G.R. No. L-10799; April 28, 1958
URSULA JOSE DE VILLABONA, petitioner, vs. THE COURT OF APPEALS and SIMEONA SANTOS DE JOSE, respondents.

FACTS

Petitioner Ursula Jose de Villabona, one of the children of the deceased Ramon Jose by his first marriage, filed an action to be declared, with her siblings, as owners of an undivided one-half share of a lot and building in Manila, claiming it as part of the conjugal partnership property of Ramon Jose and his surviving spouse, respondent Simeona Santos de Jose. The lot (Lot No. 12-B, Block No. 2210, San Lazaro Estate) and the building were declared in the name of Simeona Santos. Petitioner claimed both were acquired and constructed during the marriage, thus presumed conjugal. Respondent specifically denied this, asserting the properties were her paraphernal (exclusive) property, and counterclaimed for damages. The Court of First Instance of Manila dismissed the action, holding the properties were paraphernal, a decision affirmed by the Court of Appeals.
The evidence showed:
1. Respondent’s title to the lot originated from an extrajudicial deed of partition among her and her sisters (Bonifacia and Mercedes Santos), conveying the lot to her as her share. This deed bore the written conformity and signature of her husband, Ramon Jose. The resulting Transfer Certificate of Title No. 38003 was issued in her name on May 30, 1931.
2. On August 17, 1931, Simeona Santos alone executed a mortgage on the lot to El Ahorro Insular for a loan of P8,500.
3. The building permit (No. A-9235, dated August 27, 1931), the construction plans, and the insurance policies for the building were all in the name of “Simeona Santos de Jose.”
4. Payments on the real estate loan after the war were made in the name of Simeona Santos, though some receipts showed payments by Ramon Jose applied to her account.
5. Ramon Jose and Simeona Santos were married on May 9, 1920, and Ramon died on November 6, 1943.

ISSUE

1. Whether the lot and the building are conjugal partnership properties or the paraphernal properties of respondent Simeona Santos.
2. Specifically, if the lot is paraphernal, whether the building constructed thereon during the marriage is conjugal partnership property under Article 1404(2) of the Spanish Civil Code.

RULING

The Supreme Court affirmed the decisions of the lower courts, ruling that both the lot and the building are the paraphernal properties of respondent Simeona Santos.
1. Regarding the Lot: The Court found no evidence that the lot was acquired during the marriage. The title issued in respondent’s name in 1931 resulted from a partition of a property she already co-owned with her sisters. The origin of this co-ownership (whether by purchase or inheritance) was not shown to have occurred during her marriage. Her husband’s conformity to the partition acknowledged her exclusive ownership. Furthermore, petitioner’s counsel had admitted the lot was paraphernal property. Therefore, the lot is not conjugal partnership property.
2. Regarding the Building: The Court ruled the building also belongs exclusively to the wife. The central question was whether the loan from El Ahorro Insular used to construct the building was conjugal or paraphernal funds. The Court held it was paraphernal. The mortgage was executed by the wife alone, the building permit and plans were in her name alone, and the husband did not participate as a principal debtor. These circumstances indicated the spouses’ agreement that the loan was the wife’s exclusive responsibility, making the funds used her paraphernal property under Article 1396(4) of the Spanish Civil Code (“Property purchased with money belonging exclusively to the husband or the wife.”). The Court cited its precedent in Lim Queco vs. Ramirez, 71 Phil. 162, which held that a loan obtained by a wife by mortgaging her paraphernal property is her exclusive paraphernal fund.
The fact that some installment payments were made by the husband was deemed insufficient to alter the character of the building, as these payments were applied to the wife’s account. However, the Court noted that a portion of the original loan (approximately P3,000) appeared to have been paid from conjugal funds before Ramon Jose’s death. The Court reserved the right of Ramon Jose’s heirs (the petitioners) to demand reimbursement for this amount from the respondent, subject to any applicable defenses.
DISPOSITIVE:
The judgment appealed from was affirmed, with costs against the petitioner, subject to the reservation regarding the possible reimbursement for conjugal funds used to pay part of the loan.