Nobleza Vs Nuega

FACTS: Respondent Shirley B. Nuega (Shirley) was married to Rogelio A. Nuega (Rogelio) on September 1,
1990.4 Sometime in 1988 when the parties were still engaged, Shirley was working as a domestic helper in Israel.
Upon the request of Rogelio, Shirley sent him money5 for the purchase of a residential lot in Marikina where they
had planned to eventually build their home. Rogelio was then also working abroad as a seaman. The following
year, or on September 13, 1989, Rogelio purchased the subject house and lot for One Hundred Two Thousand
Pesos (P102,000.00)6 from Rodeanna Realty Corporation. The subject property has an aggregate area of one
hundred eleven square meters (111 sq. m.) covered by Transfer Certificate of Title (TCT) No. N-133844.7 Shirley
claims that upon her arrival in the Philippines sometime in 1989, she settled the balance for the equity over the
subject property with the developer through SSS8 financing. She likewise paid for the succeeding monthly
amortizations. On October 19, 1989, TCT No. 171963 over the subject property was issued by the Registry of
Deeds of Marikina, Rizal solely under the name of Rogelio. In June 1992, Shirley filed two cases against Rogelio:
one for Concubinage before the Provincial Prosecution Office of Rizal, and another for Legal Separation and
Liquidation of Property before the RTC of Pasig City. Shirley later withdrew the complaint for legal separation and
liquidation of property, but re-filed10 the same on January 29, 1993. In between the filing of these cases, Shirley
learned that Rogelio had the intention of selling the subject property. Shirley then advised the interested buyers -
one of whom was their neighbor and petitioner Josefina V. Nobleza (petitioner) - of the existence of the cases that
she had filed against Rogelio and cautioned them against buying the subject property until the cases are closed and
terminated. Nonetheless, under a Deed of Absolute Sale11 dated December 29, 1992, Rogelio sold the subject
property to petitioner without Shirley's consent in the amount of Three Hundred Eighty Thousand Pesos
(P380,000.00), including petitioner's undertaking to assume the existing mortgage on the property with the
National Home Mortgage Finance Corporation and to pay the real property taxes due thereon.
HELD: Shirley sufficiently proved her financial contribution for the purchase of the house and lot covered by TCT
171963. Thus, the present lot which forms part of their community property should be divided equally between
them upon the grant of the instant petition for legal separation. Having established by preponderance of evidence
the fact of her husband's guilt in contracting a subsequent marriage xxx, Shirley alone should be entitled to the net
profits earned by the absolute community property.
Quiao v. Quiao
When a couple enters into a regime of absolute community, the husband and the wife becomes joint owners of all
the properties of the marriage. Whatever property each spouse brings into the marriage, and those acquired during
the marriage (except those excluded under Article 92 of the Family Code) form the common mass of the couple's
properties. And when the couple's marriage or community is dissolved, that common mass is divided between the
spouses, or their respective heirs, equally or in the proportion the parties have established, irrespective of the
value each one may have originally owned.
Since the subject property does not fall under any of the exclusions provided in Article 92, it therefore forms part
of the absolute community property of Shirley and Rogelio. Regardless of their respective contribution to its
acquisition before their marriage, and despite the fact that only Rogelio's name appears in the TCT as owner, the
property is owned jointly by the spouses Shirley and Rogelio. Respondent and Rogelio were married on September
1, 1990. Rogelio, on his own and without the consent of herein respondent as his spouse, sold the subject property
via a Deed of Absolute Sale dated December 29, 1992 - or during the subsistence of a valid contract of marriage.
Under Article 96 of Executive Order No. 209, otherwise known as The Family Code of the Philippines, the said
disposition of a communal property is void, viz.:
Art. 96. The administration and enjoyment of the community 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 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
common properties, the other spouse may assume sole powers of administration. These powers do not include
the powers of disposition or encumbrance without 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. It is clear under the foregoing
provision of the Family Code that Rogelio could not sell the subject property without the written consent of
respondent or the authority of the court. Without such consent or authority, the entire sale is void. As correctly
explained by the appellate court:
In the instant case, defendant Rogelio sold the entire subject property to defendant-appellant Josefina on 29
December 1992 or during the existence of Rogelio's marriage to plaintiff-appellee Shirley, without the consent of
the latter. The subject property forms part of Rogelio and Shirley's absolute community of property. Thus, the trial
court erred in declaring the deed of sale null and void only insofar as the 55.05 square meters representing the
one-half (1/2) portion of plaintiff-appellee Shirley. In absolute community of property, if the husband, without
knowledge and consent of the wife, sells (their) property, such sale is void. The consent of both the husband
Rogelio and the wife Shirley is required and the absence of the consent of one renders the entire sale null and void
including the portion of the subject property pertaining to defendant Rogelio who contracted the sale with
defendant-appellant Josefina. Since the Deed of Absolute Sale x x x entered into by and between defendant-
appellant Josefina and defendant Rogelio dated 29 December 1992, during the subsisting marriage between
plaintiff-appellee Shirley and Rogelio, was without the written consent of Shirley, the said Deed of Absolute Sale
is void in its entirety. Hence, the trial court erred in declaring the said Deed of Absolute Sale as void only insofar as
the 1/2 portion pertaining to the share of Shirley is concerned.
AYALA INVESTMENT VS. CA
FACTS: Philippine Blooming Mills (PBM) obtained P50,300,000.00 loan from petitioner Ayala Investment and
Development Corporation (AIDC). Respondent Alfredo Ching, EVP of PBM, executed security agreements on
December 1980 and March 1981 making him jointly and severally answerable with PBM’s indebtedness to AIDC.
PBM failed to pay the loan hence filing of complaint against PBM and Ching. The RTC rendered judgment ordering
PBM and Ching to jointly and severally pay AIDC the principal amount with interests. Pending the appeal of the
judgment, RTC issued writ of execution. Thereafter, Magsajo, appointed deputy sheriff, caused the issuance and
service upon respondent spouses of the notice of sheriff sale on 3 of their conjugal properties on May 1982.
Respondent spouses filed injunction against petitioners on the ground that subject loan did not redound to the
benefit of the said conjugal partnership. CA issued a TRP enjoining lower court from enforcing its order paving way
for the scheduled auction sale of respondent spouses conjugal properties. A certificate of sale was issued to AIDC,
being the only bidder and was registered on July 1982.
HELD: Ansaldo vs. Sheriff of Manila, Fidelity Insurance & Luzon Insurance Co., Liberty Insurance Corporation vs.
Banuelos, and Luzon Surety Inc. vs. De Garcia, cited by the respondents, we ruled that:
The fruits of the paraphernal property which form part of the assets of the conjugal partnership, are subject to the
payment of the debts and expenses of the spouses, but not to the payment of the personal obligations (guaranty
agreements) of the husband, unless it be proved that such obligations were productive of some benefit to the
family. (Ansaldo; parenthetical phrase ours.)
When there is no showing that the execution of an indemnity agreement by the husband redounded to the benefit
of his family, the undertaking is not a conjugal debt but an obligation personal to him. (Liberty Insurance)
In the most categorical language, a conjugal partnership under Article 161 of the new Civil Code is liable only for
such debts and obligations contracted by the husband for the benefit of the conjugal partnership. There must be
the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. Certainly, to
make a conjugal partnership respond for a liability that should appertain to the husband alone is to defeat and
frustrate the avowed objective of the new Civil Code to show the utmost concern for the solidarity and well-being
of the family as a unit. The husband, therefore, is denied the power to assume unnecessary and unwarranted risks
to the financial stability of the conjugal partnership. (Luzon Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we can derive the following conclusions:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services
to be used in or for his own business or his own profession, that contract falls within the term obligations for the
benefit of the conjugal partnership. Here, no actual benefit may be proved. It is enough that the benefit to the
family is apparent at the time of the signing of the contract. From the very nature of the contract of loan or
services, the family stands to benefit from the loan facility or services to be rendered to the business or profession
of the husband. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated,
where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that
such obligation will redound to the benefit of the conjugal partnership.
(B) On the other hand, if the money or services are given to another person or entity, and the husband acted only
as a surety or guarantor, that contract cannot, by itself, alone be categorized as falling within the context of
obligations for the benefit of the conjugal partnership. The contract of loan or services is clearly for the benefit of
the principal debtor and not for the surety or his family. No presumption can be inferred that, when a husband
enters into a contract of surety or accommodation agreement, it is for the benefit of the conjugal partnership. Proof
must be presented to establish benefit redounding to the conjugal partnership.
Ching Vs CA
FACTS: On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of
₱9,000,000.00 from the Allied Banking Corporation (ABC). By virtue of this loan, the PBMCI, through its Executive
Vice-President Alfredo Ching, executed a promissory note for the said amount promising to pay on December 22,
1978 at an interest rate of 14% per annum.5 As added security for the said loan, on September 28, 1978, Alfredo
Ching, together with Emilio Tañedo and Chung Kiat Hua, executed a continuing guaranty with the ABC binding
themselves to jointly and severally guarantee the payment of all the PBMCI obligations owing the ABC to the extent
of ₱38,000,000.00.6 The loan was subsequently renewed on various dates, the last renewal having been made on
December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI in the amount of ₱13,000,000.00
payable in eighteen months at 16% interest per annum. As in the previous loan, the PBMCI, through Alfredo Ching,
executed a promissory note to evidence the loan maturing on June 29, 1981.8 This was renewed once for a period
of one month.9
The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981, the ABC filed a complaint for sum
of money with prayer for a writ of preliminary attachment against the PBMCI to collect the ₱12,612,972.88
exclusive of interests, penalties and other bank charges. Impleaded as co-defendants in the complaint were Alfredo
Ching, Emilio Tañedo and Chung Kiat Hua in their capacity as sureties of the PBMCI.
HELD: The petitioner-husband signed the continuing guaranty and suretyship agreement as security for the
payment of the loan obtained by the PBMCI from the private respondent in the amount of ₱38,000,000. In Ayala
Investment and Development Corp. v. Court of Appeals,61 this Court ruled "that the signing as surety is certainly
not an exercise of an industry or profession. It is not embarking in a business. No matter how often an executive
acted on or was persuaded to act as surety for his own employer, this should not be taken to mean that he thereby
embarked in the business of suretyship or guaranty."
For the conjugal partnership to be liable for a liability that should appertain to the husband alone, there must be a
showing that some advantages accrued to the spouses. Certainly, to make a conjugal partnership responsible for a
liability that should appertain alone to one of the spouses is to frustrate the objective of the New Civil Code to show
the utmost concern for the solidarity and well being of the family as a unit. The husband, therefore, is denied the
power to assume unnecessary and unwarranted risks to the financial stability of the conjugal partnership.62
In this case, the private respondent failed to prove that the conjugal partnership of the petitioners was benefited
by the petitioner-husband’s act of executing a continuing guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of loan was between the private respondent and the PBMCI,
solely for the benefit of the latter. No presumption can be inferred from the fact that when the petitioner-husband
entered into an accommodation agreement or a contract of surety, the conjugal partnership would thereby be
benefited. The private respondent was burdened to establish that such benefit redounded to the conjugal
partnership.63
It could be argued that the petitioner-husband was a member of the Board of Directors of PBMCI and was one of its
top twenty stockholders, and that the shares of stocks of the petitioner-husband and his family would appreciate if
the PBMCI could be rehabilitated through the loans obtained; that the petitioner-husband’s career would be
enhanced should PBMCI survive because of the infusion of fresh capital. However, these are not the benefits
contemplated by Article 161 of the New Civil Code. The benefits must be those directly resulting from the loan.
They cannot merely be a by-product or a spin-off of the loan itself.
This is different from the situation where the husband borrows money or receives services to be used for his own
business or profession. In the Ayala case, we ruled that it is such a contract that is one within the term "obligation
for the benefit of the conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services
to be used in or for his own business or his own profession, that contract falls within the term "… obligations for the
benefit of the conjugal partnership." Here, no actual benefit may be proved. It is enough that the benefit to the
family is apparent at the time of the signing of the contract. From the very nature of the contract of loan or
services, the family stands to benefit from the loan facility or services to be rendered to the business or profession
of the husband. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated,
where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that
such obligation will redound to the benefit of the conjugal partnership.

