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JOSEFINA C. FRANCISCO v. MASTER IRON WORKS

FACTS:

Josefina Castillo Francisco purchased two parcels of land with a house located in Parañaque, Metro Manila from Imus Rural Bank, Inc. The property was paid for through a check issued by the Commercial Bank of Manila, and TCTs were issued in Josefina's name. Eduardo Francisco executed an Affidavit of Waiver, stating that Josefina bought the property using her own savings and that he was waiving any claims he had over it.

Josefina later mortgaged the property to Leonila Cando for a loan. Meanwhile, Eduardo failed to pay for cement purchased from Master Iron Works & Construction Corporation (MIWCC), resulting in a complaint filed against him by MIWCC. The court ruled in favor of MIWCC, and the property purchased by Josefina was levied upon execution to satisfy the judgment.

Josefina filed an Affidavit of Third Party Claim, asserting that the property was her paraphernal property, but the property was still sold at public auction to MIWCC. In response, Josefina filed a complaint for damages against MIWCC and Sheriff Generoso Alejo, who conducted the sale.

Josefina filed a complaint to nullify the levy and sale of her properties, alleging that she acquired the properties before her marriage to Eduardo and had no knowledge of the judgment against him. She also claimed that no sheriff's certificate of sale was executed. Josefina amended her complaint to include MIWCC as a defendant and sought damages, cancellation of the levying and sale, and cancellation of entries in the property titles.

MIWCC argued in its answer that the properties were conjugal, and Eduardo executed an affidavit of waiver to evade the judgment. Josefina then filed a petition to annul her marriage to Eduardo, alleging that he was already married to another woman when they got married. The RTC declared their marriage null and void.

During the hearings, Josefina testified that she acquired the properties with her family's help and claimed that Eduardo had no involvement in the purchase. Eduardo, on the other hand, stated that he had no knowledge of the purchases and that the property was given to Josefina by her family.

The RTC ruled in favor of Josefina, declaring the levying and sale null and void, and ordering damages and attorney's fees to be paid by the defendants.

ISSUES:

  1. Whether the subject property is the conjugal property of Josefina Castillo and Eduardo Francisco.

  2. Whether the subject properties may be held to answer for the personal obligations of Eduardo.

  3. Whether the petitioner is the sole owner of the property in question.

  4. Whether Article 144 of the New Civil Code applies to the present case.

  5. Whether the petitioner is entitled to a co-ownership under Article 148 of the Family Code.

  6. Whether the petitioner has proven her contribution to the acquisition of the subject property.

    • Whether the petitioner provided sufficient evidence to prove that she borrowed the amount of P320,000.00 from her mother and sister to purchase the subject property.
    • Whether the petitioner's affidavit of waiver executed by her husband is valid and supports her claim of exclusive ownership of the property.

RULING:

  1. The Supreme Court resolved the factual issues raised by the parties since the findings of facts and conclusions of the trial court and the Court of Appeals are opposite. The Court ruled that the subject property is the conjugal property of Josefina Castillo and Eduardo Francisco. It held that the petitioner failed to provide evidence to show that the funds she used to purchase the subject properties were her personal funds or came from her mother and sister. Thus, the subject properties may be held to answer for the personal obligations of Eduardo.

  2. The petitioner failed to prove that she is the sole owner of the property. The evidence on record shows that the property was sold to the petitioner after her marriage to Eduardo.

  3. Article 144 of the New Civil Code does not apply in the present case as it only applies to relationships between a man and a woman who are not incapacitated to marry each other or to a relationship where the marriage is void from the beginning. In this case, the petitioner admitted that Eduardo was incapacitated to marry her.

  4. The petitioner's claim under Article 148 of the Family Code is not valid as it only applies to cohabitation cases not falling under Article 144. Since Eduardo was validly married to another, his share in the co-ownership shall accrue to his conjugal partnership.

  5. The petitioner failed to prove her contribution to the acquisition of the subject property. Her testimony was unsupported and contradicted by other evidence on record.

  6. The petition is DENIED for lack of merit. The Court of Appeals' decision, which reversed the Regional Trial Court's decision, is AFFIRMED.

PRINCIPLES:

  • A question of fact may be resolved by the Supreme Court if the findings of fact of the trial court and the Court of Appeals are inconsistent, if highly meritorious circumstances are present, or if it is necessary to give substantial justice to the parties. (Procedural Principle)

  • The Supreme Court may delve into and resolve factual issues alongside questions of law raised by the parties. (Procedural Principle)

  • The burden of proof lies on the party asserting an affirmative allegation. (Legal Principle)

  • Conjugal partnership of gains is the property regime that governs the relationship between spouses unless they execute a marriage settlement. (Legal Principle)

  • Conjugal property is presumed to be the conjugal property of the spouses absent proof to the contrary. (Legal Principle)

  • In determining the nature of property, the source of funds used for its acquisition must be considered. (Legal Principle)

  • A spouse's separate property may be held liable for the personal obligations of the other spouse if it was acquired during the marriage. (Legal Principle)

  • Article 144 of the New Civil Code applies only to relationships that are not incapacitated to marry each other or to marriages that are void from the beginning.

  • Article 148 of the Family Code applies to cohabitation cases not falling under Article 144, and provides for co-ownership in proportion to the respective contributions of the parties.

  • The burden of proof in establishing contribution to the acquisition of property lies with the claimant. Mere assertions and unsupported testimony are insufficient to prove contribution.

  • The burden of proof lies with the party making allegations in a case.

  • Affidavits must carry probative weight and be supported by sufficient evidence.

  • Marital conformity to a real estate mortgage may nullify claims of exclusive ownership over a property.