G.R. No. 200274 - Domingo vs. Spouses Molina

Case Summary (G.R. No. 200274)

Factual Background

The record showed that Anastacio and Flora Domingo acquired an undivided one-half interest over an 18,164 square meter parcel in Camiling, Tarlac on June 15, 1951, as annotated on the Original Certificate of Title (OCT) No. 16354. During his lifetime, Anastacio borrowed money from the spouses Molina. Flora died in 1968. On September 10, 1978, Anastacio executed a conveyance purporting to sell his interest in the property to the spouses Molina; that conveyance was annotated on the OCT. Anastacio died in 1986. The sale was later registered under TCT No. 272967 on May 19, 1995.
Upon learning of the registered transfer, Petitioner Melecio Domingo, a child of Anastacio and Flora, filed a Complaint for Annulment of Title and Recovery of Ownership on May 17, 1999. Melecio alleged that the purported sale was intended only as collateral for a loan, that Anastacio could not validly sell the conjugal property without Flora’s consent, that the conveyance was procured by fraud or forgery, and that he had been in possession of the land since Anastacio’s death.
The parties introduced conflicting testimonial and documentary evidence. A Records Officer from the Register of Deeds testified that he could not locate the original instrument of transfer but that the sale had been annotated during the tenure of a Register related to the Molinas. Melecio’s nephew, George Domingo, testified to residence on the lot since 1986 with several other occupants. The spouses Molina asserted constructive and actual delivery of title, continuous possession, payment of real estate taxes, and that Melecio knew of the transactions. The spouses produced testimony that tenants occupied the lot with the consent of Elena Molina and that Melecio did not reside there. The spouses Molina died during the proceedings and were substituted.

Trial Court Proceedings

The Regional Trial Court dismissed Melecio’s Complaint in a decision dated August 10, 2009. The trial court found that Melecio failed to prove fraud in the conveyance and held that Anastacio could dispose of conjugal property without Flora’s consent when the disposition was necessary to answer for conjugal liabilities. The RTC denied Melecio’s motion for reconsideration.

Court of Appeals Ruling

The Court of Appeals affirmed the RTC in a decision dated August 9, 2011. The CA concluded that Melecio did not prove, by preponderant evidence, that fraud attended the sale. The CA gave weight to the OCT annotation of the conveyance and interpreted the annotated deed as transferring only Anastacio’s rights and interests, excluding Flora’s share. The CA stated that Flora’s prior death did not render the sale wholly void because the surviving spouse may sell his own rights. The CA also held that Melecio’s cause of action had prescribed, reasoning that Melecio failed to bring his action within one year after the decree of registration. The CA denied reconsideration by resolution dated January 10, 2012.

The Parties’ Contentions on Review

Petitioner Melecio Domingo urged that the sale was void for lack of Flora’s consent because the property constituted conjugal partnership property and that fraud attended the conveyance; Melecio also denied that prescription had run.
The respondents adopted their appellate brief and argued, among other points, that Anastacio had delivered the title as payment of a PHP 30,000 debt and that such constructive delivery effected transfer under Article 1498, paragraph 2 of the Civil Code. The respondents further asserted that constructive delivery coupled with their exercise of ownership perfected the sale.

Issues Presented

The Supreme Court identified the controlling issues as: (1) whether the sale of conjugal property to the spouses Molina without Flora’s consent was valid; and (2) whether fraud attended the transfer of the subject property to the spouses Molina.

Ruling of the Supreme Court (Disposition)

The Supreme Court denied the petition for review on certiorari and affirmed the decision of the Court of Appeals dated August 9, 2011 in CA-G.R. CV No. 94160.

