CAMPER REALTY CORP. VS. MARIA NENA PAJO-REYES,ET AL.

Facts:

1. Mar. 27, 1974 -Respondent Rodolfo Pajo caused the notarization of an SPA purportedly by his four
siblings Maria, Godofredo, Tito & Isais (Atty. Naraval) --- w/c authorized him to sell a parcel of land in Davao
City covered by TCT under the name of the siblings

2. Mar. 28, 1974 – he sold the land to Ligaya who caused the cancellation of the TCT & issued a new one
for Ligaya

3. Mar. 30, 1974 – Atty. Naraval observed that the signatures of the siblings were forged w/c made him
send letters to the other siblings regarding the cancellation of the SPA from his notarial register

4. July 16, 1986 – Ligaya’s son, Agusto, caused the cancellation of the TCT in his Mother’s name upon
her death via Partition Agreement

5. 1992 – Agusto caused the division of the property into 2 but before the completion of the technical
survey, he sold the bigger portion to petitioner Camper Realty although the land was still registered in Agusto’s
name & he retained the smaller portion for himself

6. 1993 – respondent Nena (sister of Rodolfo) filed a complaint against Agusto, Rodolfo & Godofredo for
declaration of nullity and/or inexistence of contracts, cancellation of title, quieting of title & possession,
damages, atty.’s fee w/ PI & TRO

7. RTC – issued TRO against Agusto

8. Nena amended the complaint & impleaded Camper upon knowledge of the sale alleging that no right
could have been transmitted to Ligaya & subsequent transferees since the SPA had been forged

9. Davao RTC – dismissed the complaint of Nena on the ground of laches & that the transfer from Rodolfo
to Ligaya could have been invalid for forgery of the SPA however, the court cannot invalidate the subsequent
transfer of the property to Agusto-to-Camper

10. CA – reversed – Agusto did not acquire any better right than his mother, Ligaya

Issue: W/N Camper has a better right over the property upon relying on the title of Agusto?

Held: YES!

1. Although the acquisition of Agusto as his share in his mother’s estate was on the basis of a forged
SPA, Agusto’s title must be cancelled, however, Camper, acquired a portion of the said property in good faith &
for value

2. A person dealing with a registered land has a right to rely on the Torrens COT & to dispense w/ the
need of inquiring further except when the party has actual knowledge of facts & circumstances that would
impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of the defect in
title of the vender (w/c is not true in this case)

a. Nena did not present proff of any circumstance that could serve as caveat for Camper to undertake
searching investigation

b. Ligaya registed it in 1974, Agusto in 1986 & there was no encumberance or lien annotated

3. Agusto’s title is defeasible, he having acquired no better right than that of his mother, however, his title
becomes conclusive & indefeasible in the hands of Camper, being an innocent purchaser for value & in good
faith.
 MARIA B. CHING v. JOSEPH C. GOYANKO, JR., et al.

506 SCRA 735 (2006)

In line with the policy of the State, the law emphatically prohibits the sale of properties between
spouses.

Respondents Joseph Goyanko et al. filed with the Regional Trial Court of Cebu City a complaint for
recovery of property and damages against Maria Ching, praying for the nullification of the deed of
sale and of transfer certificate and the issuance of a new one. Goyanko et al. aver that they are the real
owners of the property involved. They further contend that it was after their father‘s death that they
found out that a contract of sale involving the same property has been executed by their father and
common-law wife Ching. However, Ching claimed that she is the actual owner of the property as it
was she who provided its purchase price. The RTC dismissed the complaint against Ching, declaring
that there is no valid and sufficient ground to declare the sale as null and void, fictitious and
simulated.

On appeal, the Court of Appeals reversed the decision of the trial court and declared null and void the
questioned deed of sale and TCT No. 138405.

ISSUES:

Whether or not the contract of sale and TCT No. 138405, in favor of the Maria Ching, was null and
void for being contrary to morals and public policy

HELD:

The subject property having been acquired during the existence of a valid marriage between Joseph
Sr. and Epifania dela Cruz-Goyanko, is presumed to belong to the conjugal partnership. Moreover,
while this presumption in favor of conjugality is rebuttable with clear and convincing proof to the
contrary, the court find no evidence on record to conclude otherwise. The record shows that while
Joseph Sr. and his wife Epifania have been estranged for years and that he and defendant-appellant
Maria Ching, have in fact been living together as common-law husband and wife, there has never been
a judicial decree declaring the dissolution of his marriage to Epifania nor their conjugal partnership.
It is therefore undeniable that the property located at Cebu City belongs to the conjugal partnership.
Assuming that the subject property was not conjugal, still the court cannot sustain the validity of the
sale of the property by Joseph, Sr. to defendant-appellant Maria Ching, there being overwhelming
evidence on records that they have been living together as common-law husband and wife.

