Jovellanos v. CA, G.R. No. 100728 June 18, 1992

Facts: Daniel Jovellanos contracted with Philamlife a lease and conditional sale agreement of a property. When the agreement took place, Daniel was still married to his first wife, Leonor, with whom he had three children. Leonor died on January 2, 1959.  On May 30, 1967, Daniel was remarried to Annette (respondent). On December 18, 1971, Mercy (daughter from first marriage) and her husband, built an extension at the back of the said property. On January 8, 1975, the lease was paid and Philamlife executed a deed of absolute sale to Daniel. The following day, he then donated the said property to his children in the first marriage (petitioners). On September 8, 1985, Daniel died.

Annette now claims that the said property is the conjugal property belonging to the second marriage due to the fact that the deed of absolute sale was dated during the celebration of their marriage (Jan. 8, 1975).

Issue: To which marriage does the property belong to as conjugal property?

Held: The Court held that the said property belongs to the second marriage, but also proclaims that reimbursements should be made to the children of the first marriage (in line with ART 118 of the FC).

The contract entered into by Daniel and Philamlife is specifically denominated as a "Lease and Conditional Sale Agreement" with a lease period of twenty years. During the twenty-year period, Daniel had only the right of possession over the property. The lessor transfers merely the temporary use and enjoyment of the thing leased. Generally, ownership is transferred upon delivery, however, the ownership may still be with the seller until full payment of the price is made.

Only at the time when the payments are made in full will the deed of absolute sale be given, entitling the buyer (Daniel) as the true owner, rather than just having inchoate rights to the property. The time when he was able to pay the remaining balance, he was already married to his second wife, Annette, which makes the said property as their conjugal property.

ART 118: “any amount advanced by the partnership or by either or both spouses shall be reimbursed”

Depriving the children from the first will be unfair due to the fact that the lease was contracted during the first marriage, wherein a portion of the payment came from.