Legal Basis and Reasoning

The Court began from the settled principle that factual findings of the trial court, when affirmed by the Court of Appeals, are generally conclusive and binding on the Supreme Court in a Rule 45 petition, absent recognized exceptions. The Court found no exception permitting factual reappraisal. The parties did not dispute that the property was conjugal in nature during the marriage. The Court applied Article 105 of the Family Code, which extends the Code’s rules to conjugal partnerships established before its effectivity, and held that the conjugal partnership of Anastacio and Flora terminated upon Flora’s death in 1968 pursuant to Civil Code, Art. 175 (now Article 126(1) of the Family Code). The Court considered Article 130 of the Family Code, which requires liquidation of conjugal partnership property upon a spouse’s death and prescribes that dispositions or encumbrances made prior to liquidation may be void under certain conditions; however, the Court emphasized that the Family Code applies “without prejudice to vested rights already acquired in accordance with the Civil Code or other laws.”
Pending liquidation, the Court treated the conjugal assets as subject to an implied co-ownership among the surviving spouse and the heirs of the deceased spouse, following Taningco v. Register of Deeds of Laguna. The surviving spouse held a vested one-half undivided share, while the deceased spouse’s heirs shared the other undivided half. Under Civil Code, Art. 493, each co-owner may alienate his part, subject to limitations in relation to co-owners. Applying these principles, the Court held that Anastacio, as a co-owner of an undivided interest, had the right to sell his undivided share. The OCT annotation explicitly stated that only Anastacio’s rights and participation were sold for the sum of P1,000.00. Thus the sale was not void in toto; rather it effected the transfer of Anastacio’s interest to the spouses Molina, making them co-owners to the extent of that interest. The Court invoked the maxim quando res non valet ut ago, valeat quantum valere potest to support recognition of the binding force of the contract to the extent legally possible.
The Court further explained that purchasers who acquired an interest that in due course may be found to belong in part to other co-heirs take the corresponding portion as trustees for such co-heirs. The Court cited Heirs of Protacio Go, Sr. v. Servacio for the proposition that where a survivi

Case Syllabus (G.R. No. 200274)

Parties and Posture

Melecio Domingo was the petitioner who filed a Complaint for Annulment of Title and Recovery of Ownership.
Spouses Genaro Molina and Elena B. Molina, substituted by Ester Molina were the respondents who held registered title to the disputed parcel.
The case proceeded from the Regional Trial Court to the Court of Appeals and thence to the Supreme Court via a petition for review on certiorari under Rule 45.
The spouses Molina died during the pendency of the case and the record also reflects substitution by their adopted son Cornelio Molina.

Key Facts

Anastacio and Flora Domingo purchased an undivided one-half interest in an 18,164 square meter parcel on June 15, 1951 as shown on OCT No. 16354.
Flora died in 1968 and Anastacio subsequently borrowed money from the spouses Molina during his lifetime.
On September 10, 1978, Anastacio executed a conveyance of his interest to the spouses Molina, which was annotated on the OCT.
Anastacio died in 1986 and the sale was registered under TCT No. 272967 on May 19, 1995.
Melecio filed his Complaint on May 17, 1999 alleging that the conveyance was collateral only, that Flora’s consent was required and absent, and that the transfer was tainted by fraud.
The parties presented lay witnesses and a Records Officer of the Register of Deeds who testified regarding the absence in the registry of the original instrument and the OCT annotation of the sale.

Trial Court Ruling

The RTC dismissed the Complaint for failure of proof that the sale was invalid or tainted by fraud.
The RTC held that Anastacio could dispose of conjugal property to answer conjugal liabilities and denied reconsideration.

CA Ruling

The Court of Appeals affirmed the RTC decision in toto on August 9, 2011.
The CA found no preponderant evidence of fraud and gave weight to the OCT annotation and the existence of a notarized deed of conveyance.
The CA ruled that Flora’s death was immaterial because Anastacio sold only his rights and that the action filed by Melecio was barred by prescription for failure to file within one year after registration.
The CA denied the motion for reconsideration for lack of merit.

Issues Presented

Whether the sale of conjugal property effected without the deceased wife’s consent is valid.
Whether fraud attended the conveyance of Anastacio’s interest to the spouses Molina.

Supreme Court Ruling

The Supreme Co