Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-31287 December 27, 1929

In the matter of the Estate of R. H. Frankel, deceased. ANNA HARTSKE, CLARA WEBBER and FREMA FISCHLER, petitioners-appellants,
vs.
FRED FRANKEL and PHILIPPINE TRUST CO., appellees.

J. A. Wolfson for appellant Hartske.
Ross, Lawrence and Selph for appellant F. Fischler.
Gibbs and McDonough for appellant Webber.
Harvey and O'Brien for appellee Frankel.
No appearance for the other appellee.

STATEMENT

Eugene Fischler and Herman Frankel were married in Austria in 1895, and he died intestate in Manila in September, 1923. September 12, 1918, his wife executed her last will and testament, and died in Manila, September, 1924, and her will was admitted to probate October 21, 1924, when an executor was duly appointed and qualified. By its terms she bequeathed to Charles Albert Robinson, a grandnephew, P10,000; Gertrude Webber, a grandniece, P10,000; Frema Fischler, a niece, P5,000; and Yatti Fischler, another niece, P5,000. The residue of her estate, both real and personal, she bequeathed, share and share alike to her nieces, Anna Hartske and Clara Webber.

November 2, 1926, the Philippine Trust Company, which was later appointed administrator of the estate, filed the "Final Accounts and Project of Partition" which, based on the inventory, consisted of real property, money and personal effects of the value of P77,021.71. November 12, 1926, the court purported to make an order approving said "Final Accounts and Project of Partition," but before it was carried out, and on November 23, 1926, Fred Frankel, claiming to be an heir of his deceased brother, Herman Frankel, husband of the deceased wife, filed a petition to set aside the order approving the "Final Accounts and Project of Partition," claiming that he was entitled to the conjugal half of the estate of the deceased wife.

December 7, 1926, it was agreed between the attorneys "that the hearing be continued to a new setting to be fixed by this Honorable Court, in order to give the petitioner time to take depositions in the United States in support of his petition."

November 17, 1927, the following written stipulation was made to take the deposition of Fred Frankel in the City of New York:

STIPULATION FOR COMMISSION TO TAKE DEPOSITION OUT OF THE PHILIPPINE ISLANDS.

Upon the affidavit of Chas. E. Tenney, attorney for Fred Frankel, petitioner in the above-entitled proceedings, dated March 22, 1927, which is hereto attached, and upon the record of the above-entitled proceedings, it is stipulated and agreed that an order be entered herein, that a commission issue out of and under the seal of the said Court to take the deposition of the said Fred Frankel, petitioner, in the City of New York, State of New York, the said commission to be directed to Rubin Wexler, 63 Park Row, Room 727, Borough of Manhattan New York City, or to any Justice of the Peace in the City of New York, State of New York; that the said deposition to be taken on the interrogatories and cross-interrogatories attached hereto; and that Mr. J. W. Bernstein, 63 Park Row, New York, in representation of Fred Frankel, and Geo, Ryall--225 Fifth Avenue, New York, in representation of Clara Webber and Anna Hartske, be given not less than three days notice of the time and place of taking said deposition, and be permitted to attend at the taking thereof, and that Alex J. Lupear, attorney-at-law, 1103 Fletcher Savings and Trust Bldg., Indianapolis, Ind., be given at least 10 days notice of the time and place of said deposition, and that he, or anyone designated or nominated by him, be permitted to appear at the taking of said deposition, for and on behalf of Frema Fischler and Yatti Fischler.

March 21, 1928, the deposition of Fred Frankel was filed in the Court of First Instance of Manila, and by order of the court, the clerk was authorized to receive the evidence of the respective parties, and the case was set for hearing before the clerk on April 24, 1928, at which time the respective parties appeared, and the deposition of Fred Frankel was offered in evidence, to which objections were made by the residuary heirs of the deceased wife on the ground "that it is not a true transcript of the proceedings to which it pretends to relate." That it "is not in due form and does not comply with the law in relation to taking depositions abroad," and "on the ground that the deposition and the exhibits thereunto attached are not properly identified in accordance with the law in such cases made and provided," and "on the ground that nothing, including said Exhibit K, has been shown that would in any way even tend to give the person alleged to be Fred Frankel any standing in this record."

