GR 257454; (July, 2023) (Digest)
G.R. No. 257454 , July 26, 2023.
Cali Realty Corporation, represented by Dr. Camilo M. Enriquez, Jr., Petitioner, vs. Paz M. Enriquez, Respondent.
FACTS
Camilo M. Enriquez, Sr. and Librada Machica Enriquez were married in 1939 and had five children, including respondent Paz M. Enriquez. Librada died in 1995. Subsequently, Cali Realty Corporation (CRC) was organized with Camilo, Sr. and four of his children as incorporators, excluding Paz. Camilo, Sr. then executed a Deed of Assignment conveying several parcels of land registered in his name to CRC. Paz annotated an adverse claim on the titles, asserting ownership over a one-sixth share of her mother’s estate. CRC filed a Petition for Cancellation of Adverse Claim. The trial court initially granted it, but the Court of Appeals reversed and remanded the case for trial. After trial, the trial court ruled in favor of Paz, ordering CRC to convey to her a one-sixth of one-half portion of the properties and to account for proceeds. The Court of Appeals affirmed the decision. CRC appealed to the Supreme Court.
ISSUE
The main issues were: (1) Whether the properties assigned to CRC were conjugal properties of Camilo, Sr. and Librada; (2) Whether Paz’s counterclaim was compulsory or permissive, and the effect of nonpayment of docket fees; and (3) Whether the award of shares and proceeds from CRC to Paz was proper.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision with modification.
1. On the nature of the properties: The Court ruled that the subject properties were conjugal. Applying Article 160 of the Old Civil Code, properties acquired during the marriage are presumed conjugal. The Transfer Certificates of Title (TCTs) showed the properties were registered in the name of “Camilo Enriquez, married to Librada M. Enriquez” during the marriage. CRC failed to present clear and convincing evidence to rebut this presumption. The phrase “married to” in the titles, under prevailing jurisprudence, indicates the property belongs to the conjugal partnership. Furthermore, the Deed of Assignment itself stated the properties were “inherited by the ASSIGNOR from his deceased parents,” which, without proof of exclusive inheritance, also falls under the conjugal presumption as an acquisition during marriage.
2. On the counterclaim: The Court held that Paz’s counterclaim was compulsory. The Court of Appeals’ prior decision (CA-G.R. CV No. 03725) had definitively ruled it was compulsory because it was closely intertwined with the main issue of the validity of her adverse claim. CRC’s failure to appeal that finding made it the “law of the case.” Thus, the nonpayment of docket fees for a permissive counterclaim was irrelevant. The trial court properly resolved the counterclaim as an integral part of the case.
3. On the awards to Paz: The Court modified the awards.
* Property Share: The Court sustained the order for CRC to convey to Paz a one-sixth of one-half portion of the properties. Upon Librada’s death, her one-half conjugal share was transmitted to her heirs (Camilo, Sr. and their five children). Paz was entitled to her one-sixth hereditary share of that half. Camilo, Sr.’s assignment of the entire property to CRC erroneously included Paz’s share, making the conveyance partly void.
* Corporate Shares and Proceeds: The Court deleted the orders for CRC to transfer 242,000 shares (19.36%) to Paz and to account for proceeds from those shares and from the use of the properties. The right to these corporate shares and income arose from Camilo, Sr.’s estate, not from Librada’s. A settlement of Camilo, Sr.’s estate in a proper proceeding was necessary to determine the lawful distribution of his assets, including his CRC shares. The trial court could not adjudicate these successional rights in the present case, as it required the participation of all compulsory heirs.
* Damages: The award of litigation expenses and attorney’s fees was deleted due to lack of factual and legal basis. The Court found no evidence of bad faith on CRC’s part in filing the petition.
DISPOSITIVE:
WHEREFORE, the Petition is DENIED. The Decision dated September 29, 2020 and Resolution dated June 9, 2021 of the Court of Appeals in CA-G.R. CV No. 07019 are AFFIRMED with MODIFICATION. Petitioner Cali Realty Corporation is ORDERED to convey to respondent Paz M. Enriquez one-sixth (1/6) of one-half (1/2) of the properties covered by the subject Transfer Certificates of Title. All other awards are DELETED.