PROPERTY RELATIONS
G.R. No. L-12093 June 29, 1959
ESTANISLAO SERRANO, plaintiff-appellant,
vs.
MELCHOR SOLOMON, defendant-appellee.
Constante Pimentel for appellant.
Faustino B. Tobia, Eufrecino T. Tagayana, Pedro R. Arce and
Emmanuel U. Ujano for appellee.
MONTEMAYOR, J.:
Estanislao Serrano is appealing the decision of the Court of First
Instance of Ilocos Sur, Judge Jose G. Bautista presiding,
declaring null and void the supposed donation propter nuptias on
which his complaint was based and dismissing the later upon
motion of the defendant. The motion for dismissal was filed
before the hearing but the trial court deferred action upon it until
after submission of evidence by the parties. Said parties entered
into a stipulation of facts after which they declined to submit any
other evidence except Exhibit "A", the supposed deed of
donationpropter nuptias, the translation of which, for purposes of
reference, is reproduced below:
That, I Melchor Solomon, single, Filipino, of legal age,
native of the municipality of Sinait, province of Ilocos
Sur and residing at present in Sinait, having decided to
get married with the consent of my parents, brothers, or
sisters and relatives, have announced and manifested my
determination and desire to Mr. Estanislao Serrano to
whose family the flower I intend to win belongs, namely
Miss Alejandria Feliciano single, born in Hawaii but is
actually residing in Cabugao, Ilocos Sur.
This ardent desire favored by good luck and accepted by
the noble lady the one concerned, is to be realized and
complied with under agreement or stipulation which
affirms, promotes and vivifies the union. This
agreement donating all my exclusive properties in order
that we shall have a basic capital for our conjugal life
and in order that there will be ready maintenance and
support of offsprings has come out voluntarily and
expontaneously from me, I the very one concerned.
These which I am donating my exclusive properties
because I have honestly acquired the same with the
sweat of my brows and I donate them gladly, to wit . . .;
The referred to properties are donated in accordance
with the existing laws of the Philippines and our
children out of the wedlock will be the ones to inherit
same inherit same with equal shares. But if God will not
bless our union with any child one half of all my
properties including the properties acquired our
conjugal union will be given the (to) my brothers or
sisters or their heirs if I, the husband will die before my
wife and if my beloved wife will die before me, one half
of all my properties and those acquired by us will be
given to those who have reared my wife in token of my
love to her. . . . (Emphasis supplied)
Alejandria Feliciano, whose father went to Hawaii to seek his
fortune and who until now resides there, had been left to her
father's friend named Estanislao Serrano who took care of and
raised her from the age 12 until she reached womanhood. On
June 21, 1948, defendant Melchor Solomon married Alejandria.
On the same day of the marriage but before the marriage
ceremony he executed the alleged Deed of Donation, Exhibit "A"
above reproduced. Less than nine months after marriage, or
rather on March 2, 1949, Alejandria died without issue. Several
months thereafter Estanislao Serrano commenced the present
action to enforce and implement the terms of the alleged
donation particularly that portion thereof to the effect that if
Alejandria died before her husband Melchor and left no children,
then one half of Melchor's properties and those acquired by him
and his wife would be given to those persons who had raised and
taken care of her namely, Estanislao Serrano.
Acting upon the motion for dismissal the trial court found that
the donation could not be regarded as a donationpropter
nuptias for the reason that though it was executed before the
marriage, it was not made in consideration of the marriage and,
what is more important, that the donation was not made to one or
both of the (marriage) contracting parties, but to a third person.
After a careful study of the case, we fully agree with the trial
court. Article 1327 of the Old Civil Code reads:
Art. 1327. Donations by reasons of marriage are those
bestowed before its celebration in consideration of the
same, upon one or both of the spouses.
This article was reproduced in the Civil Code under Article 126.
Whether we apply Article 1327 for the reason that the document
Exhibit "A" was executed in 1948 before the promulgation of the
New Civil Code in 1950 or whether we apply Article 126 of the
New Civil Code the result would be the same.
Was the donation made in considerations of the marriage
between Melchor and Alejandria or was it made consideration of
the death of either of them in the absence of any children? True,
the Deed of Donation was executed on the occasion when they
married. But, the marriage in itself was not the only
consideration or condition under which terms of the donation
would be carried out. The marriage would have to be childless
and one of the spouses would have to die before the other before
the donation would operate. So, strictly, speaking, the donation
may not be regarded as one made in consideration of the
marriage.
