Villanueva vs. Court of Appeals

Properties acquired during a subsisting marriage are presumed conjugal under Article 116 of the Family Code, notwithstanding that the acquisition appears to have been made or registered in the name of one spouse or a cohabiting partner, and such presumption is not defeated by the spouse's cohabitation with another.

Nicolas Retuya and Eusebia Napisa were married on October 7, 1926 and acquired 22 real properties in Mandaue City and Consolacion, Cebu. In 1945, Nicolas abandoned the family home and cohabited with Pacita Villanueva, with whom he begot an illegitimate son, Procopio Villanueva. Pacita had no occupation or independent source of income. Nicolas suffered a stroke on January 27, 1985, rendering him senile and incapacitated, whereupon Procopio took over the administration and receipt of income from the properties. Eusebia's attempts to negotiate with Procopio and seek barangay mediation failed, prompting the filing of a complaint for reconveyance, accounting, and damages.

• Marriage and Acquisition: Nicolas Retuya and Eusebia Napisa were married in 1926 and acquired 22 real properties during their marriage. Some of these properties earned income from coconuts, while others were leased to various corporations and individuals, generating substantial annual rentals.
• Cohabitation and Administration: In 1945, Nicolas abandoned Eusebia and cohabited with Pacita Villanueva, who had no occupation or independent income. Nicolas solely administered the properties and received the income. On January 27, 1985, Nicolas suffered a stroke that left him incapacitated and senile. His illegitimate son, Procopio, subsequently took over the receipt of property income.
• Demand and Litigation: Eusebia's daughter, Natividad, attempted to negotiate with Procopio regarding the administration of the properties, but Procopio refused. After failed barangay conciliation and written demands, Eusebia filed a complaint for reconveyance, accounting, and damages on October 13, 1988.
• Acquisition of Lot No. 152: One of the subject properties, Lot No. 152, was purchased on October 4, 1957, during the subsistence of Nicolas and Eusebia's marriage. The deed of sale, transfer certificate of title, and tax declaration for this lot were placed in the name of Pacita Villanueva. Evidence from a prior final court decision revealed that the seller, Tranquiliana Marababol Remulta, initially refused to sign the deed because the buyer named was Pacita instead of Nicolas, who was the actual offeror.

• Failure to State Cause of Action: Petitioners argued that the Court of Appeals erred in sustaining the declaration that the properties are conjugal, claiming this was not one of the causes of action in Eusebia's complaint.
• Misapplication of Presumption: Petitioners maintained that the Court of Appeals erred in applying the presumption under Article 116 of the Family Code that properties acquired during the marriage are conjugal.
• Applicability of Art. 148: Petitioners argued that the Court of Appeals erred in not applying the presumption of co-ownership under Article 148 of the Family Code in favor of Nicolas and Pacita, given their cohabitation.
• Prescription and Laches: Petitioners contended that the action for reconveyance over Lot No. 152 was already barred by prescription or laches.
• Exclusive Ownership: Petitioners asserted that the tax declarations in the name of Nicolas alone and the title in the name of Pacita prove exclusive ownership, pointing out that Nicolas even misrepresented his civil status as "single" in some documents to exclude Eusebia.

• Conjugal Nature of Properties: Respondents maintained that the properties were acquired during the marriage of Nicolas and Eusebia and are thus conjugal, as explicitly stated in the complaint.
• Pre-trial Delimitation: Respondents argued that the defense of prescription and laches was waived because petitioners failed to include it in the pre-trial order despite raising it in their answer.
• Lack of Contribution: Respondents countered that Pacita failed to prove actual joint contribution in the acquisition of Lot No. 152, rendering Article 148 inapplicable.

• Conjugal Allegation: Whether the Court of Appeals erred in declaring the properties conjugal when this was allegedly not pleaded as a cause of action.
• Prescription and Laches: Whether the defense of prescription and laches may be raised for the first time on appeal after its exclusion from the pre-trial order.
• Presumption under Art. 116: Whether the Court of Appeals erred in applying the presumption of conjugality under Article 116 of the Family Code.
• Art. 148 Co-ownership: Whether the Court of Appeals erred in not applying the presumption of co-ownership under Article 148 of the Family Code in favor of Nicolas and Pacita.