Francisco Vs. Gonzales

One man's goods shall not be sold for another man's debts.
FACTS: Petitioners Cleodia U. Francisco and Ceamantha U. Francisco are the minor children of Cleodualdo M.
Francisco (Cleodualdo) and Michele Uriarte Francisco (Michele). In a Partial Decision dated November 29,
2000 rendered by the RTC of Makati, Branch 144, in Civil Case No. 93-2289 for Declaration of Nullity of Marriage,
the Compromise Agreement entered into by the estranged couple was approved. The property subject of the
Compromise Agreement is a house and lot covered by Transfer Certificate of Title No. 167907 in the name
of Cleodualdo M. Francisco, married to Michele U. Francisco, with an area of 414 square meters, and located
in 410 Taal St., Ayala Alabang Village, Muntinlupa City. A notice of sale by execution was then issued by the
sheriff covering the real property under Transfer Certificate of Title No. T-167907 in the name of Cleodualdo M.
Francisco, married to Michele U. Francisco.[5]

When petitioners' grandmother learned of the scheduled auction, she, as guardian-in-fact of petitioners, filed with
the RTC an Affidavit of Third Party Claim[6] and a Very Urgent Motion to Stop Sale by Execution[7] but this was
denied in the Order dated June 4, 2003. Petitioners' motion for reconsideration was denied per RTC Order
dated July 31, 2003.

HELD: Records show that Cleodualdo and Michele were married on June 12, 1986, prior to the effectivity of the
Family Code on August 3, 1988. As such, their property relations are governed by the Civil Code on conjugal
partnership of gains.

A wife may bind the conjugal partnership only when she purchases things necessary for the support of the family,
or when she borrows money for that purpose upon her husband's failure to deliver the needed sum; when
administration of the conjugal partnership is transferred to the wife by the courts or by the husband; or when the
wife gives moderate donations for charity. Failure to establish any of these circumstances means that the conjugal
asset may not be bound to answer for the wife's personal obligation. Considering that the foregoing circumstances
are evidently not present in this case as the liability incurred by Michele arose from a judgment rendered in an
unlawful detaine rcase against her and her partner Matrai. It should be noted that the judgment debt for which the
subject property was being made to answer was incurred by Michele and her partner,[25] Matrai. Respondents allege
that the lease of the property in Lanka Drive redounded to the benefit of the family.[26] By no stretch of one's
imagination can it be concluded that said debt/obligation was incurred for the benefit of the conjugal partnership or
that some advantage accrued to the welfare of the family. In BA Finance Corporation v. Court of Appeals,[27] the
Court ruled that the petitioner cannot enforce the obligation contracted by Augusto Yulo against his conjugal
properties with respondent Lily Yulo because it was not established that the obligation contracted by the husband
redounded to the benefit of the conjugal partnership under Article 161 of the Civil Code. The Court stated:
In the present case, the obligation which the petitioner is seeking to enforce against the conjugal
property managed by the private respondent Lily Yulo was undoubtedly contracted
by AugustoYulo for his own benefit because at the time he incurred the obligation he had already
abandoned his family and had left their conjugal home. Worse, he made it appear that he was
duly authorized by his wife in behalf of A & L Industries, to procure such loan from the petitioner.
Clearly, to make A & L Industries liable now for the said loan would be unjust and contrary to the
express provision of the Civil Code. (Emphasis supplied)
Similarly in this case, Michele, who was then already living separately from Cleodualdo,[28] rented the house
in Lanka Drive for her and Matrais own benefit. In fact, when they entered into the lease agreement, Michele
and Matrai purported themselves to be husband and wife.[29] Respondents bare allegation that petitioners lived with
Michele on the leased property is not sufficient to support the conclusion that the judgment debt against Michele
and Matrai in the ejectment suit redounded to the benefit of the family of Michele and Cleodualdo and petitioners.

BUADO VS NICOL

FACTS: On 30 April 1984, Spouses Roberto and Venus Buado (petitioners) filed a complaint for damages against
Erlinda Nicol (Erlinda) with Branch 19 of the Regional Trial Court (RTC) of Bacoor, Cavite, docketed as Civil Case
No. 84-33. Said action originated from Erlinda Nicol’s civil liability arising from the criminal offense of slander filed
against her by petitioners.
HELD:I n determining whether the husband is a stranger to the suit, the character of the property must be taken
into account. In Mariano v. Court of Appeals,11 which was later adopted in Spouses Ching v. Court of Appeals,12 this
Court held that the husband of the judgment debtor cannot be deemed a "stranger" to the case prosecuted and
adjudged against his wife for an obligation that has redounded to the benefit of the conjugal partnership. 13 On the
other hand, in Naguit v. Court of Appeals14 and Sy v. Discaya,15 the Court stated that a spouse is deemed a
stranger to the action wherein the writ of execution was issued and is therefore justified in bringing an independent
action to vindicate her right of ownership over his exclusive or paraphernal property.lawphil.net Pursuant
to Mariano however, it must further be settled whether the obligation of the judgment debtor redounded to the
benefit of the conjugal partnership or not. Petitioners argue that the obligation of the wife arising from her criminal
liability is chargeable to the conjugal partnership. We do not agree. There is no dispute that contested property is
conjugal in nature. Article 122 of the Family Code16 explicitly provides that payment of personal debts contracted
by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership except
insofar as they redounded to the benefit of the family. Unlike in the system of absolute community where liabilities
incurred by either spouse by reason of a crime or quasi-delict is chargeable to the absolute community of property,
in the absence or insufficiency of the exclusive property of the debtor-spouse, the same advantage is not accorded
in the system of conjugal partnership of gains. The conjugal partnership of gains has no duty to make advance
payments for the liability of the debtor-spouse. Parenthetically, by no stretch of imagination can it be concluded
that the civil obligation arising from the crime of slander committed by Erlinda redounded to the benefit of the
conjugal partnership. To reiterate, conjugal property cannot be held liable for the personal obligation contracted by
one spouse, unless some advantage or benefit is shown to have accrued to the conjugal partnership.

PANA VS. Heirs of Juanite

FACTS: The prosecution accused petitioner Efren Pana (Efren), his wife Melecia, and others of murder before the.
Regional Trial Court (RTC) of Surigao City. Upon motion for execution by the heirs of the deceased, on March 12,
2002 the RTC ordered the issuance of the writ,5 resulting in the levy of real properties registered in the names of
Efren and Melecia.6 Subsequently, a notice of levy7 and a notice of sale on execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed a motion to quash the writ of execution, claiming that
the levied properties were conjugal assets, not paraphernal assets of Melecia.9 On September 16, 2002 the RTC
denied the motion.10 The spouses moved for reconsideration but the RTC denied the same on March 6, 2003. 11
HELD: Consequently, the Court must refer to the Family Code provisions in deciding whether or not the conjugal
properties of Efren and Melecia may be held to answer for the civil liabilities imposed on Melecia in the murder
case. Its Article 122 provides:
Art. 122. The payment of personal debts contracted by the husband or the wife before or during the marriage shall
not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.
However, the payment of personal debts contracted by either spouse before the marriage, that of fines and
indemnities imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced
against the partnership assets after the responsibilities enumerated in the preceding Article have been covered, if
the spouse who is bound should have no exclusive property or if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be charged for what has been paid for the purpose above-
mentioned.
Since Efren does not dispute the RTC’s finding that Melecia has no exclusive property of her own, 24 the above
applies. The civil indemnity that the decision in the murder case imposed on her may be enforced against their
conjugal assets after the responsibilities enumerated in Article 121 of the Family Code have been covered.25 Those
responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and the legitimate children of either spouse;
however, the support of illegitimate children shall be governed by the provisions of this Code on Support;
(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for
the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of
the other;
(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that
the family may have benefited;
(4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership
property;
(5) All taxes and expenses for mere preservation made during the marriage upon the separate property of
either spouse;
(6) Expenses to enable either spouse to commence or complete a professional, vocational, or other
activity for self-improvement;
(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;
(8) The value of what is donated or promised by both spouses in favor of their common legitimate children
for the exclusive purpose of commencing or completing a professional or vocational course or other
activity for self-improvement; and
(9) Expenses of litigation between the spouses unless the suit is found to be groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for
the unpaid balance with their separate properties.1âwphi1
Contrary to Efren’s contention, Article 121 above allows payment of the criminal indemnities imposed on his wife,
Melecia, out of the partnership assets even before these are liquidated. Indeed, it states that such indemnities
"may be enforced against the partnership assets after the responsibilities enumerated in the preceding article have
been covered."[26] No prior liquidation of those assets is required. This is not altogether unfair since Article 122
states that "at the time of liquidation of the partnership, such [offending] spouse shall be charged for what has
been paid for the purposes above-mentioned."

