Abing v. Waeyan
REITERATIONFacts
The Antecedents: Petitioner John Abing and respondent Juliet Waeyan lived together as husband and wife without the benefit of marriage from 1986 to 1995. During their cohabitation, they acquired a 2-storey residential house and later renovated it, annexing a structure that housed a sari-sari store. Juliet left for overseas employment in December 1991 and sent money to John, which was deposited in their joint account. The annex structure and sari-sari store were constructed in 1992 while Juliet was still abroad. Upon Juliet's return in 1994, she managed the sari-sari store. In 1995, they decided to partition their properties and executed an unsigned Memorandum of Agreement where John would leave the dwelling, and Juliet would pay him P428,870.00 for his share. Juliet paid P232,397.66 as partial payment but failed to pay the balance of P196,472.34. Procedural History: John filed an ejectment suit against Juliet, claiming exclusive ownership of the annex structure and sari-sari store, alleging he solely funded its construction. The Municipal Trial Court (MTC) ruled in favor of John, ordering Juliet's eviction. The Regional Trial Court (RTC) affirmed the MTC decision. The Court of Appeals (CA) reversed the RTC decision, holding that the property was owned in common by John and Juliet and that Juliet was entitled to possess it. The CA also stated that John's cause of action should have been for a sum of money. The Petition: John filed a petition for review, arguing that the CA erred in not giving effect to the unsigned Memorandum of Agreement, in holding that the subject premises were owned in common, and in ruling that the parties should settle their common properties in a separate action for partition.
Issue(s)
Whether the unsigned Memorandum of Agreement is binding between the parties. Whether the annex structure housing the sari-sari store is owned exclusively by the petitioner. Whether ejectment is the proper remedy for the petitioner.
Ruling
The Supreme Court affirmed the Court of Appeals' decision in reversing the RTC and MTC, ruling that the annex structure and sari-sari store are owned in common by John and Juliet. However, the Court modified the CA's ruling by giving effect to the unsigned Memorandum of Agreement, stating that Juliet's failure to pay the balance due to John could give rise to an action for a sum of money or rescission, but not ejectment. The petition was denied.
Ratio Decidendi
On the binding effect of the unsigned Memorandum of Agreement: The Court disagreed with the CA's ruling that the Memorandum of Agreement was entirely without binding effect due to being unsigned by the parties. It noted that Juliet had already made a partial payment of P232,397.66 in fulfillment of the agreement, and the document was signed by witnesses. This partial performance indicated an acknowledgment of the agreement's terms by both parties, thus giving it some legal force. However, the Court clarified that Juliet's failure to pay the remaining balance could not be a basis for ejectment, but rather for a suit for a sum of money or rescission of the agreement. On the exclusive ownership of the annex structure: The Court found that John failed to present sufficient evidence to prove his exclusive ownership of the annex structure and sari-sari store. His claim that he solely funded the construction through his own money and borrowings was unsubstantiated. The Court noted the lack of details regarding the alleged borrowings and the questionable timing of a P30,000.00 loan presented as evidence. Furthermore, tax declarations were held not to be conclusive proof of ownership. Applying Article 147 of the Family Code, which governs property relations of common-law spouses, the Court held that in the absence of proof to the contrary, properties acquired during cohabitation are presumed to be owned in equal shares through joint efforts. On the propriety of ejectment: The Court affirmed the CA's ruling that ejectment was not the proper remedy. While a co-owner may bring an action for ejectment against another co-owner who asserts exclusive possession, John failed to establish exclusive ownership. Juliet's possession was not by virtue of any contract, nor was it obtained through force, intimidation, threat, strategy, or stealth. As a co-owner, she was entitled to possess and enjoy the property. Therefore, John's recourse should have been for the recovery of the unpaid balance of his share, not for ejectment.
Main Doctrine
In a common-law relationship, property acquired through joint efforts is owned in common, and a co-owner cannot be ejected from the property. Failure to pay a balance under an unsigned memorandum of agreement for property partition may give rise to an action for a sum of money or rescission, but not ejectment.