Joaquino vs. Reyes

Property acquired during the subsistence of a valid marriage using the husband's salaries and earnings belongs to the conjugal partnership of gains, even if registered in the name of a paramour, and such registration constitutes a void donation between persons guilty of adultery or concubinage under Article 739 of the Civil Code.

Rodolfo Reyes was legally married to Lourdes Reyes but cohabited with Milagros Joaquino for nineteen years until his death. During this cohabitation, a house and lot were purchased and registered in Milagros' name, though the funds for the purchase and mortgage payments were sourced from Rodolfo's employment earnings. After Rodolfo's death, his legal wife and legitimate children filed a suit to recover the property, asserting it was conjugal in nature.

• Rodolfo Reyes was legally married to respondent Lourdes Reyes in 1947, with whom he had four children.
• Rodolfo lived with petitioner Milagros Joaquino for 19 years starting in 1962 until his death in 1981.
• In 1979, a house and lot in BF Homes, Parañaque was purchased and registered under Transfer Certificate of Title No. 90293 in Milagros Joaquino's name.
• Milagros executed a Special Power of Attorney authorizing Rodolfo to secure a mortgage loan from Commonwealth Insurance Company to pay the purchase price balance.
• Rodolfo paid the monthly amortizations for the mortgage and the premiums for a Philam Life insurance policy assigned to the insurance company.
• Upon Rodolfo's death, the remaining mortgage balance was paid in full through the proceeds of his life insurance policy.
• Rodolfo was employed as Vice President and Comptroller of Warner Barnes & Co., earning a substantial salary and retirement benefits, while Milagros was not gainfully employed after 1961.
• Respondents filed a complaint for reconveyance, claiming the property was acquired using conjugal funds.

• The petitioner claimed she purchased the real property with her own exclusive funds.
• She argued that Rodolfo only facilitated the mortgage for convenience.
• She asserted she had the financial capacity to support herself and her children.
• She contended that her three illegitimate children with Rodolfo should be recognized and entitled to a share of the estate.
• She argued that respondents acted in bad faith and violated Articles 19 and 21 of the Civil Code by denying the filiation of her children.

• The respondents argued that the funds used to purchase the property were conjugal funds and earnings of the deceased Rodolfo Reyes.
• They asserted that the petitioner had no means to pay for the property as she was not gainfully employed.
• They maintained that the property belongs to the conjugal partnership of Rodolfo and Lourdes.
• They claimed that one-half of the property belongs exclusively to Lourdes, and the other half to Rodolfo's estate.

• Procedural Issues:
  • Whether the trial court could properly rule on the filiation and successional rights of the petitioner's illegitimate children in an ordinary civil action for reconveyance.
• Substantive Issues:
  • Whether the house and lot registered in the name of the paramour is the exclusive property of the paramour or the conjugal property of the decedent and his legal wife.

• Procedural:
  • The Supreme Court ruled that matters relating to rights of filiation and heirship must be ventilated in a proper probate court or special proceeding, not in an ordinary civil action for recovery of property. The Court held that the issue of filiation was not properly raised in the pleadings nor duly established by evidence as required by the Civil Code, making the trial court's ruling on this matter improper.
• Substantive:
  • The Court declared the property to be conjugal property of Rodolfo and Lourdes Reyes. The Court reasoned that under Article 160 of the Civil Code, all property of the marriage is presumed conjugal, and the evidence showed Rodolfo paid for the loan and insurance premiums using his salary (conjugal funds). The Court further ruled that the registration in the petitioner's name was tantamount to a void donation between persons guilty of adultery or concubinage under Article 739 of the Civil Code.

• Conjugal Partnership of Gains — Under Articles 145 and 153 of the Civil Code, this partnership is created upon marriage, and properties acquired by onerous title at the expense of the common fund or obtained by the industry/salary of the spouses belong to it. The Court applied this to hold that Rodolfo's salary used to pay for the house made the property conjugal.
• Presumption of Conjugality — Under Article 160 of the Civil Code, all properties of the marriage are presumed to belong to the conjugal partnership unless proven exclusively owned by one spouse. The Court used this presumption because the property was acquired during the marriage of Rodolfo and Lourdes.
• Void Donations (Article 739) — Donations made between persons who were guilty of adultery or concubinage at the time of the donation are void. The Court applied this to nullify the transfer/registration of the property in the paramour's name, treating it as a void donation from the husband.
• Constructive Trust (Article 1456) — If property is acquired through mistake or fraud, the person obtaining it is considered a trustee of an implied trust for the benefit of the true owner. The Court applied this to state that Milagros held the title in trust for the conjugal partnership and heirs.
• Torrens System Principle — A certificate of title aims to protect dominion but cannot be used as an instrument for the deprivation of ownership. The Court used this to rule that Milagros' registration of the title did not confer ownership when the funds used were conjugal.
• Article 144 vs. Article 148 (Property Regime of Unions without Marriage) — Article 144 (Civil Code) applies to co-ownership where there is no impediment to marry; Article 148 (Family Code) applies when there is an impediment (like a subsisting marriage). The Court noted that even under the stricter Article 148, ownership requires actual joint contribution, which the petitioner failed to prove.

• "Though registered in the paramour’s name, property acquired with the salaries and earnings of a husband belongs to his conjugal partnership with the legal spouse."
• "The prohibition against donations between spouses must likewise apply to donations between persons living together in illicit relations; otherwise, the latter would be better situated than the former."
• "Regarding the registration of the property in petitioner’s name, it is enough to stress that a certificate of title under the Torrens system aims to protect dominion; it cannot be used as an instrument for the deprivation of ownership."

• Agapay v. Palang — Cited to support the ruling that the status of an illegitimate child claiming to be an heir cannot be adjudicated in an ordinary civil action for recovery of property but must be resolved in a probate proceeding.
• Tumlos v. Spouses Fernandez — Cited to explain that Article 144 of the Civil Code (co-ownership in common-law relations) does not apply to relations amounting to adultery or concubinage where a prior conjugal partnership exists.
• Adriano v. CA — Cited to reinforce that a Torrens title cannot be used to deprive ownership and that property acquired in a common-law relationship during a legal marriage is conjugal.

• Civil Code, Article 145 — Cited to establish that a conjugal partnership of gains is created upon marriage.
• Civil Code, Article 153 — Cited to define what constitutes conjugal partnership property, specifically including that acquired by onerous title at the expense of the common fund or by the salary of the spouses.
• Civil Code, Article 160 — Cited to establish the presumption that all properties of the marriage belong to the conjugal partnership.
• Civil Code, Article 739(1) — Cited to declare the donation (purchase and registration in paramour's name) void because it was made between persons guilty of adultery or concubinage.
• Civil Code, Article 1456 — Cited to establish that a constructive trust was created where the petitioner held the property in trust for the legal owners.
• Family Code, Article 148 — Cited as the applicable rule for property regimes in cohabitation where there is a legal impediment to marry, requiring proof of actual contribution.
• Family Code, Article 87 — Cited to reinforce the prohibition of donations between persons living together as husband and wife without a valid marriage.