UNDER THE CIVIL CODE

BA Finance VS CA

FACTS: On July 1, 1975, private respondent Augusto Yulo secured a loan from the petitioner in the amount of
P591,003.59 as evidenced by a promissory note he signed in his own behalf and as representative of the A & L
Industries. Respondent Yulo presented an alleged special power of attorney executed by his wife, respondent Lily
Yulo, who manages A & L Industries and under whose name the said business is registered, purportedly authorizing
Augusto Yulo to procure the loan and sign the promissory note. About two months prior to the loan, however,
Augusto Yulo had already left Lily Yulo and their children and had abandoned their conjugal home. When the
obligation became due and demandable, Augusto Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended complaint against the spouses Augusto and Lily Yulo on the
basis of the promissory note. It also prayed for the issuance of a writ of attatchment alleging that the said spouses
were guilty of fraud in contracting the debt upon which the action was brought and that the fraud consisted of the
spouses' inducing the petitioner to enter into a contract with them by executing a Deed of Assignment in favor of
the petitioner, assigning all their rights, titles and interests over a construction contract executed by and between
the spouses and A. Soriano Corporation on June 19, 1974 for a consideration of P615,732.50 when, in truth, the
spouses did not have any intention of remitting the proceeds of the said construction contract to the petitioner
because despite the provisions in the Deed of Assignment that the spouses shall, without compensation or costs,
collect and receive in trust for the petitioner all payments made upon the construction contract and shall remit to
the petitioner all collections therefrom, the said spouses failed and refuse to remit the collections and instead,
misappropriated the proceeds for their own use and benefit, without the knowledge or consent of the petitioner.

HELD: There is no dispute that A & L Industries was established during the marriage of Augusta and Lily Yulo and
therefore the same is presumed conjugal and the fact that it was registered in the name of only one of the spouses
does not destroy its conjugal nature (See Mendoza v. Reyes, 124 SCRA 161, 165). However, for the said property
to be held liable, the obligation contracted by the husband must have redounded to the benefit of the conjugal
partnership under Article 161 of the Civil Code. In the present case, the obligation which the petitioner is seeking
to enforce against the conjugal property managed by the private respondent Lily Yulo was undoubtedly contracted
by Augusto Yulo for his own benefit because at the time he incurred the obligation he had already abandoned his
family and had left their conjugal home. Worse, he made it appear that he was duly authorized by his wife in behalf
of A & L Industries, to procure such loan from the petitioner. Clearly, to make A & L Industries liable now for the
said loan would be unjust and contrary to the express provision of the Civil Code. As we have ruled in Luzon Surety
Co., Inc. v. De Gracia (30 SCRA 111, 115-117)
As explained in the decision now under review: "It is true that the husband is the administrator of the conjugal
property pursuant to the provisions of Art. 163 of the new Civil Code. However, as such administrator the only
obligations incurred by the husband that are chargeable against the conjugal property are those incurred in the
legitimate pursuit of his career, profession or business with the honest belief that he is doing right for the benefit of
the family. This is not true in the case at bar for we believe that the husband in acting as guarantor or surety for
another in an indemnity agreement as that involved in this case did not act for the benefit of the conjugal
partnership. Such inference is more emphatic in this case, when no proof is presented that Vicente Garcia in acting
as surety or guarantor received consideration therefore, which may redound to the benefit of the conjugal
partnership.(Ibid, pp. 46-47).In the most categorical language, a conjugal partnership under that provision is liable
only for such "debts and obligations contracted by the husband for the benefit of the conjugal partnership." There
must be the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. There
is none in this case. Moreover, it would negate the plain object of the additional requirement in the present Civil
Code that a debt contracted by the husband to bind a conjugal partnership must redound to its benefit. That is still
another provision indicative of the solicitude and tender regard that the law manifests for the family as a unit. Its
interest is paramount; its welfare uppermost in the minds of the codifiers and legislators We, therefore, rule that
the petitioner cannot enforce the obligation contracted by Augusto Yulo against his conjugal properties with
respondent Lily Yulo. Thus, it follows that the writ of attachment cannot issue against the said properties.

HEIRS OF AYUSTE VS CA
FACTS: Christina Ayuste married Rafael Ayuste on September 24, 1961. Although the couple resided in Manila,
they operated a machine shop in Barangay Iyam, Lucena City, which was managed by Rafael Ayuste. In order to
serve as a temporary residence for Rafael Ayuste while in Lucena, the couple purchased on August 26, 1982 a
parcel of land with an area of 180 square meters on which a residential house was built situated at Yale Street,
University Village, Barrio Ibabang Dupay, Lucena City from spouses Pedro and Aida David. A deed of sale[4] was
executed and signed by the parties and filed with the Register of Deeds of Lucena City. On October 23, 1983, the
Register of Deeds of Lucena City issued Transfer Certificate of Title No. T-42972 in the name of RAFAEL T. AYUSTE,
married to Christina Ayuste.[5]
On February 27, 1987, a deed of absolute sale[6] was executed by Rafael Ayuste in favor of private respondent
whereby the former sold the abovementioned parcel of land to the latter for P40,000, which amount Rafael Ayuste
acknowledge having received in the deed. On page 2 of this deed appears the signature of Christina Ayuste below
the phrase With my conformity. The deed of sale was registered with the Register of deeds of Lucena City on March
5, 1987 and Transfer Certificate of Title No. T-50046 was issued in the name of private respondent.[7]
After Rafael Ayustes death on October 13, 1989, Christina Ayuste discovered, in the course of an inventory of their
properties, that the title to the land in Lucena was missing. She searched for it in the office of her husband in
Lucena City and it was then that she learned from her employees about the sale of the house and lot by her
husband to private respondent.
On March 2, 1990, Christina Ayuste filed a complaint with the Regional Trial Court of Lucena City for the annulment
of the sale, cancellation of the title issued in the name of private respondent and for the payment of moral,
exemplary and actual damages. In her complaint Christina Ayuste alleges that her signature on the deed of sale
was forged and that her husband Rafael Ayuste sold the property without her knowledge and consent.
HELD: The Deed of Absolute Sale executed on February 27, 1987 by and between defendant-appellant and
plaintiff-appellants husband is declared VALID and BINDING upon the plaintiff-appellant.[9]
Both the trial and the appellate court decisions have established that Rafael Ayuste sold conjugal property
without the consent of Christina Ayuste, his wife. This factual finding shall not be disturbed because only questions
of law are reviewed in an appeal under Rule 45 of the Rules of Court subject to certain well-defined exceptions
none of which are present in the instant case. The only issue which remains to be resolved is whether petitioners
are entitled to the annulment of the contract of sale entered into by Rafael Ayuste without the consent of Christina
Ayuste.
Petitioners claim that since the law expressly prohibits the husband from alienating real property belonging to
the conjugal partnership without his wifes consent, the contract of sale in question is a nullity pursuant to article
1409 of the Civil Code which provides that contracts expressly prohibited by law are inexistent and void from the
beginning. It is further averred by petitioners that the present action is not barred because the action to declare
the nullity of a contract does not prescribe. Futhermore, Christina Ayuste cannot be faulted for having brought the
action only after the death of her husband, despite the periods stated in article 173 of the Civil Code, since she had
no knowledge of the sale during his lifetime as he concealed the same from her. Finally, it is contended that article
166 is the relevant provision, not article 173.[10]
Under the Civil Code, although the husband is the administrator of the conjugal partnership,[11] he cannot
alienate or encumber any real property of the conjugal partnership without his wifes consent, [12]subject only to
certain exceptions specified in the law.[13] The remedy available to the wife in case her husband should dispose of
their conjugal property without her consent is laid down in Article 173 of the Civil Code which states that-
The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may
demand the value of property fraudulently alienated by the husband. (emphasis supplied)
 There is no ambiguity in the wording of the law. A sale of real property of the conjugal partnership made by
the husband without the consent of his wife is voidable[14] The action for annulment must be brought during the
marriage and within ten years from the questioned transaction by the wife.[15] Where the law speaks in clear and
categorical languange, there is no room for interpretation there is room only for application.[16]
In the present case, the deed of sale was executed on February 27, 1987. Rafael Ayuste died on October 13,
1989. However, it was only on March 2, 1990 that Christina Ayuste filed her complaint with the lower court asking
for the annulment of the sale. Although the action was filed within ten years from the questioned transaction, it
was not brought during the existence of the marriage which was dissolved upon the death of Rafael Ayuste in
1989.[17] Clearly, the action for annulment filed by Christina Ayuste was barred for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after the death of her husband is not material. We
affirm public respondents ruling that registration of the sale with the Register of Deeds constitutes a notice to the
whole world.[18] Precisely, the purpose of the legislature in providing a system of registration is to afford a means of
publicity so that persons dealing with real property may search the records and thereby acquire security against
instruments the execution of which have not been revealed to them.[19] Since the deed of sale was registered on
March 5, 1987, Christina Ayuste is presumed to have constructive notice of the sale from such date.
HEIRS OF REYES VS MIJARES
FACTS: Vicente and Ignacia were married in 1960, but had been separated de facto since 1974.[9] Sometime
in 1984, Ignacia learned that on March 1, 1983, Vicente sold Lot No. 4349-B-2 to respondent spouses Cipriano and
Florentina Mijares for P40,000.00.[10] As a consequence thereof, TCT No. 205445 was cancelled and TCT No.
306087 was issued on April 19, 1983 in the name of respondent spouses.[11] She likewise found out that Vicente
filed a petition for administration and appointment of guardian with the Metropolitan Trial Court of Quezon City,
Branch XXI. Vicente misrepresented therein that his wife, Ignacia, died on March 22, 1982, and that he and their 5
minor children were her only heirs.[12] On September 29, 1983, the court appointed Vicente as the guardian of their
minor children.[13] Subsequently, in its Order dated October 14, 1983, the court authorized Vicente to sell the
estate of Ignacia.[14]
On August 9, 1984, Ignacia, through her counsel, sent a letter to respondent spouses demanding the return
of her share in the lot. Failing to settle the matter amicably, Ignacia filed on June 4, 1996 a complaint [15] for
annulment of sale against respondent spouses. The complaint was thereafter amended to include Vicente Reyes as
one of the defendants.[16]
In their answer, respondent spouses claimed that they are purchasers in good faith and that the sale was
valid because it was duly approved by the court.[17] Vicente Reyes, on the other hand, contended that what he sold
to the spouses was only his share in Lot No. 4349-B-2, excluding the share of his wife, and that he never
represented that the latter was already dead.[18] He likewise testified that respondent spouses, through the counsel
they provided him, took advantage of his illiteracy by filing a petition for the issuance of letters of administration
and appointment of guardian without his knowledge
HELD: Articles 166 and 173 of the Civil Code,[29] the governing laws at the time the assailed sale was
contracted, provide:
Art.166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership
without the wifes consent. If she refuses unreasonably to give her consent, the court may compel her to grant the
same
Art. 173. The wife may, during the marriage and within ten years from the transaction questioned, ask the courts
for the annulment of any contract of the husband entered into without her consent, when such consent is required,
or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs after the dissolution of the marriage, may
demand the value of property fraudulently alienated by the husband.
Pursuant to the foregoing provisions, the husband could not alienate or encumber any conjugal real property
without the consent, express or implied, of the wife otherwise, the contract is voidable. Indeed, in several
cases[30] the Court had ruled that such alienation or encumbrance by the husband is void. The better view,
however, is to consider the transaction as merely voidable and not void.[31] This is consistent with Article 173 of the
Civil Code pursuant to which the wife could, during the marriage and within 10 years from the questioned
transaction, seek its annulment.[32]
In the case at bar, there is no dispute that Lot No. 4349-B-2, is a conjugal property having been purchased
using the conjugal funds of the spouses during the subsistence of their marriage. It is beyond cavil therefore that
the sale of said lot to respondent spouses without the knowledge and consent of Ignacia is voidable. Her action to
annul the March 1, 1983 sale which was filed on June 4, 1986, before her demise is perfectly within the 10 year
prescriptive period under Article 173 of the Civil Code. Even if we reckon the period from November 25, 1978 which
was the date when Vicente and the respondent spouses entered into a contract concerning Lot No. 4349-B-2,
Ignacias action would still be within the prescribed period.
Anent the second issue, the trial court correctly annulled the voidable sale of Lot No. 4349-B-2 in its
entirety. In Bucoy v. Paulino,[36] a case involving the annulment of sale with assumption of mortgages executed by
the husband without the consent of the wife, it was held that the alienation or encumbrance must be annulled in its
entirety and not only insofar as the share of the wife in the conjugal property is concerned. Although the
transaction in the said case was declared void and not merely voidable, the rationale for the annulment of the
whole transaction is the same thus
The plain meaning attached to the plain language of the law is that the contract, in its entirety, executed by the
husband without the wife's consent, may be annulled by the wife. Had Congress intended to limit such annulment
in so far as the contract shall prejudice the wife, such limitation should have been spelled out in the statute. It is
not the legitimate concern of this Court to recast the law. As Mr. Justice Jose B. L. Reyes of this Court and Judge
Ricardo C. Puno of the Court of First Instance correctly stated, [t]he rule (in the first sentence of Article 173)
revokes Baello vs. Villanueva, 54 Phil. 213 and Coque vs. Navas Sioca, 45 Phil. 430, in which cases annulment was
held to refer only to the extent of the one-half interest of the wife
The necessity to strike down the contract of July 5, 1963 as a whole, not merely as to the share of the wife, is not
without its basis in the common-sense rule. To be underscored here is that upon the provisions of Articles 161, 162
and 163 of the Civil Code, the conjugal partnership is liable for many obligations while the conjugal partnership
exists. Not only that. The conjugal property is even subject to the payment of debts contracted by either spouse
before the marriage, as those for the payment of fines and indemnities imposed upon them after the
responsibilities in Article 161 have been covered (Article 163, par. 3), if it turns out that the spouse who is bound
thereby, should have no exclusive property or if it should be insufficient. These are considerations that go beyond
the mere equitable share of the wife in the property. These are reasons enough for the husband to be stopped from
disposing of the conjugal property without the consent of the wife. Even more fundamental is the fact that the
nullity is decreed by the Code not on the basis of prejudice but lack of consent of an indispensable party to the
contract under Article 166.
PELAYO VS PEREZ
FACTS: David Pelayo (Pelayo),by a Deed of Absolute Sale executed on January 11, 1988, conveyed to Melki Perez
(Perez) two parcels of agricultural land (the lots) situated in Panabo, Davao which are portions of Lot 4192, Cad.
276 covered by OCT P-16873. Loreza Pelayo (Loreza), wife of Pelayo, and another one whose signature is illegible
witnessed the execution of the deed. Loreza, however, signed only on the third page in the space provided for
witnesses on account of which Perez application for registration of the deed with the Office of the Register of Deeds
in Tagum, Davao was denied. Perez thereupon asked Loreza to sign on the first and second pages of the deed but
she refused, hence, he instituted on August 8, 1991 the instant complaint for specific performance against her and
her husband Pelayo (defendants).
HELD: Sale is a consensual contract that is perfected by mere consent, which may either be express or
implied.[7] A wifes consent to the husbands disposition of conjugal property does not always have to be explicit or
set forth in any particular document, so long as it is shown by acts of the wife that such consent or approval was
indeed given.[8] In the present case, although it appears on the face of the deed of sale that Lorenza signed only as
an instrumental witness, circumstances leading to the execution of said document point to the fact that Lorenza
was fully aware of the sale of their conjugal property and consented to the sale.