The court therefore finds the contract of sale in favor of the defendant-appellant Maria Ching null and
void for being contrary to morals and public policy. The purported sale, having been made by Joseph
Sr. in favor of his concubine, undermines the stability of the family, a basic social institution which
public policy vigilantly protects.

(it would turn out to be better than those in legal union)

BAUTISTA v SILVA
GR No. 157434
FACTS: Spouses Berlina Silva and Pedro Silva were the owners of a parcel of land with a Transfer Certificate
of Title No B-37189, which was registered on August 14, 1980 in their names.
On March 3, 1988, Pedro , for himself and as attorney-in-fact of his wife Berlina, thru a Special Power of
Attorney purportedly executed by Berlina in his favor, executed a Deed of Absolute Sale over the said parcel of
land in favor of defendants-spouses Claro Bautista and Nida Bautista.
As a consequence, TCT No B-37189 was cancelled and in lieu thereof, TCT No. V-2765 was issued in the
names of Spouses Claro Bautista and Nida Bautista on March 4, 1988.
Based on the evidence presented, the signature appearing on the SPA as that of Berlina is a forgery and
consequently the Deed of Absolute Sale Executed by Pedro in favor os Spouses Bautista is not authorized by
Berlina. Thus the RTC declared the Deed of Absolute Sale dated March 3, 1988 executed by Pedro M. Silva,
for himself and as attorney-in-fact of Berlina F. Silva, in favor of defendants-spouses Claro Bautista and Nida
Bautista over the parcel of land as null and void.
ISSUE:Whether or Not petitioners are considered as purchasers in good faith and for value having relied upon
a SPA which appears legal, valid, and genuine on its face
Whether the nullity of the deed of sale includes the one half share of the husband gratia argumenti that the
special power of attorney is a forgery and the deed of sale executed by the husband is null and void
HELD: There is no merit to petitioners' claim that they are purchasers in good faith.
There was positive and convincing evidence that respondent did not sign the SPA, and on the uncontroverted
Certification of Dorado that respondent was in Germany working as a nurse when the SPA was purportedly
executed in 1987. The SPA being a forgery, it did not vest in Pedro any authority to alienate the subject
property without the consent of respondent. Absent such marital consent, the deed of sale was a nullity.
The petitioners are not buyers in good faith. A buyer for value in good faith is one who buys property of
another, without notice that some other person has a right to, or interest in, such property and pays full and fair
price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other
persons in the property. He buys the property with the well-founded belief that the person from whom he
receives the thing had title to the property and capacity to convey it.
To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title
to the property. He need not prove that he made further inquiry for he is not obliged to explore beyond the four
corners of the title. Such degree of proof of good faith, however, is sufficient only when the following conditions
concur: first, the seller is the registered owner of the land; second, the latter is in possession thereof; and third,
at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property,
or of any defect or restriction in the title of the seller or in his capacity to convey title to the property.
Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice and obliges the latter
to exercise a higher degree of diligence by scrutinizing the certificate of title and examining all factual
circumstances in order to determine the seller's title and capacity to transfer any interest in the property.
Failure to exercise such degree of precaution makes him a buyer in bad faith. To prove good faith then,
petitioners must show that they inquired not only into the title of Pedro but also into his capacity to sell.
A test has to be done whether the buyer had a choice between knowing the forgery and finding it out, or he
had no such choice at all.
A person dealing with a seller who has possession and title to the property but whose capacity to sell is
restricted, qualifies as a buyer in good faith if he proves that he inquired into the title of the seller as well as into
the latter's capacity to sell; and that in his inquiry, he relied on the notarial acknowledgment found in the seller's
duly notarized special power of attorney. He need not prove anything more for it is already the function of the
notarial acknowledgment to establish the appearance of the parties to the document, its due execution and
authenticity. Said rule should not apply when there is an apparent flaw afflicting the notarial acknowledgment of
the special power of attorney as would cast doubt on the due execution and authenticity of the document; or
when the buyer has actual notice of circumstances outside the document that would render suspect its
genuineness.
In the present case, petitioners knew that Berlina was in Germany at the time they were buying the property
and the SPA relied upon by petitioners has a defective notarial acknowledgment. The SPA was a mere
photocopy and we are not convinced that there ever was an original copy of said SPA as it was only this
photocopy that was testified to by petitioner Nida Bautista and offered into evidence by her counsel. But then
said photocopy of the SPA contains no notarial seal. There being no notarial seal, the signature of the notary
public on the notarial certificate was therefore incomplete. It was a mere private document which petitioners
cannot foist as a banner of good faith.
All told, it was not sufficient evidence of good faith that petitioners merely relied on the photocopy of the SPA
as this turned out to be a mere private document. They verified with Atty. Lucero whether the SPA was
authentic but then the latter was not the notary public who prepared the document. Worse, they purposely
failed to inquire who was the notary public who prepared the SPA. Finally, petitioners conducted the
transaction in haste. It took them all but three days or from March 2 to 4, 1988 to enter into the deed of sale,
notwithstanding the restriction on the capacity to sell of Pedro. In no way then may petitioners qualify as buyers
for value in good faith.
That said, we come to the third issue on whether petitioners may retain the portion of Pedro Silva in the subject
property. Certainly not. It is well-settled that the nullity of the sale of conjugal property contracted by the
husband without the marital consent of the wife affects the entire property, not just the share of the wife.
Jacobs Bernhard Hulst- petitioner vs. PR Builders Inc. – respondent