But assuming for the moment that it was made in consideration
of the marriage, still, we have the fact that the donation was
being made not in favor of Alejandria, the wife, but rather in
favor of those who acted as her parents and raised her from
girlhood to womanhood in the absence of her father. That does
not place it within the provisions of Article 1327 and Article 126
of the Old Civil Code and the New Civil Code, respectively.
Manresa, in his commentary on Article 1327 of the Civil Code
says the following:
Donations excluded are those (1) made in favor of the
spouses after the celebration of marriage; (2) executed
in favor of the future spouses but not in consideration of
the marriage; and (3) granted to persons other than the
spouses even though they may be founded on the
marriage (6 M. 232).
Having come to the conclusion that the Deed of Donation does
not fulfill the requirements of a donation propter nuptias and that
it might be considered a donation inter vivos, can it be considered
valid and effective? Hardly, because it was never accepted by the
donee either in the same instrument or donation or in a separate
document as required by law.
Again, may the donation be regarded a donation mortis causa,
and given effect? The answer has to be in the negative for the
reason that this Tribunal has heretofore consistently held that a
donation to take effect after the death of the donor, is equivalent
to a disposition or bequest of property by last will, an it should be
executed in accordance with the requisites and strict provisions
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PROPERTY RELATIONS
governing the execution wills;1 and Exhibit "A" does not fulfill
said requirements. Moreover, in the present case, the donor is
still alive and naturally, even if the donation were otherwise
valid, still, the time and occasion have not arrived for considering
its operation and implementation.
In view of the foregoing, the appealed decision is hereby
affirmed, with costs.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Concepcion,
Endencia and Barrera, JJ., concur.
G.R. No. L-12707 August 10, 1918
MRS. HENRY E. HARDING, and her husband, plaintiffs-
appellees,
vs.
COMMERCIAL UNION ASSURANCE
COMPANY, defendant-appellant.
Lawrence & Ross for appellant.
Gibbs, McDonough & Johnson for appellees.
FISHER, J.:
This was an action by plaintiffs to recover from defendant the
sum of P3,000 and interest, alleged to be due under the terms of a
policy of insurance. The trial court gave plaintiffs judgment for
the amount demanded, with interest and costs, and from that
decision the defendant appeals.
The court below stated the issues made by the pleadings in this
case, and its finding of fact, as follows:
It is alleged by plaintiffs and admitted by defendant that
plaintiffs are husband and wife and residents of the city
of Manila; that the defendant is a foreign corporation
organized and existing under and by virtue of the laws
of Great Britain and duly registered in the Philippine
Islands, and Smith, Bell & Co. (limited), a corporation
organized and existing under the laws of the Philippine
Islands, with its principal domicile in the city of Manila,
is the agent in the Philippine Islands of said defendant.
The plaintiffs alleged that on February 16, 1916, the
plaintiff Mrs. Henry E. Harding was the owner of a
Studebaker automobile, registered number 2063, in the
city of Manila; that on said date; in consideration of the
payment to the defendant of the premium of P150, by
said plaintiff, Mrs. Henry E. Harding, with the consent
of her husband, the defendant by its duly authorized
agent, Smith, Bell & Company (limited), made its
policy of insurance in writing upon said automobile was
set forth in said policy to be P3,000 that the value of
said automobile was set forth in said policy (Exhibit A)
to be P3,000; that on March 24, 1916, said automobile
was totally destroyed by fire; that the loss thereby to
plaintiffs was the sum of P3,000; that thereafter, within
the period mentioned in the said policy of insurance, the
plaintiff, Mrs. Henry E. Harding, furnished the
defendant the proofs of her said loss and interest, and
otherwise performed all the conditions of said policy on
her part, and that the defendant has not paid said loss
nor any part thereof, although due demand was made
upon defendant therefor.