In their Pre-Trial Brief,[9] petitioners admitted that even prior to 1988, they have been having serious
problems, including threats to the life of petitioner David Pelayo, due to conflicts with the illegal occupants of the
property in question, so that respondent, whom many feared for being a leftist/activist, offered his help in driving
out said illegal occupants.

Human experience tells us that a wife would surely be aware of serious problems such as threats to her
husbands life and the reasons for such threats. As they themselves stated, petitioners problems over the subject
property had been going on for quite some time, so it is highly improbable for Lorenza not to be aware of what her
husband was doing to remedy such problems. Petitioners do not deny that Lorenza Pelayo was present during the
execution of the deed of sale as her signature appears thereon. Neither do they claim that Lorenza Pelayo had no
knowledge whatsoever about the contents of the subject document. Thus, it is quite

certain that she knew of the sale of their conjugal property between her husband and respondent.

Under the rules of evidence, it is presumed that a person takes ordinary care of his
concerns.[10] Petitioners did not even attempt to overcome the aforementioned presumption as no evidence was
ever presented to show that Lorenza was in any way lacking in her mental faculties and, hence, could not have
fully understood the ramifications of signing the deed of sale. Neither did petitioners present any evidence that
Lorenza had been defrauded, forced, intimidated or threatened either by her own husband or by respondent into
affixing her signature on the subject document. If Lorenza had any objections over the conveyance of the disputed
property, she could have totally refrained from having any part in the execution of the deed of sale. Instead,
Lorenza even affixed her signature thereto.

Moreover, under Article 173, in relation to Article 166, both of the New Civil Code, which was still in effect
on January 11, 1988 when the deed in question was executed, the lack of marital consent to the disposition of
conjugal property does not make the contract void ab initio but merely voidable. Said provisions of law provide:

Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is
under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber
any real property of the conjugal property without the wifes consent. If she refuses unreasonably
to give her consent, the court may compel her to grant the same.
 ...

Art. 173. The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband entered into without
her consent, when such consent is required, or any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal partnership property. Should the wife fail to
exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.

Hence, it has been held that the contract is valid until the court annuls the same and only upon an action
brought by the wife whose consent was not obtained.[11] In the present case, despite respondents repeated
demands for Lorenza to affix her signature on all the pages of the deed of sale, showing respondents insistence on
enforcing said contract, Lorenza still did not file a case for annulment of the deed of sale. It was only when
respondent filed a complaint for specific performance on August 8, 1991 when petitioners brought up Lorenzas
alleged lack of consent as an affirmative defense. Thus, if the transaction was indeed entered into without Lorenzas
consent, we find it quite puzzling why for more than three and a half years, Lorenza did absolutely nothing to seek
the nullification of the assailed contract.

The foregoing circumstances lead the Court to believe that Lorenza knew of the full import of the
transaction between respondent and her

husband; and, by affixing her signature on the deed of sale, she, in effect, signified her consent to the disposition
of their conjugal property.

With regard to petitioners asseveration that the deed of sale is invalid under Article 1491, paragraph 2 of
the New Civil Code, we find such argument unmeritorious. Article 1491 (2) provides:

Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction,
either in person or through the mediation of another:

...

(2) Agents, the property whose administration or sale may have been entrusted to them, unless
the consent of the principal has been given;

...

In Distajo vs. Court of Appeals,[12] a landowner, Iluminada Abiertas, designated one of her sons as the
administrator of several parcels of her land. The landowner subsequently executed a Deed of Certification of Sale of
Unregistered Land, conveying some of said land to her son/administrator. Therein, we held that:

Under paragraph (2) of the above article, the prohibition against agents purchasing
property in their hands for sale or management is not absolute. It does not apply if the principal
consents to the sale of the property in the hands of the agent or administrator. In this case, the
deeds of sale signed by Iluminada Abiertas shows that she gave consent to the sale of the
properties in favor of her son, Rufo, who was the administrator of the properties. Thus, the
consent of the principal Iluminada Abiertas removes the transaction out of the prohibition
contained in Article 1491(2).[13]

The above-quoted ruling is exactly in point with this case before us. Petitioners, by signing the Deed of
Sale in favor of respondent, are also deemed to have given their consent to the sale of the subject property in
favor of respondent, thereby making the transaction an exception to the general rule that agents are prohibited
from purchasing the property of their principals.