FACTS:

a.) Petitioner and his spouse (Ida) dutch nationals entered into a contract to sell with PR Builders Inc. for the
purchase of a 210 sq m residential unit in respondent town house in Niyugan, Laurel, Batangas.

b.) June 1995, the petitioner filed rescission of contract before housing and land Use Regulatory Board
(HLURB) for respondent’s failure to comply.

c.) April 22, 1997, HLURB arbiter Ma. Perpetua y Aquino(arbiter) rendered a decision in favor of petitioner.
contract is rescinded. (reimburst complaint the sum of P3,187, 500.00 PLUS 12% per anum from time
complaint was filed).

d.) Spouses Hulst divorced, Ida assigned her rights over the purchased property to petitioner and alone
pursued the case.

e.) August 21, 1997, HLURB arbiter issued a writ of execution addressed to ex-officio shrift of RTC of Tanuan,
Batangas diredcting the latter to execute its judgment.

f.) April 13, 1998, The ex-officio sherift proceed to implement the writ of execution. Respondent filed complaint
with CA on Petition for Certiorary and prohibition, levy made by the sheriff was set aside, requiring the sheriff to
levy first on respondents personal properties.

g.) January 26, 1999, upon petitioner’s motion, HLURB issued an alias writ of execution.

h.) March 23, 1999, the sheriff levied on respondent’s 15 parcels of land covered by 13 transfer of title in Brgy.
Niyugan, Laurel , Batangas.

i.) March 27, 200, Noticed of sale , the sheriff set the public auction of the levied properties on April 28, 2000 at
10 am.

j.) April 26, 2000, respondent filed an urgent motion to quash writ of levy with HLURB on the ground that sheriff
made a overlevy.

k.) Public Auction was conducted and the sum of P5,313,040.00 from Holly Properties Realty Corp(winning
bidder) was turned over to petitioner after deducting the legal fees.

l.) September 27, 2000, petitioner filed a petition for certiorari and prohibition with CA(SEC 1(N) RULE IV of
1996HLURB)- Motion for recon is prohibited).

m.) October 30,2002, CA dismissed the petition, held that when there is a right to redeem inadequacy of price
should not be material holds no water as what is obtaining in this case but an inadequacy that shock the
senses.

n.) Petitioner took the present recourse on the sole ground that the honorable CA gravely erred in affirming the
arbiter’s order setting aside the levy made by the sheriff on the subject properties.

ISSUE:

Whether or not that the foreign nationals were proscribed to own real property under the rules, but is entitled to
recover only the amount paid representing the purchase upon the rescission of the contract.

