Case Summary (A.C. No. 9831)
Background Facts
Lani and Stephen began living together in December 1975, and they had four children before their marriage in July 1983. They purchased a property in March 1978 in Quezon City, which was registered solely under Stephen's name. In January 2004, Lani discovered that this property had been mortgaged to Union Bank by the Uys, who failed to repay their loan, leading to foreclosure proceedings that threatened their family home.
Legal Proceedings and Initial Rulings
In 2004, Lani filed a complaint seeking to annul the real estate mortgage (REM) and the foreclosure by Union Bank, claiming she was a co-owner of the property. However, the Regional Trial Court (RTC) dismissed her complaint, concluding that Lani had failed to prove her ownership interest. The RTC found that the property was Stephen's exclusive hereditary property because he had acquired it before their marriage.
Court of Appeals Decision
Lani appealed to the Court of Appeals (CA), citing provisions of the Family Code, particularly Article 147, which presumes co-ownership for properties acquired during cohabitation. Nevertheless, the CA affirmed the RTC's ruling, reiterating that the presumption of co-ownership is prima facie and can be rebutted. They ruled that Lani had not presented sufficient evidence to show that the property was acquired through their joint efforts and upheld the validity of the mortgage and the title under the Torrens system.
Supreme Court's Ruling
Lani elevated her case to the Supreme Court, arguing that her consent was necessary for the mortgage agreement to be valid. However, the Supreme Court upheld the earlier decisions, determining that factual findings of both the RTC and the CA were binding. The Court emphasized that since the property was acquired before Lani and Stephen's marriage, it is considered Stephen’s exclusive property, and the mortgage was valid despite Lani’s claim of forgery regarding her signature on the Special Power of Attorney (SPA).
Ownership and Property Regime Analysis
The Court reinforced the principles governing the conjugal partnership of gains, indicating that properties acquired during the marriage are presumed to be jointly owned, but properties obtained before marriage remain as exclusive property unless proven otherwise. The mortgaged property fell under the definition of paraphernal or separate property. Lani was tasked with proving otherwise but failed, as the evidence showed that the property had been purchased with Stephen's exclusive funds.
Judgment on the Family Home
Regarding Lani's assertion that the property served as their family home, the Supreme Court indicated that mere residence in the property is insufficient to classify it as a family home for the purposes of protection against foreclosure. The evidence presented, including birth certificates of the children, did not convinc
...continue readingCase Syllabus (A.C. No. 9831)
Parties and Procedural History
- Petitioner: Lani Nayve-Pua
- Respondent: Union Bank of the Philippines
- Case Numbers: G.R. No. 253450; CA-G.R. CV No. 108917; RTC Civil Case No. Q-04-51749
- The case involves the validity of a real estate mortgage (REM), foreclosure, and certificate of sale
- The Petition seeks review under Rule 45 of the Rules of Court challenging the Court of Appeals decision dated December 20, 2019 and Resolution dated September 2, 2020 which affirmed the RTC decision dated August 30, 2016
Facts
- Lani Nayve-Pua and Stephen Pua began cohabiting as husband and wife in December 1975 without legal impediment; four children were born during this time
- In March 1978, the couple bought a property in Diliman, Quezon City registered under Stephen Pua's name as a single Filipino
- In July 1983, Lani and Stephen legally married, establishing conjugal partnership of gains as the property regime
- The house on the property became the family home
- In January 2004, Lani discovered the property had been mortgaged and foreclosed by Union Bank due to a loan default by Spouses Cromwell and Catherine Uy, who used the property as collateral via a Special Power of Attorney (SPA) she claims to have forged
- Lani filed suit to annul the mortgage, foreclosure, and certificate of sale against Union Bank and Spouses Uy
Issues
- Whether the mortgage and foreclosure in favor of Union Bank should be annulled
- Whether Lani's consent to the mortgage was necessary for its validity
Legal Framework
- Property regime between spouses prior to marriage governed by Article 147, Family Code (rules on co-ownership during cohabitation)
- Property regime upon marriage governed by Civil Code provisions on conjugal partnership of gains (Articles 119, 143, 148, 158, 160)
- Presumption of conjugal ownership of properties acquired during marriage unless proven exclusive
- Mortgage and encumbrance requirements under Articles 124 (Family Code), 232, 235 (Civil Code), 155, 158, and 160 (Family Code) regarding family home and spouse's consent
Court Findings
- The property