8 dewara vs. lamela

9/7/2015 SUPREME COURT REPORTS ANNOTATED VOLUME 647

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G.R. No. 179010.April 11, 2011.*

ELENITA M. DEWARA, represented by her AttorneyinFact, FERDINAND MAGALLANES, petitioner, vs.SPOUSES RONNIE AND GINA LAMELA and STENILEALVERO, respondents.

Civil Law; Conjugal Partnership; All property of the marriageis presumed to belong to the conjugal partnership, unless it beproved that it pertains exclusively to the husband or to the wife.Registration in the name of the husband or the wife alone does notdestroy this presumption. The separationinfact between thehusband and the wife without judicial approval shall not affectthe conjugal partnership.All property of the marriage ispresumed to belong to the conjugal partnership, unless it beproved that it pertains exclusively to the husband or to the wife.Registration in the name of the husband or the wife alone doesnot destroy this presumption. The separationinfact between thehusband and the wife without judicial approval shall not affectthe conjugal partnership. The lot retains its conjugal nature.Moreover, the presumption of conjugal ownership applies evenwhen the manner in which the property was acquired does notappear. The use of the conjugal funds is not an essentialrequirement for the presumption to arise.

Evidence; Burden of Proof; The presumption that the propertyis conjugal property may be rebutted only by strong, clear,categorical, and convincing evidencethere must be strict proof ofthe exclusive ownership of one of the spouses, and burden of proofrests upon the party asserting it.There is no dispute that thesubject property was acquired by spouses Elenita and Eduardoduring their marriage. It is also undisputed that their maritalrelations are governed by the conjugal partnership of gains, sincethey were married before the enactment of the Family Code andthey did not execute any prenuptial agreement as to theirproperty relations. Thus, the legal presumption of the conjugalnature of the property applies to the lot in question. Thepresumption that the property is conjugal property may berebutted only by strong, clear, categorical, and convincing



evidencethere must be strict proof of the exclusive ownership of

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*SECOND DIVISION.

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484 SUPREME COURT REPORTS ANNOTATED

Dewara vs. Lamela

one of the spouses, and the burden of proof rests upon the partyasserting it.

PETITION for review on certiorari of the decision andresolution of the Court of Appeals.

The facts are stated in the opinion of the Court. Omar Francis P. Monteverde for petitioner. Solomon A. Lobrido, Jr. for respondents. Jan Anthony G. Saril collaborating counsel for

respondents.

NACHURA,J.:Before the Court is a petition for review on certiorari

under Rule 45 of the Rules of Court, assailing the Decision1dated November 6, 2006 and the Resolution2 dated July 10,2007 of the Court of Appeals (CA) in CAG.R. CV No.64936, which reversed and set aside the Decision3 datedSeptember 2, 1999 of the Regional Trial Court (RTC),Branch 54, Bacolod City, in Civil Case No. 937942.

The Facts

Eduardo Dewara (Eduardo) and petitioner ElenitaMagallanes Dewara (Elenita) were married before theenactment of the Family Code. Thus, the Civil Codegoverned their marital relations. Husband and wife wereseparatedinfact because Elenita went to work inCalifornia, United States of America, while Eduardo stayedin Bacolod City.

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1Penned by Associate Justice Agustin S. Dizon, with Associate Justices



Pampio A. Abarintos and Priscilla BaltazarPadilla, concurring; Rollo, pp.2735.

2Id., at pp. 3738.3Penned by Judge Demosthenes L. Magallanes; CA Rollo, pp. 1520.