HELD:

Yes thus exception finds application in this case, under article 1414, one who repudiates the agreement and
demand his money before the illegal act has taken place is entitled to recover. Petitioner is therefore entitled to
recover what he has paid, although the basis of his claim for rescission, which was granted by the HLURB Was
not the fact that he is not allowed to acquire private land under the Phil. Consti. but petitioner is entitled to the
recovery only the amount of P3,187,500.00 representing the purchase price paid to respondent. No damages
may be recovered on the basis of void contract; being nonexistent, the agreement produces no judicial tie
between the parties involved. Further , petitioner is not entitled to actual as well as interest thereon, moral and
exemplary damages and atty’s fees.

A sense of justice and fairness demands that petitioner should not be allowed to benefit from his act of entering
into a contract to sell that violates the constitutional prescription.
Abalos v Macatangay Jr

Arturo and Esther Abalos were husband and wife. They own a parcel of land in Makati. On June 2, 1988,
Arturo, armed with a purported Special Power of Attorney, executed a Receipt and Memorandum of
Agreement in favor of Galicano Macatangay, Jr. in which Arturo acknowledged he received a P5k check
from Galicano as earnest money to be deducted from the purchase price and that Arturo binds himself to
sell the land to Galicano within 30 days from receipt of the P5k. The purchase price agreed upon was
P1.3 M. However, the P5k check was dishonored due to insufficiency.
Apparently however, Esther and Arturo were having a rocky relationship. Esther executed a SPA in favor
of her sister and that she is selling her share in the conjugal property to Galicano. It was alleged that that
the RMOA is not valid for Esther’s signature was not affixed thereto. And that Esther never executed a
SPA in favor of Arturo. Galicano informed the couple that he has prepared a check to cover the remainder
of the amount that needs to be paid for the land. He demanded that the land be delivered to him. But the
spouses failed to deliver the land. Galicano sued the spouses.
ISSUE: Whether or not there was a contract of sale between Arturo and Galicano. Whether or not the
subsequent agreement between Galicano and Esther is binding and that it cured the defect of the earlier
contract between Arturo and Galicano.
HELD: No. No matter how the RMOA is looked upon, the same cannot be valid. At best, the agreement
between Arturo and Galicano is a mere grant of privilege to purchase to Galicano. The promise to sell is
not binding to Arturo for there was actually no consideration distinct from the price. Be it noted that the
parties considered the P5k as an earnest money to be deducted from the purchase price.
Assuming arguendo that it was a bilateral promise to buy and sell, the same is still not binding for
Galicano failed to render a payment of legal tender. A check is not a legal tender.
Still assuming arguendo, that the P5k was an earnest money which supposedly perfected a contract of
sale, the RMOA is still not valid for Esther’s signature was not affixed. The property is conjugal and under
the Family Code, the spouses’ consents are required. Further, the earnest money here is not actually the
earnest money contemplated under Article 1482 under the Civil Code.
The subsequent agreement between Esther and Galicano did not ratify the earlier transaction between
Arturo and Galicano. A void contract can never be ratified.
SIOCHI V. GOZON

Facts:

This case involves a 30,000 sq.m. parcel of land. The property is situated in Malabon, Metro Manila and is
registered in the name of “Alfredo Gozon (Alfredo), married to Elvira Gozon (Elvira).”
On 23 December 1991, Elvira filed with the RTC of Cavite City a petition for legal separation against her
husband Alfredo. On Jan 2, 1992, Elvira filed a notice of lis pendens, which was then annotated on TCT no.
5357.
While the legal separation case was still pending, Alfredo and Mario Siochi (Mario) entered into an agreement
to buy and sell (agreement) involving the property for the price of P18 million.
However, despite repeated demands from Mario, Alfredo failed to comply with the stipulations provided in the
agreement. After paying the P5 million earnest money as partial payment of the purchase price, Mario took
possession of the property. On September 6, 1993, the agreement was annotated on TCT no. 5357.
Meanwhile, on 29 June 1994, the Cavite RTC rendered a decision in the legal separation case, which granted
the same. The RTC ordered among others that, the conjugal partnership of gains of the spouses is hereby
declared dissolved and liquidated. As regards the property, it held that it is deemed conjugal property.
Alfredo executed a deed of donation over the property in favor of their daughter, Winifred Gozon. Later on,
Alfredo through an SPA executed by his daughter Winifred, sold the property to IDRI and the latter paid the
purchase price in full. A new TCT was issued by the Register of Deeds in favor of IDRI.
Mario then filed with the Malabon RTC a complaint for specific performance and damages, annulment of
donation and sale, with preliminary mandatory and prohibitory injunction and/or temporary restraining order.
RTC: Malabon RTC upheld original agreement to buy and sell between Mario and Alfredo and declared
voidhe sale by Alfredo and Winifred to Inter-Dimensional.
CA: Court of Appeals said agreement between Mario and Alfredo is void because (1) it was entered into
without the consent of Elvira, Alfredo’s wife; and, (2) Alfredo’s ½ undivided share has been forfeited in favour
of Winifred by the grant of legal separation by the Cavite RTC.
Issue:

