VIRGINIA OCAMPO, PETITIONER, VS. DEOGRACIO OCAMPO, RESPONDENT.

Ocampo versus Ocampo

The Case

This is the case of Virginia Ocampo versus Deogracio Ocampo, a petition for review on certiorari brought to the Supreme Court to challenge the ruling of the Court of Appeals on the liquidation of the properties of a marriage that had already been declared void on the ground of psychological incapacity. Virginia asked the Court to strip Deogracio of his share in the properties by reason of his alleged bad faith and psychological perversity. The case matters because it settles a question every reviewee must be able to answer: when a marriage is declared void under Article 36 of the Family Code, what property regime governs the former spouses, and in what shares do they own what they acquired together? The answer is not the conjugal partnership of gains, but the co-ownership under Article 147 of the Family Code.

Procedural History

Virginia filed a petition for declaration of nullity of her marriage before the Regional Trial Court of Quezon City, Branch 87, on the ground of psychological incapacity. The trial court granted the petition, declared the marriage void from the beginning under Article 36 of the Family Code, held the children legitimate, awarded their custody to Virginia, and dissolved the conjugal partnership of gains. Because no party appealed, that judgment became final. The trial court then directed the parties to submit a project of partition of their inventoried properties. They failed to agree, so a hearing on the properties followed. The trial court later issued an order holding that the properties belonged to each of them on a fifty-fifty sharing. Virginia filed a notice of appeal, which Deogracio moved to dismiss; the trial court denied his motion, and denied his motion for reconsideration as well. The Court of Appeals denied Virginia's appeal and later denied her motion for reconsideration. Virginia then came to the Supreme Court through a petition for review on certiorari under Rule 45 of the Rules of Court.

Facts

Virginia and Deogracio were married on January 16, 1978. On September 10, 1990, Virginia filed a petition for declaration of nullity of their marriage before the Regional Trial Court of Quezon City, Branch 87, on the ground of psychological incapacity. In January 1993, the trial court declared the marriage null and void from the beginning under Article 36 of the Family Code, ordered that the status of the children remain legitimate with custody awarded to Virginia, and dissolved the conjugal partnership of gains. The decision became final because no party appealed.

In March 1999, the trial court directed the parties to submit a project of partition of their inventoried properties, and if they failed to agree, to hold a hearing on the factual issues concerning those properties. The parties could not agree, so a hearing ensued and both sides presented evidence. In January 2004, the trial court issued an order stating that the properties declared by the parties belonged to each of them on a fifty-fifty sharing.

Virginia appealed, insisting that Deogracio should be deprived of his share because of bad faith and psychological perversity. She claimed that the seed money for the business came from her mother and that she alone managed the businesses. The Court of Appeals denied her appeal, and denied her motion for reconsideration. Hence, this petition.

Issues

• Whether or not the property relations of spouses whose marriage is declared void under Article 36 of the Family Code are governed by the conjugal partnership of gains or by the co-ownership rules of Article 147 of the Family Code.
• Whether or not Deogracio should be deprived of his share in the properties by reason of alleged bad faith and psychological perversity.
• Whether or not the properties acquired during the marriage are owned by the former spouses in equal shares.

Applicable Provisions

Article 36 of the Family Code provides:

Article 36. A marriage contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest only after its solemnization. (As amended by Executive Order 227).

This is the ground on which the marriage of Virginia and Deogracio was declared void, and it is the starting point for determining their property relations.

Article 147 of the Family Code provides:

Article 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation.

This is the provision that governs the property relations of the former spouses, because their marriage is void and they were capacitated to marry each other.

Article 116 of the Family Code provides:

All property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both of the spouses, is presumed to be conjugal unless the contrary is proved.

This presumption, applied by analogy in the reasoning of the Court, places the burden on the spouse claiming that the properties are not common to prove it.

Ruling

On the first issue, the Court held that the property relations of the parties are governed by Article 147 of the Family Code, not by the conjugal partnership of gains. Although Virginia and Deogracio were married in 1978, before the effectivity of the Family Code, Article 105 of the Family Code makes its provisions on conjugal partnerships apply to partnerships established before the Code, without prejudice to vested rights. The Court explained that in a void marriage, the property relations during cohabitation are governed either by Article 147 or Article 148 of the Family Code. Article 147 applies here because both parties were legally capacitated to marry each other, no impediment having been shown, they lived exclusively with each other as husband and wife, and their marriage was void under Article 36.

On the second issue, the Court held that Deogracio should not be deprived of his share. The forfeiture under Article 147 operates only when one party is in bad faith. The Court found that Virginia failed to prove that the properties were acquired solely through her own efforts. Only testimonial evidence was presented, and the trial court found that she was able to manage the businesses only with the invaluable help of Deogracio. The Court also noted that even a plain housewife who stays at home and cares for the household is entitled to a share in the same proportion as the husband who engages in gainful activities.

On the third issue, the Court held that the properties acquired during the marriage are owned by the former spouses in equal shares. Both the trial court and the appellate court found that the properties were acquired during the marriage, and the Court gave due deference to these factual findings. The certificates of title and tax declarations in the name of one spouse alone do not overcome the presumption that properties acquired during the marriage are common. The Court ruled that the partition should be on the basis of co-ownership under Article 147, and not on the regime of conjugal partnership of gains.

Doctrine

When a marriage is declared void under Article 36 of the Family Code, and the parties were capacitated to marry each other and lived exclusively as husband and wife, their property relations are governed by Article 147 of the Family Code. Under that provision, their wages and salaries are owned in equal shares, and property acquired through their work or industry is governed by the rules on co-ownership. Properties acquired while they lived together are presumed to have been obtained by their joint efforts and are owned in equal shares, and a party who did not participate in the acquisition is deemed to have contributed jointly if that party's efforts consisted in the care and maintenance of the family and household. The share of a party in bad faith is forfeited, but only upon proof of bad faith. The rules on liquidation of the conjugal partnership of gains are irrelevant to the liquidation of this co-ownership.

Disposition

The Supreme Court denied the petition, affirmed the decision and resolution of the Court of Appeals, and remanded the case to the trial court for proper disposition.

Remember This

Memorize this line: a marriage void under Article 36 does not produce a conjugal partnership of gains but a co-ownership under Article 147, with the former spouses owning the properties in equal shares. Examiners use this case to test the property regime of void marriages and the presumption that properties acquired during the marriage are common, regardless of whose name appears on the title.