485

VOL. 647, APRIL 11, 2011 485Dewara vs. Lamela

On January 20, 1985, Eduardo, while driving a privatejeep registered in the name of Elenita,4 hit respondentRonnie Lamela (Ronnie). Ronnie filed a criminal case forserious physical injuries through reckless imprudence5against Eduardo before the Municipal Trial Court in Cities(MTCC), Branch IV, Bacolod City. The MTCC foundEduardo guilty of the charge and sentenced him to sufferthe penalty of imprisonment of two (2) months and one (1)day to (3) months, and to pay civil indemnity of SixtyTwoThousand Five Hundred NinetyEight Pesos and SeventyCentavos (P62,598.70) as actual damages and TenThousand Pesos (P10,000.00) as moral damages. Onappeal, the RTC6 affirmed the decision of the MTCC7 and itbecame final and executory.8

The writ of execution on the civil liability was served onEduardo, but it was returned unsatisfied because he had noproperty in his name. Ronnie requested the City Sheriff,respondent Stenile Alvero, to levy on Lot No. 234C, Psd.26667 of the Bacolod Cadastre, with an area of OneThousand Four Hundred Forty (1,440) square meters (sqm), under Transfer Certificate of Title (TCT) No. T80054,in the name of ELENITA M. DEWARA, of legal age,Filipino, married to Eduardo Dewara, and resident ofBacolod City, to satisfy the judgment on the civil liabilityof Eduardo. The City Sheriff served a notice of embargo onthe title of the lot and subsequently sold the lot in a publicauction. In the execution sale, there were no interestedbuyers other than Ronnie. The City Sheriff issued acertificate of sale to spouses Ronnie and Gina

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4RTC records, p. 254.5The case was entitled People of the Philippines v. Eduardo Dewara,

which was docketed as Criminal Case No. 43719 in the MTCC and



Criminal Case No. 7155 in the RTC.6RTC decision in Criminal Case No. 7155; RTC records, pp. 178180.7MTCC decision in Criminal Case No. 43719; id., at pp. 254262.8Supra note 1, at p. 28.

486

486 SUPREME COURT REPORTS ANNOTATEDDewara vs. Lamela

Lamela to satisfy the civil liability in the decision againstEduardo.9 Ronnie then caused the consolidation of title in aCadastral Proceeding before the RTC, which ordered thecancellation of TCT No. T80054 in the name of Elenita andthe issuance of a new certificate of title in the name ofrespondent spouses.10

The levy on execution, public auction, issuance ofcertificate of sale, and cancellation of title of the lot in thename of Elenita were done while Elenita was working inCalifornia.11 Thus, Elenita, represented by her attorneyinfact, Ferdinand Magallanes, filed a case for annulment ofsale and for damages against respondent spouses and exofficio sheriff Stenile Alvero before the RTC of BacolodCity. Petitioner claimed that the levy on execution of LotNo. 234C was illegal because the said property was herparaphernal or exclusive property and could not be made toanswer for the personal liability of her husband.Furthermore, as the registered owner of the property, shereceived no notice of the execution sale. She sought theannulment of the sale and the annulment of the issuance ofthe new TCT in the name of respondent spouses.12

On the other hand, respondent spouses averred that thesubject lot was the conjugal property of petitioner Elenitaand Eduardo. They asserted that the property wasacquired by Elenita during her marriage to Eduardo; thatthe property was acquired with the money of Eduardobecause, at the time of the acquisition of the property,Elenita was a plain housewife; that the jeep involved in theaccident was registered in the name of petitioner; and thatElenita did not interpose any objection pending the levy onexecution of the property.13

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9 Id., at pp. 2829.



10Id., at p. 29.11Id.12CA Rollo, p. 15.13Id., at p. 16.

487


On September 2, 1999, the RTC rendered a decision infavor of petitioner, the fallo of which reads:

WHEREFORE, judgment is hereby rendered in favor of the[petitioner] and against the [respondents]:

1.The levy on execution on Lot No. 234C of the Bacolod Cadastrecovered by TCT No. 80054 in the name of [petitioner] Elenita M.Dewara, the public auction of the property, and the consolidationof the title and issuance of new TCT No. 167403 in the name of[respondent] Ronnie Lamela, are hereby declared null and void;

2.The Register of Deeds of Bacolod City is ordered to cancel TCTNo. 167403 in the name of [respondent] Ronnie Lamela and TCTNo. 80054 be reinstated or a new one issued in the name of[petitioner] Elenita M. Dewara;

