Descallar Jambrich Properties Contributed  In Borromeo Capacitated Marry

b) Jambrich, an Austrian, fell in-love and lived together with Descallar and bought their house and lots at Agro-Macro Subdivision.  In the Contracts to Sell, Jambrich and Descallar were referred to as the buyers. When the Deed of Absolute Sale was presented for registration before the Register of Deeds, it was refused because Jambrich was an alien and could not acquire alienable lands of the public domain. After Jambrich and Descaller separated, Jambrich purchased an engine and some accessories for his boat from Borromeo. To pay for his debt, he sold his rights and interests in the Agro-Macro properties to Borromeo. 

Borromeo discovered that titles to the three (3) lots have been transferred in the name of Descallar. Who is the rightful owner of the properties? Explain.  (5%)

SUGGESTED ANSWER:

It depends.  On the assumption that the Family Code is the applicable law, the ownership of the properties depends on whether or not Jambrich and Descallar are capacitated to marry each other during their cohabitation, and whether or not both have contributed their cohabitation, and whether or not both have contributed funds for the acquisition of the properties.

If both of them were capacitated to marry each other, Article 147, co-ownership will apply to their property relations and the properties in question are owned by them in equal shares even though all the funds used in acquiring the properties came only from the salaries or wages, or the income of Jambrich from his business or profession.  In such a case, while Jambrich is disqualified to own any part of the properties, his subsequent transfer of all his interest therein to Borromeo, a Filipino, was valid as it removed the disqualification.  In such case, the properties are owned by Borromeo and Descallar in equal shares.

If, on the other hand, Jambrich and Descallar were not capacitated to marry each other,  Article 148 governs their property relations.  Under this regime,  Jambrich and Descallar are co-owners of the properties but only if both of them contributed in their acquisition.  If all funds used in acquiring the properties in questions came from Jambrich, the entire property is his even though he is disqualified from owning it.  His subsequent transfer to Borromeo, however, is valid as it removed the disqualification.  If, on the other hand, Descallar contributed to their acquisition, the properties are co-owned by Descallar and Borromeo in proportion to the respective contributions of Descallar and Jambrich.