absolute community shall be paid out of its assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties in accordance with the provisions of the second paragraph of Article 94.

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. (4) The net remainder of the properties of the absolute community shall constitute its net assets, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements, or unless there has been a voluntary waiver of such share as provided in this Code. For purposes of computing the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2 ), the said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution. (5) The presumptive legitimes of the common children shall be delivered upon partition, in accordance with Article 51. (6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best interests of said children. Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply; (1) An inventory shall be prepared, listing separately all the properties of the conjugal partnership and the exclusive properties of each spouse. (2) Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.

(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value of his or her exclusive property, the ownership of which has been vested by law in the conjugal partnership. (4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties, in accordance with the provisions of paragraph (2) of Article 121. (5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. (6) Unless the owner has been indemnified from whatever source, the loss or deterioration of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any. (7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. (8) The presumptive legitimes of the common children shall be delivered upon partition in accordance with Article 51. (9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best interests of said children.

xiii[13] Art. 43. The termination of the subsequent marriage referred to in the preceding Article shall produce the following effects: (1) The children of the subsequent marriage conceived prior to its termination shall be considered legitimate, and their custody and support in case of dispute shall be decided by the court in a proper proceeding; (2) The absolute community of property or the conjugal partnership, as the case may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith, his or her share of the net profits of the community property or conjugal partnership property shall be forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a previous marriage or, in default of children, the innocent spouse; (3) Donations by reason or marriage shall remain valid, except that if the donee contracted the marriage in bad faith, such donations made to said donee are revoked by operation of law; (4) The innocent spouse may revoke the designation of the other spouse who acted in bad faith as a beneficiary in any insurance policy, even if such designation be stipulated as irrevocable; and (5) The spouse who contracted the subsequent marriage in bad faith shall be disqualified to inherit from the innocent spouse by testate and intestate succession. xiv[14] Art. 40. The absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void. xv[15] Art. 41. A marriage contracted by any person during the subsistence of a previous marriage shall be null and void,

unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present had a well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. For the purpose of contracting the subsequent marriage under the preceding paragraph, the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. xvi[16] Art. 42. The subsequent marriage referred to in the preceding Article shall be automatically terminated by the recording of the affidavit of reappearance of the absent spouse, unless there is a judgment annulling the previous marriage or declaring it void ab initio. A sworn statement of the fact and circumstances of reappearance shall be recorded in the civil registry of the residence of the parties to the subsequent marriage at the instance of any interested person, with due notice to the spouses of the subsequent marriage and without prejudice to the fact of reappearance being judicially determined in case such fact is disputed.

SECOND DIVISION [G.R. No. 151967. February 16, 2005] JOSEFINA C. FRANCISCO, petitioner, vs. MASTER IRON WORKS & CONSTRUCTION CORPORATION and ROBERTO V. ALEJO, Sheriff IV, Regional Trial Court of Makati City, Branch 142, respondents. DECISION CALLEJO, SR., J.: Before us is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. No. CV No. 59045, which reversed and set aside the Decision[2] of the Regional Trial Court (RTC) of Paraaque, Metro Manila, Branch 260, in Civil Case No. 94-2260 and the Resolution of the CA denying the petitioners motion for reconsideration of the said decision. Josefina Castillo was only 24 years old when she and Eduardo G. Francisco were married on January 15, 1983.[3] Eduardo was then employed as the vice president in a private corporation. A little more than a year and seven months thereafter, or on August 31, 1984, the Imus Rural Bank, Inc. (Imus Bank) executed a deed of absolute sale for P320,000.00 in favor of Josefina Castillo Francisco, married to Eduardo Francisco, covering two parcels of residential land with a house thereon located at St. Martin de Porres Street, San Antonio Valley I, Sucat, Paraaque, Metro Manila. One of the lots was covered by Transfer Certificate of Title (TCT) No. 36519, with an area of 342 square meters, while the other lot, with an area of 360 square meters, was covered by TCT No. 36518.[4] The purchase price of the property was paid to the Bank via Check No. 002334 in the amount of P320,000.00 drawn and issued by the Commercial Bank of Manila, for which the Imus Bank issued

Official Receipt No. 121408 on August 31, 1984.[5] On the basis of the said deed of sale, TCT Nos. 36518 and 36519 were cancelled and, on September 4, 1984, the Register of Deeds issued TCT Nos. 87976 (60550) and 87977 (60551) in the name of Josefina Castillo Francisco married to Eduardo G. Francisco.[6] On February 15, 1985, the Register of Deeds made of record Entry No. 85-18003 at the dorsal portion of the said titles. This referred to an Affidavit of Waiver executed by Eduardo where he declared that before his marriage to Josefina, the latter purchased two parcels of land, including the house constructed thereon, with her own savings, and that he was waiving whatever claims he had over the property.[7] On January 13, 1986, Josefina mortgaged the said property to Leonila Cando for a loan of P157,000.00.[8] It appears that Eduardo affixed his marital conformity to the deed.[9] On June 11, 1990, Eduardo, who was then the General Manager and President of Reach Out Trading International, bought 7,500 bags of cement worth P768,750.00 from Master Iron Works & Construction Corporation (MIWCC) but failed to pay for the same. On November 27, 1990, MIWCC filed a complaint against him in the RTC of Makati City for the return of the said commodities, or the value thereof in the amount of P768,750.00. The case was docketed as Civil Case No. 90-3251. On January 8, 1992, the trial court rendered judgment in favor of MIWCC and against Eduardo. The fallo of the decision reads: Accordingly, the Court renders judgment in favor of the plaintiff Master Iron Works And Construction Corporation against the defendant [Eduardo] Francisco ordering the latter as follows: 1. To replace to plaintiff 7,500 bags at 50 kilos/bag of Portland cement or, in the alternative, to pay the plaintiff the amount of P768,750.00;

2. In either case, to pay liquidated damages by way of interest at 12% per annum from June 21, 1990 until fully paid; 3. To pay P50,000.00 as actual damages; and

4. To pay attorneys fees of P153,750.00 and litigation expenses of P20,000.00. SO ORDERED.[10] The decision in Civil Case No. 90-3251 became final and executory and, on June 7, 1994, the court issued a writ of execution.[11] On June 14, 1994, Sheriff Roberto Alejo sold at a public auction one stainless, owner-type jeep for P10,000.00 to MIWCC.[12] Sheriff Alejo issued a Notice of Levy on Execution/Attachment over the lots covered by TCT No. 87976 (60550) and 87977 (60551) for the recovery of the balance of the amount due under the decision of the trial court in Civil Case No. 90-3251.[13] On June 24, 1994, the sale of the property at a public auction was set to August 5, 1994.[14] On July 3, 1994, Josefina executed an Affidavit of Third Party Claim[15] over the two parcels of land in which she claimed that they were her paraphernal property, and that her husband Eduardo had no proprietary right or interest over them as evidenced by his affidavit of waiver, a copy of which she attached to her affidavit. She, likewise, requested Sheriff Alejo to cause the cancellation of the notice of levy on execution/attachment earlier issued by him. On July 7, 1994, Josefina filed the said Affidavit of Third Party Claim in the trial court and served a copy thereof to the sheriff. MIWCC then submitted an indemnity bond[16] in the amount of P1,361,500.00 issued by the Prudential Guarantee and Assurance, Inc. The sale at public auction proceeded. MIWCC made a bid for the property for the price of P1,350,000.00.[17]

