Title
Nayve-Pua vs. Union Bank of the Philippines
Case
G.R. No. 253450
Decision Date
Jan 22, 2024
Lani Nayve-Pua contested that property acquired during her cohabitation was jointly owned. The SC upheld that the mortgage was valid as the property was registered solely under Stephen's name and was his exclusive property.
property regime
conjugal partnership
cohabitation
A

Case Summary (G.R. No. 253450)

Procedural Posture

RTC, Quezon City, Branch 216 (Civil Case No. Q‑04‑51749) dismissed Lani’s complaint on August 30, 2016. The Court of Appeals affirmed on December 20, 2019 and denied reconsideration on September 2, 2020. The Supreme Court denied the petition for review on certiorari; the decision under review was affirmed.

Key Dates

Cohabitation began December 1975; property purchased March 1978; children born 1976–1982 (all before marriage); marriage of Lani and Stephen July 1983; mortgage executed January 1998; certificate of sale issued to Union Bank February 10, 2003; RTC decision August 30, 2016; CA decision December 20, 2019 (resolution September 2, 2020); Supreme Court decision (denial of petition) rendered in the appealed matter.

Applicable Law (1987 Constitution as basis) and Statutory Provisions Relied Upon

  • Constitution: 1987 Philippine Constitution (applicable because the decision date is after 1990).
  • Civil Code provisions discussed: arts. 119, 143, 148, 158, 160, 223, 227, 228, 232, 235.
  • Family Code provisions applied or discussed (suppletory to Civil Code rules on conjugal partnership of gains): arts. 109, 116, 147, 153, 155, 158, 160, and art. 124 (on administration, disposition and encumbrance of conjugal partnership).
  • Torrens system principle (strength of registered title) as treated in the appellate and Supreme Court reasoning.

Core Facts

Lani and Stephen lived together from 1975 and had four children prior to their marriage in July 1983. In March 1978 Stephen purchased the subject property and the title was registered solely in his name as a single person. Years later (1997–1998) Spouses Uy, related by family ties to Stephen, used the property as collateral for a loan from Union Bank purportedly by special power of attorney (SPA) executed in the names of Lani and Stephen. Lani denied signing the SPA and denied consenting to the mortgage; when Spouses Uy defaulted, Union Bank foreclosed and acquired the property at public auction. Lani sued to annul the mortgage, foreclosure, and certificate of sale.

Parties’ Contentions

  • Petitioner (Lani): The property was acquired during cohabitation; Article 147 of the Family Code presumes co‑ownership of property acquired while parties live together as husband and wife; absence of Lani’s written consent (per Article 124) makes the mortgage void; alleged forgery of her SPA signature; property was the family home.
  • Respondent (Union Bank): The property was Stephen’s exclusive property because it was acquired before marriage and the title and sale documents name Stephen as sole purchaser; the SPA and REM were properly notarized and annotated on the title; Union Bank acted in good faith and exercised standard diligence, including appraisal and inspection.

Issue Presented

Whether the mortgage and subsequent foreclosure in favor of Union Bank should be annulled, and whether Lani’s consent was necessary to validate the mortgage.

Standard of Review and Scope of This Court’s Inquiry

The Supreme Court adhered to the established rule of deference to trial court factual findings when affirmed by the Court of Appeals, declining to reweigh evidence absent recognized exceptions. The petitioner did not demonstrate facts or circumstances warranting departure from those findings.

Majority Holding

The petition is denied. The Supreme Court affirmed the Court of Appeals and the Regional Trial Court: Lani failed to prove that the property was conjugal or that she had an ownership interest requiring her consent to the mortgage; Union Bank exercised required diligence and was a mortgagee in good faith; the mortgage and foreclosure stand.

Majority Reasoning — Character of Ownership and Burden of Proof

  • The property was acquired by Stephen in 1978 and the title identifies him as sole owner prior to marriage. Because the acquisition predated the 1983 marriage, the presumption that property acquired during marriage is conjugal does not apply. Under Civil Code art. 148 and Family Code art. 109, property "brought to the marriage as his or her own" is exclusive to that spouse.
  • The conversion rule (Civil Code art. 158) that paraphernal property becomes conjugal when improvements are made at conjugal expense does not apply: the two‑storey residential home was already included in the 1978 purchase and not constructed at partnership expense during the marriage. Accordingly, the property retained its character as Stephen’s separate property.
  • Where acquisition during marriage would give rise to the conjugal presumption, the spouse asserting exclusivity must overcome the presumption by clear and convincing evidence. Here Lani admitted the property was acquired before marriage and therefore bore the heavier onus to prove co‑ownership or conversion — a burden she did not meet.

Majority Reasoning — Article 147 and Proof of Cohabitation/Contribution

  • Article 147’s presumption of co‑ownership for couples who live exclusively as husband and wife without benefit of marriage is only prima facie and may be rebutted by proof to the contrary. The Court found that Lani did not sufficiently show (i) that she and Stephen lived exclusively as husband and wife at the relevant times, or (ii) that she actually contributed to the acquisition of the property.
  • Documentary evidence (Conditional Contract of Sale and Deed of Absolute Sale) and the Torrens title naming Stephen alone were persuasive and uncontroverted. The children’s birth certificates established residence only during 1978–1982 but did not prove continued occupancy or contribution at the time of the mortgage (1998). Lani failed to present other corroborative evidence (e.g., barangay certification, utility bills, neighbor testimony) to establish ongoing residency or contribution.

Majority Reasoning — Family Home Status and Consent Requirement

  • The Court analyzed the family home concept (Civil Code arts. 223, 227–228; Family Code art. 153). To claim protection or consent rights as a beneficiary of the family home, a party must prove that the property was actually used and occupied as the family residence at the time relevant to the encumbrance. Lani did not do so for the 1998 mortgage.
  • Even if the property were a family home, both Civil Code art. 232 and Family Code art. 155 allow execution or foreclosure of the family home in specified instances, including satisfaction of a debt secured by a mortgage constituted on the premises. Because the property was established as Stephen’s separate property, Lani’s consent was not requisite to validate the mortgage and foreclosu

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