Whether or not Alfredo may sell the conjugal property, being the sole administrator of the same without
obtaining the consent of Elvira?

Held: NO.

This case involves the conjugal property of Alfredo and Elvira. Since the disposition of the property
occurred after the effectivity of the Family Code, the applicable law is the Family Code. Article 124 of the family
code provides

Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husband’s decision shall prevail, subject to the recourse to the court by the
wife for a proper remedy, which must be availed of within five years from the date of the contract implementing
such decision.

IN THE EVENT THAT ONE SPOUSE IS INCAPACITATED OR OTHERWISE UNABLE TO

PARTICIPATE IN THE ADMINISTRATION OF THE CONJUGAL PROPERTIES, THE OTHER SPOUSE MAY
ASSUME SOLE POWERS OF ADMINISTRATION. THESE POWERS DO NOT INCLUDE THE POWERS OF
DISPOSITION OR ENCUMBRANCE WHICH MUST HAVE THE AUTHORITY OF THE COURT OR THE
WRITTEN CONSENT OF THE OTHER SPOUSE. IN THE ABSENCE OF SUCH AUTHORITY OR CONSENT,
THE DISPOSITION OR ENCUMBRANCE SHALL BE VOID. HOWEVER, THE TRANSACTION SHALL BE
CONSTRUED AS A CONTINUING OFFER ON THE PART OF THE CONSENTING SPOUSE AND THE
THIRD PERSON, AND MAY BE PERFECTED AS A BINDING CONTRACT UPON THE ACCEPTANCE BY
THE OTHER SPOUSE OR AUTHORIZATION BY THE COURT BEFORE THE OFFER IS WITHDRAWN BY
EITHER OR BOTH OFFERORS. (EMPHASIS SUPPLIED)

In this case, Alfredo was the sole administrator of the property because Elvira, with whom Alfredo was
separated in fact, was unable to participate in the administration of the conjugal property. However, as sole
administrator of the property, Alfredo still cannot sell the property without the written consent of Elvira or the
authority of the court. Without such consent or authority, the sale is void. The absence of the consent of one of
the spouse renders the entire sale void, including the portion of the conjugal property pertaining to the spouse
who contracted the sale. Even if the other spouse actively participated in negotiating for the sale of the
property, that other spouse’s written consent to the sale is still required by law for its validity. The Agreement
entered into by Alfredo and Mario was without the written consent of Elvira. Thus, the Agreement is entirely
void. As regards Mario’s contention that the Agreement is a continuing offer which may be perfected by Elvira’s
acceptance before the offer is withdrawn, the fact that the property was subsequently donated by Alfredo to
Winifred and then sold to IDRI clearly indicates that the offer was already withdrawn.
SPOUSES JOSELINA ALCANTARA AND ANTONIO ALCANTARA, and SPOUSES JOSEFINO RUBI AND
ANNIE DISTOR- RUBI, petitioners, vs. BRIGIDA L. NIDO, as attorney-in-fact of REVELEN N. SRIVASTAVA,
respondent.

G.R. No. 165133. April 19, 2010

Facts: Revelen N. Srivastava is the owner of an unregistered land in Cardona, Rizal. Sometime in
March 1984, respondent accepted the offer of petitioners to purchase a 200-square meter portion of Revelen's
lot. Petitioners paid P3,000 as downpayment and the balance was payable on instalment. Petitioners
constructed their houses in 1985. In 1986, with respondent's consent, petitioners occupied an additional 150
square meters of the lot. By 1987, petitioners had already paid P17,500 before petitioners defaulted on their
instalment payments. On 11 May 1994, Brigida L. Nido, acting as administrator and attorney-in-fact of Revelen,
filed a complaint for recovery of possession with damages and prayer for preliminary injunction against
petitioners.

