G.R. No. L-13952; February 6, 1919
WILLIAM AHERN, petitioner-appellant, vs. TORIBIO JULIAN, objector-appellee.

FACTS:
William Ahern filed a voluntary insolvency petition, scheduling only his personal clothing (valued at P50 and claimed as exempt) and a claim of P186.67 due from his wife for services rendered as manager of her rice mill. He claimed to have no other property. Toribio Julian, a judgment creditor for P3,578.80, opposed Ahern’s discharge, alleging that a parcel of land in Cabanatuan, Nueva Ecija, registered in the name of Ahern’s wife, along with a rice mill constructed thereon and the milling business conducted in her name, were in fact conjugal partnership property (bienes gananciales) and should be included in the schedule to pay Ahern’s debts.

The undisputed facts showed that Ahern married in 1901 and was previously engaged in an unprofitable garage business in Manila, incurring substantial debts, including Julian’s judgment. In 1910, a tract of land in Manila was purchased and registered in the wife’s name; it was later sold, with the proceeds allegedly used to pay Ahern’s garage debts. In 1913, after the garage business failed, Ahern and his wife moved to Cabanatuan, where another tract was purchased and registered in the wife’s name, and a rice mill was constructed, with a total investment of about P60,000. Ahern managed the mill as his wife’s agent. The wife claimed the funds came from a P25,000 gift/loan from her aunt and additional personal borrowings, but no documentary evidence was presented to support this. Only the uncorroborated testimonies of Ahern and his wife were offered to rebut the presumption that the property was conjugal.

ISSUE:
Whether the Cabanatuan property (land, rice mill, and business) registered in the wife’s name is conjugal partnership property subject to inclusion in Ahern’s insolvency schedule, despite the spouses’ claim that it is the wife’s separate property.

RULING:
Yes, the Cabanatuan property is conjugal partnership property and must be included in Ahern’s schedule. Under Article 1407 of the Civil Code, property acquired during marriage is presumed to be conjugal. The burden to rebut this presumption lies with the party claiming otherwise. Here, Ahern and his wife failed to provide clear, satisfactory, and convincing evidence to overcome the presumption. Their uncorroborated and vague testimonies about the aunt’s P25,000 advanceunsupported by any written records, and inconsistent with the wife’s independent borrowing and management of the propertywere deemed inherently unreasonable and insufficient. The Court emphasized that where both spouses are alive and interested in establishing separate ownership to prejudice creditors, stronger proof is required. The trial court’s findings were affirmed, and Ahern was ordered to include the property in his schedule, without prejudice to the wife’s right to appear and defend any interest she may claim in the proceedings.