Delgado vs. GQ Realty Development Corp.

A spouse who executes an Ante-Nuptial Agreement providing for complete separation of properties and stipulating that any gift bestowed upon the other spouse shall become the latter's exclusive property waives all interest in properties previously given as gifts to the other spouse, even if such properties are registered in the name of the donee-spouse's holding company. The waiver operates to extinguish any claim based on implied trust, and the registration of the property in the name of a corporation that is a mere alter ego of the donee-spouse does not remove the property from the coverage of the agreement.

Petitioner Francisco C. Delgado was married to Carmencita Chuidian-Delgado until her death on January 15, 1983, with whom he had five children. He later entered into a relationship with Victoria Quirino Gonzales, daughter of former President Elpidio R. Quirino, who was previously married to Luis Gonzales and had four children with him, including respondent Ma. Rosario Gonzales-Meyer. Victoria and her children with Luis established respondent GQ Realty Development Corporation, a family corporation whose name stands for "Gonzales Quirino." Before their marriage on June 20, 1987, petitioner Francisco and Victoria executed an Ante-Nuptial Agreement dated June 15, 1987, drafted by petitioner's own counsel, Romulo Mabanta Law Offices, stipulating that their property relations would be governed by complete separation of properties.

Petitioner Francisco C. Delgado was married to Carmencita Chuidian-Delgado until her death on January 15, 1983, and they had five children, including petitioner Jose Mari Delgado. Subsequently, petitioner Francisco met Victoria Quirino Gonzales, the daughter of former President Elpidio R. Quirino, who was formerly married to Luis Gonzales, a former Philippine Ambassador to Spain who passed away in 1984. Victoria and Luis had four children, including respondent Ma. Rosario Gonzales-Meyer. Together with her children, Victoria started respondent GQ Realty Development Corporation, a family corporation whose name stands for "Gonzales Quirino."

Petitioner Francisco alleged that respondent GQ Realty's capitalization was insufficient for the realty business, so he offered to help Victoria by buying real properties using his own money, with the naked title registered in the name of respondent GQ Realty to show potential investors that the corporation had sufficient assets. Victoria allegedly suggested that petitioner Francisco buy a condominium apartment at Unit 12-C, Urdaneta Apartments Condominium, 6735 Ayala Avenue, Makati City. Petitioner Francisco purchased the subject property, and Condominium Certificate of Title No. 9159 was issued in the name of respondent GQ Realty. Petitioner Francisco allegedly lived in the subject property even though the title was in respondent GQ Realty's name.

On June 20, 1987, petitioner Francisco, then 76 years old, and Victoria, then 56 years old, got married. Before the marriage, on June 15, 1987, they executed an Ante-Nuptial Agreement, drafted by petitioner Francisco's own counsel, Romulo Mabanta Law Offices, stipulating that their property relations would be governed by complete separation of properties. The agreement provided that all properties owned by each spouse would remain their exclusive property, that any gift bestowed by petitioner Francisco on Victoria would become her exclusive property, and that neither spouse would acquire any interest, directly or indirectly, over the properties of the other.

According to the respondents, respondent GQ Realty was a family corporation established in 1984 after Luis's death for the sole purpose of holding Victoria's properties. Victoria decided to buy the subject property for respondent Rosario, who became a paraplegic due to a vehicular accident, so she could live beside her. However, after realizing the subject property was not wheelchair-friendly, Victoria swapped apartments and took the subject property for herself while respondent Rosario became the owner of Unit 12-B. Respondent Rosario contended that since 1998, she had been paying the real estate taxes on the subject property and was able to mortgage it with the Bank of the Philippine Islands in 2000 through respondent GQ Realty.

Victoria passed away on November 29, 2006 in Amsterdam, the Netherlands. Following her death, petitioner Francisco learned that Victoria's children with Luis distributed among themselves the properties held by Victoria's corporations, and the subject property was transferred from respondent GQ Realty to respondent Rosario. On July 12, 2007, petitioner Francisco, through petitioner Jose Mari, filed a Verified Complaint for Reconveyance, Declaration of Nullity of Sale, and Damages before the RTC of Makati City, Branch 139, asserting his right over the subject property based on implied trust. The respondents filed a Motion for Preliminary Hearing on Affirmative Defenses, arguing that petitioner Francisco's claim had been waived, abandoned, or extinguished by the Ante-Nuptial Agreement and that the Complaint had prescribed. The RTC granted the motion and set a preliminary hearing on March 2, 2012, during which only the respondents appeared; petitioner Francisco failed to participate despite due notice.

