G.R. No. L-34313 March 11, 1988
SALVADOR ASCALON, et al., petitioners, vs. COURT OF APPEALS and LUIS E. CUAYCONG, JR., respondents.

FACTS

This case involves the intestate estate of Praxedes Ascalon, who died in 1959. She was survived by her husband, Luis D. Cuaycong, Sr., her siblings, and her nephews and nieces. The respondent, Luis E. Cuaycong, Jr., is the son of Luis, Sr., from another woman. After Praxedes’s death, Luis, Jr., initiated special proceedings. Luis, Sr., was later substituted as petitioner and appointed judicial administrator. The estate included several parcels of land collectively known as Hacienda Bacayan. Upon Luis, Sr.’s death in 1964, Luis, Jr., was appointed administrator. A dispute arose regarding the nature of these properties. The heirs of Praxedes (the petitioners) claimed the entire Hacienda Bacayan was conjugal property of Praxedes and Luis, Sr. Luis, Jr., contended that only 20% was conjugal, and 80% was the separate capital property of his father, Luis, Sr., allegedly acquired through a donation and sale from his own father, Justo Cuaycong.
The pivotal evidence was an uncaptioned 1934 document (Exhibit “G”) executed by Justo Cuaycong and Luis, Sr. The petitioners argued this document evidenced a sale of the hacienda to Luis, Sr., which, occurring during his marriage, would make the property conjugal. Luis, Jr., argued it represented a donation or a transfer for a nominal sum, making it Luis, Sr.’s separate property. The trial court declared the properties conjugal. The Court of Appeals reversed, holding that 80% of the land was Luis, Sr.’s separate property, based on its interpretation of the document and the alleged inadequacy of the stated purchase price of one peso.

ISSUE

Whether the parcels of land comprising Hacienda Bacayan are entirely conjugal property of the spouses Luis D. Cuaycong, Sr. and Praxedes Ascalon, or partly the separate property of Luis, Sr.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the trial court’s order. The Court held the properties were entirely conjugal. The legal logic centered on the interpretation of the 1934 document and the applicable presumptions. The Court found the document was unequivocally a deed of sale (“vendo, cedo y traspaso”), not a donation. It imposed specific, onerous obligations on Luis, Sr., including paying a substantial pre-existing mortgage debt of P61,000 and another bank loan of P7,500. The nominal one-peso consideration was not grossly inadequate given these assumed liabilities, which constituted the real price. Since the acquisition by purchase occurred during the marriage, Article 160 of the Civil Code applied, creating a presumption that the property is conjugal. This presumption was strengthened by Luis, Sr.’s own judicial admissions in the initial petition for administration, where he certified the properties as conjugal, and his failure to assert a separate claim during his lifetime. The burden to rebut the presumption with clear and convincing proof fell on Luis, Jr., which he failed to do. The Court of Appeals erred in re-evaluating the factual findings and credibility assessments made by the trial court, which are generally binding on appeal. Therefore, the entire Hacienda Bacayan was correctly declared conjugal property.