On July 28, 1994, Josefina filed a Complaint against MIWCC and Sheriff Alejo in the RTC of Paraaque for damages with a prayer for a writ of preliminary injunction or temporary restraining order, docketed as Civil Case No. 94-2260. She alleged then that she was the sole owner of the property levied on execution by Sheriff Alejo in Civil Case No. 90-3251; hence, the levy on execution of the property was null and void. She reiterated that her husband, the defendant in Civil Case No. 903251, had no right or proprietary interest over the said property as evidenced by his affidavit of waiver annotated at the dorsal portion of the said title. Josefina prayed that the court issue a temporary restraining order/writ of preliminary injunction to enjoin MIWCC from causing the sale of the said property at public auction. Considering that no temporary restraining order had as yet been issued by the trial court, the sheriff sold the subject property at public auction to MIWCC for P1,350,000.00 on August 5, 1994.[18] However, upon the failure of MIWCC to remit the sheriffs commission on the sale, the latter did not execute a sheriffs certificate of sale over the property. The RTC of Paraaque, thereafter, issued a temporary restraining order[19] on August 16, 1994. When Josefina learned of the said sale at public auction, she filed an amended complaint impleading MIWCC, with the following prayer: WHEREFORE, premises considered, it is most respectfully prayed to this Honorable Court that, after hearing, judgment be rendered in favor of the plaintiff and against the defendants and the same be in the following tenor: 1. Ordering the defendants, jointly and severally, to pay the plaintiff the following amounts: A. The sum of P50,000.00 representing as actual damages;

B. The sum of P200,000.00 representing as moral damages;

C. The sum of P50,000.00 or such amount which this Honorable Court deems just as exemplary damages; D. The sum of P60,000.00 as and for attorneys fees.

that Eduardo had no participation whatsoever in the said acquisition. She added that Eduardo had five children, namely, Mary Jane, Dianne, Mary Grace Jo, Mark Joseph and Mary Cecille, all surnamed Francisco. On September 9, 1996, the RTC of Paraaque rendered judgment[21] in Civil Case No. 95-0169, declaring the marriage between Josefina and Eduardo as null and void for being bigamous. In the meantime, Josefina testified in Civil Case No. 94-2260, declaring, inter alia, that she was able to purchase the property from the Bank when she was still single with her mothers financial assistance; she was then engaged in recruitment when Eduardo executed an affidavit of waiver; she learned that he was previously married when they already had two children; nevertheless, she continued cohabiting with him and had three more children by him; and because of Eduardos first marriage, she decided to have him execute the affidavit of waiver. Eduardo testified that when his wife bought the property in 1984, he was in Davao City and had no knowledge of the said purchases; he came to know of the purchase only when Josefina informed him a week after his arrival from Davao;[22] Josefinas sister, Lolita Castillo, told him that she would collect from him the money his wife borrowed from her and their mother to buy the property;[23] when he told Lolita that he had no money, she said that she would no longer collect from him, on the condition that he would have no participation over the property,[24] which angered Eduardo;[25] when Josefina purchased the property, he had a gross monthly income of P10,000.00 and gave P5,000.00 to Josefina for the support of his family;[26] Josefina decided that he execute the affidavit of waiver because her mother and sister gave the property to her.[27] On December 20, 1997, the trial court rendered judgment finding the levy on the subject property and the sale thereof at

2. Declaring the levying and sale at public auction of the plaintiffs properties null and void; 3. To issue writ of preliminary injunction and makes it permanent; 4. Order the cancellation of whatever entries appearing at the titles as a result of the enforcement of the writ of execution issued in Civil Case No. 90-3251. Plaintiff further prays for such other reliefs as may be just under the premises.[20] In its answer to the complaint, MIWCC cited Article 116 of the Family Code of the Philippines and averred that the property was the conjugal property of Josefina and her husband Eduardo, who purchased the same on August 31, 1984 after their marriage on January 14, 1983. MIWCC asserted that Eduardo executed the affidavit of waiver to evade the satisfaction of the decision in Civil Case No. 90-3251 and to place the property beyond the reach of creditors; hence, the said affidavit was null and void. Before she could commence presenting her evidence, Josefina filed a petition to annul her marriage to Eduardo in the RTC of Paraaque, Metro Manila, on the ground that when they were married on January 15, 1983, Eduardo was already married to one Carmelita Carpio. The case was docketed as Civil Case No. 95-0169. Josefina and Carmelita testified in Civil Case No. 95-0169. Josefina declared that during her marriage to Eduardo, she acquired the property covered by TCT Nos. 87976 (60550) and 87977 (60551), through the help of her sisters and brother, and

public auction to be null and void. The fallo of the decision reads: WHEREFORE, PREMISES CONSIDERED, THIS COURT finds the Levying and sale at public auction of the plaintiffs properties null and void. The court orders the defendants to, jointly and severally, pay plaintiff the following amounts: a. b. c. d. The sum of P50,000.00 as actual damages; The sum of P50,000.00 representing as moral damages; The sum of P50,000.00 as exemplary damages; The sum of P60,000.00 as and for attorneys fees.

II. THE TRIAL COURT ERRED IN ALLOWING THE RECEPTION OF REBUTTAL EVIDENCE WITH REGARD TO THE ANNULMENT OF PLAINTIFF-APPELLEES MARRIAGE WITH EDUARDO FRANCISCO; III. THE TRIAL COURT ERRED IN RULING THAT THE LEVY ON EXECUTION OF PLAINTIFF-APPELLEES PROPERTIES SUBJECT OF THE PRESENT CONTROVERSY IS NULL AND VOID; IV. THE TRIAL COURT ERRED IN ORDERING DEFENDANTAPPELLANT TO PAY DAMAGES TO PLAINTIFF-APPELLEE FOR ALLEGED IMPROPER LEVY ON EXECUTION.[29] The CA rendered judgment setting aside and reversing the decision of the RTC on September 20, 2001. The fallo of the decision reads: WHEREFORE, premises considered, the Decision, dated 20 December 1997, of the Regional Trial Court of Paraaque, Branch 260, is hereby REVERSED and SET ASIDE and a new one entered dismissing Civil Case No. 94-0126. SO ORDERED.[30] The CA ruled that the property was presumed to be the conjugal property of Eduardo and Josefina, and that the latter failed to rebut such presumption. It also held that the affidavit of waiver executed by Eduardo was contrary to Article 146 of the New Civil Code and, as such, had no force and effect. Josefina filed a motion for reconsideration of the decision, which was, likewise, denied by the CA. Josefina, now the petitioner, filed the present petition for review, alleging that: A. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THERE EXISTS A CONJUGAL

The court orders the cancellation of whatever entries appearing at the Titles as a result of the enforcement of the writ of execution issued in Civil Case No. 90-3251. SO ORDERED.[28] The trial court held that the property levied by Sheriff Alejo was the sole and exclusive property of Josefina, applying Articles 144, 160, 175 and 485 of the New Civil Code. The trial court also held that MIWCC failed to prove that Eduardo Francisco contributed to the acquisition of the property. MIWCC appealed the decision to the CA in which it alleged that: I. THE TRIAL COURT ERRED IN RULING THAT THE REAL ESTATE PROPERTIES SUBJECT OF THE AUCTION SALE ARE PARAPHERNAL PROPERTIES OWNED BY PLAINTIFFAPPELLEE JOSEFINA FRANCISCO;