The defendant, by its answer, admitted the allegations of
the residence and status of the parties and denied all the
other allegation of the said complaint, and for a separate
and affirmative defense alleged (1) that on February 17,
1916, at the city of Manila, P.I. the defendant upon
request of plaintiff, Mrs. Henry E. Harding, issued to the
said plaintiff the policy of insurance on an automobile
alleged by the said plaintiff to be her property; that the
said request for the issuance of said policy of insurance
was made by means of a proposal in writing signed and
delivered by said plaintiff to the defendant, guaranteeing
the truth of the statements contained therein which said
proposal is referred to in the said policy of insurance
made a part thereof; (2) that certain of the statements
and representations contained in said proposal and
warranted by said plaintiff to be true, to wit: (a) the
price paid by the proposer for the said automobile; (b)
the value of said automobile at the time of the execution
and delivery of the said proposal and (c) the ownership
of said automobile, were false and known to be false by
the said plaintiff at the time of signing and delivering
the said proposal and were made for the purpose of
misleading and deceiving the defendant, and inducing
the defendant, relying upon the warranties, statements,
and representations contained in the said proposal and
believing the same to be true, issued the said policy of
insurance.
The defendant prays that judgment be entered declaring
the said policy of insurance to be null and void, and that
plaintiffs take nothing by this action; and for such
further relief as to the court may seem just and
equitable.
The evidence in this case shows that some time in the
year 1913 Levy Hermanos, the Manila agents for the
Studebaker automobile, sold the automobile No. 2063 to
John Canson for P3,200 (testimony of Mr. Diehl); that
under date of October 14, 1914, John Canson sold the
said automobile to Henry Harding for the sum of P1,500
(Exhibit 2); that under date of November 19, 1914, the
said Henry Harding sold the said automobile No. 2063
to J. Brannigan, of Los Baños, Province of Laguna, P.I.,
for the sum of P2,000 (Exhibit 3); that under date of
December 20, 1915, J. C. Graham of Los Baños,
Province of Laguna, P.I., sold the said automobile No.
2063 to Henry Harding of the city of Manila for the sum
of P2,800 (Exhibit 4 and testimony of J. C. Graham);
that on or about January 1, 1916, the said Henry
Harding gave the said automobile to his wife; Mrs.
Henry E. Harding, one of the plaintiffs, as a present; that
said automobile was repaired and repainted at the
Luneta Garage at a cost of some P900 (testimony of Mr.
Server); that while the said automobile was at the
Luneta Garage; the said Luneta Garage, acting as agent
for Smith, Bell & Company, (limited), solicited of the
plaintiff Mrs. Harding the insurance of said automobile
by the defendant Company (testimony of Mrs. Henry
Harding and Mr. Server); that a proposal was filled out
by the said agent and signed by the plaintiff Mrs. Henry
E. Harding, and in said proposal under the heading
"Price paid by proposer," is the amount of "3,500" and
under another heading "Present value" is the amount of
"3,000" (Exhibit 1).
The evidence tends to show that after the said proposal
was made a representative of the Manila agent of
defendant went to the Luneta Garage and examined said
automobile No. 2063 and Mr. Server, the General
Manager of the Luneta Garage, an experienced
automobile mechanic, testified that at the time this
automobile was insured it was worth about P3,000, and
the defendant, by and through its said agent Smith, Bell
& Company (limited), thereafter issued a policy of
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PROPERTY RELATIONS
insurance upon proposal in which policy the said
automobile was described as of the "present value" of
P3,000 and the said defendant charged the said plaintiff
Mrs. Henry E. Harding as premium on said policy the
sum of P150, or 5 per cent of the then estimated value
of P3,000. (Exhibit A.)
The "Schedule" in said policy of insurance describes the
automobile here in question, and provides in part of
follows:
"Now it is hereby agreed as follows:
"That during the period above set forth and
during any period for which the company may
agree to renew this policy the company will
subject to the exception and conditions
contained herein or endorsed hereon indemnify
the insured against loss of or damage to any
motor car described in the schedule hereto
(including accessories) by whatever cause such
loss or damage may be occasioned and will
further indemnify the insured up to the value of
the car or P3,000 whichever is the greater
against any claim at common law made by any
person (not being a person in the said motor car
nor in the insured's service) for loss of life or
for accidental bodily injury or damage to
property caused by the said motor car including
law costs payable in connection with such
claim when incurred with the consent of the
company."
The evidence further shows that on March 24, 1916, the
said automobile was totally destroyed by fire, and that
the iron and steel portions of said automobile which did
not burn were taken into the possession of the defendant
by and through its agent Smith, Bell & Company
(limited), and sold by it for a small sum, which had
never been tendered to the plaintiff prior to the trial of
this case, but in open court during the trial the sum of
P10 as the proceeds of such sale was tendered to
plaintiff and refused.
