G.R. No. 143286 . April 14, 2004.
PROCOPIO VILLANUEVA, NICOLAS RETUYA and PACITA VILLANUEVA, petitioners, vs. COURT OF APPEALS and THE HEIRS OF EUSEBIA NAPISA RETUYA, respondents.

FACTS

Eusebia Napisa Retuya, the legal wife of Nicolas Retuya since 1926, filed a complaint for reconveyance, accounting, and damages against her husband Nicolas, his cohabiting partner Pacita Villanueva, and their son Procopio Villanueva. Eusebia alleged that numerous real properties acquired during her marriage to Nicolas were conjugal. Nicolas had abandoned the conjugal home in 1945 to cohabit with Pacita, and he alone received the income from these properties. After Nicolas suffered a stroke in 1985, their son Procopio took over the collection of the rentals. Demands for settlement were ignored, prompting the lawsuit.
The trial court ruled in favor of Eusebia, declaring the subject properties, except one, as conjugal and ordering their reconveyance and an accounting of fruits and income. The Court of Appeals affirmed this decision. The petitioners argued that the properties were Nicolas’s exclusive capital, that Eusebia’s action had prescribed, and that the property under Tax Declaration No. 01450 registered in Pacita’s name was acquired through her own funds.

ISSUE

The core issue is whether the subject properties are conjugal partnership properties of Eusebia and Nicolas, and consequently, whether Eusebia is entitled to reconveyance and an accounting of the income derived therefrom.

RULING

The Supreme Court denied the petition and affirmed the appellate court’s decision. The legal logic rests on the presumption of conjugality under Article 160 of the Civil Code, which states that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved to pertain exclusively to the husband or wife. This presumption applies to properties acquired during the marriage. The petitioners failed to present clear, convincing, and conclusive evidence to rebut this presumption. Their claim that the properties were acquired through Nicolas’s exclusive funds, unsupported by documentary proof, was insufficient to overcome the legal presumption.
Regarding the property registered in Pacita’s name (Tax Dec. No. 01450), the Court applied Article 148 of the Family Code, governing cohabitation without a valid marriage. It provides that only properties acquired by both parties through their actual joint contribution are owned in common. The evidence showed the purchase money came from Nicolas, not from any contribution by Pacita. Therefore, the property was correctly declared as conjugal property of the lawful spouses. The Court also found no merit in the defense of prescription, as an action for reconveyance based on an implied trust prescribes in ten years from the date the trust is repudiated, which in this case was when the demand was refused.