PARTNERSHIP BETWEEN PETITIONER AND EDUARDO FRANCISCO; B. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT THE SUBJECT PROPERTIES WERE NOT PARAPHERNAL PROPERTIES OF PETITIONER; C. THE HONORABLE COURT OF APPEALS ERRED IN DISTURBING THE FINDINGS OF FACTS AND CONCLUSION BY THE TRIAL COURT IN ITS DECISION OF DECEMBER 20, 1997, THE SAME BEING IN ACCORDANCE WITH LAW AND JURISPRUDENCE.[31] The threshold issues for resolution are as follows: (a) whether or not the subject property is the conjugal property of Josefina Castillo and Eduardo Francisco; and (b) whether or not the subject properties may be held to answer for the personal obligations of Eduardo. We shall deal with the issues simultaneously as they are closely related. The petitioner asserts that inasmuch as her marriage to Eduardo is void ab initio, there is no occasion that would give rise to a regime of conjugal partnership of gains. The petitioner adds that to rule otherwise would render moot and irrelevant the provisions on the regime of special co-ownership under Articles 147 and 148 of the Family Code of the Philippines, in relation to Article 144 of the New Civil Code. The petitioner avers that since Article 148 of the Family Code governs their property relationship, the respondents must adduce evidence to show that Eduardo actually contributed to the acquisition of the subject properties. The petitioner asserts that she purchased the property before her marriage to Eduardo with her own money without any contribution from him; hence, the subject property is her paraphernal property. Consequently,

such property is not liable for the debts of Eduardo to private respondent MIWCC. The respondents, on the other hand, contend that the appellate court was correct in ruling that the properties are conjugal in nature because there is nothing in the records to support the petitioners uncorroborated claim that the funds she used to purchase the subject properties were her personal funds or came from her mother and sister. The respondents point out that if, as claimed by the petitioner, the subject properties were, indeed, not conjugal in nature, then, there was no need for her to obtain marital (Eduardos) consent when she mortgaged the properties to two different parties sometime in the first quarter of 1986, or after Eduardo executed the affidavit of waiver. We note that the only questions raised in this case are questions of facts. Under Rule 45 of the Rules of Court, only questions of law may be raised in and resolved by the Court. The Court may, however, determine and resolve questions of facts in cases where the findings of facts of the trial court and those of the CA are inconsistent, where highly meritorious circumstances are present, and where it is necessary to give substantial justice to the parties. In the present action, the findings of facts and the conclusions of the trial court and those of the CA are opposite. There is thus an imperative need for the Court to delve into and resolve the factual issues, in tandem with the questions of law raised by the parties. The petition has no merit. The petitioner failed to prove that she acquired the property with her personal funds before her cohabitation with Eduardo and that she is the sole owner of the property. The evidence on record shows that the Imus Bank executed a deed of absolute sale over the property to the petitioner on August 31, 1984 and titles over the property were, thereafter, issued to the latter as vendee on September 4, 1984 after her marriage to Eduardo on January 15, 1983.

We agree with the petitioner that Article 144 of the New Civil Code does not apply in the present case. This Court in Tumlos v. Fernandez[32] held that Article 144 of the New Civil Code applies only to a relationship between a man and a woman who are not incapacitated to marry each other, or to one in which the marriage of the parties is void from the very beginning. It does not apply to a cohabitation that is adulterous or amounts to concubinage, for it would be absurd to create a co-ownership where there exists a prior conjugal partnership or absolute community between the man and his lawful wife. In this case, the petitioner admitted that when she and Eduardo cohabited, the latter was incapacitated to marry her. Article 148 of the Family Code of the Philippines, on which the petitioner anchors her claims, provides as follows: 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 evidences 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 who 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. Indeed, the Family Code has filled the hiatus in Article 144 of the New Civil Code by expressly regulating in Article 148 the

property relations of couples living in a state of adultery or concubinage. Under Article 256 of the Family Code, the law can be applied retroactively if it does not prejudice vested or acquired rights. The petitioner failed to prove that she had any vested right over the property in question.[33] Since the subject property was acquired during the subsistence of the marriage of Eduardo and Carmelita, under normal circumstances, the same should be presumed to be conjugal property.[34] Article 105 of the Family Code of the Philippines provides that the Code shall apply to conjugal partnership established before the code took effect, without prejudice to vested rights already acquired under the New Civil Code or other laws.[35] Thus, even if Eduardo and Carmelita were married before the effectivity of the Family Code of the Philippines, the property still cannot be considered conjugal property because there can only be but one valid existing marriage at any given time.[36] Article 148 of the Family Code also debilitates against the petitioners claim since, according to the said article, a co-ownership may ensue in case of cohabitation where, for instance, one party has a pre-existing valid marriage provided that the parents prove their actual joint contribution of money, property or industry and only to the extent of their proportionate interest thereon.[37] We agree with the findings of the appellate court that the petitioner failed to adduce preponderance of evidence that she contributed money, property or industry in the acquisition of the subject property and, hence, is not a co-owner of the property: First of all, other than plaintiff-appellees bare testimony, there is nothing in the record to support her claim that the funds she used to purchase the subject properties came from her mother and sister. She did not, for instance, present the testimonies of her mother and sister who could have corroborated her claim. Furthermore, in her Affidavit of Third-Party Claim (Exh. C), she stated that the subject properties are my own paraphernal

properties, including the improvements thereon, as such are the fruits of my own exclusive efforts , clearly implying that she used her own money and contradicting her later claim that the funds were provided by her mother and sister. She also stated in her affidavit that she acquired the subject properties before her marriage to Eduardo Francisco on 15 January 1983, a claim later belied by the presentation of the Deed of Absolute Sale clearly indicating that she bought the properties from Imus Rural Bank on 31 August 1984, or one year and seven months after her marriage (Exh. D). In the face of all these contradictions, plaintiff-appellees uncorroborated testimony that she acquired the subject properties with funds provided by her mother and sister should not have been given any weight by the lower court. It is to be noted that plaintiff-appellee got married at the age of 23. At that age, it is doubtful if she had enough funds of her own to purchase the subject properties as she claimed in her Affidavit of Third Party Claim. Confronted with this reality, she later claimed that the funds were provided by her mother and sister, clearly an afterthought in a desperate effort to shield the subject properties from appellant Master Iron as judgment creditor.[38] Aside from her bare claims, the petitioner offered nothing to prove her allegation that she borrowed the amount of P320,000.00 from her mother and her sister, which she paid to the Imus Bank on August 31, 1984 to purchase the subject property. The petitioner even failed to divulge the name of her mother and the sources of her income, if any, and that of her sister. When she testified in Civil Case No. 95-0169, the petitioner declared that she borrowed part of the purchase price of the property from her brother,[39] but failed to divulge the latters name, let alone reveal how much money she borrowed and when. The petitioner even failed to adduce any evidence to prove that her mother and sister had P320,000.00 in 1984, which, considering the times, was then quite a substantial amount. Moreover, the petitioners third-party-claim affidavit stating that the properties are the fruits of my own exclusive

effort before I married Eduardo Francisco belies her testimony in the trial court and in Civil Case No. 95-0169. We note that, as gleaned from the receipt issued by the Imus Bank, the payment for the subject property was drawn via Check No. 002334 and issued by the Commercial Bank of Manila in the amount of P320,000.00.[40] The petitioner failed to testify against whose account the check was drawn and issued, and whether the said account was owned by her and/or Eduardo Francisco or her mother, sister or brother. She even failed to testify whether the check was a managers check and, if so, whose money was used to purchase the same. We also agree with the findings of the CA that the affidavit of waiver executed by Eduardo on February 15, 1985, stating that the property is owned by the petitioner, is barren of probative weight. We are convinced that he executed the said affidavit in anticipation of claims by third parties against him and hold the property liable for the said claims. First, the petitioner failed to prove that she had any savings before her cohabitation with Eduardo. Second, despite Eduardos affidavit of waiver, he nevertheless affixed his marital conformity to the real estate mortgage executed by the petitioner over the property in favor of Leonila on January 13, 1986.[41] Third, the petitioner testified that she borrowed the funds for the purchase of the property from her mother and sister.[42] Fourth, the petitioner testified that Eduardo executed the affidavit of waiver because she discovered that he had a first marriage.[43] Lastly, Eduardo belied the petitioners testimony when he testified that he executed the affidavit of waiver because his mother-in-law and sister-in-law had given the property to the petitioner.[44] IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The Decision of the Court of Appeals reversing the decision of the Regional Trial Court is AFFIRMED. No pronouncement as to costs. SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

[16] Id. at 227. (Exhibit 6) [17] Id. at 229. (Exhibit 8) [18] Id. at 56.

