Saguid vs. Court of Appeals

In property regimes governed by Article 148 of the Family Code, co-ownership is limited to properties acquired through actual joint contribution of money, property, or industry, and the party claiming co-ownership bears the burden of proving the extent of such contribution; absent such proof, their contributions and corresponding shares are presumed equal.

Gina S. Rey, a minor legally married but separated de facto from her husband, cohabited with Jacinto Saguid in Marinduque starting in July 1987. Saguid earned a living as the patron of a fishing vessel, while Rey worked as a fish dealer and later as an entertainer in Japan from 1992 to 1994. The couple maintained a joint bank account. Their relationship deteriorated due to conflicts with Saguid's relatives, prompting Rey to work abroad and, eventually, the couple's separation in 1996 after nine years of cohabitation. During their union, a house was constructed on a lot owned by Saguid's father, and various personal properties were acquired.

• Cohabitation: Gina S. Rey and Jacinto Saguid lived together as husband and wife from 1987 to 1996. Their union was adulterous because Rey was validly married to another man at the time.
• Acquisition of Properties: During the cohabitation, a house was constructed on a lot owned by Saguid’s father. The couple also acquired appliances, furniture, and other household effects valued at P111,375.00. Both parties maintained individual and joint bank accounts with First Allied Development Bank.
• Claimed Contributions: Rey alleged that from her earnings as an entertainer in Japan and a fish dealer, she contributed P70,000.00 to the construction of the house and purchased the personal properties. Saguid countered that the house and personal properties were funded solely by his income from the fishing business, emphasizing that Rey’s income was meager and intermittent, and that his savings of P130,000.00 (P75,000.00 of which was in their joint account) paid for the properties.
• Procedural Default: Saguid failed to file a pre-trial brief as required by the trial court. Consequently, the trial court declared him in default and allowed Rey to present evidence ex parte.
• Evidence Presented: Rey presented her savings passbook showing a balance of P21,046.08 and testified to having a P35,465.00 share in the joint account. However, the only concrete proof of contribution to the house were receipts in her name for construction materials totaling P11,413.00.

• Retroactive Application of 1997 Rules: Petitioner argued that the Court of Appeals committed reversible error in applying the 1997 Rules of Civil Procedure retroactively to justify the ex parte presentation of evidence, thereby failing to rule on the propriety of setting aside the default order precipitated by his mistake or excusable negligence due to lack of counsel.
• Reliance on Ex Parte Evidence: Petitioner maintained that the Court of Appeals erred in relying on the factual findings of the trial court, which were based solely on the ex parte evidence presented by the private respondent, asserting that such evidence was insufficient to prove her claims.

• Entitlement to Reimbursement and Ownership: Respondent countered that she was entitled to the reliefs prayed for, having contributed P70,000.00 to the construction of the house from her salary as an entertainer in Japan, and having acquired the personal properties from her own earnings as an entertainer and fish dealer.
• Propriety of Default: Respondent argued that the trial court correctly declared petitioner in default for failing to file a pre-trial brief, justifying the ex parte presentation of evidence.

• Ex Parte Presentation of Evidence: Whether the trial court erred in allowing private respondent to present evidence ex parte due to petitioner's failure to file a pre-trial brief.
• Sufficiency of Evidence on Co-ownership: Whether the trial court's decision regarding the extent of private respondent's co-ownership is supported by evidence, in light of the requirements of Article 148 of the Family Code.

• Ex Parte Presentation of Evidence: The trial court did not err in allowing the ex parte presentation, although the Court of Appeals' reliance on the retroactive effect of the 1997 Rules of Civil Procedure was incorrect. Even before the 1997 Rules took effect, Supreme Court Circular No. 1-89 already required the filing of a pre-trial brief and prescribed that failure to do so could result in the party being declared non-suited or in default. Petitioner's justification of lacking counsel was insufficient to set aside the order, because the right to counsel is not mandated in non-criminal proceedings, and petitioner had successfully managed to file other pleadings without legal assistance.
• Sufficiency of Evidence on Co-ownership: The lower courts' findings on the extent of contribution were not fully supported by evidence. Under Article 148 of the Family Code, which governs adulterous cohabitation, co-ownership is limited to properties acquired through actual joint contribution, and the burden of proving such contribution rests on the claimant. Rey failed to substantiate her claimed P70,000.00 contribution to the house; the only proof of actual contribution were receipts amounting to P11,413.00. Regarding the personal properties acquired from the joint account, because the exact amount of each party's respective contributions to the joint account was not proven, the presumption of equal shares under Article 148 applies, entitling Rey to one-half of the value (P55,687.50).

• Property Regime Under Article 148 of the Family Code — Applies to couples who are not legally capacitated to marry each other (e.g., bigamous marriages, adulterous relationships, concubinage). Only properties acquired through their actual joint contribution of money, property, or industry are owned by them in common in proportion to their respective contributions. Proof of actual contribution is essential; a mere allegation or property title in both names is insufficient.
• Presumption of Equal Shares — In cases governed by Article 148 of the Family Code, if the extent of the parties' respective contributions cannot be proven, their contributions and corresponding shares are presumed to be equal.
• Retroactive Application of Article 148 — Article 148 applies even if the cohabitation or acquisition of property occurred before the effectivity of the Family Code on August 3, 1988, because the provision was intended to fill the hiatus in Article 144 of the Civil Code, which previously lacked rules for property relations in adulterous or concubinage relationships.

• "The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven actual contribution of money, property or industry. Absent proof of the extent thereof, their contributions and corresponding shares shall be presumed to be equal."
• "In the case at bar, although the adulterous cohabitation of the parties commenced in 1987, which is before the date of the effectivity of the Family Code on August 3, 1988, Article 148 thereof applies because this provision was intended precisely to fill up the hiatus in Article 144 of the Civil Code."
• "As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the party’s own evidence and not upon the weakness of the opponent’s defense. This applies with more vigor where, as in the instant case, the plaintiff was allowed to present evidence ex parte."

• Agapay v. Palang, 342 Phil. 302 (1997) — Followed. Established that proof of actual contribution in the acquisition of property is essential in bigamous or adulterous unions; a claim of co-ownership without substantiation of contribution has no basis.
• Tumlos v. Fernandez, G.R. No. 137650, 12 April 2000 — Followed. Reiterated the requirement of proof of actual contribution and ruled that Article 148 of the Family Code applies retroactively to fill the gap in the Civil Code regarding property relations in adulterous relationships.
• Adriano v. Court of Appeals, 385 Phil. 474 (2000) — Followed. Held that property titled in the names of parties to an adulterous relationship is not sufficient proof of co-ownership absent evidence of actual contribution in the acquisition of the property.

• Article 148, Family Code — Governs the property relations of couples not legally capacitated to marry each other. Applied to limit co-ownership to properties acquired through actual joint contribution and to invoke the presumption of equal shares in the absence of proof of the extent of contributions to the joint bank account.
• Section 6, Rule 18, 1997 Rules of Civil Procedure; Supreme Court Circular No. 1-89 — Requires the filing of a pre-trial brief and prescribes that failure to do so allows the plaintiff to present evidence ex parte. Applied to uphold the trial court's order of default, noting that Circular No. 1-89 already provided for such consequences prior to the 1997 Rules.

Davide, Jr., C.J., Vitug, Carpio, and Azcuna, JJ.