Tarrosa v. De Leon
REITERATIONFacts
The Antecedents: Bonifacio O. De Leon entered into a Conditional Contract to Sell with PHHC for a lot on July 20, 1965, while single. He married Anita B. De Leon on April 24, 1968. Bonifacio fully paid the lot on June 22, 1970, and a Final Deed of Sale was executed in his favor. TCT No. 173677 was issued in his name on February 24, 1972, stating he was 'single.' On January 12, 1974, Bonifacio sold the lot to his sister, Lita, and her husband, Felix Rio Tarrosa (petitioners), via a Deed of Sale, which did not bear Anita's written consent. Bonifacio and Anita renewed their vows in a church wedding on May 23, 1977. Bonifacio died on February 29, 1996. Three months later, the Tarrosas registered the Deed of Sale and obtained TCT No. N-173911 in their names. Danilo and Vilma, children of Bonifacio and Anita, filed a Notice of Adverse Claim, followed by a reconveyance suit, alleging fraud in the execution of the Deed of Sale and that Bonifacio still considered himself owner. Procedural History: The RTC ruled in favor of Anita and her children, declaring the Deed of Sale void ab initio, ordering the cancellation of TCT No. N-173911 and restoration of TCT No. 173677, and awarding damages, attorney's fees, and costs. The CA affirmed the RTC's decision regarding the voidness of the sale but deleted the awards for damages, attorney's fees, and costs. The Tarrosas' motion for reconsideration was denied. The Petition: Petitioners assail the CA's decision, arguing that the land was Bonifacio's exclusive property, not conjugal, and that the cited cases were inapplicable. They question the CA's affirmation of the RTC's findings regarding the lack of proof of exclusive acquisition and the non-vesting of Bonifacio's share due to absence of liquidation.
Issue(s)
Whether the Court of Appeals gravely erred in concluding that the land purchased on installment by Bonifacio O. De Leon before marriage, although some installments were paid during the marriage, is conjugal and not his exclusive property. Whether the Court of Appeals gravely erred in ruling that the Lorenzo, et al. vs. Nicolas, et al., and Alvarez vs. Espiritu cases do not apply in the case at bar because in the latter the land involved is not a friar land unlike in the former. Whether the Court of Appeals gravely erred in affirming the decision of the trial court a quo which ruled that petitioners did not adduce any proof that the property was acquired solely by the efforts of Bonifacio O. De Leon. Whether the Court of Appeals gravely erred in affirming the decision of the trial court which ruled that one-half (1/2) of the conjugal assets do not vest to Bonifacio O. De Leon because of the absence of liquidation.
Ruling
The petition is denied. The Court of Appeals Decision is affirmed. The Deed of Sale dated January 12, 1974, is declared void ab initio. The Register of Deeds is directed to cancel TCT No. N-173911 and restore TCT No. 173677 in the name of Bonifacio O. De Leon. The share of Bonifacio after liquidation should be liable to reimburse the Tarrosas for the PhP 19,000 paid.
Ratio Decidendi
On the conjugal nature of the property: The Court reiterated that under Article 160 of the Civil Code, all property of the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or wife. For this presumption to arise, proof of acquisition during the marriage is sufficient; it is not even necessary to prove acquisition with funds of the partnership. In this case, ownership of the lot only passed to Bonifacio upon full payment of the purchase price on June 22, 1970, which was during his marriage to Anita (April 24, 1968). Therefore, the property was acquired during the marriage and is presumed conjugal. The registration of the title in Bonifacio's name as 'single' does not overcome this presumption, as the material factor is the time of acquisition. The burden of proof to rebut this presumption rests on the party asserting exclusive ownership, and the petitioners failed to provide strong, clear, categorical, and convincing evidence. On the applicability of cited cases: The Court distinguished the cited cases of Lorenzo v. Nicolas and Alvarez v. Espiritu from the present case. Those cases involved friar lands governed by Act No. 1120, where equitable and beneficial title could pass upon the first installment payment. The disputed property in this case is not friar land, making the specific provisions and legislative intent of Act No. 1120 inapplicable. Therefore, the principles applied in those cases do not govern the acquisition of the lot from PHHC. On the lack of proof of exclusive acquisition: The Court affirmed the lower courts' finding that the petitioners failed to adduce proof that the property was acquired solely by Bonifacio's efforts. The presumption of conjugality under Article 160 of the Civil Code stands unrebutted. The fact that Bonifacio brought the land into the marriage, even as a possessor under a conditional contract, does not make it exclusive property, especially since the title was issued and full payment was made during the marriage. The absence of evidence on the source of funding further necessitates the application of the presumption in favor of the plaintiffs. On the vesting of interest prior to liquidation: The Court agreed with the CA that the sale of one-half of the conjugal property without liquidation of the partnership is void. Prior to liquidation, the interest of each spouse in the conjugal assets is merely inchoate, a mere expectancy, which does not ripen into a legal or equitable estate until after liquidation and settlement of conjugal obligations. Thus, the right of a spouse to one-half of the conjugal assets does not vest until the dissolution and liquidation of the partnership. Even if Bonifacio intended to sell only his share, the sale is theoretically void because his right to one-half of the conjugal assets had not yet vested.
Main Doctrine
A property acquired under a conditional contract to sell, where ownership vests only upon full payment of the purchase price, is considered conjugal if the full payment and transfer of title occurred during the marriage, even if the contract was entered into before the marriage. The sale of conjugal property by the husband without the wife's consent is void ab initio. The interest of each spouse in conjugal assets is inchoate until liquidation.