Petitioners also argue that the CA erred in ruling that there was consideration for the sale. We find no
error in said appellate courts ruling. The element of consideration for the sale is indeed present. Petitioners, in
adopting the trial courts narration of antecedent facts in their petition,[14] thereby admitted that they authorized
respondent to represent them in negotiations with the squatters occupying the disputed property and, in
consideration of respondents services, they executed the subject deed of sale. Aside from such services rendered
by respondent, petitioners also acknowledged in the deed of sale that they received in full the amount of Ten
Thousand Pesos. Evidently, the consideration for the sale is respondents services plus the aforementioned cash
money.
 Petitioners contend that the consideration stated in the deed of sale is excessively inadequate, indicating
that the deed of sale was merely simulated. We are not persuaded. Our ruling in Buenaventura vs. Court of
Appeals[15] is pertinent, to wit:

. . . Indeed, there is no requirement that the price be equal to the exact value of the
subject matter of sale. . . . As we stated in Vales vs. Villa:

Courts cannot follow one every step of his life and extricate him from
bad bargains, protect him from unwise investments, relieve him from one-sided
contracts, or annul the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally incompetent. Courts
operate not because one person has been defeated or overcome by another,
but because he has been defeated or overcome illegally. Men may do foolish
things, make ridiculous contracts, use miserable judgment, and lose money by
them indeed, all they have in the world; but not for that alone can the law
intervene and restore. There must be, in addition, a violation of the law, the
commission of what the law knows as an actionable wrong, before the courts
are authorized to lay hold of the situation and remedy it.[16]

Verily, in the present case, petitioners have not presented proof that there has been fraud, mistake or undue
influence exercised upon them by respondent. It is highly unlikely and contrary to human experience that a layman
like respondent would be able to defraud, exert undue influence, or in any way vitiate the consent of a lawyer like
petitioner David Pelayo who is expected to be more knowledgeable in the ways of drafting contracts and other legal
transactions.

Furthermore, in their Reply to Respondents Memorandum,[17] petitioners adopted the CAs narration of fact
that petitioners stated in a letter they sent to the Register of Deeds of Tagum that they have entrusted the titles
over subject lots to herein respondent. Such act is a clear indication that they intended to convey the subject
property to herein respondent and the deed of sale was not merely simulated or fictitious.

Lastly, petitioners claim that they were not able to fully ventilate their defense before the CA as their
lawyer, who was then suffering from cancer of the liver, failed to file their appellees brief. Thus, in their motion for
reconsideration of the CA Decision, they prayed that they be allowed to submit such appellees brief. The CA, in its
Resolution dated December 17, 1999, stated thus:

By movant-defendant-appellees own information, his counsel received a copy of the

decision on May 5, 1999. He, therefore, had fifteen (15) days from said date or up to May 20,
1999 to file the motion. The motion, however, was sent through a private courier and, therefore,
considered to have been filed on the date of actual receipt on June 17, 1999 by the addressee
Court of Appeals, was filed beyond the reglementary period.

Technicality aside, movant has not proffered any ground bearing on the merits of the
case why the decision should be set aside.

Petitioners never denied the CA finding that their motion for reconsideration was filed beyond the fifteen-
day reglementary period. On that point alone, the CA is correct in denying due course to said motion. The motion
having been belatedly filed, the CA Decision had then attained finality. Thus, in Abalos vs. Philex Mining
Corporation,[18] we held that:

. . . Nothing is more settled in law than that once a judgment attains finality it thereby
becomes immutable and unalterable. It may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted to be made by the court rendering it or
by the highest court of the land.

Moreover, it is pointed out by the CA that said motion did not present any defense or argument on the
merits of the case that could have convinced the CA to reverse or modify its Decision.

We have consistently held that a petitioners right to due process is not violated where he was able to
move for reconsideration of the order or decision in question.[19] In this case, petitioners had the opportunity to
fully expound on their defenses through a motion for reconsideration. Petitioners did file such motion but they
wasted such opportunity by failing to present therein whatever errors they believed the CA had committed in its
Decision. Definitely, therefore, the denial of petitioners motion for reconsideration, praying that they be allowed to
file appellees brief, did not infringe petitioners right to due process as any issue that petitioners wanted to raise
could and should have been contained in said motion for reconsideration.

Aguete Vs PNB

FACTS: The appellate court narrated the facts as follows:

On January 13, 1983, spouses Jose A. Ros and Estrella Aguete filed a complaint for the annulment of the Real
Estate Mortgage and all legal proceedings taken thereunder against PNB, Laoag Branch before the Court of First
Instance, Ilocos Norte docketed as Civil Case No. 7803.
The complaint was later amended and was raffled to the Regional Trial Court, Branch 15, Laoag City.
The averments in the complaint disclosed that plaintiff-appellee Joe A. Ros obtained a loan of ₱115,000.00 from
PNB Laoag Branch on October 14, 1974 and as security for the loan, plaintiff-appellee Ros executed a real estate
mortgage involving a parcel of land – Lot No. 9161 of the Cadastral Survey of Laoag, with all the improvements
thereon described under Transfer Certificate of Title No. T-9646.
Upon maturity, the loan remained outstanding. As a result, PNB instituted extrajudicial foreclosure proceedings on
the mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in favor of PNB, Laoag
as the highest bidder. After the lapse of one (1) year without the property being redeemed, the property was
consolidated and registered in the name of PNB, Laoag Branch on August 10, 1978.
Claiming that she (plaintiff-appellee Estrella Aguete) has no knowledge of the loan obtained by her husband nor
she consented to the mortgage instituted on the conjugal property – a complaint was filed to annul the proceedings
pertaining to the mortgage, sale and consolidation of the property – interposing the defense that her signatures
affixed on the documents were forged and that the loan did not redound to the benefit of the family.1avvphi1
In its answer, PNB prays for the dismissal of the complaint for lack of cause of action, and insists that it was
plaintiffs-appellees’ own acts [of]
omission/connivance that bar them from recovering the subject property on the ground of estoppel, laches,
abandonment and prescription.4]
HELD: The petition has no merit. We affirm the ruling of the appellate court.
The Civil Code was the applicable law at the time of the mortgage. The subject property is thus considered part of
the conjugal partnership of gains. The pertinent articles of the Civil Code provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at the expense of the common fund,
whether the acquisition be for the partnership, or for only one of the spouses;
(2) That which is obtained by the industry, or work or as salary of the spouses, or of either of them;
(3) The fruits, rents or interest received or due during the marriage, coming from the common property or
from the exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and
those contracted by the wife, also for the same purpose, in the cases where she may legally bind the
partnership;
(2) Arrears or income due, during the marriage, from obligations which constitute a charge upon property
of either spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the marriage upon the separate property of either
the husband or the wife; major repairs shall not be charged to the partnership;
(4) Major or minor repairs upon the conjugal partnership property;
(5) The maintenance of the family and the education of the children of both husband and wife, and of
legitimate children of one of the spouses;
(6) Expenses to permit the spouses to complete a professional, vocational or other course.
Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership
without the wife’s consent. If she refuses unreasonably to give her consent, the court may compel her to grant the
same.
Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts
for the annulment of any contract of the husband entered into without her consent, when such consent is required,
or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs after the dissolution of the marriage may
demand the value of the property fraudulently alienated by the husband.
There is no doubt that the subject property was acquired during Ros and Aguete’s marriage. Ros and Aguete were
married on 16 January 1954, while the subject property was acquired in 1968.15 There is also no doubt that Ros
encumbered the subject property when he mortgaged it for P115,000.00 on 23 October 1974. 16 PNB Laoag does
not doubt that Aguete, as evidenced by her signature, consented to Ros’ mortgage to PNB of the subject property.
On the other hand, Aguete denies ever having consented to the loan and also denies affixing her signature to the
mortgage and loan documents.
The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of
the wife. Should the husband do so, then the contract is voidable.17 Article 173 of the Civil Code allows Aguete to
question Ros’ encumbrance of the subject property. However, the same article does not guarantee that the courts
will declare the annulment of the contract. Annulment will be declared only upon a finding that the wife did not give
her consent. In the present case, we follow the conclusion of the appellate court and rule that Aguete gave her
consent to Ros’ encumbrance of the subject property.
The documents disavowed by Aguete are acknowledged before a notary public, hence they are public documents.
Every instrument duly acknowledged and certified as provided by law may be presented in evidence without further
proof, the certificate of acknowledgment being prima facie evidence of the execution of the instrument or
document involved.18 The execution of a document that has been ratified before a notary public cannot be
disproved by the mere denial of the alleged signer.19 PNB was correct when it stated that petitioners’ omission to
present other positive evidence to substantiate their claim of forgery was fatal to petitioners’ cause. 20 Petitioners
did not present any corroborating witness, such as a handwriting expert, who could authoritatively declare that
Aguete’s signatures were really forged.
A notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and it has
in its favor the presumption of regularity which may only be rebutted by evidence so clear, strong and convincing
as to exclude all controversy as to the falsity of the certificate. Absent such, the presumption must be upheld. The
burden of proof to overcome the presumption of due execution of a notarial document lies on the one contesting
the same. Furthermore, an allegation of forgery must be proved by clear and convincing evidence, and whoever
alleges it has the burden of proving the same.21]
Ros himself cannot bring action against PNB, for no one can come before the courts with unclean
hands.1avvphi1 In their memorandum before the trial court, petitioners themselves admitted that Ros forged
Aguete’s signatures.
Joe A. Ros in legal effect admitted in the complaint that the signatures of his wife in the questioned documents are
forged, incriminating himself to criminal prosecution. If he were alive today, he would be prosecuted for forgery.
This strengthens the testimony of his wife that her signatures on the questioned documents are not hers.
In filing the complaint, it must have been a remorse of conscience for having wronged his family; in forging the
signature of his wife on the questioned documents; in squandering the P115,000.00 loan from the bank for himself,
resulting in the foreclosure of the conjugal property; eviction of his family therefrom; and, exposure to public
contempt, embarassment and ridicule.22]
The application for loan shows that the loan would be used exclusively "for additional working [capital] of buy & sell
of garlic & virginia tobacco."23 In her testimony, Aguete confirmed that Ros engaged in such business, but claimed
to be unaware whether it prospered. Aguete was also aware of loans contracted by Ros, but did not know where he
"wasted the money."24 Debts contracted by the husband for and in the exercise of the industry or profession by
which he contributes to the support of the family cannot be deemed to be his exclusive and private debts. 25
If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to
be used in or for his own business or his own profession, that contract falls within the term "x x x x obligations for
the benefit of the conjugal partnership." Here, no actual benefit may be proved. It is enough that the benefit to the
family is apparent at the signing of the contract. From the very nature of the contract of loan or services, the
family stands to benefit from the loan facility or services to be rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated, where
the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that such
obligation will redound to the benefit of the conjugal partnership.26]
For this reason, we rule that Ros’ loan from PNB redounded to the benefit of the conjugal partnership. Hence, the
debt is chargeable to the conjugal partnership.
HEIRS OF HERNANDEZ VS MINGOA

