Cohabitation and Co-ownership: Why Proof of Contribution Matters

When unmarried couples acquire property together in the Philippines, the rules of co-ownership are not as straightforward as they are for legally married spouses. This case clarifies that simply living together is not enough to establish co-ownership. You must prove actual contributions to the property’s acquisition to claim a share. This principle protects individual property rights and prevents unwarranted claims based solely on relationships.

G.R. No. 165427, March 21, 2011: BETTY B. LACBAYAN, PETITIONER, VS. BAYANI S. SAMOY, JR., RESPONDENT.

INTRODUCTION

Imagine building a life and acquiring properties with a partner, only to face a legal battle disputing your ownership rights when the relationship ends. This is the stark reality for many unmarried couples in the Philippines. The case of Lacbayan v. Samoy, Jr. highlights a crucial aspect of Philippine property law: co-ownership between unmarried partners is not automatically presumed. Betty Lacbayan sought judicial partition of properties acquired during her relationship with Bayani Samoy, Jr., arguing they were co-owners. The Supreme Court, however, sided with Samoy, emphasizing the necessity of proving actual contribution to property acquisition, not just cohabitation.

LEGAL CONTEXT: ARTICLE 148 OF THE FAMILY CODE

Philippine law differentiates property rights based on marital status. For legally married couples, property relations are governed by marriage settlements or, in their absence, by the Family Code’s provisions on conjugal partnership or absolute community of property. However, for couples living together without marriage, also known as cohabitants, Article 148 of the Family Code specifically applies. This article is pivotal in understanding cases like Lacbayan v. Samoy, Jr.

Article 148 of the Family Code states:

“In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions.”

This provision is crucial because it explicitly requires actual joint contribution to establish co-ownership. Mere cohabitation, regardless of the length, does not automatically grant property rights. The law mandates proof that both parties actively participated in acquiring the property through financial input, assets, or labor. This differs significantly from the default property regimes in marriage, where co-ownership is often presumed for properties acquired during the marriage.

Furthermore, the concept of a Torrens title is relevant in this case. A Torrens title is a certificate of title issued under the Torrens system of land registration, considered the best evidence of ownership in the Philippines. However, as the Supreme Court clarified in this case, while a Torrens title is indefeasible, it does not preclude disputes on ownership itself. The certificate of title is evidence, but not absolute proof against claims of co-ownership or other interests.

CASE BREAKDOWN: LACBAYAN VS. SAMOY, JR.

Betty Lacbayan and Bayani Samoy, Jr.’s relationship began in 1978, even though Samoy was married to someone else. During their relationship, they acquired five real estate properties, registered under Samoy’s name, sometimes indicated as “married to Betty Lacbayan.” Lacbayan and Samoy also established a manpower services company. When their relationship ended in 1991, they initially attempted a partition agreement, but disagreements arose, leading Lacbayan to file a complaint for judicial partition in 1999.

Lacbayan claimed co-ownership, asserting they lived as husband and wife and jointly acquired properties worth P15.5 million. Samoy denied cohabitation and claimed the properties were solely purchased with his funds. During the trial, Lacbayan admitted the properties were acquired from the manpower company’s income, where she held a minor 3.33% share. Samoy argued he registered the properties under both names to shield them from his wife’s gambling habits and as investments.

The Regional Trial Court (RTC) dismissed Lacbayan’s complaint, finding her admission about the source of funds weakened her claim. The Court of Appeals (CA) affirmed the RTC’s decision, emphasizing that the core issue was ownership, a necessary precursor to partition. The CA underscored that the Torrens title’s indefeasibility was not under attack, but rather the underlying ownership.

The Supreme Court upheld the lower courts’ decisions, focusing on Article 148 of the Family Code. The Court addressed several key issues raised by Lacbayan:

• Partition Case and Ownership: The Court clarified that determining co-ownership is integral to a partition case. “Until and unless this issue of co-ownership is definitely and finally resolved, it would be premature to effect a partition of the disputed properties.”
• Collateral Attack on Torrens Title: The Court distinguished between the certificate of title and the title itself (ownership). Resolving ownership in a partition case is not a collateral attack on the certificate of title. “What cannot be collaterally attacked is the certificate of title and not the title itself.”
• Admission Against Interest: Lacbayan argued Samoy’s initial partition agreement was an admission of co-ownership. The Court disagreed, stating the agreement involved legal questions and couldn’t waive the rights of Samoy’s legal wife.

