The Supreme Court ruled that properties acquired during a marriage, even if later annulled due to psychological incapacity, are subject to co-ownership principles. This means such properties are presumed to have been acquired through the joint efforts of the spouses and must be divided equally. The decision clarifies the property rights of parties in annulled marriages, particularly concerning assets acquired during the union, safeguarding the economic interests of both spouses.

From Nullity to Co-Ownership: Unraveling Property Rights After Annulment

The case of Juan Sevilla Salas, Jr. v. Eden Villena Aguila (G.R. No. 202370, September 23, 2013) delves into the complexities of property division following the annulment of a marriage based on psychological incapacity. At the heart of the matter is determining how assets acquired during the marriage should be distributed when the union is later declared void. This issue arises because the Family Code provides different property regimes for valid marriages, void marriages, and unions without marriage, leading to potential confusion when a marriage initially believed to be valid is later nullified.

Salas and Aguila were married on September 7, 1985, and had a daughter in 1986. Shortly after, Salas abandoned the conjugal home, ceasing contact with Aguila and their daughter. In 2003, Aguila filed for declaration of nullity of marriage based on psychological incapacity under Article 36 of the Family Code, stating they had no conjugal properties. The trial court granted the petition in 2007, also ordering the “dissolution of their conjugal partnership of gains, if any.” Subsequently, Aguila discovered properties registered under “Juan S. Salas, married to Rubina C. Salas,” leading her to file a manifestation seeking their inclusion in the property division.

The central legal question is whether these properties, acquired during the marriage but titled with Salas’ name and his common-law wife’s name, should be considered conjugal assets subject to partition. Salas opposed, arguing that Aguila’s initial claim of no conjugal property constituted a judicial admission. He also asserted that Aguila had waived her rights by receiving other properties. Rubina Cortez, claiming to be Salas’s common-law wife and the true owner of the discovered properties, sought to intervene, arguing that the properties were her paraphernal assets and that Salas had no contribution to their purchase. The Regional Trial Court (RTC) ordered the partition of the discovered properties, a decision affirmed by the Court of Appeals (CA), leading Salas to appeal to the Supreme Court.

The Supreme Court addressed Salas’s claims, finding them unmeritorious. Salas argued that Aguila’s initial statement in her petition about not having conjugal properties should bar her from claiming a share in the newly discovered assets. However, the Court considered this argument untenable. The court stated that Aguila was clearly mistaken in her initial assessment, as she only discovered the properties later and before the RTC decision was promulgated.

On the other hand, the Supreme Court pointed out that Aquila proved that the Discovered Properties were acquired by Salas during the marriage. Both the RTC and the CA agreed that the Discovered Properties registered in Salas’ name were acquired during his marriage with Aguila. The TCTs of the Discovered Properties were entered on 2 July 1999 and 29 September 2003, or during the validity of Salas and Aguila’s marriage. Thus, the court emphasized the principle that factual findings of lower courts, especially when affirmed by the Court of Appeals, are generally binding, absent compelling reasons to the contrary. Salas presented photocopies of alleged properties transferred to Aguila. However, the RTC rejected them due to a lack of certified true copies and documentation.

The Court also dismissed the contention that Rubina owned the discovered properties. The Supreme Court stated that “The phrase ‘married to’ is merely descriptive of the civil status of the registered owner.”

The Supreme Court referred to the case of Diño v. Diño, wherein it held that Article 147 of the Family Code applies to void marriages under Article 36 of the same code. Article 147 states:

ART. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares.

Thus, property acquired during the marriage is prima facie presumed to have been obtained through the couple’s joint efforts and governed by the rules on co-ownership. The Supreme Court held that Salas did not rebut this presumption.

The court’s application of Article 147 underscores a critical point: even in cases where a marriage is declared void due to psychological incapacity, the financial contributions and efforts of both parties during the union are recognized. This ensures that one party is not unfairly disadvantaged when it comes to dividing assets accumulated during the period they were together.

FAQs

What was the key issue in this case?	The key issue was how to divide properties acquired during a marriage that was later annulled due to psychological incapacity, specifically when one party claimed no assets existed initially.
What is Article 36 of the Family Code?	Article 36 of the Family Code refers to psychological incapacity, which, if proven, can be grounds for declaring a marriage null and void from the beginning. It requires demonstrating a severe and incurable condition that prevents a spouse from fulfilling essential marital obligations.
What does co-ownership mean in this context?	Co-ownership means that the properties acquired during the marriage are presumed to have been obtained through the joint efforts of both spouses and are owned by them in equal shares. This principle applies even if the marriage is later declared void.
Who is Rubina Cortez, and what was her claim?	Rubina Cortez claimed to be Salas’s common-law wife and asserted that she owned the properties in question, arguing they were her paraphernal assets acquired independently of Salas. However, the court did not uphold her claim.
What is the significance of the phrase “married to” on the property titles?	The phrase “married to” on the property titles is considered merely descriptive of the civil status of the registered owner and does not automatically grant ownership rights to the spouse mentioned. It primarily serves to identify the owner’s marital status at the time of registration.
Why was Salas’s argument about Aguila’s initial claim of no conjugal property rejected?	Salas’s argument was rejected because Aguila’s initial claim was made before she discovered the properties in question, and the court recognized that her statement was a mistake based on a lack of knowledge at the time.
What evidence did Aguila present to support her claim?	Aguila presented Transfer Certificates of Title (TCTs) showing that the properties were registered under Salas’s name during their marriage, which established a presumption that they were acquired through their joint efforts.
Can a third party intervene in a marriage annulment case to claim property rights?	A third party can only intervene if they have a legal interest in the matter in litigation or would be adversely affected by the distribution of the property. In this case, Rubina failed to prove her legal interest.

In summary, the Supreme Court’s decision reinforces the principle of co-ownership in cases of annulled marriages due to psychological incapacity, ensuring a fair division of assets acquired during the union. This ruling highlights the importance of presenting clear and convincing evidence to support property claims and underscores that even in void marriages, the efforts and contributions of both parties are considered in determining property rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Juan Sevilla Salas, Jr. v. Eden Villena Aguila, G.R. No. 202370, September 23, 2013