FACTS: pears that in the early part of 1958, Domingo Hernandez, Sr. (who was then a Central Bank employee) and
his spouse Sergia V. Hernandez were awarded a piece of real property by the Philippine Homesite and Housing
Corporation (PHHC) by way of salary deduction. On October 18, 1963, the [petitioners] then having paid in full the
entire amount of P6,888.96, a Deed of Absolute Sale of the property was executed by the PHHC in their favor. TCT
No. 107534, covering the property was issued to the [petitioners] on May 23, 1966. It bears an annotation of the
retention period of the property by the awardee (i.e., restriction of any unauthorized sale to third persons within a
certain period). Tax payments due on the property were religiously paid (until 1955) by the [petitioners] as
evidenced by receipts under the [petitioners] name. Hernandez, Sr. died intestate in April 1983 and it was only
after his burial that his heirs found out that TCT No. 107534 was already cancelled a year before (in 1982), and in
lieu thereof, TCT No. 290121 was issued to the [respondents]. Upon diligent inquiry, [petitioners] came to know
that the cancellation of TCT (No. 107534) in favor of the [respondents] xxx TCT (No. 290121) was based upon
three sets of documents, namely, (1) Irrevocable Power of Attorney; (2) Irrevocable Special Power of Attorney;
and (3) Deed of Absolute Sale.[Petitioners] also allege that because of financial difficulties, they were only able to
file a complaint on February 11, 1995 after consulting with several lawyers. xxx on the other hand do not deny that
Hernandez, Sr. was indeed awarded a piece of real property by the PHHC. According to the [respondents] xxx,
Hernandez, Sr. was awarded by the PHHC the Right to Purchase the property in question; however, the late
Hernandez, Sr. failed to pay all the installments due on the said property. Thus, afraid that he would forfeit his
right to purchase the property awarded to him, Hernandez, Sr. sold to Dolores Camisura his rights for the sum of
P6,500.00 on February 14, 1963, through a deed of transfer of rights, seemingly a printed form from the
PHHC. Simultaneous to this, Hernandez, Sr. and his spouse executed an irrevocable special power of attorney,
appointing Dolores Camisura as their attorney-in-fact with express power to sign, execute and acknowledge any
contract of disposition, alienation and conveyance of her right over the aforesaid parcel of land.

Apparently, this special power of attorney was executed for the purpose of securing her right to transfer the
property to a third person considering that there was a prohibition to dispose of the property by the original
purchaser within one (1) year from full payment. Else wise stated, the irrevocable power of attorney was necessary
in order to enable the buyer, Dolores Camisura, to sell the lot to another, Plaridel Mingoa, without the need of
requiring Hernandez, to sign a deed of conveyance.

On May 9, 1964, Dolores Camisura sold her right over the said property to Plaridel Mingoa for P7,000.00. Camisura
then executed a similar irrevocable power of attorney and a deed of sale of right in a residential land and
improvements therein in favor of Plaridel Mingoa. Upon such payment and on the strength of the said irrevocable
power of attorney, Plaridel Mingoa took possession of the said property and began paying all the installments due
on the property to PHHC. Plaridel Mingoa further secured TCT No. 107534 (issued in the name of Domingo
Hernandez, Sr.) on May, 1966. On July 9, 1978, Plaridel Mingoa sold to his eldest child, Melanie Mingoa, the
property in question for P18,000.00. TCT No. 107534 was thus cancelled and TCT No. 290121 was issued in the
name of Melanie Mingoa. It is further claimed that since 1966 until 1982, Plaridel Mingoa religiously paid all the
taxes due on the said property; and that from 1983 up to the present, Melanie Mingoa paid all the property taxes
due thereon aside from having actual possession of the said property. (words in brackets ours)
HELD: To constitute a valid contract, the Civil Code requires the concurrence of the following elements:
(1) cause, (2) object, and (3) consent.

The consent of Domingo Hernandez, Sr. to the contract is undisputed, thus, the sale of his share in the conjugal
property was valid. With regard to the consent of his wife, Sergia Hernandez, to the sale involving their conjugal
property, the trial court found that it was lacking because said wifes signature on the SPA was falsified. Notably,
even the CA observed that the forgery was so blatant as to be remarkably noticeable to the naked eye of an
ordinary person. Having compared the questioned signature on the SPA[34] with those of the documents[35] bearing
the sample standard signature of Sergia Hernandez, we affirm both lower courts' findings regarding the forgery.

However, Sergias lack of consent to the sale did not render the transfer of her share invalid.
Petitioners contend that such lack of consent on the part of Sergia Hernandez rendered the SPAs and the deed of
sale fictitious, hence null and void in accordance with Article 1409[36] of the Civil Code. Petitioners likewise contend
that an action for the declaration of the non-existence of a contract under Article 1410[37] does not prescribe.

We find, after meticulous review of the facts, that Articles 1409 and 1410 are not applicable to the matter now
before us.

It bears stressing that the subject matter herein involves conjugal property. Said property was awarded to
Domingo Hernandez, Sr. in 1958. The assailed SPAs were executed in 1963 and 1964. Title in the name of
Domingo Hernandez, Sr. covering the subject property was issued on May 23, 1966. The sale of the property to
Melanie Mingoa and the issuance of a new title in her name happened in 1978. Since all these events occurred
before the Family Code took effect in 1988, the provisions of the New Civil Code govern these transactions. We
quote the applicable provisions, to wit:

Art. 165. The husband is the administrator of the conjugal partnership.

Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is
under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber
any real property of the conjugal partnership without the wifes consent. If she refuses
unreasonably to give her consent, the court may compel her to grant the same. x x x.

Art. 173. The wife may, during the marriage, and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the husband
entered into without her consent, when such consent is required, or any act or contract of the
husband which tends to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the
marriage, may demand the value of property fraudulently alienated by the husband. (Emphasis
ours.)

Notwithstanding the foregoing, petitioners argue that the disposition of conjugal property made by a husband
without the wifes consent is null and void and the right to file an action thereon is imprescriptible, in accordance
with Garcia v. CA[38] and Bucoy v. Paulino.[39].
Concededly, in the aforementioned cases of Garcia and Bucoy, the contracts involving the sale of conjugal property
by the husband without the wife's consent were declared null and void by this Court. But even in Bucoy, we
significantly ruled, in reference to Article 173, that:

The plain meaning attached to the plain language of the law is that the contract, in its
entirety, executed by the husband without the wifes consent, may be annulled by the
wife.[40](emphasis ours)

In succeeding cases, we held that alienation and/or encumbrance of conjugal property by the husband
without the wifes consent is not null and void but merely voidable.
In Sps. Alfredo v. Sps. Borras,[41] we held that:

The Family Code, which took effect on 3 August 1988, provides that any alienation or
encumbrance made by the husband of the conjugal partnership property without the consent of
the wife is void. However, when the sale is made before the effectivity of the Family Code, the
applicable law is the Civil Code.

Article 173 of the Civil Code provides that the disposition of conjugal property without
the wife's consent is not void but merely voidable.

We likewise made the same holding in Pelayo v. Perez :[42]

xxx [Under] Article 173, in relation to Article 166, both of the New Civil Code, which was still in
effect on January 11, 1988 when the deed in question was executed, the lack of marital consent
to the disposition of conjugal property does not make the contract void ab initio but merely
voidable.
In Vera-Cruz v. Calderon,[43] the Court noted the state of jurisprudence and elucidated on the matter,
thus:

In the recent case of Heirs of Ignacia Aguilar-Reyes v. Spouses Mijares, we reiterated

the rule that the husband cannot alienate or encumber any conjugal real property without the
consent, express or implied, of the wife, otherwise, the contract is voidable. To wit:

Indeed, in several cases the Court has ruled that such alienation or
encumbrance by the husband is void. The better view, however, is to consider
the transaction as merely voidable and not void. This is consistent with
Article 173 of the Civil Code pursuant to which the wife could, during
the marriage and within 10 years from the questioned transaction,
seek its annulment.

xxx

Likewise, in the case of Heirs of Christina Ayuste v. Court of Appeals, we declared that:

There is no ambiguity in the wording of the law. A sale of real property

of the conjugal partnership made by the husband without the consent of his
wife is voidable. The action for annulment must be brought during the marriage
and within ten years from the questioned transaction by the wife. Where the
law speaks in clear and categorical language, there is no room for interpretation
there is room only for application.

x x x (Emphasis ours.)
Here, the husbands first act of disposition of the subject property occurred in 1963 when he executed the SPA and
the Deed of Transfer of Rights in favor of Dolores Camisura.Thus, the right of action of the petitioners accrued in
1963, as Article 173 of the Civil Code provides that the wife may file for annulment of a contract entered into by
the husband without her consent within ten (10) years from the transaction questioned. Petitioners filed the action
for reconveyance in 1995. Even if we were to consider that their right of action arose when they learned of the
cancellation of TCT No. 107534 and the issuance of TCT No. 290121 in Melanie Mingoas name in 1993, still, twelve
(12) years have lapsed since such discovery, and they filed the petition beyond the period allowed by
law. Moreover, when Sergia Hernandez, together with her children, filed the action for reconveyance, the conjugal
partnership of property with Hernandez, Sr. had already been terminated by virtue of the latter's death on April 16,
1983. Clearly, therefore, petitioners action has prescribed.

And this is as it should be, for in the same Vera-Cruz case, we further held that:[44]
 xxx [Under] Article 173 of the New Civil Code, an action for the annulment of any
contract entered into by the husband without the wifes consent must be filed (1) during the
marriage; and (2) within ten years from the transaction questioned. Where any one of these
two conditions is lacking, the action will be considered as having been filed out of time.
In the case at bar, while respondent filed her complaint for annulment of the deed of sale on July
8, 1994, i.e., within the ten-year period counted from the execution of the deed of sale of the
property on June 3, 1986, the marriage between her and Avelino had already been dissolved by
the death of the latter on November 20, 1993. In other words, her marriage to Avelino was no
longer subsisting at the time she filed her complaint. Therefore, the civil case had already been
barred by prescription. (Emphasis ours.)

Thus, the failure of Sergia Hernandez to file with the courts an action for annulment of the contract during
the marriage and within ten (10) years from the transaction necessarily barred her from questioning the sale of the
subject property to third persons.

As we held in Vda. De Ramones v. Agbayani:[45]

In Villaranda v. Villaranda, et al., this Court, through Mr. Justice Artemio V. Panganiban, ruled
that without the wifes consent, the husbands alienation or encumbrance of conjugal property
prior to the effectivity of the Family Code is not void, but merely voidable. However, the wifes
failure to file with the courts an action for annulment of the contract during the
marriage and within ten (10) years from the transaction shall render the sale valid. x x
x (emphasis ours)

More than having merely prescribed, petitioners action has likewise become stale, as it is barred
by laches.