November 8, 1928, the court made the following order:

With regard to the objection of Mr. Wolfson to the admission of the deposition of Fred Frankel, it appears that the parties, among whom was Mr. Wolfson, have agreed to the taking of the deposition and that the set of questions to be asked was prepared and made a part of the agreement. It appears also that the deposition was taken in the presence of the representatives of the parties concerned, and that said deposition appears to be sworn to and subscribed by the deponent before the commissioner appointed by the consent of all the interested parties.

In view of the above, the court finds that the objection of Mr. Wolfson is not well founded; the same is, therefore, overruled.

And upon the merits the court rendered the following decision:

With regard to the first question, Fred Frankel stated that he is the son of Srul Frankel and Chaje Frankel, both of whom are now dead, and that he had four brothers and one sister, all of whom are also now deceased. According to the records, Mr. and Mrs. Herman Frankel had no issue. It appearing from the above that Herman left no ascendants or descendants and it appearing that Fred Frankel is the only surviving brother, the latter must be declared the sole heir of Herman Frankel.

It is contended that Herman Frankel, as husband, has an interest in the property left by his wife. It should be observed that upon the death of Herman Frankel, who was the first to die, no liquidation of the conjugal partnership was made; neither was any liquidation made at any time subsequent to the death of Mrs. R. H. Frankel. It is safe to conclude, therefore, that the community property, if any, has been left undivided all this time.

It is an admitted fact that Herman Frankel and Mrs. R. H. Frankel were legally married, although the evidence is contradictory as to the place where the marriage took place. As no proof has been introduced to the contrary, it is presumed that they have entered upon the regime of legal conjugal partnership. Through the testimony of witnesses, it was endeavored to show that each of the couple had possessed certain properties belonging exclusively to each before the celebration of the marriage. Mrs. Anna Hartske declared that she is a niece of the testatrix, and that she had lived with her during her childhood. She declared that her aunt had already been engaged in the wig manufacturing business in Austria even before her marriage to Herman and later in Chicago, U. S. A., and that the testatrix had in 1904, when she (the witness) came to Manila, between P17,000 and P18,000 which amount, according to the witness, was derived from the business in question. She also stated that Herman Frankel, as far as she knew, had no property, so much so that he oftentimes asked his wife to give him money, and that he was even supported by the witness and her aunt. Asked if she knew if Herman had even been engaged in any business, she replied that to her knowledge he had never been. She also stated that Herman became insane. The records show that he had been confined in the San Lazaro Hospital, in Manila, between May 19, 1920 and September 9, 1923, when he died.

On the other hand, Fred Frankel in his deposition, declared that his brother Herman was engaged in the amusement business, having been proprietor of a circus. He stated that Herman sold a patent on some amusement machinery for P18,000 and that the latter showed him a traveling check book for that amount. He also stated that Mrs. R. H. Frankel had no property, although he admitted that the latter once asked him to take charge of certain real property.

There is nothing in the depositions tending to reveal what become of the P18,000. The deponent stated that he did not hear further from his brother until 1923, when he met Herman's wife, who told him that Herman Frankel had become insane, and that he was confined in a sanitorium in New York.

The parties have agreed, however, that on August 30, 1916, Torrens title No. 3374, registry of Manila, was issued to Eugene Fischler, the wife of Herman Frankel; also another title was issued on June 20, 1921, in favor of Eugene Fischler, married to Herman Frankel. Also they have agreed that the money now deposited in the International Banking Corporation was deposited on the 4th of January, 1922, by Eugene Fischler Frankel, and that the same amount was withdrawn by her one year thereafter and redeposited in the same bank under her name, and has remained there since.

According to the inventory submitted by the administrator the properties of the deceased are the following:

Real Estate ..............................................P48,827.00
Cash .....................................................20,292.81
Promissory Note of J. R. Serra ..................600.00
Jewelry ..................................................6,560.50
Furniture ................................................741.40

77,021.71

Apparently, the real estate above mentioned is the same property covered by the certificates of title Nos. 3374 and 16245 and that the cash is the same amount deposited in the International Banking Corporation.

