Same-sex couples may be recognized as co-owners of a property they purchased while living together provided there is proof of actual contribution, the Supreme Court (SC) ruled.

The co-ownership of a property purchased by same-sex couples, who cannot legally marry, is governed under Article 148 of the Family Code, it said.

Article 148 states: “In cases of cohabitation…, 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.”

It also states: “In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidence of credit.”

In a decision in GR No. 267469 written by Associate Justice Jhosep Y. Lopez, the SC granted the petition of one of the same-sex couples who was denied her share in the house and lot they purchased and later sold when they separated.

In a summary of the decision, the SC’s Office of the Spokesperson said that the two women lived together as a couple.

After a year, they purchased a house and lot in Quezon City and agreed to register the property only in the name of one of the partners to facilitate bank transactions.

When they separated, they agreed to sell the property and divide the proceeds equally with one of the partners signing an acknowledgment that the other had paid about 50 percent of the purchase and renovation costs.

However, one of the partners – who signed the acknowledgment -- later refused to sell the property and denied that her former partner was a co-owner.

The former partner annotated an adverse claim on the title and demanded partition of the property.

When the annotation failed, she filed a case before the Regional Trial Court (RTC) and relied on the acknowledgment as proof of her co-ownership.

The RTC dismissed the case for lack of proof of contribution and even ordered her to pay damages. On appeal, the Court of Appeals (CA) affirmed the RTC but reversed the award of damages. The aggrieved party elevated the case to the SC.

In resolving the issue, the SC granted the petition of the aggrieved party as it reversed the rulings of both the RTC and the CA.

It said that property acquired during their cohabitation is presumed jointly owned, and Article 148 of the Family code applies to couples who are not permitted to marry like same-sex couples.

The SC pointed out that only properties obtained through actual contribution are considered common property.

It said that the signed acknowledgement, where one partner admitted that the other paid about half of the property costs, was a binding admission and sufficient proof of actual contribution, and established co-ownership.

The SC emphasized that, without a law recognizing same-sex marriage, Congress and other government branches must address same-sex couples’ rights, as courts alone cannot resolve all related policy concerns.

It said: “This Court does not have the monopoly to assure the freedom and rights of homosexual couples. With the political, moral, and cultural questions that surround the issue concerning the rights of same-sex couples, political departments especially the Congress must be involved to quest for solutions, which balance interests while maintaining fealty to fundamental freedoms.”

It also said: “The process of legislation exposes the experiences of homosexuals who have been oppressed, ensuring that they are understood by those who stand with the majority. Mostly, public reason needs to be first shaped through the crucible of campaigns and advocacies within our political forums before it is sharpened for judicial fiat.”

In his concurring opinion, Senior Associate Justice Marvic M.V.F. Leonen said that Article 148 of the Family Code does not distinguish based on gender and applies to all forms of cohabitation.

He stressed that a same-sex relationship is a normal relationship which must be covered by Article 148.

Associate Justice Amy C. Lazaro‑Javier, in her concurrence, said that Article 148 is broad enough to cover same-sex cohabitation and should not be limited to heterosexual relationships, “given the prevailing values in modern society as well as the glaring yet unjustified difference in the treatment of homosexual couples vis-à-vis their homosexual counterparts.”