G.R. No. 102330 November 25, 1998
TERESITA C. FRANCISCO, petitioner, vs. HON. COURT OF APPEALS; and CONCHITA EVANGELISTA and Her Husband SIMEON EVANGELISTA; ARACELI F. MARILLA and Her Husband FREDDY MARILLA; ANTONIO V. FRANCISCO; and EUSEBIO FRANCISCO, respondents.

FACTS

Petitioner Teresita C. Francisco is the legal wife of private respondent Eusebio Francisco by his second marriage. The other private respondents are Eusebio’s children from his first marriage. Petitioner alleged that several properties, including a sari-sari store, residential houses, lots, and an apartment, were acquired during her marriage to Eusebio and thus constituted conjugal partnership property. She further claimed that Eusebio became incapacitated due to illness and was persuaded to sign a general power of attorney authorizing his daughter, Conchita Evangelista, to administer some of these properties.
Consequently, petitioner filed a suit for damages, annulment of the power of attorney, and sought to be declared administratrix of the disputed properties. The trial court dismissed her complaint, declaring the properties as the exclusive capital of Eusebio and upholding his capacity to administer them. The Court of Appeals affirmed this decision in toto, prompting this petition for review.

ISSUE

Whether the Court of Appeals committed reversible error in affirming the trial court’s ruling that the subject properties are the exclusive capital of Eusebio Francisco and not conjugal partnership property.

RULING

The Supreme Court denied the petition and affirmed the assailed decision. The pivotal legal issue was the applicable law governing the property regime. While petitioner argued for the application of the Family Code, which repealed the relevant Civil Code provisions on conjugal partnership, the Court held that the repeal did not impair vested rights accrued under the old law. Since the property relations in question vested prior to the Family Code’s effectivity, the New Civil Code provisions governed.
Under Article 160 of the New Civil Code, all property of the marriage is presumed conjugal unless proven to belong exclusively to one spouse. However, this presumption applies only after proof is first presented that the property was acquired during the marriage. The burden was on petitioner to establish that the disputed assets were acquired during her coverture with Eusebio. The Court found she failed to discharge this burden. Eusebio’s testimony, which petitioner did not refute, established that the land was inherited from his parents, making it his exclusive property under Article 148 of the Civil Code. The other properties were either acquired through his industry prior to the second marriage or constructed using funds from his exclusive capital. Without proof of acquisition during the marriage, the presumption of conjugality did not arise. Consequently, the properties remained Eusebio’s exclusive capital, and he retained the right to administer them.