The RTC issued an Order dated January 29, 2014 dismissing the Complaint based on the affirmative defenses of prescription and waiver, abandonment, and extinguishment. On appeal, the CA held that the RTC erred on prescription, citing that an action for reconveyance based on implied trust is imprescriptible if the movant is in actual, continuous, and peaceful possession of the property, but upheld the dismissal on the ground of waiver. The CA found that the Ante-Nuptial Agreement clearly provided that any property owned by Victoria would remain in her possession subject to her own disposition, and that the certificate of title is the best proof of ownership.

• Waiver of the Affirmative Defense: Petitioner Francisco invoked Rule 9, Section 1 of the Rules of Court, arguing that since the respondents allegedly failed to raise the defense of waiver in their Amended Answer, such defense was deemed waived.
• Need for Full-Blown Trial: Petitioner Francisco argued that whether there was indeed a waiver of rights is an issue involving evidentiary matters requiring a full-blown trial on the merits and cannot be determined in a mere motion to dismiss.
• No Waiver of Rights: Petitioner Francisco argued that he did not waive his alleged rights and interests over the subject property, maintaining that the property was not bestowed upon Victoria but was given to respondent GQ Realty, a separate juridical entity, and thus is not within the coverage of the Ante-Nuptial Agreement.
• Unconscionable Interpretation: Petitioner Francisco argued that the RTC's and CA's interpretation of the Ante-Nuptial Agreement as including the subject property is "unconscionable and unreasonable on its face" because there was allegedly no explanation offered for the alleged waiver.

• Waiver Through Ante-Nuptial Agreement: Respondents argued that petitioner Francisco's claim had been deemed waived, abandoned, or otherwise extinguished by virtue of the Ante-Nuptial Agreement, wherein petitioner Francisco acknowledged and declared that all properties of the parties would be respectively owned by each of them and that neither would have an interest over the properties of the other.
• Prescription: Respondents argued that the Complaint had already prescribed since 20 years had passed from the time the subject property was acquired by respondent GQ Realty on April 27, 1987.
• Ownership Through Certificate of Title: Respondents presented CCT No. 9159 bearing respondent GQ Realty as the first owner, the Deed of Absolute Sale between GQ Realty and respondent Rosario, and CCT No. 101544 bearing respondent Rosario's name, arguing that the best proof of ownership of land is the certificate of title, which enjoys a legal presumption of regularity of issuance.

• Waiver of Affirmative Defense: Whether the respondents waived the affirmative defense of waiver, abandonment, and extinguishment by allegedly failing to raise the same in their Amended Answer.
• Need for Full-Blown Trial: Whether the issue of waiver requires a full-blown trial on the merits or may be resolved in a preliminary hearing on affirmative defenses.
• Effect of the Ante-Nuptial Agreement: Whether petitioner Francisco, in executing the Ante-Nuptial Agreement, waived, abandoned, or otherwise extinguished his alleged interest over the subject property.

• Waiver of Affirmative Defense: No. The respondents sufficiently alleged the affirmative defense of waiver in their Amended Answer under its "Special and Affirmative Defenses" section, which stated that under the Pre-Nuptial Agreement, properties of Victoria remain hers alone and that any property petitioner Francisco may give Victoria shall pertain to her exclusively. The failure to use the words "waiver," "abandonment," and "extinguishment" is immaterial since the substance of the defense was specifically raised.

• Need for Full-Blown Trial: No. The RTC's finding on waiver was based on evidence actually presented during the preliminary hearing on affirmative defenses, which petitioner Francisco failed to attend despite due notice. Under Rule 8, Section 7 of the Rules of Court, the Ante-Nuptial Agreement attached to the Amended Answer was deemed part of the pleading, and under Rule 8, Section 8, its genuineness and due execution were deemed admitted because petitioner Francisco failed to specifically deny them under oath.

• Effect of the Ante-Nuptial Agreement: Yes. Hypothetically admitting the material allegations of the Complaint, petitioner Francisco's purchase of the subject property using his own funds was a genuine act of gratuity in favor of Victoria, constituting a gift bestowed upon her. Since the Ante-Nuptial Agreement provided that any gift bestowed upon Victoria shall become her exclusive property and that petitioner Francisco waived all direct and indirect interests in Victoria's properties, his alleged interest in the subject property was completely waived. Respondent GQ Realty, being a mere holding company and alter ego of Victoria, does not remove the property from the coverage of the agreement.

