Mere cohabitation

When a man and a woman co-habit without the benefit of marriage, perhaps because one of them is already married, are all properties acquired by them during their cohabitation owned in common? If not, what properties are owned in common? These are the questions answered in this case of Betty and Danny.

Sometime in 1978, Betty and Danny met each other through a common friend. At that time Danny was already married, although not happily because his wife was a heavy gambler. Hence, that meeting with Betty blossomed into a romantic relationship, ultimately resulting in the birth of a son on Oct. 12, 1979.

Initially, Betty lived with her parents but in 1983, she left her parents and decided to co-habit with Danny in a property located in Project 4, Quezon City registered in the name of “Danny married to Betty” under TCT No. 30324. Later, Betty and their son transferred to another property also in Project 4, Quezon City registered in the name of “Danny, married to Betty” under TCT No. 335193. Finally, they again transferred and co-habited at Don Enrique Heights subdivision, QC, registered in the name of “Danny married to Betty” covered by TCT No. 90232. Danny practically co-habited with Betty and their son almost 24 hours, although he would go home to his legal wife in the wee hours of the morning.

In 1991, however, their relationship turned sour and they decided to part ways. By that time, two other properties had been acquired during their co-habitation, one located in Teachers Village, QC, registered in the name of “Danny married to Betty” under TCT No RT-38264, and another one located in Cubao, registered in the name of “Spouses Danny and Betty.” In 1998, Danny and Betty agreed to divide the five properties acquired during their co-habitation with two properties, one in Project 4 and the other in Don Enrique Heights, going to Betty, while the three others will go to Danny. They also agreed to terminate their business partnership in a manpower services corporation where Betty had a 3.33 percent share.

This partition, however, was not consummated because Betty demanded more but Danny refused. Feeling aggrieved, Betty filed a complaint for judicial partition of all the five properties acquired during their co-habitation worth P15.5 million. She claimed that they were acquired from the income of the manpower services company which she and Danny established.

Danny, on the other hand, denied said claim. He testified that the properties were purchased with his personal funds, salaries, dividends and commissions. He countered that said properties were registered in his name together with Betty only to exclude the same from the property regime with his legal wife and to prevent their possible dissipation since his legal wife was a heavy gambler.

After trial, the Regional Trial Court (RTC) dismissed Betty’s petition. The RTC ruled that Betty failed to prove she was a co-owner of those properties, citing her own admission that the properties were acquired not from her own personal funds but from the income of the manpower services company where she owned a measly 3.33 percent share. Was the RTC correct?

Yes. In an action for partition, the existence of co-ownership must first be established. And the burden of proving the same by preponderance of evidence lies on the party filing the action – Betty in this case.

Indeed, as Justice Arturo D. Brion in his concurring opinion said, under Article 148 of the Family Code, only the properties acquired by both parties during their co-habitation through their actual contribution of money, property or industry shall be owned in common, in proportion to their respective contribution. Thus, mere co-habitation without proof of contribution will not result in co-ownership. Proof of actual contribution must be established by clear evidence, showing that the party either used his or her own money or that he/she actually contributed his or her own money to purchase the property. This fact may be proven in the form of bank account statements and bank transactions as well as testimonial evidence proving the financial capacity of the party to purchase the property or to contribute to the purchase of the property.

In this case, Betty did not present any evidence showing that the funds, or a portion of said funds, used in the purchase of the subject properties came from her own earnings. On the contrary, she presented contradictory evidence when she admitted that the funds used to purchase the subject properties came from the income of the manpower business which she managed and in which she only had 3.33 percent share. Thus, in the absence of a clear showing of co-ownership of said properties, Betty’s action for judicial partition has no legal basis. Danny is really the sole owner of the disputed properties (Lacbayan vs. Samoy, Jr., G.R. 165427, March 21, 2011, 645 SCRA, 677).