[1] Penned by Associate Justice Wenceslao I. Agnir, Jr. (retired), with Associate Justices Salvador J. Valdez, Jr. and Mariano C. Del Castillo, concurring. [2] Penned by Judge Helen Bautista-Ricafort. [3] TSN, 24 January 1995, pp. 13-14. (Exhibit H) [4] Exhibit D. [5] Exhibit E. [6] Records, pp. 149, 151. (Exhibits A and B) [7] Dorsal portion of TCT Nos. 87976 and 87977. [8] Records, pp. 236-239. (Exhibits 13 to 13-D) [9] Id. at 238. (Exhibit 13-D) [10] Id. at 221. [11] Id. at 222. (Exhibit 2) [12] Id. at 45. [13] Id. at 223. (Exhibit 3) [14] Id. at 224. (Exhibit 4) [15] Id. at 153.

[19] Id. at 19. [20] Id. at 32. [21] Id. at 287-289. [22] TSN, 11 July 1995, p. 15. [23] Id. at 10-12. [24] TSN, 14 July 1995, p. 14. [25] TSN, 11 July 1995, pp. 19-20. [26] Id. at 31. [27] Id. at 29-32. [28] CA Rollo, pp. 41-42. [29] Id. at 21. [30] Rollo, pp. 39-40. [31] Id. at 13. [32] 330 SCRA 718 (2000). [33] Id. at 733. [34] Art. 116. All property acquired during the marriage, whether the acquisition appears to have been made, contracted

or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. [35] Villanueva v. Court of Appeals, G.R. No. 143286, April 14, 2004. [36] Tumlos v. Fernandez, supra. [37] Ibid; Malang v. Moson, 338 SCRA 393 (2000). [38] Rollo, pp. 34-35. [39] Exhibit G-1. [40] Exhibit E. [41] Exhibit 13-D. [42] TSN, 11 July 1995, pp. 11-12. [43] TSN, 30 May 1995, pp. 8-9. [44] TSN, 11 July 1995, pp. 29-30.

SECOND DIVISION [G.R. No. 116668. July 28, 1997] ERLINDA A. AGAPAY, petitioner, vs. CARLINA (CORNELIA) V. PALANG and HERMINIA P. DELA CRUZ, respondents. DECISION ROMERO, J.: Before us is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 24199 entitled Erlinda Agapay v. Carlina (Cornelia) Palang and Herminia P. Dela Cruz dated June 22, 1994 involving the ownership of two parcels of land acquired during the cohabitation of petitioner and private respondents legitimate spouse. Miguel Palang contracted his first marriage on July 16, 1949 when he took private respondent Carlina (or Cornelia) Vallesterol as a wife at the Pozorrubio Roman Catholic Church in Pangasinan. A few months after the wedding, in October 1949, he left to work in Hawaii. Miguel and Carlinas only child, Herminia Palang, was born on May 12, 1950. Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and during the entire duration of his year-long sojourn he stayed in Zambales with his brother, not in Pangasinan with his wife and child. The trial court found evidence that as early as 1957, Miguel had attempted to divorce Carlina in Hawaii.xvi[1] When he returned for good in 1972, he refused to live with private respondents, but stayed alone in a house in Pozorrubio, Pangasinan. On July 15, 1973, the then sixty-three-year-old Miguel contracted his second marriage with nineteen-year-old Erlinda Agapay, herein petitioner.xvi[2] Two months earlier, on May 17, 1973, Miguel and Erlinda, as evidenced by the Deed of Sale,

jointly purchased a parcel of agricultural land located at San Felipe, Binalonan, Pangasinan with an area of 10,080 square meters. Consequently, Transfer Certificate of Title No. 101736 covering said rice land was issued in their names. A house and lot in Binalonan, Pangasinan was likewise purchased on September 23, 1975, allegedly by Erlinda as the sole vendee. TCT No. 143120 covering said property was later issued in her name. On October 30, 1975, Miguel and Cornelia Palang executed a Deed of Donation as a form of compromise agreement to settle and end a case filed by the latter.xvi[3] The parties therein agreed to donate their conjugal property consisting of six parcels of land to their only child, Herminia Palang.xvi[4] Miguel and Erlindas cohabitation produced a son, Kristopher A. Palang, born on December 6, 1977. In 1979, Miguel and Erlinda were convicted of Concubinage upon Carlinas complaint.xvi[5] Two years later, on February 15, 1981, Miguel died. On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz, herein private respondents, instituted the case at bar, an action for recovery of ownership and possession with damages against petitioner before the Regional Trial Court in Urdaneta, Pangasinan (Civil Case No. U-4265). Private respondents sought to get back the riceland and the house and lot both located at Binalonan, Pangasinan allegedly purchased by Miguel during his cohabitation with petitioner. Petitioner, as defendant below, contended that while the riceland covered by TCT No. 101736 is registered in their names (Miguel and Erlinda), she had already given her half of the property to their son Kristopher Palang. She added that the house and lot covered by TCT No. 143120 is her sole property, having bought the same with her own money. Erlinda added that Carlina is precluded from claiming aforesaid properties

since the latter had already donated their conjugal estate to Herminia. After trial on the merits, the lower court rendered its decision on June 30, 1989 dismissing the complaint after declaring that there was little evidence to prove that the subject properties pertained to the conjugal property of Carlina and Miguel Palang. The lower court went on to provide for the intestate shares of the parties, particularly of Kristopher Palang, Miguels illegitimate son. The dispositive portion of the decision reads: WHEREFORE, premises considered, judgment is hereby rendered1) Dismissing the complaint, with costs against plaintiffs;

5)

No pronouncement as to damages and attorneys fees.

SO ORDERED.xvi[6] On appeal, respondent court reversed the trial courts decision. The Court of Appeals rendered its decision on July 22, 1994 with the following dispositive portion: WHEREFORE, PREMISES CONSIDERED, the appealed decision is hereby REVERSED and another one entered: 1. Declaring plaintiffs-appellants the owners of the properties in question; 2. Ordering defendant-appellee to vacate and deliver the properties in question to herein plaintiffs-appellants; 3. Ordering the Register of Deeds of Pangasinan to cancel Transfer Certificate of Title Nos. 143120 and 101736 and to issue in lieu thereof another certificate of title in the name of plaintiffs-appellants. No pronouncement as to costs.xvi[7] Hence, this petition. Petitioner claims that the Court of Appeals erred in not sustaining the validity of two deeds of absolute sale covering the riceland and the house and lot, the first in favor of Miguel Palang and Erlinda Agapay and the second, in favor of Erlinda Agapay alone. Second, petitioner contends that respondent appellate court erred in not declaring Kristopher A. Palang as Miguel Palangs illegitimate son and thus entitled to inherit from Miguels estate. Third, respondent court erred, according to petitioner, in not finding that there is sufficient pleading and evidence that Kristoffer A. Palang or Christopher A. Palang should be considered as party-defendant in Civil Case No. U4625 before the trial court and in CA-G.R. No. 24199.xvi[8]