• Waiver of Affirmative Defense: The Court examined the Amended Answer and found that the respondents unequivocally asserted under "Special and Affirmative Defenses" that under the Pre-Nuptial Agreement, properties of Victoria remain hers alone and that any property petitioner Francisco may give Victoria shall pertain to her exclusively. The pertinent portions of the Ante-Nuptial Agreement were stated in the Amended Answer, and a copy of the document was appended thereto. The Court held that the respondents' failure to use the specific words "waiver," "abandonment," and "extinguishment" is of no moment, considering that it was specifically raised that, by virtue of the Ante-Nuptial Agreement, petitioner Francisco has no valid claim over the subject property.

• Need for Full-Blown Trial: The Court noted that the RTC set a preliminary hearing on the affirmative defenses, which was the venue for both parties to present evidence. On March 2, 2012, only the respondents appeared; petitioner Francisco failed to participate despite due notice. The Court held that petitioner Francisco cannot use his own act of not appearing and presenting evidence as a basis to argue that he was deprived of the opportunity to produce evidence. With respect to the existence, genuineness, and due execution of the Ante-Nuptial Agreement, no further evidence was needed because under Rule 8, Section 7 of the Rules of Court, the document attached to the pleading is deemed part of the pleading, and under Rule 8, Section 8, its genuineness and due execution are deemed admitted unless the adverse party, under oath, specifically denies them. Petitioner Francisco never questioned the existence of the Ante-Nuptial Agreement and merely contested its meaning and import.

• Effect of the Ante-Nuptial Agreement: The Court applied Rule 6, Section 5(b) of the Rules of Court, which defines an affirmative defense as an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery. Under Rule 16, Section 6, a preliminary hearing may be had on affirmative defenses as if a motion to dismiss had been filed. Hypothetically admitting petitioner Francisco's allegations that he used his own money to buy the subject property, the Court held that this purchase was, for all intents and purposes, a gift bestowed upon Victoria. The Court relied on petitioner Francisco's own allegations in the Complaint: that he purchased the subject property to express support for the ailing Victoria, that Victoria suggested the acquisition of the property to live beside her daughter, that Victoria was the very animus behind his purchase, and that he described his act as one "of benevolence and of concern" that endeared him to Victoria. Since the Ante-Nuptial Agreement provided that any gift bestowed upon Victoria shall become her exclusive property and that neither spouse shall acquire any interest, directly or indirectly, over the properties of the other, petitioner Francisco's alleged interest was completely waived.

The Court further held that respondent GQ Realty and Victoria were one and the same person insofar as the subject property was concerned. The Court noted that respondent GQ Realty is a family corporation, with Victoria owning P1,135,000.00 out of the P1,875,000.00 total capital stock, and the other incorporators being Victoria's children with minimal shareholdings. The principal office of respondent GQ Realty was Unit 12-B, Victoria's residence. The Court found that respondent GQ Realty never really operated as a legitimate real estate corporation, having entered into transactions only with respondent Rosario, and that it was a mere holding company and instrumentality utilized by Victoria to hold her properties. The Court also noted that the Ante-Nuptial Agreement was drafted by petitioner Francisco through his counsel, Romulo Mabanta Law Offices, and any ambiguity in a contract must be read against the party who drafted it. The Court further held that petitioner Francisco failed to provide any evidence, aside from his mere say-so, that he actually bought the subject property, and that the certificate of title is the best proof of ownership requiring more than a bare allegation to defeat its face value.

• Affirmative Defense and Preliminary Hearing — An affirmative defense is an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery. Under Rule 16, Section 6 of the Rules of Court, if no motion to dismiss has been filed, any of the grounds for dismissal may be pleaded as an affirmative defense in the answer, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed. The Court applied this doctrine to uphold the dismissal of the Complaint based on the affirmative defense of waiver, which was resolved through a preliminary hearing where petitioner Francisco failed to appear.

• Deemed Admission of Genuineness and Due Execution of Attached Documents — Under Rule 8, Sections 7 and 8 of the Rules of Court, when a defense is based upon a written instrument, the substance of such instrument shall be set forth in the pleading and the original or copy thereof shall be attached, which shall be deemed part of the pleading. The genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them and sets forth what he claims to be the facts. The Court applied this doctrine to hold that the Ante-Nuptial Agreement's genuineness and due execution were deemed admitted because petitioner Francisco failed to specifically deny them under oath.

• Alter Ego Doctrine / Piercing the Veil of Corporate Fiction — While ordinarily a corporation and its stockholders are deemed to have unique and separable juridical personalities, the factual circumstances may reveal that, insofar as a particular property is concerned, the corporation and the stockholder are one and the same person. The Court applied this doctrine to hold that respondent GQ Realty, being a mere holding company and alter ego of Victoria, did not remove the subject property from the coverage of the Ante-Nuptial Agreement, since the property was really Victoria's property.

