Joaquin v. Avellana
REITERATIONFacts
The Antecedents: Leocadio Joaquin (plaintiff-appellant) levied an attachment on certain property. The property in question was a leasehold interest in land and a house constructed thereon. Agustina Brillo, wife of Tan Tongco, entered into the contract of lease and constructed the house while married to Tan Tongco. The defendant-appellee, Lamberto Avellana, later purchased the house from a receiver. Procedural History: A former appeal in this case is reported in 6 Phil. Rep., 551. Upon a new trial, the evidence was directed to whether Tan Tongco had rights in the property when the plaintiff's attachment was levied and whether he had lost those rights. The court below rendered a judgment, which is now being appealed. The Petition: The plaintiff-appellant seeks a declaration that he acquired all the interests of Tan Tongco and his wife in the leasehold and house through a sale under execution, and that he is entitled to have his certificate of sale filed in the office of the registrar of deeds. He also sought the cancellation of the deed made by the receiver in favor of the defendant.
Issue(s)
Whether the leasehold interest and the house constructed thereon were conjugal property at the time of the plaintiff's attachment. Whether the presumption under Article 1407 of the Civil Code was overcome by the evidence presented by the defendant. Whether the rights of Tan Tongco and his wife in the lease had ceased. Whether the plaintiff is entitled to have his certificate of sale filed in the office of the registrar of deeds. Whether the plaintiff is entitled to the cancellation of the deed made by the receiver in favor of the defendant.
Ruling
The Supreme Court reversed the judgment of the court below. It declared that the plaintiff, by the sale under execution, acquired all the interests of Tan Tongco and his wife in the leasehold and the house, and that such leasehold interest still existed at the time of the sale. The Court further declared that the plaintiff is entitled to have the certificate of sale filed in the office of the registrar of titles of the city of Manila. The relief sought for the cancellation of the deed made by the receiver in favor of the defendant was denied.
Ratio Decidendi
On whether the leasehold interest and the house were conjugal property: The Court held that by the provisions of article 1407 of the Civil Code, both the contract of lease and the house constructed were presumptively the property of the conjugal partnership, as Agustina Brillo was the wife of Tan Tongco when she made the contract and constructed the house. This presumption is established by law and applies to property acquired during the marriage. On whether the presumption was overcome: The Court found that the evidence presented by the defendant, namely, the permit given by the city authorities to Agustina Brillo for construction and a notarial act wherein she declared the land leased and the house erected with her own money, was insufficient to overcome the presumption. The permit did not prove she used her own money, and the notarial act, being a statement made out of court by a person not a party to the action, was incompetent evidence against the plaintiff. The defendant should have presented Agustina Brillo as a witness to testify directly. On whether the rights of the lessees had ceased: The Court found that the only evidence presented by the defendant on this point was his own testimony that he deducted from the purchase price the amount of rent owing by the lessees. This only proved that the rent then owing by them had been paid, not that their rights had terminated. On the entitlement to file the certificate of sale: The Court affirmed that the plaintiff, as the purchaser at the execution sale, is entitled to have his certificate of sale filed in the office of the registrar of land titles, as provided by section 463 of the Code of Procedure relating to the sale of real property on execution. This filing would likely lead to a marginal note on the records relating to the property. On the cancellation of the deed: The Court denied the cancellation of the deed made by the receiver in favor of the defendant. The plaintiff's only document was the certificate of sale, which indicated the property was subject to redemption within one year. Without evidence that the redemption period had expired without redemption, or that a deed had been executed by the sheriff after such expiration, cancellation could not be granted. Furthermore, if the defendant had redeemed the property, the deed would be valid.
Main Doctrine
The leasehold interest and the house constructed thereon during the marriage are presumed to be conjugal property under Article 1407 of the Civil Code, and are therefore liable for the debts of the husband. The presumption can only be overcome by clear and convincing evidence that the property was acquired with the wife's separate funds.