3.There is no pronouncement on damages with cost de officio.SO ORDERED.14

The RTC declared that said property was paraphernal innature. It arrived at this conclusion by tracing how Elenitaacquired the subject property. Based on the documentaryevidence submitted, Elenitas grandfather, ExequielMagallanes, originally owned Lot No. 234C. Upon hisdemise, his children, Jesus (Elenitas father), Salud, andConcepcion, inherited the property, each entitled to a shareequal to onethird (1/3) of the total area of the land. Theywere issued a new title (TCT No. T17541) for the property.On July 6, 1966, petitioners aunt, Salud, executed a waiverof rights duly registered with the Office of the Register ofDeeds under Entry No. 76392, thereby waiving her rightsand participation over her 1/3 share of the property in favorof her siblings, Jesus and Concepcion. The two siblingsthen became the owners of the property, each owning onehalf (1/2) of the property. Jesus subsequently sold his shareto his daughter,



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14Id., at p. 20.

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Elenita, for the sum of Five Thousand Pesos (P5,000.00),based on the deed of sale dated March 26, 1975. The deedof sale was duly registered with the Register of Deedsunder Entry No. 76393. Concepcion also sold her share toher niece, Elenita, for the sum of Ten Thousand Pesos(P10,000.00), based on the deed of sale dated April 29,1975, which was duly registered with the Register of Deedsunder Entry No. 76394. By virtue of the sale transactions,TCT No. T17541 was cancelled and a new title, TCT No. T80054, was issued in the name of Elenita.15

The RTC gave credence to the testimony of Elenita onthe circumstances surrounding the sale of the property.First, it was sold to her by her father and her aunt so thatthe family would remain on the lot. Second, the minimaland inadequate consideration for the 1,440 sq m propertywas for the purpose of helping her expand her capital inher business at the time. Thus, the sale was essentially adonation and was therefore gratuitous in character.16

Having declared that the property was the paraphernalproperty of Elenita, the RTC ruled that the civil liability ofEduardo, which was personal to him, could not be chargedto the exclusive property of his wife.17

On appeal, the CA reversed the decision of the RTC. Thedispositive portion of the Decision reads:

WHEREFORE, in view of all the foregoing, the instant appealis GRANTED. The assailed decision of the Regional Trial Courtof Bacolod City, Branch 54, dated September 2, 1999, in CivilCase No. 937942 is hereby REVERSED and SET ASIDE, and anew Decision is entered DISMISSING the complaint for lack ofmerit. Let a copy of this Decision be furnished to the Office of theRegister of Deeds of Bacolod City, Negros Occidental [which] ishereby ordered to cancel Transfer Certificate of Title No. T80054 or any

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15Rollo, pp. 3031; id., at p. 17.16CA Rollo, p. 18.17Id.

489


transfer certificate of title covering Lot No. 234C issued in thename of Elenita M. Dewara, and reinstate Transfer Certificate ofTitle No. 167403 or issue a new transfer certificate of titlecovering Lot No. 234C in the name of Ronnie Lamela. Nopronouncement as to costs.

SO ORDERED.18

In reversing the decision of the RTC, the CA elucidatedthat the gross inadequacy of the price alone does not affecta contract of sale, except that it may indicate a defect in theconsent, or that the parties really intended a donation orsome other act or contract. Except for the assertions ofElenita, there was nothing in the records that wouldindicate a defect in Jesus and Concepcion Magallanesconsent to the sale.19 The CA ruled that Elenita andEduardo acquired the property by onerous title duringtheir marriage through their common fund. Thus, itbelonged to the conjugal partnership of gains and might belevied upon to answer for civil liabilities adjudged againstEduardo.20

Hence, this petition.

The Issue

The sole issue for resolution is whether the subjectproperty is the paraphernal/exclusive property of Elenita orthe conjugal property of spouses Elenita and Eduardo.