2) Confirming the ownership of defendant Erlinda Agapay of the residential lot located at Poblacion, Binalonan, Pangasinan, as evidenced by TCT No. 143120, Lot 290-B including the old house standing therein; 3) Confirming the ownership of one-half (1/2) portion of that piece of agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan, consisting of 10,080 square meters and as evidenced by TCT No. 101736, Lot 1123-A to Erlinda Agapay; 4) Adjudicating to Kristopher Palang as his inheritance from his deceased father, Miguel Palang, the one-half (1/2) of the agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan, under TCT No. 101736 in the name of Miguel Palang, provided that the former (Kristopher) executes, within 15 days after this decision becomes final and executory, a quitclaim forever renouncing any claims to annul/reduce the donation to Herminia Palang de la Cruz of all conjugal properties of her parents, Miguel Palang and Carlina Vallesterol Palang, dated October 30, 1975, otherwise, the estate of deceased Miguel Palang will have to be settled in another separate action;

After studying the merits of the instant case, as well as the pertinent provisions of law and jurisprudence, the Court denies the petition and affirms the questioned decision of the Court of Appeals. The first and principal issue is the ownership of the two pieces of property subject of this action. Petitioner assails the validity of the deeds of conveyance over the same parcels of land. There is no dispute that the transfers of ownership from the original owners of the riceland and the house and lot, Corazon Ilomin and the spouses Cespedes, respectively, were valid. The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. The provision of law applicable here is Article 148 of the Family Code providing for cases of cohabitation when a man and a woman who are not capacitated to marry each other live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage. While Miguel and Erlinda contracted marriage on July 15, 1973, said union was patently void because the earlier marriage of Miguel and Carlina was still susbsisting and unaffected by the latters de facto separation. Under Article 148, 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. It must be stressed that actual contribution is required by this provision, in contrast to Article 147 which states that efforts in the care and maintenance of the family and household, are regarded as contributions to the acquisition of common property by one who has no salary or income or work or industry. If the actual contribution of the party is not proved, there will be no coownership and no presumption of equal shares.xvi[9] In the case at bar, Erlinda tried to establish by her testimony that she is engaged in the business of buy and sell and had a sari-sari storexvi[10] but failed to persuade us that she actually

contributed money to buy the subject riceland. Worth noting is the fact that on the date of conveyance, May 17, 1973, petitioner was only around twenty years of age and Miguel Palang was already sixty-four and a pensioner of the U.S. Government. Considering her youthfulness, it is unrealistic to conclude that in 1973 she contributed P3,750.00 as her share in the purchase price of subject property,xvi[11] there being no proof of the same. Petitioner now claims that the riceland was bought two months before Miguel and Erlinda actually cohabited. In the nature of an afterthought, said added assertion was intended to exclude their case from the operation of Article 148 of the Family Code. Proof of the precise date when they commenced their adulterous cohabitation not having been adduced, we cannot state definitively that the riceland was purchased even before they started living together. In any case, even assuming that the subject property was bought before cohabitation, the rules of coownership would still apply and proof of actual contribution would still be essential. Since petitioner failed to prove that she contributed money to the purchase price of the riceland in Binalonan, Pangasinan, we find no basis to justify her co-ownership with Miguel over the same. Consequently, the riceland should, as correctly held by the Court of Appeals, revert to the conjugal partnership property of the deceased Miguel and private respondent Carlina Palang. Furthermore, it is immaterial that Miguel and Carlina previously agreed to donate their conjugal property in favor of their daughter Herminia in 1975. The trial court erred in holding that the decision adopting their compromise agreement in effect partakes the nature of judicial confirmation of the separation of property between spouses and the termination of the conjugal partnership.xvi[12] Separation of property between spouses during the marriage shall not take place except by judicial order or without judicial conferment when there is an express stipulation in the marriage settlements.xvi[13] The judgment

which resulted from the parties compromise was not specifically and expressly for separation of property and should not be so inferred. With respect to the house and lot, Erlinda allegedly bought the same for P20,000.00 on September 23, 1975 when she was only 22 years old. The testimony of the notary public who prepared the deed of conveyance for the property reveals the falsehood of this claim. Atty. Constantino Sagun testified that Miguel Palang provided the money for the purchase price and directed that Erlindas name alone be placed as the vendee.xvi[14] The transaction was properly a donation made by Miguel to Erlinda, but one which was clearly void and inexistent by express provision of law because it was made between persons guilty of adultery or concubinage at the time of the donation, under Article 739 of the Civil Code. Moreover, Article 87 of the Family Code expressly provides that the prohibition against donations between spouses now applies to donations between persons living together as husband and wife without a valid marriage,xvi[15] for otherwise, the condition of those who incurred guilt would turn out to be better than those in legal union.xvi[16] The second issue concerning Kristopher Palangs status and claim as an illegitimate son and heir to Miguels estate is here resolved in favor of respondent courts correct assessment that the trial court erred in making pronouncements regarding Kristophers heirship and filiation inasmuch as questions as to who are the heirs of the decedent, proof of filiation of illegitimate children and the determination of the estate of the latter and claims thereto should be ventilated in the proper probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in the instant ordinary civil action which is for recovery of ownership and possession.xvi[17]

As regards the third issue, petitioner contends that Kristopher Palang should be considered as party-defendant in the case at bar following the trial courts decision which expressly found that Kristopher had not been impleaded as party defendant but theorized that he had submitted to the courts jurisdiction through his mother/guardian ad litem.xvi[18] The trial court erred gravely. Kristopher, not having been impleaded, was, therefore, not a party to the case at bar. His mother, Erlinda, cannot be called his guardian ad litem for he was not involved in the case at bar. Petitioner adds that there is no need for Kristopher to file another action to prove that he is the illegitimate son of Miguel, in order to avoid multiplicity of suits.xvi[19] Petitioners grave error has been discussed in the preceeding paragraph where the need for probate proceedings to resolve the settlement of Miguels estate and Kristophers successional rights has been pointed out. WHEREFORE, the instant petition is hereby DENIED. The questioned decision of the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED. Regalado, (Chairman), Puno, and Mendoza, JJ., concur. Torres, Jr., J., on leave.

Rosalia Arroyo, for sixteen (16) years in a relationship akin to that of husband and wife. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-50127-28 March 30, 1979 VICTOR JUANIZA, Heirs of Josefa P. Leus etc., et al., plaintiffs and appellees, vs. EUGENIO JOSE, THE ECONOMIC INSURANCE COMPANY, INC., and ROSALIA ARROYO, defendants and appellants. Victoriano O. Javier and Ricardo A. Fabros, Jr. for appellees. Luis Viscocho and Francisco E. Rodrigo, Jr. for appellants. In the resulting cages for damages filed in the Court of First Instance of Laguna, decision was rendered, the dispositive part of which reads as follows: (4) In Civil Case No. SP-867 ordering defendants Eugenio Jose and Rosalia Arroyo jointly and severally to pay plaintiff Victor Juaniza the sum of P1,600.00 plus legal interest from date of complaint until fully paid and costs of suit; (5) In Civil Case No. SP-872, ordering defendants Eugenio Jose and Rosalia Arroyo jointly and severally to pay the respective heirs of the deceased Josefa P. Leus, Fausto Retrita, Nestor del Rosario Aonuevo and Arceli de la Cueva in the sum of P12,000.00 for the life of each of said deceased, with legal interest from date of complaint, and costs of suit. (pp. 47-48, Rello). Motion for reconsideration was filed by Rosalia Arroyo praying that the decision be reconsidered insofar as it condemns her to pay damages jointly and severally with her co-defendant, but was denied. The lower court based her liability on the provision of Article 144 of the Civil Code which reads: When a man and woman driving together as husband and wife, but they are not married, or their marriage is void from the beginning, the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on coownership. Rosalia Arroyo then filed her appeal with the Court of Appeals which, as previously stated, certified the same to Us, the

