Marino vs. Court of Appeals

Property acquired during the subsistence of a marriage is presumed conjugal and remains so where the party claiming co-ownership with a common-law partner incapacitated to marry proves no joint contribution and the conjugal origin of the purchase funds is established. Applied to land acquired in 1964 while Lucio Adriano's first marriage subsisted, registration in the names of Lucio and his common-law partner did not create half-ownership in her, and disposition of the entire property under his will in favor of both families was sustained.

Lucio Adriano, also known as Ambrocio Adriano, married Gliceria Dorado on October 29, 1933, with whom he had three children: Celestina, Manolo, and Aida. Sometime in 1942 or earlier Lucio and Gliceria separated, after which Lucio cohabited with Vicenta Villa, with whom he had eight children, while Gliceria settled in Rizal, Laguna until her death on June 11, 1968. Lucio married Vicenta on November 22, 1968, five months after Gliceria's death.

Lucio Adriano married Gliceria Dorado on October 29, 1933, and they had three children, Celestina, Manolo, and Aida. In 1942 or earlier, Lucio and Gliceria separated, with Gliceria settling in Rizal, Laguna where she died on June 11, 1968. From 1942 or even earlier, Lucio cohabited with Vicenta Villa in Candelaria, Quezon, and they had eight children: Marino, Renato, Leticia, Imelda, Maria Alicia, Ligaya, Jose Vergel, and Zenaida. Five months after Gliceria's death, on November 22, 1968, Lucio married Vicenta, with whom he lived until they separated in 1972.

On October 10, 1980, Lucio executed a last will and testament disposing of all his properties and instituting, among others, Vicenta and all his children by both marriages as devisees and legatees. The will disposed of a 45,000-square meter lot with residential house, rice mill, warehouse and equipment in Candelaria, Quezon, registered under TCT No. T-56553, by giving private respondents 10,000 square meters including the warehouse, rice mill and equipment, giving Vicenta and petitioners the remaining 35,000 square meters, and giving private respondents the residential house. Lucio died on February 11, 1981, and Celestina, named executrix, petitioned for probate on February 18, 1981 in Spec. Proc. No. 4442. Vicenta opposed probate, lost at the trial court level, appealed, and lost again before the then Intermediate Appellate Court; she died on July 2, 1985.

While settlement proceedings were pending, petitioners filed Civil Case No. 88-115 on August 17, 1988 for annulment of the will, alleging that properties inventoried in Spec. Proc. No. 4442 were undivided civil partnership and/or conjugal properties of Lucio and Vicenta acquired while they lived together as husband and wife before their 1968 marriage, so that the will was void insofar as it disposed of Vicenta's share. It was undisputed that the same properties had been subject to Civil Case No. 7534, filed sometime in 1980 by Vicenta against Lucio before the then Court of First Instance of Quezon for provisional partition or separation of properties pendente lite, which was dismissed without prejudice on January 28, 1991 for lack of interest.

At the consolidated trial, private respondents presented evidence tracing the purchase funds to Lucio's 1947 business partnership entered during his marriage to Gliceria. According to that evidence, Lucio's initial P15,000.00 investment in Central Rice Mill & Co., formed November 30, 1947, came from pre-war savings of Lucio and Gliceria from peddling betel nuts and ikmo leaves and later selling goods and retailing rice at a Candelaria market stall, plus proceeds from sale during the Japanese occupation between 1943 and 1944 of a fairbanks rice mill acquired through their joint efforts since 1933. Thereafter Lucio increased his investment to P33,750.00 on January 8, 1951 from 1947-1950 conjugal savings when the partnership became Quezon Central Rice Mill & Co., invested P25,000.00 on January 22, 1952 in The Lessee of the Quezon Central Rice Mill for a total of P58,750.00, and on May 3, 1952 bought withdrawing partner Tan Kim alias Joaquin Tan's share for P34,342.55 under a Deed of Sale and Mortgage covering two rice mills, two diesel engines and a camarin, paying P10,342.45 upon signing and the P24,000.00 balance later with registration and installment receipts. By the end of 1953 his total investment from the first conjugal partnership reached P94,744.88; after verbal dissolution in late 1954 and equal division, and Francisco Ramirez's withdrawal of his P16,250.00 share in favor of Lucio by end of 1955, Lucio became sole owner of what he registered as Adriano Central Rice Mill with total investment of P110,994.88, described as fruit or income of his common fund with Gliceria cumulatively used to acquire other inventoried properties. The trial court credited this evidence and found the contested property conjugal of the first marriage.

