Aranas vs. Mercado, Gr. No.

156407, January 15, 2014Facts:

Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his second wife,Teresita V. Mercado (Teresita), and
their five children, namely: Allan V. Mercado, Felimon V.Mercado, Carmencita M. Sutherland, Richard V. Mercado, and Maria Teresita
M. Anderson; andhis two children by his first marriage, namely: respondent Franklin L. Mercado and petitionerThelma M. Aranas
(Thelma).Emigdio and Teresita were married before 1988 and so, their property regime is governed bythe conjugal partnership of
gains. During the lifetime of Emigdio, he inherited and acquired realproperties from her deceased mother. He owned corporate shares
in Mervir Realty Corporation(Mervir Realty) and Cebu Emerson Transportation Corporation (Cebu Emerson). He assignedhis real
properties in exchange for corporate stocks of Mervir Realty, and sold his real propertyin Badian, Cebu (Lot 3353 covered by Transfer
Certificate of Title No. 3252) to Mervir Realtyand such deed of assignments were executed days before he died.Thelma then
petitioned the RTC in Cebu City for the appointment of Teresita as administrator of
Emigdios estate. Followi
ng an order from the court, Teresita filed an inventory of the propertiesleft by the deceased but excluded therefrom the properties
mentioned to have been alreadyassigned to Mervir Realty. Thelma moved that the list of inventory be amended to include all
theproperties of the deceased even if already assigned. The trial court issued an order thatmandates Teresita to re-do the inventory
made. Teresita appealed to the CA to which the CAruled in her favour.
Issue:
Whether the properties that had already been assigned to Mervir Realty should beincluded in the inventory of the administrator of the
estate considering the fact that the samewere conjugal properties of the deceased and his surviving spouse.
Held:
Yes, the properties, even though assigned to Mervir Realty should be included in the inventoryfor the settlement of the estate of the
deceased.
xxx with Emigdio and Teresita having been married prior to the effectivity of the
Family Code
in August 3, 1988, their property regime was the conjugal partnership of gains. For purposes of the
settlement of Emigdios estate, it was unavoidable for Teresita to include his shares in the
conjugal partnership of gains. The party asserting that specific property acquired during thatproperty regime did not pertain to the
conjugal partnership of gains carried the burden of proof,and that party must prove the exclusive ownership by one of them by clear,
categorical, andconvincing evidence.
In the absence of or pending the presentation of such proof, the conjugalpartnership of Emigdio and Teresita must be provisionally
liquidated to establish who the realowners of the affected properties were, and which of the properties should form part of theestate of
Emigdio. The portions that pertained to the estate of Emigdio must be included in theinventory.Moreover, although the title over Lot
3353 was already registered in the name of Mervir Realty,the RTC made findings that put that title in dispute. Civil Case No. CEB

12692, a dispute thathad involved the ownership of Lot 3353, was resolved in favor of the estate of Emigdio, and
Transfer Certificate of Title No. 3252 covering Lot 3353 was still in Emigdios name. Indeed, the
RTC noted in the order of March 14, 2001, or ten years after his death, that Lot 3353 had
remained registered in the name of Emigdio.