DE CASTRO, J.: This case was certified by the Court of Appeals to this Court on the ground that the questions raised in the appeal of the decision of the Court of First Instance of Laguna are purely questions of law. Eugenio Jose was the registered owner and operator of the passenger jeepney involved in an accident of collision with a freight train of the Philippine National Railways that took place on November 23, 1969 which resulted in the death to seven (7) and physical injuries to five (5) of its passengers. At the time of the accident, Eugenio Jose was legally married to Socorro Ramos but had been cohabiting with defendant-appellant,

question raised being purely legal as may be seen from the lone assigned error as follows: The lower court erred in holding defendantappellant Rosalia Arroyo liable 'for damages resulting from the death and physical injuries suffered by the passengers' of the jeepney registered in the name of Eugenio Jose, on the erroneous theory that Eugenio Jose and Rosalia Arroyo, having lived together as husband and wife, without the benefit of marriage, are co- owners of said jeepney. (p. 2, Appellant's Brief). The issues thus to be resolved are as follows: (1) whether or not Article 144 of the Civil Code is applicable in a case where one of the parties in a common-law relationship is incapacitated to marry, and (2) whether or not Rosalia who is not a registered owner of the jeepney can be held jointly and severally liable for damages with the registered owner of the same. It has been consistently ruled by this Court that the coownership contemplated in Article 144 of the Civil Code requires that the man and the woman living together must not in any way be incapacitated to contract marriage. (Camporedondo vs. Aznar, L-11483, February 4, 1958, 102 Phil. 1055, 1068; Osmea vs. Rodriguez, 54 OG 5526; Malajacan vs. Rubi, 42 OG 5576). Since Eugenio Jose is legally married to Socorro Ramos, there is an impediment for him to contract marriage with Rosalia Arroyo. Under the aforecited provision of the Civil Code, Arroyo cannot be a co-owner of the jeepney. The jeepney belongs to the conjugal partnership of Jose and his legal wife. There is therefore no basis for the liability of Arroyo for damages arising from the death of, and physical injuries suffered by, the passengers of the jeepney which figured in the collision. Rosalia Arroyo, who is not the registered owner of the jeepney can neither be liable for damages caused by its operation. It is settled in our jurisprudence that only the registered owner of a

public service vehicle is responsible for damages that may arise from consequences incident to its operation, or maybe caused to any of the passengers therein. (De Peralta vs. Mangusang, L18110, July 31, 1964, 11 SCRA 598; Tamayo vs. Aquino, L-12634 and L-12720, May 29, 1959; Roque vs. Malibay Transit, L-8561, November 18,1955; Montoya vs. Ignacio, L-5868, December 29, 1953). WHEREFORE, in view of the foregoing, Rosalia Arroyo is hereby declared free from any liability for damages and the appealed decision is hereby modified accordingly. No costs. Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and Melencio-Herrera, JJ., concur.

REINSTATED. Costs against the private respondents."xvi[3] The assailed Order of the RTC disposed as follows: Supr-ema THIRD DIVISION [G.R. No. 137650. April 12, 2000] GUILLERMA TUMLOS, petitioner, vs. SPOUSES MARIO FERNANDEZ and LOURDES FERNANDEZ, respondents. DECISION PANGANIBAN, J.: Under Article 148 of the Family Code, a man and a woman who are not legally capacitated to marry each other, but who nonetheless live together conjugally, may be deemed co-owners of a property acquired during the cohabitation only upon proof that each made an actual contribution to its acquisition. Hence, mere cohabitation without proof of contribution will not result in a co-ownership. The Case Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the November 19, 1998 Decision of the Court of Appealsxvi[1] (CA), which reversed the October 7, 1997 Order of the Regional Trial Court (RTC).xvi[2] The dispositive part of the CA Decision reads: Jur-is "WHEREFORE, the instant petition is GRANTED, and the questioned orders of the court a quo dated October 7, 1997 and November 11, 1997, are hereby REVERSED and SET ASIDE. The judgment of the court a quo dated June 5, 1997 is hereby "Wherefore, the decision of this Court rendered on June 5, 1997 affirming in toto the appealed judgment of the [MTC] is hereby reconsidered and a new one is entered reversing said decision of the [MTC] and dismissing the complaint in the aboveentitled case."xvi[4] Petitioner also assails the February 14, 1999 CA Resolution denying the Motion for Reconsideration. The Facts The Court of Appeals narrates the facts as follows: "[Herein respondents] were the plaintiffs in Civil Case No. 6756, an action for ejectment filed before Branch 82 of the MTC of Valenzuela, Metro Manila against [herein Petitioner] Guillerma Tumlos, Toto Tumlos, and Gina Tumlos. In their complaint dated July 5, 1996, the said spouses alleged that they are the absolute owners of an apartment building located at ARTE SUBDIVISION III, Lawang Bato, Valenzuela, Metro Manila; that through tolerance they had allowed the defendants-private respondents to occupy the apartment building for the last seven (7) years, since 1989, without the payment of any rent; that it was agreed upon that after a few months, defendant Guillerma Tumlos will pay P1,600.00 a month while the other defendants promised to pay P1,000.00 a month, both as rental, which agreement was not complied with by the said defendants; that they have demanded

several times [that] the defendants x x x vacate the premises, as they are in need of the property for the construction of a new building; and that they have also demanded payment of P84,000.00 from Toto and Gina Tumlos representing rentals for seven (7) years and payment of P143,600.00 from Guillerma Tumlos as unpaid rentals for seven (7) years, but the said demands went unheeded. They then prayed that the defendants be ordered to vacate the property in question and to pay the stated unpaid rentals, as well as to jointly pay P30,000.00 in attorneys fees. "[Petitioner] Guillerma Tumlos was the only one who filed an answer to the complaint. She averred therein that the Fernandez spouses had no cause of action against her, since she is a co-owner of the subject premises as evidenced by a Contract to Sell wherein it was stated that she is a co-vendee of the property in question together with [Respondent] Mario Fernandez. She then asked for the dismissal of the complaint. "After an unfruitful preliminary conference on November 15, 1996, the MTC required the parties to submit their affidavits and other evidence on the factual issues defined in their pleadings within ten (10) days from receipt of such order, pursuant to section 9 of the Revised Rule on Summary Procedure. [Petitioner] Guillerma Tumlos submitted her affidavit/position paper on November 29, 1996, while the [respondents] filed their position paper on December 5, 1996, attaching thereto their marriage contract, letters of demand to the defendants, and the Contract to Sell over the disputed property. The MTC thereafter promulgated its judgment on January 22, 1997[.]Scs-daad

xxxxxxxxx "Upon appeal to the [RTC], [petitioner and the two other] defendants alleged in their memorandum on appeal that [Respondent] Mario Fernandez and [Petitioner] Guillerma had an amorous relationship, and that they acquired the property in question as their love nest. It was further alleged that they lived together in the said apartment building with their two (2) children for around ten(10) years, and that Guillerma administered the property by collecting rentals from the lessees of the other apartments, until she discovered that [Respondent Mario] deceived her as to the annulment of his marriage. It was also during the early part of 1996 when [Respondent Mario] accused her of being unfaithful and demonstrated his baseless [jealousy]. "In the same memorandum, [petitioner and the two other] defendants further averred that it was only recently that Toto Tumlos was temporarily accommodated in one of the rooms of the subject premises while Gina Tumlos acted as a nanny for the children. In short, their presence there [was] only transient and they [were] not tenants of the Fernandez spouses. "On June 5, 1997, the [RTC] rendered a decision affirming in toto the judgment of the MTC. S-daad "The [petitioner and the two other defendants] seasonably filed a motion for reconsideration on July 3, 1997, alleging that the decision of affirmance by the RTC was constitutionally flawed for failing to point out distinctly and clearly the findings of facts and law on which it was based vis-vis the statements of issues they have raised in