Upon the facts so found, which we hold are supported by the
evidence, the trial judge decided that there was no proof of fraud
on the part of plaintiff in her statement of the value of the
automobile, or with respect to its ownership; that she had an
insurable interest therein; and that defendant, having agreed to
the estimated value, P3,000, and having insured the automobile
for that amount, upon the basis of which the premium was paid,
is bound by it and must pay the loss in accordance with the
stipulated insured value. The assignments of error made on
behalf of appellant put in issue the correctness of those
conclusions of law, and some others of minor importance relating
to the exclusion of evidence. Disposing of the minor objections
first, as we have reached the conclusion that the trial court was
right in holding that the defendant is bound by the estimated
value of the automobile upon which policy was issued, and that
the plaintiff was not guilty of fraud in regard thereto, the
exclusion of the testimony of the witness Diehl is without
importance. It merely tended to show the alleged actual value of
the automobile, and in the view we take of the case such
evidence was irrelevant.
Appellant contends that Mrs. Harding was not the owner of the
automobile at the time of the issuance of the policy, and,
therefore, had no insurable interest in it. The court below found
that the automobile was given to plaintiff by her husband shortly
after the issuance of the policy here in question. Appellant does
not dispute the correctness of this finding, but contends that the
gift was void, citing article 1334 of the Civil Code which
provides that "All gifts between spouses during the marriage
shall be void. Moderate gifts which the spouses bestow on each
other on festive days of the family are not included in this rule."
We are of the opinion that this contention is without merit. In the
case of Cook vs. McMicking 27 Phil. Rep., 10), this court said:
It is claimed by the appellants that the so-called transfer
from plaintiff's husband to her was completely void
under article 1458 of the Civil Code and that, therefore,
the property still remains the property of Edward Cook
and subject to levy under execution against him.
In our opinion the position taken by appellants is
untenable. They are not in a position to challenge the
validity of the transfer, if it may be called such. They
bore absolutely no relation to the parties to the transfer
at the time it occurred and had no rights or interests
inchoate, present, remote, or otherwise, in the property
in question at the time the transfer occurred. Although
certain transfers from husband to wife or from wife to
husband are prohibited in the article referred to, such
prohibition can be taken advantage of only by persons
who bear such a relation to the parties making the
transfer or to the property itself that such transfer
interferes with their rights or interests. Unless such a
relationship appears the transfer cannot be attacked.
Even assuming that defendant might have invoked article 1334
as a defense, the burden would be upon it to show that the gift in
question does not fall within the exception therein established.
We cannot say, as a matter of law, that the gift of an automobile
by a husband to his wife is not a moderate one. Whether it is or is
not would depend upon the circumstances of the parties, as to
which nothing is disclosed by the record.
Defendant contends that the statement regarding the cost of the
automobile was a warranty, that the statement was false, and that,
therefore, the policy never attached to the risk. We are of the
opinion that it has not been shown by the evidence that the
statement was false — on the contrary we believe that it shows
that the automobile had in fact cost more than the amount
mentioned. The court below found, and the evidence shows, that
the automobile was bought by plaintiff's husband a few weeks
before the issuance of the policy in question for the sum of
P2,800, and that between that time and the issuance of the policy
some P900 was spent upon it in repairs and repainting. The
witness Server, an expert automobile mechanic, testified that the
automobile was practically as good as new at the time the
insurance was effected. The form of proposal upon which the
policy was issued does not call for a statement regarding the
value of the automobile at the time of its acquisition by the
applicant for the insurance, but merely a statement of its cost.
The amount stated was less than the actual outlay which the
automobile represented to Mr. Harding, including repairs, when
the insurance policy was issued. It is true that the printed form
calls for a statement of the "price paid by the proposer," but we
are of the opinion that it would be unfair to hold the policy void
simply because the outlay represented by the automobile was
made by the plaintiff's husband and not by his wife, to whom he
had given the automobile. It cannot be assumed that defendant
should not have issued the policy unless it were strictly true that
the price representing the cost of the machine had been paid by
the insured and by no other person — that it would no event
insure an automobile acquired by gift, inheritance, exchange, or
any other title not requiring the owner to make a specific cash
outlay for its acquisition.
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PROPERTY RELATIONS
Furthermore, the court below found and the evidence shows,
without dispute, that the proposal upon which the policy in
question was issued was made out by defendant's agent by whom
the insurance was solicited, and that appellee simply signed the
same. It also appears that an examiner employed by the
defendant made an inspection of the automobile before the
acceptance of the risk, and that the sum after this examination.