The evidence presented does not disclose the origin of the promissory note of J. R. Serra, the jewelry, and the furniture above listed. In fact, absolute nothing has been mentioned concerning them. "In view of the foregoing and following the doctrine repeatedly laid down by the Supreme Court with regard to conjugal estate, it is presumed, in the absence of proof to the contrary, that the promissory note of P600, the jewelry amounting to P6,560 and the furniture valued at P741.40 are ganancial property.

With respect to the real estate, the evidence as to the source of ownership is, it must be stated, so scant that it is impossible to reach a finding. While it is true that the certificates of title are actually registered in the maiden name of the deceased who is described as a married woman, there is nothing in the record upon which to establish the fact that the properties covered by said titles were bought with paraphernal funds or were acquired by donation or through inheritance. It is likely, indeed the presumption is strong, that the real estate was acquired during the existence of the marriage. Therefore, applying the same principle as above stated, the conclusion is inevitable that the property in question forms part of the ganancial estate.

Concerning the cash deposit, the same line of reasoning as set forth in the preceding paragraph is equally applicable thereto. Mrs, Hartske testified that this money was obtained from the business of her aunt and that the latter had this amount in 1904. In that year it should be observed, she was already married to Herman. No evidence, however, has been submitted indicating whether the funds represented the earnings or the proceeds of the sale or the liquidation of the business in question, nor is there any proof tending to show the exact period during which the same have been accumulated. Here, again, as above, the legal presumption is that the cash deposit had been acquired during coverture, and as such, it must be considered as community property.

Wherefore, that portion of the order approving the scheme of partition is set aside, and the administrator is directed to file an amended scheme of partition in accordance with this decision.

It is decreed that Fred Frankel is the sole heir of Herman Frankel and as such is entitled to receive the share of the latter in this estate.

It is also decreed that all the properties left by the testatrix appearing in the schedule of partition submitted by the administrator are conjugal properties.

Inasmuch as the conjugal estate has never been liquidated, it is directed that the Philippine Trust Company proceed immediately with its liquidation, diving it not equal parts and adjudicating one-half thereof to this testate estate and the other half to Herman Frankel or his legal representative. After the liquidation has been effected, it is directed that the portion pertaining to Mrs. R. H. Frankel be distributed in accordance with the last wishes of the testatrix as expressed in her will, and the remaining half be delivered to Fred Frankel, or his legal representative upon payment of the inheritance tax.

A motion for reconsideration was made and overruled, and on appeal the residuary heirs assign the following errors:

I. The lower court erred in admitting the deposition of Fred Frankel, Exhibit K, and in holding that the provisions of Act No. 2103 of the Philippine Legislature are not applicable thereto.

II. The lower court erred in holding Exhibit A fraudulent and in holding that all property left by the deceased was conjugal property, one-half of which should go to Fred Frankel.

III. The lower court erred in ignoring the order of January 19, 1926, which had long since become final, and ordering a distribution which is physically impossible to comply with.

JOHNS, J.:

There is no merit in the first assignment of error. As the lower court well said, the deposition of Fred Frankel was taken under the stipulation in which both parties appeared by their respective attorneys at the stipulated time and place, and propounded their respective questions to the witness, who made written answers to such questions, and it appears that the answers were subscribed and sworn to by the witness. In other words, the deposition was taken under and pursuant to the terms of the stipulation of the parties, and, hence, is admissible in evidence. It clearly appears from the deposition that Herman Frankel died without lineal descendants, and that Fred Frankel is his only surviving brother, and as such is an heir to the estate of his deceased brother, Herman Frankel.

Exhibit A, which the lower court held to be fraudulent, is a deed from Edward A. Carlstrom to the deceased wife of Herman Frankel. It appears that on the same day that it was executed, Herman Frankel conveyed the identical property therein described to Edward A. Carlstrom, and it is contended that such conveyances should be construed together, and that when so construed, it is apparent that they were made for the sole purpose and intent of divesting the conjugal partnership of the property and to vest it in Eugene Fischler, the deceased wife, and for such reasons, it is null and void as against public policy.