their memorandum on appeal. They also averred that the Contract to Sell presented by the plaintiffs which named the buyer as Mario P. Fernandez, of legal age, married to Lourdes P. Fernandez, should not be given credence as it was falsified to appear that way. According to them, the Contract to Sell originally named Guillerma Fernandez as the spouse of [Respondent Mario]. As found by the [RTC] in its judgment, a new Contract to Sell was issued by the sellers naming the [respondents] as the buyers after the latter presented their marriage contract and requested a change in the name of the vendee-wife. Such facts necessitate the conclusion that Guillerma was really a co-owner thereof, and that the [respondents] manipulated the evidence in order to deprive her of her rights to enjoy and use the property as recognized by law. Sd-aamiso xxxxxxxxx "The [RTC], in determining the question of ownership in order to resolve the issue of possession, ruled therein that the Contract to Sell submitted by the Fernandez spouses appeared not to be authentic, as there was an alteration in the name of the wife of [Respondent] Mario Fernandez. Hence, the contract presented by the [respondents] cannot be given any weight. The court further ruled that Guillerma and [Respondent Mario] acquired the property during their cohabitation as husband and wife, although without the benefit of marriage. From such findings, the court concluded that [Petitioner] Guillerma Tumlos was a co-owner of the subject property and could not be ejected therefrom.

"The [respondents] then filed a motion for reconsideration of the order of reversal, but the same was denied by the [RTC]."xvi[5] As earlier stated, the CA reversed the RTC. Hence, this Petition filed by Guillerma Tumlos only.xvi[6] Ruling of the Court of Appeals The CA rejected petitioners claim that she and Respondent Mario Fernandez were co-owners of the disputed property. The CA ruled: Scnc-m "From the inception of the instant case, the only defense presented by private respondent Guillerma is her right as a co-owner of the subject property[.] xxxxxxxxx This claim of co-ownership was not satisfactorily proven by Guillerma, as correctly held by the trial court. No other evidence was presented to validate such claim, except for the said affidavit/position paper. As previously stated, it was only on appeal that Guillerma alleged that she cohabited with the petitioner-husband without the benefit of marriage, and that she bore him two (2) children. Attached to her memorandum on appeal are the birth certificates of the said children. Such contentions and documents should not have been considered by the x x x (RTC), as they were not presented in her affidavit/position paper before the trial court (MTC). xxxxxxxxx

"However, even if the said allegations and documents could be considered, the claim of coownership must still fail. As [herein Respondent] Mario Fernandez is validly married to [Respondent] Lourdes Fernandez (as per Marriage Contract dated April 27, 1968, p. 45, Original Record), Guillerma and Mario are not capacitated to marry each other. Thus, the property relations governing their supposed cohabitation is that found in Article 148 of Executive Order No. 209, as amended, otherwise known as the Family Code of the Philippines[.] xxxxxxxxx "It is clear that actual contribution is required by this provision, in contrast to Article 147 of the Family Code which states that efforts in the care and maintenance of the family and household are regarded as contributions to the acquisition of common property by one who has no salary or income or work or industry (Agapay v. Palang, 276 SCRA 340). The care given by one party [to] the home, children, and household, or spiritual or moral inspiration provided to the other, is not included in Article 148 (Handbook on the Family Code of the Philippines by Alicia V. Sempio-Diy, 1988 ed., p. 209). Hence, if actual contribution of the party is not proved, there will be no coownership and no presumption of equal shares (Agapay, supra at p. 348, citing Commentaries and Jurisprudence on the Civil Code of the Philippines Volume I by Arturo M. Tolentino, 1990 ed., p. 500). "In the instant case, no proof of actual contribution by Guillerma Tumlos in the purchase of the subject property was presented. Her only

evidence was her being named in the Contract to Sell as the wife of [Respondent] Mario Fernandez. Since she failed to prove that she contributed money to the purchase price of the subject apartment building, We find no basis to justify her co-ownership with [Respondent Mario]. The said property is thus presumed to belong to the conjugal partnership property of Mario and Lourdes Fernandez, it being acquired during the subsistence of their marriage and there being no other proof to the contrary (please see Article 116 of the Family Code). "The court a quo (RTC) also found that [Respondent Mario] has two (2) children with Guillerma who are in her custody, and that to eject them from the apartment building would be to run counter with the obligation of the former to give support to his minor illegitimate children, which indispensably includes dwelling. As previously discussed, such finding has no leg to stand on, it being based on evidence presented for the first time on appeal. Nc-mmis xxxxxxxxx "Even assuming arguendo that the said evidence was validly presented, the RTC failed to consider that the need for support cannot be presumed. Article 203 of the Family Code expressly provides that the obligation to give support shall be demandable from the time the person who has a right to receive the same needs it for maintenance, but it shall not be paid except from the date of judicial or extrajudicial demand. x x x. Nc-m "In contrast to the clear pronouncement of the Supreme Court, the RTC instead presumed that

Guillerma and her children needed support from [Respondent Mario]. Worse, it relied on evidence not properly presented before the trial court (MTC). "With regard to the other [defendants], Gina and Toto Tumlos, a close perusal of the records shows that they did not file any responsive pleading. Hence, judgment may be rendered against them as may be warranted by the facts alleged in the complaint and limited to what is prayed for therein, as provided for in Section 6 of the Revised Rules on Summary Procedure. There was no basis for the public respondent to dismiss the complaint against them."xvi[7] (emphasis in the original) Oldmiso The Issues In her Memorandum, petitioner submits the following issues for the consideration of the Court: "I. The Court of Appeals gravely erred and abused its discretion in not outrightly dismissing the petition for review filed by respondents. "II. The Court of Appeals erred in finding that petitioner is not the co-owner of the property in litis. "III. Corollary thereto, the Court of Appeals erred in applying Art. 148 of the Family Code in the case at bar. Man-ikan "IV. The Court of Appeals erred in disregarding the substantive right of support vis--vis the remedy of ejectment resorted to by respondents."xvi[8]

In resolving this case, we shall answer two questions: (a) Is the petitioner a co-owner of the property? (b) Can the claim for support bar this ejectment suit? We shall also discuss these preliminary matters: (a) whether the CA was biased in favor of respondents and (b) whether the MTC had jurisdiction over the ejectment suit. Manik-s The Courts Ruling The Petition has no merit. Preliminary Matters Petitioner submits that the CA exhibited partiality in favor of herein respondents. This bias, she argues, is manifest in the following: Man-ikx 1. The CA considered the respondents Petition for Reviewxvi[9] despite their failure to attach several pleadings as well as the explanation for the proof of service, despite the clear mandate of Section 11xvi[10] of Rule 13 of the Revised Rules of Court and despite the ruling in Solar Team Entertainment, Inc. v. Ricafort.xvi[11] 2. It allowed respondents to submit the pleadings that were not attached. 3. It considered respondents Reply dated May 20, 1998, which had allegedly been filed out of time. Ne-xold 4. It declared that the case was submitted for decision without first determining whether to give due course to the Petition, pursuant to Section 6, Rule 42 of the Rules of Court.xvi[12] The CA, for its part, succinctly dismissed these arguments in this wise: Mi-so