The trial court found that Mrs. Harding, in fixing the value of the
automobile at P3,000, acted upon information given her by her
husband and by Mr. Server, the manager of the Luneta Garage.
The Luneta Garage, it will be remembered, was the agent of the
defendant corporation in the solicitation of the insurance. Mrs.
Harding did not state of her own knowledge that the automobile
originally cost P3,000, or that its value at the time of the
insurance was P3,000. She merely repeated the information
which had been given her by her husband, and at the same time
disclosed to defendant's agent the source of her information.
There is no evidence to sustain the contention that this
communication was made in bad faith. It appears that the
statements in the proposal as to the price paid for the automobile
and as to its value were written by Mr. Quimby who solicited the
insurance on behalf of defendant, in his capacity as an employee
of the Luneta Garage, and wrote out the proposal for Mrs.
Harding to sign. Under these circumstances, we do not think that
the facts stated in the proposal can be held as a warranty of the
insured, even if it should have been shown that they were
incorrect in the absence of proof of willful misstatement. Under
such circumstance, the proposal is to be regarded as the act of the
insurer and not of the insured. This question was considered in
the case of the Union Insurance Company vs. Wilkinson (13
Wall., 222; 20 L. ed., 617), in which the Supreme Court of the
United States said:
This question has been decided differently by courts of
the highest respectability in cases precisely analogous to
the present. It is not to be denied that the application
logically considered, is the work of the assured, and if
left to himself or to such assistance as he might select,
the person so selected would be his agent, and he alone
would be responsible. On the other hand, it is well-
known, so well that no court would be justified in
shutting its eyes to it, that insurance companies
organized under the laws of one State, and having in
that State their principal business office, send these
agents all over the land, with directions to solicit and
procure applications for policies furnishing them with
printed arguments in favor of the value and necessity of
life insurance, and of the special advantages of the
corporation which the agent represents. They pay these
agents large commissions on the premiums thus
obtained, and the policies are delivered at their hands to
the assured. The agents are stimulated by letters and
instructions to activity in procuring contracts, and the
party who is in this manner induced to take out a policy,
rarely sees or knows anything about the company or its
officers by whom it is issued, but looks to and relies
upon the agent who has persuaded him to effect
insurance as the full and complete representative of the
company, in all that is said or done in making the
contract. Has he not a right to so regard him? It is quite
true that the reports of judicial decisions are filled with
the efforts of these companies, by their counsel, to
establish the doctrine for the acts of these agents to the
simple receipt of the premium and delivery of the
policy, the argument being that, as to all other acts of the
agent, he is the agent of the assured. This proposition is
not without support in some of the earlier decision on
the subject; and, at a time when insurance companies
waited for parties to come to them to seek assurance, or
to forward applications on their own motion, the
doctrine had a reasonable foundation to rest upon. But
to apply such a doctrine, in its full force, to the system
of selling policies through agents, which we have
described, would be a snare and a delusion, leading, as
it has done in numerous instances, to the grossest
frauds, of which the insurance corporations receive the
benefits, and the parties supposing themselves insured
are the victims. The tendency of the modern decisions in
this country is steadily in the opposite direction. The
powers of the agent are, prima facie, co-extensive with
the business intrusted to his care, and will not be
narrowed by limitations not communicated to the person
with whom he deals. (Bebee vs. Ins. Co., 25 Conn., 51;
Lycoming Ins. Co. vs. Schoolenberger, 44 Pa., 259;
Beal vs. Ins. Co., 16 Wis., 241; Davenport vs. Ins. Co.,
17 Iowa, 276.) An insurance company, establishing a
local agency, must be held responsible to the parties
with whom they transact business, for the acts and
declarations of the agent, within the scope of his
employment, as if they proceeded from the principal.
(Sav. Bk. vs. Ins. Co., 31 Conn., 517; Hortwitz vs.Ins.
Co., 40 Mo., 557; Ayres vs. Ins. Co., 17 Iowa, 176;
Howard Ins. Co. vs. Bruner, 23 Pa., 50.)
In the fifth edition of American Leading Cases, 917,
after a full consideration of the authorities, it is said:
"By the interested or officious zeal of the
agents employed by the insurance companies
in the wish to outbid each other and procure
customers, they not unfrequently mislead the
insured, by a false or erroneous statement of
what the application should contain; or, taking
the preparation of it into their own hands,
procure his signature by an assurance that it is
properly drawn, and will meet the requirements
of the policy. The better opinion seems to be
that, when this course is pursued, the
description of the risk should, though
nominally proceeding from the insured, be
regarded as the act of the insurers."
