- The wife inherited a residential lot which she mortgaged to secure a housing loan from GSIS with her husband. They used the loan to construct a house.
- They later got a second loan from PNB to pay off the GSIS loan. PNB required the title and a waiver from the husband. The title was given but the husband did not waive his rights.
- PNB then kept the title and claimed ownership. The spouses sued to annul the sale. The RTC ruled the sale was valid but the CA reversed, finding the property was conjugal.
- The Supreme Court ruled the property was the wife's paraphernal property as she inherited it. The transaction with PNB
- The wife inherited a residential lot which she mortgaged to secure a housing loan from GSIS with her husband. They used the loan to construct a house.
- They later got a second loan from PNB to pay off the GSIS loan. PNB required the title and a waiver from the husband. The title was given but the husband did not waive his rights.
- PNB then kept the title and claimed ownership. The spouses sued to annul the sale. The RTC ruled the sale was valid but the CA reversed, finding the property was conjugal.
- The Supreme Court ruled the property was the wife's paraphernal property as she inherited it. The transaction with PNB
- The wife inherited a residential lot which she mortgaged to secure a housing loan from GSIS with her husband. They used the loan to construct a house.
- They later got a second loan from PNB to pay off the GSIS loan. PNB required the title and a waiver from the husband. The title was given but the husband did not waive his rights.
- PNB then kept the title and claimed ownership. The spouses sued to annul the sale. The RTC ruled the sale was valid but the CA reversed, finding the property was conjugal.
- The Supreme Court ruled the property was the wife's paraphernal property as she inherited it. The transaction with PNB
CARLOS 25 August 2010 FACTS: Respondent-spouses mortgaged a residential lot (which the wife inherited) to the GSIS to secure a housing loan (!!")# Thereafter$ the% used the mone% loaned to construct a residential house on said lot# It is alleged that &'()* granted the spouses a +!!" loan$ which the latter used to pa% the de,t to GSIS# The ,alance of the loan (-!!") will ,e deli.ered ,% &'()S upon surrender of the title o.er the propert% and an affida.it of wai.er of rights (o.er the propert%) to ,e e/ecuted ,% the hus,and# 0hile the spouses were a,le to turn o.er the title$ no affida.it was signed ,% the hus,and# Conse1uentl%$ &'()* refused to gi.e the -!!" ,alance of the loan and since the spouses could no longer return the !!" (which was alread% paid to GSIS)$ &'()* "ept the title o.er the propert% and su,se1uentl%$ caused the issuance of a new one in his own name# The spouses then filed a case for the annulment of the purported sale of the propert% in fa.or of &'()*# The RTC ruled that the propert% was the wife2s e/clusi.e paraphernal propert% (since she inherited it from her father) and as such$ the sale is .alid e.en without the hus,and2s consent# The CA re.ersed and ruled that while the propert% was originall% e/clusi.e paraphernal propert% of the wife$ it ,ecame con3ugal propert% when it was used as a collateral for a housing loan that was paid through con3ugal funds# 4ence$ the sale is .oid# ISSUE (1): Is the property paraphernal or conjugal? R'5I(G: 6ARA647R(A5# As a general rule$ all propert% ac1uired during the marriage is presumed to ,e con3ugal unless the contrar% is pro.ed# In this case$ clear e.idence that the wife inherited the lot from her father has sufficientl% re,utted this presumption of con3ugal ownership# Conse1uentl%$ the residential lot is the wife2s e/clusi.e paraphernal propert% (pursuant to Article 8 and 9!8 of FC)# It was error for the CA to appl% Article 9:; of the CC and the ruling on Calili!Canullas" True$ respondents were married during the effecti.it% of the CC and thus its pro.isions should go.ern their propert% relations# 0ith the enactment of the FC howe.er$ the pro.isions of the latter on con3ugal partnership of gains superseded those of the CC# Thus$ it is the FC that go.erns the present case and not the CC# And under Article 9! of the FC (which supersedes Article 9:; of the CC)$ when the cost of the impro.ement and an% resulting increase in the .alue are more than the .alue of the propert% at the time of the impro.ement$ the entire propert% shall ,elong to the con3ugal partnership$ su,3ect to reim,ursement< otherwise$ the propert% shall ,e retained in ownership ,% the owner-spouse$ li"ewise su,3ect to reim,ursement for the cost of impro.ement# In this case$ the hus,and onl% paid a small portion of the GSIS loan (+!")# Thus$ it is fairl% reasona,le to assume that the .alue of the residential lot is considera,l% more than the contri,ution paid ,% the hus,and# Thus$ the propert% remained the e/clusi.e paraphernal propert% of the wife at the time she contracted with &'()*< the written consent of the hus,and was not necessar%# ISSUE (2): #as the transaction a sale or e$uita%le ortgage? R'5I(G: 7='ITA>57 &)RTGAG7# 'nder Article 9+! of the CC$ a contract is presumed an e1uita,le mortgage when: (a) price of sale with right to repurchase is unusuall% inade1uate< (,) .endor remains in possession as lessee or otherwise< (c) upon or after the e/piration of the right to repurchase$ another instrument e/tending the period of redemption is e/ecuted< (d) purchase retains for himself a part of the purchase price< (e) .endor ,inds himself to pa% the ta/es on the thing sold< and$ (f) in an% other case it ma% ,e fairl% inferred that the real intention of the parties is for the transaction to secure the pa%ment of a de,t# In this case$ considering that (a) the spouses remained in possession of the propert% (al,eit as lessees thereof)< (,) &'()* retained a portion of the ?purchase price2 (!!")< (c) it was the spouses who paid real propert% ta/es on the propert%< and$ (d) it was the wife who secure the pa%ment of the principal de,t with the su,3ect propert% @ the parties clearl% intended an e1uita,le mortgage and not a contract of sale#