It appears that Herman Frankel and his wife separated January 8, 1902, and never again lived together as husband and wife. Exhibit A was executed February 25, 1902, and paragraph 4 of it, which is the certificate of the notary public, recites:

4. Mrs. Eugene Fischler, with the license and consent of her husband, Mr. Herman Frankel, which was asked and conceded, in this act and in my presence, I, the notary, do give faith and therefore state: That she accepts this sale in the precise terms in which it is made by Mr. Edward A. Carlstrom, manifesting that this present acquisition is made with her own money and does not pertain to the conjugal partnership gananciales, for which reason her husband, from whom she has been separated by virtue of an act dated January 8, 1902, formulated before the notary public of this capital, Don Enrique Barrera y Caldes, only concurs to this instrument so that same may be inscribed in the corresponding property register, he having manifested this to me, corroborating that which is said by the signer, that he has not for himself nor for hi heirs any participation in the property the subject matter of this instrument.

It also appears that on August 30, 1916, Torrens certificate of title No. 3374 was issued to and in the name of the deceased wife, Eugene Fischler, for the identical land described in Exhibit A.

The storm center of that exhibit is whether or not it was made with a fraudulent intent and purpose to nullify the statue, as the trial court found. There is some evidence which tends to show that before her marriage, the deceased wife at one time had about P20,000 of her own money, and the evidence of Fred Frankel tends to show that at one time before his marriage, his brother had about P80,000 in money. But in truth and in fact, there is no oral evidence as to the amount of money, if any, which either of them had at the time of their marriage, and the lower court based on legal presumptions found that any property which either of them had was acquired after marriage, and as such was conjugal property.

Act No. 496 became a law January 1, 1903, and Exhibit A was executed on February 25, 1902, when the old Spanish Notarial law was still in force and effect, under which the certificate of the notary is entitled to much weight.

It will be noted that in this certificate, the deceased wife says that she accepts the conveyance from Carlstrom "manifesting that this present acquisition is made with her own money and does not pertain to the conjugal partnership gananciales," for which reason her husband, from whom she has been separated since January 8, 1902, as evidenced by the certificate of the notary public "only concurs to this instrument so that same may be inscribed in the corresponding property register, he having manifested this to me, corroborating that which is said by the signer, that he has not for himself nor for his heirs any participation in the property the subject matter of this instrument." That is to say, that this Spanish notarial certificate recites that the wife then claimed and asserted that she acquired this property with her own personal, individual money, and that her husband then confirmed and corroborated that statement of his wife, and says: "That he has not for himself nor for his heirs any participation in the property," and it is a fact that from and after the execution of Exhibit A, the husband during his lifetime did not claim or assert any right, title or interest in or to the property, and that the wife dealt with and treated it as her sole and exclusive property, and there is no evidence to overcome or which is in conflict with those notarial recitals.

Construing them as true, we have the statement of the wife made before the notary that this property was purchased with her own money, which is also confirmed and corroborated by that of her husband.

Without some evidence, and based upon legal presumptions only, how can the court find as a fact that the statements of both the husband and the wife made before a Spanish notary are false and unworth of belief, in particular, where for twenty-two years they were confirmed and approved by the subsequent acts and conduct of both the husband and the wife?

The following provisions of the Civil Code are in point:

ART. 1381. Paraphernal property is that which the wife brings in marriage without including it in the dowry and that which she may acquire after its constitution without adding it to the dowry.

ART. 1392. By virtue of the conjugal partnership the earnings or profits obtained by either of the spouses during the marriage shall belong to the husband and the wife, share and share alike, upon the dissolution of the marriage.lawphi1.net

ART. 1393. The conjugal partnership shall begin on the same day that the marriage is celebrated. Any stipulation to the contrary shall be void.