In Isabela Colleges v. Heirs of Nieves-Tolentino,[46] this Court held:

Laches means the failure or neglect for an unreasonable and unexplained length of time to do
that which, by observance of due diligence, could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time, warranting the presumption
that the party entitled to assert his right either has abandoned or declined to assert it. Laches
thus operates as a bar in equity.

xxx
The time-honored rule anchored on public policy is that relief will be denied to a litigant whose
claim or demand has become stale, or who has acquiesced for an unreasonable length of time, or
who has not been vigilant or who has slept on his rights either by negligence, folly or
inattention. In other words, public policy requires, for peace of society, the discouragement of
claims grown stale for non-assertion; thus laches is an impediment to the assertion or
enforcement of a right which has become, under the circumstances, inequitable or unfair to
permit.

Pertinently, in De la Calzada-Cierras v. CA,[47] we ruled that a complaint to recover the title and possession
of the lot filed 12 years after the registration of the sale is considered neglect for an unreasonably long time to
assert a right to the property.
Here, petitioners' unreasonably long period of inaction in asserting their purported rights over the subject property
weighs heavily against them. We quote with approval the findings of the CA that:[48]

It was earlier shown that there existed a period of 17 years during which time Hernandez, Sr. xxx
never even questioned the defendants-appellants possession of the property; also there was
another interval of 12 years after discovering that the TCT of the property in the name of
Hernandez, Sr. before the Heirs of Hernandez instituted an action for the reconveyance of the
title of the property.

xxx

The fact that the Mingoa's were able to take actual possession of the subject property for such a
long period without any form of cognizable protest from Hernandez, Sr. and the plaintiffs-
appellees strongly calls for the application of the doctrine of laches. It is common practice in the
real estate industry, an ocular inspection of the premises involved is a safeguard to the cautious
and prudent purchaser usually takes, and should he find out that the land he intends to buy is
occupied by anybody else other than the seller who is not in actual possession, it could then be
incumbent upon the purchaser to verify the extent of the occupant's possessory rights. The
plaintiffs-appellees asseverate that the award was made in favor of Hernandez, Sr. in 1958; full
 payment made in 1963; and title issued in 1966. It would thus be contrary to ordinary human
conduct (and prudence dictates otherwise) for any awardee of real property not to visit and
inspect even once, the property awarded to him and find out if there are any transgressors in his
property.
Furthermore, Hernandez, Sr.'s inaction during his lifetime lends more credence to the
defendants-appellants assertion that the said property was indeed sold by Hernandez, Sr. by way
of the SPAs, albeit without the consent of his wife. xxx
In addition, the reasons of poverty and poor health submitted by the plaintiffs-appellees could
not justify the 12 years of delay in filing a complaint against the defendants-appellants. The
records are bereft of any evidence to support the idea that the plaintiffs-appellees diligently
asserted their rights over the said property after having knowledge of the cancellation of the TCT
issued in Hernandez name. Moreover the Court seriously doubts the plausibility of this contention
since what the plaintiffs-appellees are trying to impress on this Court's mind is that they did not
know anything at all except only shortly before the death of Hernandez. To accept that not even
the wife knew of the transactions made by Hernandez, Sr. nor anything about the actual
possession of the defendants-appellants for such a long period is to Us absurd if not fantastic.

In sum, the rights and interests of the spouses Hernandez over the subject property were validly
transferred to respondent Dolores Camisura. Since the sale of the conjugal property by Hernandez, Sr. was without
the consent of his wife, Sergia, the same is voidable; thus, binding unless annulled. Considering that Sergia failed
to exercise her right to ask for the annulment of the sale within the prescribed period, she is now barred from
questioning the validity thereof. And more so, she is precluded from assailing the validity of the subsequent
transfers from Camisura to Plaridel Mingoa and from the latter to Melanie Mingoa. Therefore, title to the subject
property cannot anymore be reconveyed to the petitioners by reason of prescription and laches. The issues of
prescription and laches having been resolved, it is no longer necessary to discuss the other issues raised in this
petition.

HEIRS OF GO VS SERVACIO

FACTS: On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total area of 17,140 square meters
situated in Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty three years later, or on March 29, 1999,
Protacio, Jr. executed an Affidavit of Renunciation and Waiver,[1] whereby he affirmed under oath that it was his
father, Protacio Go, Sr. (Protacio, Sr.), not he, who had purchased the two parcels of land (the property).

On November 25, 1987, Marta Barola Go died. She was the wife of Protacio, Sr. and mother of the
petitioners.[2] On December 28, 1999, Protacio, Sr. and his son Rito B. Go (joined by Ritos wife Dina B. Go) sold a
portion of the property with an area of 5,560 square meters to Ester L. Servacio (Servacio)
for ₱5,686,768.00.[3] On March 2, 2001, the petitioners demanded the return of the property,[4] but Servacio
refused to heed their demand. After barangay proceedings failed to resolve the dispute,[5] they sued Servacio and
Rito in the Regional Trial Court in Maasin City, Southern Leyte (RTC) for the annulment of the sale of the property.

The petitioners averred that following Protacio, Jr.s renunciation, the property became conjugal property; and that
the sale of the property to Servacio without the prior liquidation of the community property between Protacio, Sr.
and Marta was null and void.[6]

HELD: Article 130 of the Family Code reads:

Article 130. Upon the termination of the marriage by death, the conjugal partnership
property shall be liquidated in the same proceeding for the settlement of the estate of the
deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the
conjugal partnership property either judicially or extra-judicially within one year from the death
of the deceased spouse. If upon the lapse of the six month period no liquidation is made, any
disposition or encumbrance involving the conjugal partnership property of the terminated
marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance with the
foregoing requirements, a mandatory regime of complete separation of property shall govern the
property relations of the subsequent marriage.

Article 130 is to be read in consonance with Article 105 of the Family Code, viz:

Article 105. In case the future spouses agree in the marriage settlements that the regime
of conjugal partnership of gains shall govern their property relations during marriage, the
provisions in this Chapter shall be of supplementary application.
 The provisions of this Chapter shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in accordance with the Civil Code or other
laws, as provided in Article 256. (n) [emphasis supplied]

It is clear that conjugal partnership of gains established before and after the effectivity of the Family
Code are governed by the rules found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations
Between Husband And Wife) of the Family Code. Hence, any disposition of the conjugal property after the
dissolution of the conjugal partnership must be made only after the liquidation; otherwise, the disposition is void.

Before applying such rules, however, the conjugal partnership of gains must be subsisting at the time of
the effectivity of the Family Code. There being no dispute that Protacio, Sr. and Marta were married prior to the
effectivity of the Family Code on August 3, 1988, their property relation was properly characterized as one of
conjugal partnership governed by the Civil Code. Upon Martas death in 1987, the conjugal partnership was
dissolved, pursuant to Article 175 (1) of the Civil Code,[15] and an implied ordinary co-ownership ensued among
Protacio, Sr. and the other heirs of Marta with respect to her share in the assets of the conjugal partnership
pending a liquidation following its liquidation.[16] The ensuing implied ordinary co-ownership was governed by
Article 493 of the Civil Code,[17] to wit:

Article 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But the
effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the co-ownership.
(399)

Protacio, Sr., although becoming a co-owner with his children in respect of Martas share in the conjugal
partnership, could not yet assert or claim title to any specific portion of Martas share without an actual partition of
the property being first done either by agreement or by judicial decree. Until then, all that he had was an ideal or
abstract quota in Martas share.[18] Nonetheless, a co-owner could sell his undivided share; hence, Protacio, Sr. had
the right to freely sell and dispose of his undivided interest, but not the interest of his co-owners.[19] Consequently,
the sale by Protacio, Sr. and Rito as co-owners without the consent of the other co-owners was not necessarily
void, for the rights of the selling co-owners were thereby effectively transferred, making the buyer (Servacio) a co-
owner of Martas share.[20] This result conforms to the well-established principle that the binding force of a contract
must be recognized as far as it is legally possible to do so (quando res non valet ut ago, valeat quantum valere
potest).[21]

Article 105 of the Family Code, supra, expressly provides that the applicability of the rules on dissolution
of the conjugal partnership is without prejudice to vested rights already acquired in accordance with
the Civil Code or other laws. This provision gives another reason not to declare the sale as entirely void. Indeed,
such a declaration prejudices the rights of Servacio who had already acquired the shares of Protacio, Sr. and Rito in
the property subject of the sale.

In their separate comments,[22] the respondents aver that each of the heirs had already received a certain
allotted portion at the time of the sale, and that Protacio, Sr. and Rito sold only the portions adjudicated to and
owned by them. However, they did not present any public document on the allocation among her heirs, including
themselves, of specific shares in Martas estate. Neither did they aver that the conjugal properties had already been
liquidated and partitioned. Accordingly, pending a partition among the heirs of Marta, the efficacy of the sale, and
whether the extent of the property sold adversely affected the interests of the petitioners might not yet be properly
decided with finality. The appropriate recourse to bring that about is to commence an action for judicial partition,
as instructed in Bailon-Casilao v. Court of Appeals,[23] to wit:

From the foregoing, it may be deduced that since a co-owner is entitled to sell his
undivided share, a sale of the entire property by one

co-owner without the consent of the other co-owners is not null and void. However, only
the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the
property.

The proper action in cases like this is not for the nullification of the sale or for the recovery
of possession of the thing owned in common from the third person who substituted the co-owner
or co-owners who alienated their shares, but the DIVISION of the common property as if it
 continued to remain in the possession of the co-owners who possessed and administered it[Mainit
v. Bandoy, supra].