Issue: Whether or not the contract entered into is valid.

Held: No, the contract entered into is null and void.

The Supreme Court ruled that according to Article 1318 of the Civil Code, the requisites for a
valid contract are: 1.) consent of the contracting parties; 2.) object certain which is the subject matter of the
contract; 3.) cause of the obligation which is established.

In the case at bar, the respondent did not have the written authority to enter into a contract to
sell the lot. As the consent of Revelen, the real owner of the lot, was not obtained n writing as required by law,
no contract was perfected. Hence, the petitioners failed to validly acquire the lot.
Aggabao v Parulan

FACTS:

In January 1991, real estate broker Marta K.Atanacio offered 2 lots located in Parañaque to the petitioners. On
February 2, 1991, the petitioners met up with Elena Parulan at the site of the property and showed them the
following documents: (a.) Owner’s original copy of the TCT of the 2 lots; (b.) tax declarations; (c.) a copy of the
special power of attorney dated January 7, 1991 executed by Dionisio authorizing Elena to sell the property.
The petitioners paid P200,000.00 as earnest money for which Elena executed a handwritten Receipt of
Earnest Money which stipulated that the peitioners would pay an additional payment of P130, 000.00 on
February 4, 1991; P650,000.00 on or before February 15, 1991 and P700, 000.00 on March 31, 1991 once
Elena turned over the property.

On February 4, 1991, the petitioners, accompanied by the broker, went to the Office of the Register of Deeds
to verify the TCTs shown by Elena. There they discovered that one of the lots had been encumbered to Banco
Filipino, but that the encumbrance had been cancelled due to the full payment of the obligation. They noticed
that the loan was effected through and SPA executed by Dionisio in favor of Elena. The other lot on the other
hand had an annotation of an existing mortgage in favor of Los Baños Rural Bank, with the same SPA with a
court order authorizing Elena to mortgage the lot to secure the loan.

The petitioners and the broker next inquired about the mortgage and the court order at the Los Baños Rural
Bank. There, they met with Atty. Zarate, related that the bank had asked for the court order because the lot
involved was conjugal property.

Following their verification, the petitioners delivered P130,000.00 as additional down payment on February 4,
1991; and P650,000.00 to the Los Baños Rural Bank on February 12, 1991, which then released the owner’s
duplicate copy of TCT to them.

On March 18, 1991, the petitioners delivered the final amount of P700,000.00 to Elena, who executed a deed
of absolute sale in their favor. However, Elena did not turn over the owner’s duplicate copy of the TCT claiming
that said copy was in the possession of a relative who was then in Hongkong. She assured them that the
owner’s duplicate copy of TCT would be turned over after a week.

On March 19, 1991, TCT was cancelled and a new one was issued in the name of the petitioners. Elena did
not turn over the duplicate owner’s copy of TCT as promised. In due time, the petitioners learned that the
duplicate owner’s copy of TCT had been all along in the custody of Atty. Jeremy Z. Parulan, who appeared to
hold an SPA executed by his brother Dionisio authorizing him to sell both lots. At Atanacio’s instance, the
petitioners met on March 25, 1991 with Atty. Parulan at the Manila Peninsula. They were accompanied by one
Atty. Olandesca. They recalled that Atty. Parulan “smugly demanded P800,000.00” in exchange for the
duplicate owner’s copy of TCT, because Atty. Parulan represented the current value of the property to be P1.5
million. As a counter-offer, however, they tendered P250,000.00, which Atty. Parulan declined, giving them
only until April 5, 1991 to decide. Hearing nothing more from the petitioners, Atty. Parulan decided to call them
on April 5, 1991, but they informed him that they had already fully paid to Elena.

Thus, on April 15, 1991, Dionisio, through Atty. Parulan, commenced an action (Civil Case No. 91-1005
entitled Dionisio Z. Parulan, Jr., represented by Jeremy Z. Parulan, as attorney in fact, v. Ma. Elena Parulan,
Sps. Rex and Coney Aggabao), praying for the declaration of the nullity of the deed of absolute sale executed
by Ma. Elena, and the cancellation of the title issued to the petitioners by virtue thereof. In turn, the petitioners
filed on July 12, 1991 their own action for specific performance with damages against the respondents. Both
cases were consolidated for trial and judgment in the RTC.

