Inapplicable presumption

Under the law (Article 160 0f the Family Code) all property of the marriage are presumed to belong to the conjugal partnership. But for the presumption to apply it must first be proved that the property was acquired during the marriage. Is it enough proof if the property is registered in the name of the wife “married to” somebody whose name is also specified? This is the question resolved in this case of Ana.

The case concerns a 277 square meter parcel of residential land together with the improvements thereon originally registered in the name of Ana “married to Antero” under Transfer Certificate of Title No. N-3215. On May 7, 1996, Ana mortgaged the property to a company (ACS Inc.) to secure a loan of P250,000 which she obtained from ACS payable on July 7, 1996.

Unable to pay the loan, Ana was referred by a friend to Gina, to help her prevent the foreclosure of the property. Gina agreed to settle Ana’s outstanding obligation to ACS and to extend an additional P50,000 loan to Ana. To pay back her obligations to Gina, Ana agreed to the use of the property as collateral for a loan which Gina will obtain from a bank (BPI).

Hence on November 4, 1997 Ana executed a notarized Deed of Absolute Sale over the property in favor of Gina for a consideration of P600,000. By virtue of said Deed, TCT No. N-3215 was cancelled a new TCT (No. 337834) was issued in Gina’s name. Then, on November 26, 1997 Gina constituted a real estate mortgage over the said property in favor of the bank as collateral for a loan totaling P1.2 million.

Meantime, on March 3, 1998, Ana filed an Affidavit of Adverse Claim asserting that she was still the true and lawful owner of the property because the Deed of Sale dated November 4, 1997 which Gina used in procuring her title was only simulated. On the other hand, when Gina also failed to pay her loan with the bank, the latter caused the extrajudicial foreclosure of the mortgage over the property. As the highest bidder at the public auction, the bank later consolidated ownership over the property and acquired a new title (No. 415392) in its name.

On May 18, 1998 Ana and her son Al filed a suit before the Regional Trial Court (RTC), for the annulment of the Deed of Sale dated November 4, 1997 in Gina’s favor, and for re-conveyance of subject property with damages. Later on, they also included the bank as additional defendant for being a mortgagee in bad faith. Ana claimed that subject property was conjugal property as it was purchased during the marriage. In fact she asserted tha it was registered in her name “married to Antero”. And while the mortgage first executed in favor of ACS was without the consent of the husband Antero, it was only because the latter was already dead, she further alleged. Ana also claimed that the November 4, 1997 Deed of Sale in Gina’s favor was simulated because she was led into believing that the transfer was necessary for the loan that Gina would obtain from the bank.

On December 18, 2007, the RTC ruled in favor of Ana and her son finding that the property was conjugal in nature and that therefore the November 4, 1997, Deed of Sale Ana executed in Gina’s favor was void. Was the RTC correct?

No. While it is presumed that all the property of the marriage belongs to the conjugal partnership, proof of acquisition during the marriage is an essential condition for the operation of the presumption. In this case, the record is bereft of any evidence proving that the property was acquired during the marriage between Ana and Antero except Ana’s bare and uncorroborated assertion that the property was purchased when she was already married as shown by the fact that the title was in her name “married to Antero”.

The phrase “married to” is merely descriptive of the civil status of the wife and cannot be interpreted to mean that the husband is also a registered owner. Because it is likewise possible that the property was acquired by the wife while she was still single and registered only after their marriage; neither would registration thereof in said manner constitute proof that the same was acquired during the marriage and therefore presumed conjugal in nature. Since there is no showing as to when the property in question was acquired, the fact that the title is in the name of the wife alone is determinative of its nature as paraphernal, i.e belonging exclusively to said spouse.

So, the RTC is not correct in declaring as void, the November 4, 1997 Deed of Sale executed by Ana in Gina’s favor. This is the ruling in the case of De La Pena vs. Avila,  G.R. 187490 February 8, 2012, 665 SCRA 553, citing Ruiz vs. CA, 410 SCRA 410).

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