The answer to this question will define whether theproperty may be subject to levy and execution sale toanswer for the civil liability adjudged against Eduardo inthe criminal case for serious physical injuries, whichjudgment had already attained finality.

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18Rollo, pp. 3435.19Id., at p. 32.



20Id., at pp. 3233.

490


The Ruling of the CourtAll property of the marriage is presumed to belong to the

conjugal partnership, unless it be proved that it pertainsexclusively to the husband or to the wife.21 Registration inthe name of the husband or the wife alone does not destroythis presumption.22 The separationinfact between thehusband and the wife without judicial approval shall notaffect the conjugal partnership. The lot retains its conjugalnature.23 Moreover, the presumption of conjugal ownershipapplies even when the manner in which the property wasacquired does not appear. The use of the conjugal funds isnot an essential requirement for the presumption toarise.24

There is no dispute that the subject property wasacquired by spouses Elenita and Eduardo during theirmarriage. It is also undisputed that their marital relationsare governed by the conjugal partnership of gains, sincethey were married before the enactment of the Family Codeand they did not execute any prenuptial agreement as totheir property relations. Thus, the legal presumption of theconjugal nature of the property applies to the lot inquestion. The presumption that the property is conjugalproperty may be rebutted only by strong, clear, categorical,and convincing evidencethere must be strict proof of theexclusive ownership of one of the spouses, and the burdenof proof rests upon the party asserting it.25

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21CIVIL CODE, Art. 160; Villanueva v. Chiong, G.R. No. 159889, June 5,2008, 554 SCRA 197, 203.

22Bucoy v. Paulino, et al., 131 Phil. 790, 800; 23 SCRA 248, 257 (1968).23CIVIL CODE, Art. 178; Villanueva v. Chiong, supra, at 202.24 Metropolitan Bank and Trust Co. v. Pascual, G.R. No. 163744,

February 29, 2008, 547 SCRA 246, 256257.25Coja v. Court of Appeals, G.R. No. 151153, December 10, 2007, 539

SCRA 517, 528.



491


Aside from the assertions of Elenita that the sale of theproperty by her father and her aunt was in the nature of adonation because of the alleged gross disparity between theactual value of the property and the monetaryconsideration for the sale, there is no other evidence thatwould convince this Court of the paraphernal character ofthe property. Elenita proffered no evidence of the marketvalue or assessed value of the subject property in 1975.Thus, we agree with the CA that Elenita has notsufficiently proven that the prices involved in the sales inquestion were so inadequate for the Court to reach aconclusion that the transfers were in the nature of adonation rather than a sale.

Furthermore, gross inadequacy of the price does notaffect a contract of sale, except as it may indicate a defectin the consent, or that the parties really intended adonation or some other act or contract.26 The records arebereft of proof that the consent of petitioners father andher aunt were vitiated or that, in reality, they intended thesale to be a donation or some other contract. Inadequacy ofthe price per se will not rule out the transaction as one ofsale; the price must be grossly inadequate or shocking tothe conscience, such that the mind would revolt at it andsuch that a reasonable man would neither directly norindirectly consent to it.27

However, even after having declared that Lot No. 234Cis the conjugal property of spouses Elenita and Eduardo, itdoes not necessarily follow that it may automatically belevied upon in an execution to answer for debts,obligations, fines, or indemnities of one of the spouses.Before debts and obligations may be charged against theconjugal partnership, it must be shown that the same werecontracted for, or the debts and obligations should haveredounded to, the benefit of the conjugal partnership. Finesand pecuniary indemnities

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26CIVIL CODE, Art. 1470.



27Acabal v. Acabal, 494 Phil. 528, 545; 454 SCRA 555, 573 (2005).

492


imposed upon the husband or the wife, as a rule, may notbe charged to the partnership. However, if the spouse whois bound should have no exclusive property or if theproperty should be insufficient, the fines and indemnitiesmay be enforced upon the partnership assets only after theresponsibilities enumerated in Article 161 of the Civil Codehave been covered.