On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in Makati City annulled the deed of absolute
sale executed in favor of the petitioners covering two parcels of registered land the respondents owned for
want of the written consent of respondent husband Dionisio Parulan, Jr. The CA affirmed the RTC decision.

ISSUE:

Which between Article 173 of the Civil Code and Article 124 of the Family Code should apply to the sale of the
conjugal property executed without the consent of Dionisio?

HELD:

Article 124, Family Code, applies to sale of conjugal properties made after the effectivity of the Family Code

RATIO:

The petitioners submit that Article 173 of the CivilCode, not Article 124 of the Family Code, governed the
property relations of the respondents because they had been married prior to the effectivity of the Family Code;
and that the second paragraph of Article 124 of the Family Code should not apply because the other spouse
held the administration over the conjugal property. They argue that notwithstanding his absence from the
country Dionisio still held the administration of the conjugal property by virtue of his execution of the SPA in
favor of his brother; and that even assuming that Article 124 of the Family Code properly applied, Dionisio
ratified the sale through Atty. Parulan’s counter-offer during the March 25, 1991 meeting.

To start with, Article 25427 the Family Code has expressly repealed several titles under the Civil Code, among
them the entire Title VI in which the provisions on the property relations between husband and wife, Article 173
included, are found.

Secondly, the sale was made on March 18, 1991, or after August 3, 1988, the effectivity of the Family Code.
The proper law to apply is, therefore, Article 124 of the Family Code, for it is settled that any alienation or
encumbrance of conjugal property made during the effectivity of the Family Code is governed by Article 124 of
the Family Code.

Article 124 of the Family Code provides:

“Article 124. The administration and enjoyment of the conjugal partnership property shall belong to both
spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court
by the wife for proper remedy, which must be availed of within five years from the date of the contract
implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the
conjugal properties, the other spouse may assume sole powers of administration. These powers do not include
disposition or encumbrance without authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction
shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before
the offer is withdrawn by either or both offerors.”

Thirdly, according to Article 256 of the Family Code, the provisions of the Family Code may apply retroactively
provided no vested rights are impaired. In Tumlos v. Fernandez, the Court rejected the petitioner’s argument
that the Family Code did not apply because the acquisition of the contested property had occurred prior to the
effectivity of the Family Code, and pointed out that Article 256 provided that the Family Code could apply
retroactively if the application would not prejudice vested or acquired rights existing before the effectivity of the
Family Code. Herein, however, the petitioners did not show any vested right in the property acquired prior to
August 3, 1988 that exempted their situation from the retroactive application of the Family Code.

Fourthly, the petitioners failed to substantiate their contention that Dionisio, while holding the administration
over the property, had delegated to his brother, Atty. Parulan, the administration of the property, considering
that they did not present in court the SPA granting to Atty. Parulan the authority for the administration.

Nonetheless, we stress that the power of administration does not include acts of disposition or encumbrance,
which are acts of strict ownership. As such, an authority to dispose cannot proceed from an authority to
administer, and vice versa, for the two powers may only be exercised by an agent by following the provisions
on agency of the Civil Code (from Article 1876 to Article 1878). Specifically, the apparent authority of Atty.
Parulan, being a special agency, was limited to the sale of the property in question, and did not include or
extend to the power to administer the property.

Lastly, the petitioners’ insistence that Atty. Parulan’s making of a counter-offer during the March 25, 1991
meeting ratified the sale merits no consideration. Under Article 124 of the Family Code, the transaction
executed sans the written consent of Dionisio or the proper court order was void; hence, ratification did not
occur, for a void contract could not be ratified. On the other hand, we agree with Dionisio that the void sale was
a continuing offer from the petitioners and Ma. Elena that Dionisio had the option of accepting or rejecting
before the offer was withdrawn by either or both Ma. Elena and the petitioners. The last sentence of the
second paragraph of Article 124 of the Family Code makes this clear, stating that in the absence of the other
spouse’s consent, the transaction should be construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other
spouse or upon authorization by the court before the offer is withdrawn by either or both offerors.