Mercado-Fehr vs. Fehr

Properties acquired by a man and a woman who are capacitated to marry each other and live exclusively as husband and wife without the benefit of marriage or under a void marriage are governed by the rules on co-ownership under Article 147 of the Family Code, precluding exclusive ownership by one party if acquired during cohabitation, and precluding a three-way partition that includes the common children.

In March 1983, petitioner left Cebu City and moved in with respondent in Metro Manila. Their first child was born in December 1983. The couple married on March 14, 1985. During their pre-marital cohabitation, they purchased a condominium unit (Suite 204) on installment on July 26, 1983, under a Contract to Sell where respondent was the buyer and petitioner signed as witness using the name "Elna Mercado Fehr." Title was eventually issued in petitioner's name.

• Void Marriage Declaration: Petitioner filed for nullity of marriage under Article 36 of the Family Code. The RTC declared the marriage void ab initio due to respondent's psychological incapacity, dissolved the conjugal partnership, and awarded custody of the minor children to petitioner.
• Property Settlement Order: The RTC issued an Order dividing the properties. It declared Suite 204 of the LCG Condominium the exclusive property of respondent, having been purchased by him on installment prior to the marriage. The remaining conjugal properties were divided between the parties.
• Motion for Reconsideration: Petitioner sought reconsideration, arguing Suite 204 was acquired during their cohabitation and should be governed by co-ownership under Article 147 of the Family Code. She also contested the support arrangement and the property division.
• RTC Ruling on MR: The RTC applied co-ownership rules pursuant to Article 147 but affirmed its previous ruling that Suite 204 was exclusive to respondent. The RTC also noted that the parties had agreed in principle to divide the properties into three: 1/3 to petitioner, 1/3 to respondent, and 1/3 to their children.

• Propriety of Certiorari: Petitioner argued that certiorari was proper because the RTC committed grave abuse of discretion, and no other speedy and adequate remedy was available.
• Grave Abuse of Discretion: Petitioner maintained that the RTC gravely abused its discretion by declaring Suite 204 exclusive property despite evidence of cohabitation prior to its purchase, and by dividing properties into three instead of two under Article 147, or four as allegedly agreed upon by the parties.

• Foreclosure of Remedies: Respondent contended that petitioner lost all right to appeal or file certiorari after the main decision became final and executory, arguing the subsequent Order merely executed the final judgment.
• Three-Way Partition: Respondent argued that the three-way division was proper under Articles 50, 51, 147, and 148 of the Family Code, mandating delivery of the presumptive legitime to common children.
• Exclusive Ownership of Suite 204: Respondent claimed Suite 204 as his exclusive property, having been acquired prior to the marriage.

• Procedural Remedy: Whether the Court of Appeals erred in dismissing the petition for certiorari on the ground that the RTC committed mere errors of judgment rather than grave abuse of discretion.
• Ownership of Suite 204: Whether Suite 204 of LCG Condominium is the exclusive property of respondent or part of the co-ownership with petitioner under Article 147 of the Family Code.
• Partition of Common Properties: Whether the common properties of the parties should be divided into three parts to include their common children.

• Procedural Remedy: The dismissal of the certiorari petition was erroneous. While certiorari is not a substitute for a lost appeal, exceptions exist where rigid application results in manifest failure or miscarriage of justice. Relaxation of the rule was justified to prevent divesting petitioner of her just share and income for the children.
• Ownership of Suite 204: Suite 204 is common property under Article 147. It was acquired during cohabitation, purchased on July 26, 1983, after petitioner moved in with respondent in March 1983. Under Article 147, properties acquired during cohabitation are presumed obtained through joint efforts and owned in equal shares.
• Partition of Common Properties: The three-way division was incorrect. The Civil Code provisions on co-ownership apply, not a three-way partition. There was no evidence supporting the trial court's finding of an agreement for a 1/3 division. Articles 50 and 51 cited by respondent apply to voidable marriages and Article 40 void marriages, not the Article 36 void marriage at hand.

• Certiorari as substitute for appeal — Defined as generally prohibited, but allowed in exceptional cases where rigid application results in manifest failure or miscarriage of justice, irreparable damage, or clear failure of justice. Applied to allow the petition despite the availability of ordinary appeal, to prevent unjust deprivation of property and income.
• Property regime under Article 147 of the Family Code — Applies when a man and a woman, capacitated to marry, live exclusively as husband and wife without marriage or under a void marriage. Requisites: (1) capacitated to marry each other; (2) live exclusively with each other as husband and wife; (3) union is without the benefit of marriage or the marriage is void. Properties acquired during cohabitation are presumed obtained through joint efforts and owned in equal shares. A party who did not participate in acquisition is deemed to have contributed jointly if efforts consisted in care and maintenance of the family and household. Applied to include Suite 204 in the co-ownership.

• "When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership."
• "In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares."

• Valdes vs. Regional Trial Court, Br. 102, Quezon City, 260 SCRA 221 (1996) — Followed. Defined the peculiar kind of co-ownership under Article 147 and the requisites for its application.
• Cariño vs. Cariño, 351 SCRA 127 (2001) — Followed. Cited for the proposition that Article 147 applies to unions of parties legally capacitated but whose marriage is void.
• Estate of Salud Jimenez vs. Philippine Export Processing Zone, 349 SCRA 240 (2001) — Cited for the definition of grave abuse of discretion and the general rule that certiorari will not lie if appeal is the proper remedy.
• BF Corporation vs. Court of Appeals, 288 SCRA 267 (1998) and Caraan vs. Court of Appeals, 289 SCRA 579 (1998) — Followed. Cited for the exception that certiorari is justified to prevent irreparable damage or manifest failure of justice.

• Article 36, Family Code — Ground for declaration of nullity of marriage (psychological incapacity). Applied as the basis for declaring the marriage void.
• Article 147, Family Code — Governs property relations of couples capacitated to marry living together as husband and wife without marriage or under a void marriage; creates co-ownership. Applied to determine that Suite 204 is common property and to invalidate the three-way partition.
• Articles 50 and 51, Family Code — Relate to voidable marriages and Article 40 void marriages. Distinguished and held inapplicable to the property settlement of an Article 36 void marriage between capacitated parties.

Panganiban, Sandoval-Gutierrez, and Corona, JJ.