G.R. No. 68873 March 31, 1989
LUCILDA DAEL, EVERGISTO DAEL, DOMINGO DAEL, JR., CONRADO DAEL, FEDERICO DURANA, JR., FREDISVINDA DURANA, FLEURDELIZADA DURANA, FABIAN DURANA and FE PATRICIO DURANA, petitioners, vs. INTERMEDIATE APPELLATE COURT, CARMENCITA CABUTIHAN, NONILON CABUTIHAN, ROMULO CABUTIHAN, LERMO CABUTIHAN, and BIENVENIDO CABUTIHAN, respondents.

FACTS

Victorina Durana died intestate. She was the second wife of Cesario Cabutihan, who predeceased her. Cesario was first married to Bienvenida Durana, Victorina’s sister, with whom he had five children (the private respondents). The second marriage produced no children. The petitioners are the nieces and nephews of Victorina, being the children of her other siblings. The estate proceedings were initiated by private respondent Carmencita Cabutihan. The core dispute centered on the classification of properties listed in the estate inventory, particularly whether they were part of the conjugal partnership of Cesario’s first marriage, his second marriage with Victorina, or were Victorina’s paraphernal assets. The trial court and the Intermediate Appellate Court ruled that Victorina brought no paraphernal property to her marriage and that the primary asset, a lucrative copra business, was established during Cesario’s first marriage. They concluded that the properties acquired during the second marriage were fruits of this pre-existing business and thus belonged to the conjugal partnership of the first marriage.

ISSUE

The principal issue was whether the properties listed in the inventory of Victorina Durana’s estate were correctly classified by the lower courts as belonging to the conjugal partnership of the first marriage of Cesario Cabutihan, thereby excluding them from Victorina’s estate available for distribution to her heirs.

RULING

The Supreme Court reversed the decisions of the lower courts. The legal logic hinged on the presumption of conjugal ownership under the Civil Code. Properties acquired during a marriage are presumed to belong to the conjugal partnership unless proven to be paraphernal or exclusive. The Court found that the lower courts erroneously applied this presumption. The properties in question were acquired during the second marriage of Cesario and Victorina. The burden of proof to rebut the presumption that these were conjugal properties of that second marriage lay upon the private respondents (children from the first marriage), who claimed they were fruits of the first conjugal partnership. The Supreme Court held that this burden was not satisfactorily discharged. Mere proof that the capital originated from a business started in the first marriage was insufficient; it must be conclusively shown that the assets themselves were fruits of that capital, not merely acquired with income generated during the second marriage. The Court remanded the case for proper determination, instructing that the properties be presumed conjugal of the second marriage. Consequently, one-half of these would form part of Victorina’s estate for distribution to her heirs (the petitioners and private respondents as her nieces and nephews), while the other half would form part of Cesario’s estate to be divided among his heirs (Victorina and his five children).