Atienza vs. De Castro

Article 148 of the Family Code, requiring proof of actual joint contribution of money, property, or industry for co-ownership, governs the property relations of couples in adulterous relationships, applying retroactively even if the cohabitation and acquisition occurred before the Code's effectivity.

Petitioner Lupo Atienza, a married man, hired respondent Yolanda de Castro as an accountant in 1983, and they subsequently cohabited, producing two children. After their separation, Atienza demanded partition of a Bel-Air subdivision property registered in De Castro's name, claiming it was acquired using his exclusive funds during their union.

• The Cohabitation: Petitioner Lupo Atienza, then President and General Manager of two corporations and validly married to another woman, hired respondent Yolanda de Castro as accountant in 1983. They began living together as common-law husband and wife later that year and had two children before separating.
• The Property Acquisition: In 1987, a parcel of land with improvements in Bel-Air Subdivision, Makati City, covered by TCT No. 147828, was acquired and registered solely in De Castro’s name.
• The Demand to Partition: After their separation and upon learning that De Castro allowed her new live-in partner to reside in the property, Atienza demanded partition. He alleged the property was purchased with his exclusive funds without his knowledge or consent that the title would be solely in De Castro’s name. De Castro countered that she purchased the property for ₱2,600,000.00 using her own savings and earnings as a businesswoman engaged in foreign currency trading, money lending, and jewelry retail.

• Applicability of Civil Code: Petitioner argued that Article 144 of the Civil Code governs, under which he is deemed a co-owner regardless of whether he contributed to the acquisition of the property.
• Default Co-ownership Rules: Petitioner maintained that under Article 484 of the Civil Code, property acquired during their union is legally owned in common and governed by co-ownership rules in default of contracts or special provisions.
• Respondent’s Financial Incapacity: Petitioner asserted that respondent lacked the financial capacity to purchase the property and merely manipulated the dollar bank accounts of his corporations to raise the necessary funds.

• Exclusive Ownership: Respondent countered that she acquired the property using her exclusive funds, specifically her savings and earnings as a businesswoman.
• Best Evidence: Respondent argued that the documents appertaining to her acquisition—the Contract to Sell, Deed of Assignment of Redemption, and Deed of Transfer, all in her name—are the best evidence of sole ownership.
• Preponderance of Evidence: Respondent maintained that the evidence on record preponderates in her favor, refuting the trial court's findings and petitioner's assertions regarding her financial capacity.

• Applicable Law: Whether Article 144 of the Civil Code or Article 148 of the Family Code governs the property relations of the parties.
• Retroactive Application: Whether Article 148 of the Family Code applies even if the cohabitation and property acquisition occurred before the Code's effectivity.
• Burden of Proof: Whether the petitioner must prove actual contribution to establish co-ownership under the governing law.

• Applicable Law: Article 148 of the Family Code applies because the relationship was adulterous, petitioner being married to another woman, a circumstance not covered by Article 144 of the Civil Code.
• Retroactive Application: Article 148 applies retroactively because it was intended to fill the hiatus in Article 144 of the Civil Code, which previously lacked provisions for property relations in adulterous or concubinage relationships.
• Burden of Proof: Co-ownership under Article 148 requires proof of actual joint contribution. Petitioner failed to substantiate his alleged contribution, his evidence consisting merely of corporate bank account records that did not directly trace the funds to the property's purchase price. Respondent successfully proved her exclusive ownership and financial capacity through the deeds of purchase and evidence of her business dealings.

• Property Regime in Adulterous Relationships — Under Article 148 of the Family Code, only properties acquired by both parties through their actual joint contribution of money, property, or industry are owned in common in proportion to their respective contributions. Proof of actual contribution is required; absent proof of the extent thereof, contributions and corresponding shares are presumed equal.
• Retroactive Application of Art. 148 — Article 148 of the Family Code applies even if the cohabitation or the acquisition of the property occurred before the Code's effectivity, it being intended to fill the hiatus in Article 144 of the Civil Code regarding property relations of couples in adultery or concubinage.

• "Under this regime, …only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions ... Proof of actual contribution is required."
• "Before Article 148 of the Family Code was enacted, there was no provision governing property relations of couples living in a state of adultery or concubinage. Hence, even if the cohabitation or the acquisition of the property occurred before the Family Code took effect, Article 148 governs."
• "Simply stated, he who alleges a fact has the burden of proving it; mere allegation is not evidence."

• Cariño v. Cariño, G.R. No. 132529 (2001) — Followed: Cited for the rule that properties acquired under Art. 148 are owned in common in proportion to respective contributions.
• Agapay v. Palang, 342 Phil. 302 (1997) — Followed: Cited for the requirement of proof of actual contribution under Art. 148.
• Tumlos v. Fernandez, G.R. No. 137650 (2000) — Followed: Cited for the presumption of equal contributions in the absence of proof to the contrary and for the retroactive application of Art. 148.
• Saguid v. Court of Appeals, G.R. No. 150611 (2003) — Followed: Cited for the proposition that Art. 148 was intended to fill the hiatus in Art. 144 of the Civil Code.

• Art. 148, Family Code — Governs property relations of parties not capacitated to marry each other (adultery, concubinage, etc.). Applied to deny petitioner's claim because he failed to prove actual contribution to the acquisition of the property.
• Art. 144, Civil Code — Governs property of a man and woman living together as husband and wife without marriage. Distinguished and held inapplicable because it does not cover adulterous or concubinage relationships.
• Art. 484, Civil Code — Defines co-ownership. Petitioner's invocation thereof was rejected, the specific provisions of Art. 148 of the Family Code prevailing over the general rules on co-ownership.

Reynato S. Puno, Angelina Sandoval-Gutierrez, Renato C. Corona, Adolfo S. Azcuna.