• Contra Proferentem Rule — Any ambiguity in a contract whose terms are susceptible of different interpretations must be read against the party who drafted it. The Court applied this rule because the Ante-Nuptial Agreement was drafted by petitioner Francisco through his counsel, Romulo Mabanta Law Offices, and if he intended to exclude properties registered in the name of Victoria's holding company, he could have included a provision to that effect.

• Certificate of Title as Best Proof of Ownership — The best proof of the ownership of land is the certificate of title, and it requires more than a bare allegation to defeat the face value of a certificate of title, which enjoys a legal presumption of regularity of issuance. The Court applied this doctrine to note that petitioner Francisco failed to provide any evidence, aside from his mere say-so, that he actually bought the subject property.

• "Hence, under the Ante-Nuptial Agreement, petitioner Francisco unequivocally discharged any and all interest over all gifts that he had bestowed upon Victoria." — This passage states the core ratio decidendi: the Ante-Nuptial Agreement operated as a complete waiver of petitioner Francisco's interest in the subject property, which was deemed a gift to Victoria.

• "Therefore, taking into consideration the foregoing material allegations in the Complaint, despite the subject property being registered in the name of respondent GQ Realty, petitioner Francisco's act of purchasing the subject property using his own funds was a genuine act of gratuity in favor of Victoria." — This passage establishes that even hypothetically admitting petitioner Francisco's allegations, the purchase constituted a gift to Victoria, triggering the waiver provision of the Ante-Nuptial Agreement.

• "While ordinarily, respondent GQ Realty and Victoria are deemed to have unique and separable juridical personalities, the factual circumstances of the instant case reveal that, in so far as the subject property is concerned, respondent GQ Realty and Victoria are one and the same person." — This passage articulates the Court's application of the alter ego doctrine to treat the property registered in respondent GQ Realty's name as Victoria's property for purposes of the Ante-Nuptial Agreement.

• "It is elementary that any ambiguity in a contract whose terms are susceptible of different interpretations must be read against the party who drafted it, who in this case was petitioner Francisco." — This passage applies the contra proferentem rule against petitioner Francisco, who drafted the Ante-Nuptial Agreement through his counsel.

• Sps. Yu Hwa Ping and Mary Gaw vs. Ayala Land, Inc., 814 Phil. 468 (2017) — Cited by the CA for the proposition that while an action for reconveyance based on an implied or constructive trust prescribes after 10 years from the date the adverse party repudiates the implied trust, it is imprescriptible if the movant is in actual, continuous, and peaceful possession of the property involved. The CA relied on this to reverse the RTC's finding on prescription.

• Garcia vs. Court of Appeals, 327 Phil. 1097, 1111 (1996) — Cited for the elementary rule that any ambiguity in a contract whose terms are susceptible of different interpretations must be read against the party who drafted it.

• Heirs of Velasquez vs. Court of Appeals, 382 Phil. 438, 458 (2000) — Cited for the doctrine that the best proof of ownership of land is the certificate of title, which enjoys a legal presumption of regularity of issuance and requires more than a bare allegation to defeat its face value.

• Rule 45, Rules of Court — The procedural basis for the Petition for Review on Certiorari filed by petitioner Francisco before the Supreme Court.

• Rule 6, Section 5(b), Rules of Court — Defines an affirmative defense as an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery. The Court applied this to characterize the respondents' defense of waiver.

• Rule 8, Section 7, Rules of Court — Provides that whenever a defense is based upon a written instrument or document, the substance of such instrument shall be set forth in the pleading and the original or copy thereof shall be attached to the pleading, which shall be deemed part of the pleading. The Court applied this to treat the Ante-Nuptial Agreement as part of the Amended Answer.

• Rule 8, Section 8, Rules of Court — Provides that the genuineness and due execution of an instrument attached to a pleading shall be deemed admitted unless the adverse party, under oath, specifically denies them and sets forth what he claims to be the facts. The Court applied this because petitioner Francisco failed to specifically deny the genuineness and due execution of the Ante-Nuptial Agreement.

• Rule 9, Section 1, Rules of Court — Provides that defenses and objections not raised in either a motion to dismiss or in the answer are deemed waived. Petitioner Francisco invoked this provision, but the Court found it inapplicable because the respondents did raise the defense of waiver in their Amended Answer.

• Rule 16, Section 6, Rules of Court — Provides that if no motion to dismiss has been filed, any of the grounds for dismissal may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed. The Court applied this to uphold the RTC's preliminary hearing on the affirmative defenses.

Carpio, Acting C.J. (Chairperson), J. Reyes, Jr., Lazaro-Javier, and Zalameda, JJ., concurred in the decision.

N/A — No dissenting opinions were noted in the provided case text.