• Torrens Title as Conclusive Proof: Petitioner argued that TCT No. T-56553, issued to Spouses, Lucio Adriano and Vicenta Villa, constitutes conclusive and indefeasible evidence of Vicenta's co-ownership of one-half of the property.
• Deed of Sale as Best Evidence: Petitioner maintained that the Deed of Sale dated March 15, 1964, as annotated in OCT No. O-9198, the mother title of TCT No. T-56553, designates Vicenta Villa as co-vendee, and being the best evidence of its contents, proves Vicenta's co-ownership in the land.

• Character of Property Acquired During First Marriage: Whether the property covered by TCT No. T-56553, acquired in 1964, is co-owned by Vicenta Villa to the extent of one-half or belongs to the conjugal partnership of Lucio Adriano and Gliceria Dorado.
• Conclusiveness of Torrens Title: Whether registration of title in the names of both Lucio Adriano and Vicenta Villa conclusively establishes Vicenta's half-ownership precluding inquiry into true ownership.
• Annotation of Deed of Sale as Proof of Co-vendee Status: Whether the memorandum of the March 15, 1964 Deed of Sale annotated in OCT No. O-9198 proves Vicenta Villa was a co-buyer and co-owner of the land.

• Character of Property Acquired During First Marriage: No. The property is conjugal of Lucio and Gliceria, the Article 144 co-ownership being inapplicable where Lucio was incapacitated to marry and no joint contribution by Vicenta was proved.
• Conclusiveness of Torrens Title: No. A Torrens certificate does not preclude determination of real ownership, and Vicenta's designation as co-owner was a mistake giving rise to a constructive trust for the first conjugal partnership.
• Annotation of Deed of Sale as Proof of Co-vendee Status: No. The unpresented Deed's annotation proves only execution, presentation, and notation for constructive notice, not its contents, and cannot bind third parties such as private respondents.

• Character of Property Acquired During First Marriage: Co-ownership under Article 144 of the Civil Code requires that the man and woman living together without marriage be in no way incapacitated to marry, a requisite absent here because Lucio's marriage to Gliceria subsisted when he cohabited with Vicenta and when the land was acquired in 1964. Property acquired during marriage being presumed conjugal under Article 160 unless proved exclusive, the presumption was not overcome; on the contrary, credited evidence traced the purchase to earnings and fruits of the first conjugal fund invested from 1947 to 1955 in the rice-mill partnerships. Although equity allocates property acquired through joint endeavor in void common-law relations proportionate to efforts, or under Article 148 of the Family Code only upon actual joint contribution, no evidence of Vicenta's contribution was submitted. Factual findings of both lower courts on conjugal source, borne out by the record, were binding and conclusive.
• Conclusiveness of Torrens Title: A certificate of title is aimed at protecting dominion, not at effecting deprivation of ownership, so complete resolution required determination of real ownership through evidence apart from or contrary to the title. This was especially compelling where heirs of a lawful pre-existing marriage would otherwise be deprived, as recognized where property acquired by a man living with a common-law wife during a subsisting marriage remains conjugal even if titled in the common-law wife's name. By Article 1456 of the Civil Code, Vicenta's mistaken designation as co-owner in TCT No. T-56553 created an implied trust by operation of law for the first conjugal partnership, consistent with the exception that a trustee taking Torrens title cannot repudiate the trust by relying on registration.
• Annotation of Deed of Sale as Proof of Co-vendee Status: By petitioners' own best-evidence position, the Deed itself, which was not even presented, would be the proof of its contents; the OCT memorandum bears no weight as proof of co-ownership. Under settled rule, such annotation is admissible only to show execution, presentation for notation, and actual notation for constructive notice of preferential rights, not the truth of its contents. Even if submitted, the sale instrument between its parties could not affect or bind private respondents as third parties to that sale.