(Rowley vs. Empire Ins. Co., 36 N.Y., 550.)
The modern decisions fully sustain this proposition, and
they seem to us founded on reason and justice, and meet
our entire approval. This principle does not admit oral
testimony to vary or contradict that which is in writing,
but it goes upon the idea that the writing offered in
evidence was not the instrument of the party whose
name is signed to it; that it was procured under such
circumstances by the other side as estops that side from
using it or relying on its contents; not that it may be
contradicted by oral testimony, but that it may be shown
by such testimony that it cannot be lawfully used
against the party whose name is signed to it. (See
also Am. Life Ins. Co. vs. Mahone, 21 Wallace, 152.)
The defendant, upon the information given by plaintiff, and after
an inspection of the automobile by its examiner, having agreed
that it was worth P3,000, is bound by this valuation in the
absence of fraud on the part of the insured. All statements of
value are, of necessity, to a large extent matters of opinion, and it
would be outrageous to hold that the validity of all valued
policies must depend upon the absolute correctness of such
estimated value. As was said by the Supreme Court of the United
States in the case of the First National Bank vs. Hartford Fire
Insurance Co. (5 Otto, 673; 24 L. ed., 563), at. p. 565 of the
Lawyers Edition:
The ordinary test of the value of property is the price it
will commend in the market if offered for sale. But that
test cannot, in the very nature of the case, be applied at
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PROPERTY RELATIONS

the time application is made for insurance. Men may aspects for the factual background of the - case and to enable us
honestly differ about the value of property, or as to what to Identify the legal problem.
it will bring in the market; and such differences are
often very marked among those whose special business It appears that on December 21, 1929, Decree
it is to buy and sell property of all kinds. The assured No. 440157 was issued by the Court of First
could do no more than estimate such value; and that, it Instance of Occidental Negros in favor of
seems, was all that he was required to do in this case. Felimon Torela, married to Graciana Gallego,
His duty was to deal fairly with the Company in making decreeing that he is the owner of a certain
such estimate. The special finding shows that he parcel of land (Lot No. 3770 of the Cad.
discharged that duty and observed good faith. We shall Survey of Cauayan) described therein, and
not presume that the Company, after requiring the ordering that the same be registered in the
assured in his application to give the "estimated value," name of said Felimon Torela in accordance
and then to covenant that he had stated all material facts with the provision of Land Registration Act
in regard to such value, so far as known to him, and (Exh. 3 also Exh. 4). Consequently, Original
after carrying that covenant, by express words, into the Certificate of Title No. 29257 covering said
written contract, intended to abandon the theory upon Lot No. 3770 of the Cauayan Cadastre was
which it sought the contract, and make the absolute issued in favor of Felimon Torela. As the
correctness of such estimated value a condition certificate of title (O.C.T. No. 29257) was
precedent to any insurance whatever. The application, either lost or destroyed during the last world
with its covenant and stipulations, having been made a war, Felimon Torela filed a verified petition for
part of the policy, that presumption cannot be indulged reconstitution, dated December 28, 1953,
without imputing to the Company a purpose, by studied praying that after due publication thereof in the
intricacy or an ingenious framing of the policy, to entrap Official Gazette, as provided for by law, an
the assured into incurring obligations which, perhaps, he order be issued setting the petition for hearing
had no thought of assuming. (Exh. A). Thereafter an order was issued on
July 8, 1957, the dispositive portion of which is
Section 163 of the Insurance Law (Act No. 2427) provides that as follows -
"the effect of a valuation in a policy of fire insurance is the same
as in a policy of marine insurance." WHEREFORE, the Court,
pursuant to section 13 of
By the terms of section 149 of the Act cited, the valuation in a Republic Act No. 26, hereby
policy of marine insurance is conclusive if the insured had an orders the Register of Deeds
insurable interest and was not guilty of fraud. of this province to
reconstitute the original as
We are, therefore, of the opinion and hold that plaintiff was the well as the owner's duplicate
owner of the automobile in question and had an insurable interest of Original Certificate of
therein; that there was no fraud on her part in procuring the Title No. 29257, covering
insurance; that the valuation of the automobile, for the purposes Lot No. 3770 of Cauayan
of the insurance, is binding upon the defendant corporation, and Cadastre, this province, on
that the judgment of the court below is, therefore, correct and the basis of the above-
must be affirmed, with interest, the costs of this appeal to be paid mentioned Decree No.
by the appellant. So ordered. 440157 (Exh. D) for the said
lot. All liens and
Arellano, C.J., Torres, Street, Malcolm and Avanceña, incumbrances affecting the
JJ., concur. above state lot which
appeared noted on the
certificate of title sought to
G.R. No. L-27843 October 11, 1979 be reconstituted at the time
of its loss or destruction.