"It is too late in the day now to question the alleged procedural error after we have rendered the decision. More importantly, when the private respondent filed their comment to the petition on April 26, 1998, they failed to question such alleged procedural error. Neither have they questioned all the resolutions issued by the Court after their filing of such comment. They should, therefore, be now considered in estoppel to question the same."xvi[13] We agree with the appellate court. Petitioner never raised these matters before the CA. She cannot be allowed now to challenge its Decision on grounds of alleged technicalities being belatedly raised as an afterthought. In this light, she cannot invoke Solarxvi[14] because she never raised this issue before the CA. Spp-edjo More important, we find it quite sanctimonious indeed on petitioners part to rely, on the one hand, on these procedural technicalities to overcome the appealed Decision and, on the other hand, assert that the RTC may consider the new evidence she presented for the first time on appeal. Such posturing only betrays the futility of petitioners assertion, if not its absence of merit. One other preliminary matter. Petitioner implies that the court of origin, the Municipal Trial Court (MTC), did not have jurisdiction over the "nature of the case," alleging that the real question involved is one of ownership. Since the issue of possession cannot be settled without passing upon that of ownership, she maintains that the MTC should have dismissed the case. Josp-ped This contention is erroneous. The issue of ownership may be passed upon by the MTC to settle the issue of possession.xvi[15] Such disposition, however, is not final insofar as the issue of

ownership is concerned,xvi[16] which may be the subject of another proceeding brought specifically to settle that question. Having resolved these preliminary matters, we now move on to petitioners substantive contentions. Spped First Issue: Petitioner as Co-owner Petitioners central theory and main defense against respondents action for ejectment is her claim of co-ownership over the property with Respondent Mario Fernandez. At the first instance before the MTC, she presented a Contract to Sell indicating that she was his spouse. The MTC found this document insufficient to support her claim. The RTC, however, after considering her allegation that she had been cohabiting with Mario Fernandez as shown by evidence presented before it,xvi[17] ruled in her favor. Misspped On the other hand, the CA held that the pieces of evidence adduced before the RTC could no longer be considered because they had not been submitted before the MTC. Hence, the appellate court concluded that "[t]he claim of co-ownership was not satisfactorily proven x x x."xvi[18] We agree with the petitioner that the RTC did not err in considering the evidence presented before it. Nonetheless, we reject her claim that she was a co-owner of the disputed property. Missc Evidence Presented on Appeal Before the RTC In ruling that the RTC erred in considering on appeal the evidence presented by petitioner, the CA relied on the doctrine that issues not raised during trial could not be considered for the first time during appeal.xvi[19] We disagree. In the first place, there were no new matters or issues belatedly raised during the appeal before the RTC. The

defense invoked by petitioner at the very start was that she was a co-owner. To support her claim, she presented a Contract to Sell dated November 14, 1986, which stated that Mario Fernandez was legally married to her. The allegation that she was cohabiting with him was a mere elaboration of her initial theory. In the second place, procedural rules are generally premised on considerations of fair play. Respondents never objected when the assailed evidence was presented before the RTC. Thus, they cannot claim unfair surprise or prejudice. Scmis Petitioner Not a Co-Owner Under Article 144 of the Civil Code Even considering the evidence presented before the MTC and the RTC, we cannot accept petitioners submission that she is a co-owner of the disputed property pursuant to Article 144 of the Civil Code.xvi[20] As correctly held by the CA, the applicable law is not Article 144 of the Civil Code, but Article 148 of the Family Code which provides: "Art. 148. In cases of cohabitation not falling under the preceding Article,xvi[21] 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 evidences 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 who 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." Sc Article 144 of the Civil Code applies only to a relationship between a man and a woman who are not incapacitated to marry each other,xvi[22] or to one in which the marriage of the parties is voidxvi[23] from the beginning.xvi[24] It does not apply to a cohabitation that amounts to adultery or concubinage, for it would be absurd to create a co-ownership where there exists a prior conjugal partnership or absolute community between the man and his lawful wife.xvi[25] Based on evidence presented by respondents, as well as those submitted by petitioner herself before the RTC, it is clear that Mario Fernandez was incapacitated to marry petitioner because he was legally married to Lourdes Fernandez. It is also clear that, as readily admitted by petitioner, she cohabited with Mario in a state of concubinage. Therefore, Article 144 of the Civil Code is inapplicable. As stated above, the relationship between petitioner and Respondent Mario Fernandez is governed by Article 148 of the Family Code. Justice Alicia V. Sempio-Diy points outxvi[26] that "[t]he Family Code has filled the hiatus in Article 144 of the Civil Code by expressly regulating in its Article 148 the property relations of couples living in a state of adultery or concubinage." x-sc Hence, petitioners argument -- that the Family Code is inapplicable because the cohabitation and the acquisition of the property occurred before its effectivity -- deserves scant consideration. Suffice it to say that the law itself states that it can be applied retroactively if it does not prejudice vested or acquired rights.xvi[27] In this case, petitioner failed to show any vested right over the property in question. Moreover, to resolve

similar issues, we have applied Article 148 of the Family Code retroactively.xvi[28] No Evidence of Actual Joint Contribution Another consideration militates against petitioners claim that she is a co-owner of the property. In Agapay,xvi[29] the Court ruled: "Under Article 148, 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. It must be stressed that the actual contribution is required by this provision, in contrast to Article 147 which states that efforts in the care and maintenance of the family and household, are regarded as contributions to the acquisition of common property by one who has no salary or income or work or industry. If the actual contribution of the party is not proved, there will be no co-ownership and no presumption of equal shares." (emphasis ours) xl-aw In this case, petitioner fails to present any evidence that she had made an actual contribution to purchase the subject property. Indeed, she anchors her claim of co-ownership merely on her cohabitation with Respondent Mario Fernandez. Likewise, her claim of having administered the property during the cohabitation is unsubstantiated. In any event, this fact by itself does not justify her claim, for nothing in Article 148 of the Family Code provides that the administration of the property amounts to a contribution in its acquisition. Clearly, there is no basis for petitioners claim of co-ownership. The property in question belongs to the conjugal partnership of

respondents. Hence, the MTC and the CA were correct in ordering the ejectment of petitioner from the premises. Sc-lex Second Issue: Support versus Ejectment Petitioner contends that since Respondent Mario Fernandez failed to repudiate her claim regarding the filiation of his alleged sons, Mark Gil and Michael Fernandez, his silence on the matter amounts to an admission. Arguing that Mario is liable for support, she advances the theory that the childrens right to support, which necessarily includes shelter, prevails over the right of respondents to eject her. We disagree. It should be emphasized that this is an ejectment suit whereby respondents seek to exercise their possessory right over their property. It is summary in character and deals solely with the issue of possession of the property in dispute. Here, it has been shown that they have a better right to possess it than does the petitioner, whose right to possess is based merely on their tolerance. Scl-aw Moreover, Respondent Mario Fernandez alleged failure to repudiate petitioners claim of filiation is not relevant to the present case. Indeed, it would be highly improper for us to rule on such issue. Besides, it was not properly taken up below.xvi[30] In any event, Article 298xvi[31] of the Civil Code requires that there should be an extrajudicial demand.xvi[32] None was made here. The CA was correct when it said: "Even assuming arguendo that the said evidence was validly presented, the RTC failed to consider that the need for support cannot be presumed. Article [298] of the [New Civil Code] expressly provides that the obligation to give support shall be demandable from the time the person who has a right to receive the same need it for maintenance, but it shall not be paid except from

the date of judicial and extrajudicial demand."xvi[33] WHEREFORE, the Petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioner. Rtc-spped SO ORDERED. Melo, (Chairman), Purisima, and Gonzaga-Reyes, JJ., concur. Vitug, J., abroad-on official business.