• Presumption of conjugality — Property acquired during the marriage is presumed to belong to the conjugal partnership unless proved to pertain exclusively to the husband or to the wife. Applied here, land acquired in 1964 while Lucio's marriage to Gliceria subsisted was presumed conjugal, a presumption petitioners failed to overcome and private respondents affirmatively rebutted with tracing evidence.
• Article 144 co-ownership — When a man and woman live together as husband and wife without marriage or under a void marriage, property acquired through work, industry, wages or salaries is governed by co-ownership, provided they are not in any way incapacitated to marry. Because Lucio remained married to Gliceria during cohabitation with Vicenta, no Article 144 co-ownership arose between Lucio and Vicenta.
• Contribution in adulterous cohabitation; Article 148, Family Code — Where an impediment to marry exists, only properties acquired through actual joint contribution of money, property, or industry are owned in common in proportion to respective contributions, presumed equal absent contrary proof. No allocation to Vicenta was warranted for lack of any proof of actual contribution to acquisition of the disputed property.
• Torrens title not conclusive on true ownership; constructive trust — A Torrens certificate protects dominion but does not preclude proof that property recorded in one or both names belongs exclusively to another, and a trustee taking title cannot repudiate the trust by invoking registration. Vicenta's titling as co-owner, being mistaken, made her trustee by implied trust under Article 1456 of the Civil Code for the first conjugal partnership, following Belcodero vs. Court of Appeals.
• Best evidence and effect of registered memorandum — The contents of a document are proved by the document itself; a memorandum of a deed annotated on an original certificate proves only execution, presentation, and notation for constructive notice, not the contents. Hence the OCT annotation of the unpresented March 15, 1964 Deed of Sale did not prove Vicenta was co-vendee, following Philippine National Bank vs. Tan Ong Zse.

• "When a man and a woman live together as husband and wife, but they are not married, or their marriage is void from the beginning, the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules of co-ownership." — States the text of Article 144 of the Civil Code whose incapacity proviso bars petitioners' co-ownership claim during Lucio's subsisting first marriage.
• "A certificate of title under the Torrens system is aimed to protect dominion, and should certainly not be turned into an instrument for deprivation of ownership." — Defines the limit of Torrens conclusiveness and justifies looking beyond TCT No. T-56553 to determine true conjugal ownership.
• "If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes." — States Article 1456 of the Civil Code under which Vicenta's mistaken titling as co-owner created a constructive trust for the first conjugal partnership.

• Belcodero vs. Court of Appeals, 227 SCRA 303 — Followed as controlling that property acquired by a man while living with a common-law wife during a subsisting marriage is conjugal, even if titled in the common-law wife's name, with a constructive trust by operation of Article 1456.
• Pisueña vs. Heirs of Petra Unating and Aquilino Villar, G.R. No. 132803, August 31, 1999 — Followed that the prima facie presumption of conjugality cannot prevail over a specific contrary finding reached in adversarial proceedings; here the specific finding was conjugality itself, supported by evidence.
• Padilla vs. Padilla, 74 Phil. 377 — Followed that Torrens title is not conclusive on ownership and property recorded in both spouses' names may be shown to be exclusive property of one, supporting inquiry beyond TCT No. T-56553.
• Severino vs. Severino, 44 Phil. 343 — Cited for the exception that a trustee taking Torrens title cannot repudiate the implied trust by relying on registration.
• Philippine National Bank vs. Tan Ong Zse, 51 Phil. 317 — Followed that an OCT memorandum of a deed proves only execution, presentation, and notation for constructive notice, not the deed's contents.

• Article 144, Civil Code — Governs co-ownership of property acquired through work or industry by a man and woman living together without marriage or under a void marriage; held inapplicable because Lucio and Vicenta were incapacitated to marry during the relevant cohabitation.
• Article 160, Civil Code — Presumes property acquired during marriage to be conjugal unless proved exclusive; applied to treat the 1964 acquisition as conjugal of Lucio and Gliceria absent contrary proof.
• Article 1456, Civil Code — Imposes an implied trust where property is acquired through mistake or fraud; applied to deem Vicenta trustee for the first conjugal partnership as to her mistaken titling as co-owner.
• Article 148, Family Code — Limits common ownership in cohabitation with legal impediment to properties acquired through actual joint contribution, proportionate to contributions; cited to deny Vicenta a share for lack of proof of contribution, with a validly married party's share accruing to the conjugal partnership.

Melo, J., Chairman, Vitug, J., Panganiban, J.