• Conjugal Allegation: The contention was dismissed as baseless. A cursory reading of the complaint shows that the second paragraph explicitly declares the spouses as "conjugal owners" of the subject properties.
• Prescription and Laches: The defense was barred for failure to include it in the pre-trial order. Section 1, Rule 9 of the Rules of Court does not apply because the defense was raised in the answer but omitted from the pre-trial stipulation. Parties are bound by the delimitation of issues agreed upon during pre-trial, and issues not included may not be raised on appeal absent exceptional circumstances.
• Presumption under Art. 116: The properties were acquired during the marriage of Nicolas and Eusebia, triggering the presumption of conjugality under Article 116. This presumption is not rebutted by the mere fact that tax declarations or titles are in the name of one spouse or a third party, nor by the unilateral declaration of a spouse claiming to be single. The cohabitation of a spouse with another does not sever the subsisting marriage; thus, properties acquired during the marriage remain conjugal to the exclusion of the paramour.
• Art. 148 Co-ownership: Article 148 requires proof of actual joint contribution by both live-in partners before co-ownership arises. Because Pacita failed to prove that she used her own money to acquire Lot No. 152, the presumption of equal sharing under Article 148 does not apply.

• Presumption of Conjugal Property (Art. 116, Family Code) — All property acquired during the marriage, whether the acquisition appears to have been made, contracted, or registered in the name of one or both spouses, is presumed conjugal unless the contrary is proved. The burden of proving exclusive ownership rests on the party asserting it, requiring clear and convincing evidence. The presumption is not rebutted by the mere fact that the certificate of title or tax declaration is in the name of one spouse only. Applied to uphold the conjugal nature of properties acquired during the marriage of Nicolas and Eusebia, despite tax declarations being in Nicolas or Pacita's names.
• Pre-trial Delimitation of Issues — The determination of issues during the pre-trial conference bars the consideration of other questions during trial or on appeal. Issues not included in the pre-trial order may be considered only if they are impliedly included or inferable from the issues raised by necessary implication. Applied to bar the defense of prescription and laches, which was raised in the answer but omitted from the pre-trial order.
• Actual Joint Contribution in Cohabitation (Art. 148, Family Code) — In cases of cohabitation not falling under Article 147, only properties acquired through actual joint contribution of money, property, or industry are owned in common in proportion to respective contributions. Proof of actual joint contribution is a condition precedent before the presumption of equal sharing arises. Applied to deny Pacita's claim of co-ownership over Lot No. 152 due to lack of proof of her actual contribution.
• Indissolubility of the Marital Tie — The cohabitation of a spouse with another person, even for a long period, does not sever the tie of a subsisting previous marriage. The law will not give a stamp of approval to an illegal and immoral act to the detriment of the legal spouse. Applied to maintain the conjugal property regime between Nicolas and Eusebia despite Nicolas' cohabitation with Pacita.

• "The cohabitation of a spouse with another person, even for a long period, does not sever the tie of a subsisting previous marriage. Otherwise, the law would be giving a stamp of approval to an act that is both illegal and immoral."
• "Whether a property is conjugal or not is determined by law and not by the will of one of the spouses. No unilateral declaration by one spouse can change the character of conjugal property."
• "Simply put, proof of actual contribution by both parties is required, otherwise there is no co-ownership and no presumption of equal sharing."

• Macaraeg v. Court of Appeals, G.R. No. 48008, 20 January 1989, 169 SCRA 259 — Followed. Stated that the determination of issues during the pre-trial conference bars the consideration of other questions, whether during trial or on appeal.
• Diancin v. Court of Appeals, G.R. No. 119991, 20 November 2000, 345 SCRA 117 — Followed. Held that all property acquired by the spouses during the marriage, regardless in whose name the property is registered, is presumed conjugal unless proved otherwise.
• Borja-Manzano v. Sanchez, A.M. No. MTJ-00-1329, 8 March 2001, 354 SCRA 1 — Followed. Established that the cohabitation of a spouse with another person does not sever the tie of a subsisting previous marriage.
• Mendoza v. Reyes, 209 Phil. 120 (1983) — Followed. Ruled that the presumption of conjugality is not rebutted by the mere fact that the certificate of title or tax declaration is in the name of one of the spouses only.

• Article 116, Family Code of the Philippines — Presumes all property acquired during the marriage as conjugal unless the contrary is proved, even if registered in the name of one spouse. Applied as the controlling presumption once it was established that the subject properties were acquired during the marriage of Nicolas and Eusebia.
• Article 148, Family Code of the Philippines — Governs property relations of couples in cohabitation not falling under Art. 147, requiring actual joint contribution for co-ownership. Inapplicable to benefit Pacita because she failed to prove her actual contribution to the acquisition of Lot No. 152.
• Article 105, Family Code of the Philippines — Mandates the retroactive application of the Family Code to conjugal partnerships established before its effectivity, without prejudice to vested rights. Applied to subject the property relations of Nicolas and Eusebia to the Family Code.
• Section 1, Rule 9, Rules of Court — Deems defenses and objections not pleaded in a motion to dismiss or answer as waived, and allows dismissal based on statute of limitations if it appears from the pleadings. Distinguished and held inapplicable because the defense of prescription was pleaded in the answer but waived by its non-inclusion in the pre-trial order.

Davide, Jr., Panganiban, Ynares-Santiago, and Azcuna, JJ.