In this case, it is just and proper that Ronnie becompensated for the serious physical injuries he suffered. Itshould be remembered that even though the vehicle thathit Ronnie was registered in the name of Elenita, she wasnot made a party in the said criminal case. Thus, she maynot be compelled to answer for Eduardos liability.Nevertheless, their conjugal partnership property may beheld accountable for it since Eduardo has no property in hisname. The payment of indemnity adjudged by the RTC ofBacolod City in Criminal Case No. 7155 in favor of Ronniemay be enforced against the partnership assets of spousesElenita and Eduardo after the responsibilities enumeratedunder Article 161 of the Civil Code have been covered. Thisremedy is provided for under Article 163 of the Civil Code,viz.:

Art.163.The payment of debts contracted by the husbandor the wife before the marriage shall not be charged to theconjugal partnership.

Neither shall the fines and pecuniary indemnitiesimposed upon them be charged to the partnership.

However, the payment of debts contracted by the husband orthe wife before the marriage, and that of fines and indemnitiesimposed upon them, may be enforced against thepartnership assets after the responsibilities enumerated inArticle 161 have been covered, if the spouse who is boundshould have no exclusive property or if it should beinsufficient; but at the time of the liquidation of the partnershipsuch spouse shall be charged for what has been paid for thepurposes abovementioned.28



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28Emphasis supplied.

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Article 161 of the Civil Code enumerates the obligationswhich the conjugal partnership may be held answerable,viz.:

Art.161.The conjugal partnership shall be liable for:(1)All debts and obligations contracted by the husband for

the benefit of the conjugal partnership, and those contracted bythe wife, also for the same purpose, in the cases where she maylegally bind the partnership;

(2)Arrears or income due, during the marriage, fromobligations which constitute a charge upon property of eitherspouse or of the partnership;

(3)Minor repairs or for mere preservation made during themarriage upon the separate property of either the husband or thewife; major repairs shall not be charged to the partnership;

(4)Major or minor repairs upon the conjugal partnershipproperty;

(5)The maintenance of the family and the education of thechildren of both the husband and wife, and of legitimate childrenof one of the spouses;

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

The enumeration abovelisted should first be compliedwith before the conjugal partnership may be held to answerfor the liability adjudged against Eduardo.

Finally, the indemnity imposed against Eduardo shallearn an interest at the rate of twelve percent per annum, inaccordance with our ruling in Eastern Shipping Lines, Inc.v. Court of Appeals.29

WHEREFORE, in view of the foregoing, the Decisiondated November 6, 2006 and the Resolution dated July 10,2007 of the Court of Appeals in CAG.R. CV No. 64936 arehereby ANNULLED and SET ASIDE. The decision datedSeptember 2, 1999 of the Regional Trial Court of BacolodCity in Civil



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29G.R. No. 97412, July 12, 1994, 234 SCRA 78.

494


Case No. 937942 is hereby REINSTATED WITHMODIFICATION that the conjugal properties of spousesElenita Dewara and Eduardo Dewara shall be held toanswer for the judgment of SeventyTwo Thousand FiveHundred NinetyEight Pesos and Seventy Centavos(P72,598.70), plus an interest rate of twelve (12) percentper annum from the date of finality of the decision of theRegional Trial Court of Bacolod City in Criminal Case No.7155, after complying with the provisions of Article 161 ofthe Civil Code.

SO ORDERED.

Carpio (Chairperson), Peralta, Abad and Mendoza, JJ.,concur.

Judgment and resolution annulled and set aside.

Note.If proof obtains on the acquisition of theproperty during the existence of the marriage, then thepresumption of conjugal ownership applies, but when thereis no showing as to when the property was acquired by thespouse, the fact that a title is in the name of the spouse isan indication that the property belongs exclusively to saidspouse. (Metropolitan Bank and Trust Co. vs. Pascual, 547SCRA 246 [2008])

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8 dewara vs. lamela

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