Ultimately, the Supreme Court found Lacbayan failed to prove actual joint contribution. Her claim that the properties came from the company’s income, where she was a minor shareholder, was insufficient. The Court highlighted the lack of evidence showing her personal financial contribution to the property acquisitions. The dispositive portion of the decision stated:

“WHEREFORE, the petition is DENIED. The September 14, 2004 Decision of the Court of Appeals in CA-G.R. CV No. 67596 is AFFIRMED with MODIFICATION.  Respondent Bayani S. Samoy, Jr. is hereby declared the sole owner of the disputed properties, without prejudice to any claim his legal wife may have filed or may file against him. The award of P100,000.00 as attorney’s fees in respondent’s favor is DELETED.”

PRACTICAL IMPLICATIONS: PROTECTING PROPERTY RIGHTS

Lacbayan v. Samoy, Jr. serves as a critical reminder for unmarried couples in the Philippines. It underscores that cohabitating and acquiring property together does not automatically equate to co-ownership. To establish co-ownership under Article 148 of the Family Code, both parties must demonstrate actual joint contributions to the acquisition of the properties.

This ruling has significant implications:

• Burden of Proof: The burden of proving actual joint contribution rests on the party claiming co-ownership. Vague claims or assumptions are insufficient.
• Documentation is Key: Unmarried couples acquiring property jointly should meticulously document their financial contributions, agreements, and intentions regarding ownership from the outset. This could include keeping records of bank transfers, joint accounts, and written agreements outlining each party’s contribution.
• Separate vs. Joint Property: If one party intends to claim co-ownership, it’s crucial to ensure that the property acquisition reflects this intention, with clear documentation of joint effort and contribution. Simply being named in the title as ‘married to’ may not suffice if the ‘marriage’ is not legally recognized and actual joint contribution is not proven.
• Legal Counsel: Unmarried couples should seek legal advice when acquiring property to understand their rights and obligations and to structure ownership in a way that reflects their intentions and protects their interests.

KEY LESSONS

• Prove Contribution: For unmarried couples, co-ownership requires clear proof of actual joint contributions (financial, property, or industry) to property acquisition.
• Document Everything: Maintain detailed records of financial contributions and agreements related to property to substantiate co-ownership claims.
• Seek Legal Advice Early: Consult with a lawyer when acquiring property as an unmarried couple to ensure your rights are protected and your intentions are legally sound.

FREQUENTLY ASKED QUESTIONS (FAQs)

Q: Does living together automatically mean we co-own property acquired during our relationship?

A: No, not automatically in the Philippines. Article 148 of the Family Code requires proof of actual joint contribution to establish co-ownership for unmarried couples.

Q: What kind of proof is needed to show ‘actual joint contribution’?

A: Evidence can include bank records showing joint funds used, receipts for property expenses paid by both parties, loan documents signed jointly, and evidence of significant labor or industry contributed by both to acquire the property.

Q: If a property title lists both our names as ‘spouses,’ does that guarantee co-ownership?

A: Not necessarily. If you are not legally married, the ‘spouses’ designation is technically incorrect. While it might suggest intent, courts will still look for proof of actual joint contribution, as highlighted in Lacbayan v. Samoy, Jr.

Q: What happens if one partner contributed more financially than the other?

A: Article 148 states co-ownership is “in proportion to their respective contributions.” If contributions are unequal, ownership shares will reflect this disparity, provided contributions from both parties are proven.

Q: Is a partition agreement signed by one party considered an admission of co-ownership?

A: Not necessarily. As the Supreme Court clarified in Lacbayan v. Samoy, Jr., a partition agreement might involve legal complexities and not automatically constitute an irreversible admission of co-ownership, especially if it potentially affects the rights of third parties, like a legal spouse.

Q: What is the first step if I want to claim co-ownership of property acquired with my unmarried partner?

A: Consult with a lawyer specializing in family law and property law. They can assess your situation, advise on the strength of your evidence, and guide you on the legal process, which may involve filing a case for declaration of co-ownership and partition.

ASG Law specializes in Family Law and Property Law in the Philippines. Contact us or email hello@asglawpartners.com to schedule a consultation.