CLARA TORELA AND SILVERIANA TORELA, appellants- shall be an annotated on the
petitioners, reconstituted certificate of
vs. title. Once the reconstitution
FELIMON TORELA, MARCIANA GEPANAGO AND herein ordered is duly
MARCOS MAHILUM AND THE COURT OF accomplished, let a second
APPEALS, appellees-respondents. (NOT SURE, PLS. owner's duplicate certificate
REVIEW) be issued to the petitioner.

Thus, Original Certificate of Title No. RO-

6898 (29257) was issued in favor of Felimon
ABAD SANTOS, J.: Torela, in lieu of the lost and/or destroyed one
(Exh. D, p. 125, Rec.).
Petitioners, whose complaint was dismissed both in the Court of
First Instance of Negros Occidental and in the Court of Appeals, On March 5, 1958, Felimon Torela, filed a
would have us reverse the decision of the latter and declare the Motion Ex-Parte alleging that Lot No. 3770 of
land in litigation as the conjugal property of their parents so that the Cauayan Cadastre having been acquired by
they wig be entitled to their mother's share who had died. him by way of inheritance prior to his marriage
to his first wife, Graciana Gallego, the
The decision of the Court of Appeals which was penned by Mr. Cadastral court ordered that said land be
Justice Hermogenes Concepcion, Jr., now a distinguished registered in the name of Felimon Torela,
member of this Court, is reproduced hereunder in its material married to Graciana Gallego; that his first wife
died many years ago; and that he is married by
5
PROPERTY RELATIONS
second nuptial to Marciana Gepanago. He,
therefore, prayed that the court order the
Register of Deeds of Negros Occidental to
change his (movant's) civil status, appearing on
the face of the original certificate of title, "from
Felimon Torela, married to Graciana Gallego to
Felimon Torela, married to Marciana
Gepanago" (Exh. E). Acting upon the Motion
Ex-Parte, the court, finding no opposition
thereto and with the conformity of Clara
Torela, daughter of Felimon Torela by first
marriage, granted the motion and ordered the
Register of Deeds to change the civil status of
the movant from "Felimon Torela, married to
Marciana Gepanago", which is the actual civil
status of the movant, upon payment of the
required fees. (Order of March 10, 1958, Exh.
F.)
On March 4, 1958, Felimon, Torela executed a
definite deed of sale (EXH 1), whereby, for and
in consideration of P3,000.00, he sold Lot No.
3770 of the Cadastral Survey of Cauayan to
Marcos P. Mahilum and Maria Luna Mahilum
He also stated in the deed of sale that he was a
widower by first marriage to Graciana Gallego,
and now married to Marciana Gepanago; that
he is the registered owner of said Lot No.
3770, having acquired it by inheritance from
his parents before his marriage to Graciana
Gallego, deceased. The document (Exh. 1) was
acknowledged before Notary Public Jose T.
Tabuga. Upon registration of Exhibit 1,
Transfer Certificate of Title No. T-23078 was
issued to said spouses (Exh. 2)
According, however, to the plaintiffs while in
their youth they had seen their father Felimon
and their mother Graciana Gallego clean the lot
in question, as it was there, forested. And when
their mother died, their father married
Marciana Gepanago. In other words, the
plaintiffs want us to believe that the parcel of
land is a conjugal property of their father and
mother (Felimon and Graciana), And since
their father succeeded in changing his status
and in conveying the land to another, they now
assert their right to the estate appertaining to
their mother, alleging that they were deprived
of their corresponding share from the property
thus sold.
Under the conflicting claims of the plaintiffs
and their father, defendant Felimon Torela, the
decisive question is whether or not the parcel
of land herein involved is a conjugal property
of the spouses Felimon Torela and Graciana
Gallego (plaintiffs' mother).
Felimon Torela declared that he and his first
wife Graciana were married in 1915 (t. s. n., p.