ART. 1396. The following is the separate property of each of the spouses:

1. That brought to the marriage as his or her own;

2. That acquired gratuitously be either of them during the marriage;

3. That acquired by right of re-purchase or by exchange for other property belonging to one of the spouses only;

4. That bought with money belonging exclusively to the wife or to the husband.

ART. 1407. All the 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.

ART. 1432. In default of a specific declaration in the marriage contract, no separation of the property of the spouses shall take place during the marriage except by virtue of a judicial decree, except in the case provided for by article 50.

ART 1458. The husband and the wife cannot sell property to each other, except in case a separation of property has been agreed upon or when a judicial separation of such property should have been decreed in accordance with the provisions of Chapter VI, Title III, of this book.

Under similar laws, there is good authority for holding that Exhibit A is valid even as a gift against an heir of the deceased husband.

In the case of Brown vs. Brown (174 Massachusetts, 197; American State Reports, vol., 75, p. 292), that court said:

Although in this commonwealth there has been much change in the law regarding the relations of husband and wife and the power of a married woman to acquire property and make contracts, yet it is still the law here that, with certain exceptions as to wearing apparel and similar articles not material to this case, a married woman cannot acquire property by gift from her husband, though such a gift may be so far valid as to give the wife a right to the property at the death of her husband as against his heirs or executors but not against his creditors. Property thus, given remains the property of the husband during his life, and may be demanded by him or attached by his creditors.

And Marshall vs. Jaquith (134 Massachusetts, 138), the same court said:

A husband may make a gift of personal property to his wife, which, if not revoked by him, will, after his death, give her a valid title to the property against his heirs, if, with the intention on his part to give it to her, the property is actually delivered to and retained by her, and no rights of the creditors of the husband are impaired.

Be that as it may, upon that point we prefer to base this opinion on the recitals made in the Spanish notarial certificate above quoted, and the subsequent acts and conduct of the parties, that the property described in Exhibit A was purchased by the wife with her own personal money. There is no evidence to overcome the legal force and effect of that certificate.

On the record, we are clearly of the opinion that Exhibit A was a good and valid conveyance to the deceased wife, and that it was and is legally binding on both the husband and his heirs.

As to the remaining property, both real and personal, for ought that appears in the record, it was acquired during the marriage, and there is no evidence to overcome the statutory presumptions, or which tends to show that it was the separate and exclusive property of the wife.

The judgment of the lower court as to the real property described in Exhibit A is reversed, and it is held to be the sole and separate property of the wife and of her estate. In all other things and respects, the judgment of the lower court is affirmed, without costs to either party. So ordered.

Avanceña, C.J., Malcolm, Ostrand, Romualdez and Villa-Real, JJ., concur.

 

 

 

Separate Opinions

 

STREET, J., dissenting:

The judgment which is the subject of this appeal should in my opinion be affirmed in its entirety, and I dissent from so much of the present decision as holds that the real property covered by Exhibit A is separate property of the wife. There is admittedly no sufficient proof that Eugene Fischler owned property in her own right prior to her marriage to Herman Frankel; and whatever she possessed thereafter must have been acquired during the marriage regime. Of course the mere separation of the spouses did not destroy the right of either to participate in their mutual acquisitions, as in ganancial property. The sole ground upon which the opinion of the court in this case proceeds, in holding the aforesaid property to be separate estate of the wife, is discovered in the recitals of the conveyance, Exhibit A, and in recitals of the notarial acknowledgment appended thereto. But it appears that this property originally was held in the name of the husband, Herman Frankel, and that after he had conveyed it to Carlstrom, the latter, on the same day, executed the Exhibit A, conveying the property to the wife, Eugene Fischler, as separate property. It is transparent that these transactions were consummated as a mere device to evade the statute, which denies validity to direct conveyances made by the husband or wife to each other. Carlstrom was evidently a mere conduit for the purpose of transferring the property from the husband from conveying property directly to the wife, it is difficult to see how his heir can be held bound by an admission, evidently fictitious, inserted in the conveyance of Carlstrom to the wife, that the property was purchased by her with means pertaining to her separate estate. The courts ought not, in my opinion, to grasp at fictions of this sort for the purpose of diverting ganancial property from the channel appointed by law for its devolution.




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