18). And the land in question was decreed in
the name of Felimon Torela, married to
Graciana Gallego, (Exh. B, which is also Exh.
4). According to Article 1401 of the Old Civil
Code, the following properties belong to the
conjugal partnership:
1. Property acquired for a valuable
consideration during the marriage at the
expense of the common fund, whether the
acquisition is made for the partnership or for
one of the spouses only;
2. Property obtained by the industry, wages or
work of the spouses or of either of them;
3. The fruits, income, or interest collected or
accrued during the marriage, derived from the
partnership property., or from that which
belongs separately to either of the spouses.
Felimon Torela testified that he inherited the
contested property from his parents, Pedro
Torela and Soperiana Magbanua. True enough
that plaintiff Silveriana Torela and Miguel
Pedrosa declared that the land in question was
jointly cleared by Felimon Torela and his first
wife Graciana Gallego, but the trial court did
not give credence to their testimonies for the
simple reason that Silveriana was not yet born
at the time when said Felimon, together with
his father, started living in the land in 1905
(t.s.n., p. 18); while Miguel Pedrosa was only
one year old then, considering that he was 55
years of age when he testified on February 10,
1959. It is thus plainly obvious that Silveriana
and Miguel could not have known when
defendant Felimon and his father moved to the
land in 1905. Considering that Felimon was 81
years old when he testified on February 10,
1959, he was already 27 years in 1905, in
which case he must have already helped his
father in cleaning and tilling that land. As a
matter of fact at the time of his marriage with
his first wife, Graciana Gallego, a portion of
said land had already been cultivated by him.
Asked what was the condition of the land in
1915 (the date of his first marriage), he
answered: "Only a portion of the lot was
plowed by me." (t.s.n., p. 18.)
In the light of the foregoing, the property in
question is not one of those enumerated in
Article 1401 of the Old Civil Code. On the
other hand, as it was inherited by Felimon from
his parents and brought to the marriage with
his first wife, the same is deemed his separate
property (Art, 1396, Old Civil Code). For these
reasons, defendant Felimon Torela had lawfully
disposed of his property to the exclusion of his
children by his first marriage. Accordingly,
plaintiffs' complaint was correctly dismissed by
the court below.
Petitioners allege that the Court of Appeals failed to take into
account Article 1407 of the Spanish Civil Code, which now
correspond to Article 160 of the New Civil Code, and which
reads as follows:
Art. 1407, All property of the spouses shall be
deemed partnership property in the absence of
proof that it belongs exclusively to the husband
or to the wife.
Petitioners claim that since the lot in question was registered in
the name of Felimon Torela, married to Graciana Gallego, it must
be presumed to be the conjugal property of Felimon and
Graciana so that one-half thereof should be adjudicated to them
as their inheritance from their mother.
6
PROPERTY RELATIONS

While it is true that all property of the marriage is presumed to be

conjugal, as above stated, nonetheless the party who invokes the
presumption must first prove that the property was acquired
during the marriage. This proof is a condition sine qua non for
the application of the presumption. (Cobb-Perez vs. Lantin, L-
22320, May 22, 1968, 23 SCRA 637; Ponce de Leon vs. RFC, L-
24571, Dec. 18,1970; 36 SCRA 289.)

In the instant case there is nothing in the record to show that the
lot in question was acquired during the marriage of Felimon
Torela and Graciana Gallego. On the contrary, the factual finding
of the Court of Appeals is to the effect that Felimon acquired the
land through inheritance and this conclusion is bolstered by that
fact that one of the petitioners herein, Clara Torela, gave her
conformity to her father's Ex-Parte Motion of March 5, 1958,
wherein it was recited, inter alia, that Felimon Torela had
acquired the property by way of inheritance prior to his marriage
to his first wife, Graciana Gallego.

The circumstance that Decree No. 440157 of the Court of First

Instance of Negros Occidental which confirmed the ownership of
Felimon Torela over the land in question described him as
married to Graciana Gallego was merely descriptive of his civil
status at that time and cannot be taken as proof that the land was
acquired during their coverture. The further circumstance that the
land was registered during their marriage cannot in itself
constitute proof that it was acquired during their marriage for
land registration under Act No. 496, as amended, does not confer
title; it merely confirms a title already existing and which is
registerable.

WHEREFORE, finding no reversible error in the decision of the

Court of Appeals, the same is hereby affirmed without any
special pronouncement as to costs.

SO ORDERED.