Thus, it is now settled that the appropriate recourse of co-owners in cases where
their consent were not secured in a sale of the entire property as well as in a sale
merely of the undivided shares of some of the co-owners is an action for PARTITION
under Rule 69 of the Revised Rules of Court. xxx[24]

In the meanwhile, Servacio would be a trustee for the benefit of the co-heirs of her vendors in respect of
any portion that might not be validly sold to her. The following observations of Justice Paras are explanatory of this
result, viz:

xxx [I]f it turns out that the property alienated or mortgaged really would pertain to the share of
the surviving spouse, then said transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is null and void. But if it turns
out that half of the property thus alienated or mortgaged belongs to the husband as his share in
the conjugal partnership, and half should go to the estate of the wife, then that corresponding to
the husband is valid, and that corresponding to the other is not. Since all these can be
determined only at the time the liquidation is over, it follows logically that a disposal made by the
surviving spouse is not void ab initio. Thus, it has been held that the sale of conjugal properties
cannot be made by the surviving spouse without the legal requirements. The sale is void as to
the share of the deceased spouse (except of course as to that portion of the husbands share
inherited by her as the surviving spouse). The buyers of the property that could not be validly
sold become trustees of said portion for the benefit of the husbands other heirs, the cestui que
trust ent. Said heirs shall not be barred by prescription or by laches (See Cuison, et al. v.
Fernandez, et al.,L-11764, Jan.31, 1959.)[

FAMILY CODE

GUING VS CA

FACTS: 1. Plaintiff Gilda Corpuz and defendant Judie Corpuz are legally married spouses. They were
married on December 24, 1968 in Bacolod City, before a judge. This is admitted by defendants-spouses
Antonio and Luzviminda Guiang in their answer, and also admitted by defendant Judie Corpuz when he
testified in court (tsn. p..3, June 9, 1992), although the latter says that they were married in 1967. The
couple have three children, namely: Junie 18 years old, Harriet 17 years of age, and Jodie or Joji, the
youngest, who was 15 years of age in August, 1990 when her mother testified in court.
Sometime on February 14, 1983, the couple Gilda and Judie Corpuz, with plaintiff-wife Gilda Corpuz as
vendee, bought a 421 sq. meter lot located in Barangay Gen. Paulino Santos (Bo. 1), Koronadal, South
Cotabato, and particularly known as Lot 9, Block 8, (LRC) Psd-165409 from Manuel Callejo who signed as
vendor through a conditional deed of sale for a total consideration of P14,735.00. The consideration was
payable in installment, with right of cancellation in favor of vendor should vendee fail to pay three
successive installments (Exh. 2, tsn. p. 6, February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie Corpuz sold one-half portion of their Lot No. 9,
Block 8, (LRC) Psd-165409 to the defendants-spouses Antonio and Luzviminda Guiang. The latter have
since then occupied the one-half portion [and] built their house thereon (tsn. p. 4, May 22, 1992). They
are thus adjoining neighbors of the Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June 1989. She was trying to look for work abroad, in
[the] Middle East. Unfortunately, she became a victim of an unscrupulous illegal recruiter. She was not
able to go abroad. She stayed for sometime in Manila however, coming back to Koronadal, South
Cotabato, x x x on March 11, 1990. Plaintiffs departure for Manila to look for work in the Middle East was
with the consent of her husband Judie Corpuz (tsn. p. 16, Aug.12, 1990; p. 10, Sept. 6, 1991).
After his wifes departure for Manila, defendant Judie Corpuz seldom went home to the conjugal
dwelling. He stayed most of the time at his place of work at Samahang Nayon Building, a hotel,
restaurant, and a cooperative. Daughter Harriet Corpuz went to school at Kings College, Bo. 1,
Koronadal, South Cotabato, but she was at the same time working as household help of, and staying at,
the house of Mr. Panes. Her brother Junie was not working. Her younger sister Jodie (Joji) was going to
school. Her mother sometimes sent them money (tsn. p. 14, Sept. 6, 1991).
Sometime in January 1990, Harriet Corpuz learned that her father intended to sell the remaining one-half
portion including their house, of their homelot to defendants Guiangs. She wrote a letter to her mother
informing her. She [Gilda Corpuz] replied that she was objecting to the sale. Harriet, however, did not
inform her father about this; but instead gave the letter to Mrs. Luzviminda Guiang so that she [Guiang]
would advise her father (tsn. pp. 16-17, Sept. 6, 1991).
4. However, in the absence of his wife Gilda Corpuz, defendant Judie Corpuz pushed through the sale of
the remaining one-half portion of Lot 9, Block 8, (LRC) Psd-165409. On March 1, 1990, he sold to
defendant Luzviminda Guiang thru a document known as Deed of Transfer of Rights (Exh. A) the
 remaining one-half portion of their lot and the house standing thereon for a total consideration
of P30,000.00 of which P5,000.00 was to be paid in June , 1990. Transferor Judie Corpuzs children Junie
and Harriet signed the document as witnesses.
Four (4) days after March 1, 1990 or on March 5, 1990, obviously to cure whatever defect in defendant
Judie Corpuzs title over the lot transferred, defendant Luzviminda Guiang as vendee executed another
agreement over Lot 9, Block 8, (LRC) Psd-165408 (Exh. 3), this time with Manuela Jimenez Callejo, a
widow of the original registered owner from whom the couple Judie and Gilda Corpuz originally bought
the lot (Exh. 2), who signed as vendor for a consideration of P9,000.00. Defendant Judie Corpuz signed
as a witness to the sale (Exh. 3-A). The new sale (Exh. 3) describes the lot sold as Lot 8, Block 9, (LRC)
Psd-165408 but it is obvious from the mass of evidence that the correct lot is Lot 8, Block 9, (LRC) Psd-
165409, the very lot earlier sold to the couple Gilda and Judie Corpuz.
5. Sometime on March 11, 1990, plaintiff returned home. She found her children staying with other
households. Only Junie was staying in their house. Harriet and Joji were with Mr. Panes. Gilda gathered
her children together and stayed at their house. Her husband was nowhere to be found. She was
informed by her children that their father had a wife already.
6. For staying in their house sold by her husband, plaintiff was complained against by defendant
Luzviminda Guiang and her husband Antonio Guiang before the Barangay authorities of Barangay General
Paulino Santos (Bo. 1), Koronadal, South Cotabato, for trespassing (tsn. p. 34, Aug. 17, 1990). The case
was docketed by the barangay authorities as Barangay Case No. 38 for trespassing. On March 16, 1990,
the parties thereat signed a document known as amicable settlement. In full, the settlement provides for,
to wit:
That respondent, Mrs. Gilda Corpuz and her three children, namely: Junie, Hariet and Judie to
leave voluntarily the house of Mr. and Mrs. Antonio Guiang, where they are presently boarding
without any charge, on or before April 7, 1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.
Believing that she had received the shorter end of the bargain, plaintiff went to the Barangay Captain of
Barangay Paulino Santos to question her signature on the amicable settlement. She was referred
however to the Officer-In-Charge at the time, a certain Mr. de la Cruz. The latter in turn told her that he
could not do anything on the matter (tsn. p. 31, Aug. 17, 1990).
This particular point was not rebutted. The Barangay Captain who testified did not deny that Mrs. Gilda
Corpuz approached him for the annulment of the settlement. He merely said he forgot whether Mrs.
Corpuz had approached him (tsn. p. 13, Sept. 26, 1990). We thus conclude that Mrs. Corpuz really
approached the Barangay Captain for the annulment of the settlement. Annulment not having been
made, plaintiff stayed put in her house and lot.
7. Defendant-spouses Guiang followed thru the amicable settlement with a motion for the execution of
the amicable settlement, filing the same with the Municipal Trial Court of Koronadal, South Cotabato. The
proceedings [are] still pending before the said court, with the filing of the instant suit.
8. As a consequence of the sale, the spouses Guiang spent P600.00 for the preparation of the Deed of
Transfer of Rights, Exh. A; P9,000.00 as the amount they paid to Mrs. Manuela Callejo, having assumed
the remaining obligation of the Corpuzes to Mrs. Callejo (Exh. 3); P100.00 for the preparation of Exhibit
3; a total of P759.62 basic tax and special educational fund on the lot; P127.50 as the total documentary
stamp tax on the various documents; P535.72 for the capital gains tax; P22.50 as transfer tax; a
standard fee of P17.00; certification fee of P5.00. These expenses particularly the taxes and other
expenses towards the transfer of the title to the spouses Guiangs were incurred for the whole Lot 9, Block
8, (LRC) Psd-165409.

HELD: Petitioners insist that the questioned Deed of Transfer of Rights was validly executed by the parties-
litigants in good faith and for valuable consideration. The absence of private respondents consent merely rendered
the Deed voidable under Article 1390 of the Civil Code, which provides:
ART. 1390. The following contracts are voidable or annullable, even though there may have been no
damage to the contracting parties:
xxxxxxxxx
(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of
ratification.(n)
The error in petitioners contention is evident. Article 1390, par. 2, refers to contracts visited by vices of
consent, i.e., contracts which were entered into by a person whose consent was obtained and vitiated through
mistake, violence, intimidation, undue influence or fraud. In this instance, private respondents consent to the
contract of sale of their conjugal property was totally inexistent or absent. Gilda Corpuz, on direct examination, tes
This being the case, said contract properly falls within the ambit of Article 124 of the Family Code, which was
correctly applied by the two lower courts:
ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both
spouses jointly. In case of disagreement, the husbands 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 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.(165a) (Italics supplied)
Comparing said law with its equivalent provision in the Civil Code, the trial court adroitly explained the
amendatory effect of the above provision in this wise:[12]
The legal provision is clear. The disposition or encumbrance is void. It becomes still clearer if we compare
the same with the equivalent provision of the Civil Code of the Philippines.Under Article 166 of the Civil
Code, the husband cannot generally alienate or encumber any real property of the conjugal partnership
without the wifes consent. The alienation or encumbrance if so made however is not null and void. It is
merely voidable. The offended wife may bring an action to annul the said alienation or
encumbrance. Thus, the provision of Article 173 of the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband entered into
without her consent, when such consent is required, or any act or contract of the husband
which tends to defraud her or impair her interest in the conjugal partnership property. Should
the wife fail to exercise this right, she or her heirs after the dissolution of the marriage, may
demand the value of property fraudulently alienated by the husband.(n)
This particular provision giving the wife ten (10) years x x x during [the] marriage to annul the alienation
or encumbrance was not carried over to the Family Code. It is thus clear that any alienation or
encumbrance made after August 3, 1988 when the Family Code took effect by the husband of the
conjugal partnership property without the consent of the wife is null and void.
Furthermore, it must be noted that the fraud and the intimidation referred to by petitioners were perpetrated
in the execution of the document embodying the amicable settlement. Gilda Corpuz alleged during trial that
barangay authorities made her sign said document through misrepresentation and coercion.[13] In any event, its
execution does not alter the void character of the deed of sale between the husband and the petitioners-spouses,
as will be discussed later. The fact remains that such contract was entered into without the wifes consent.
In sum, the nullity of the contract of sale is premised on the absence of private respondents consent. To
constitute a valid contract, the Civil Code requires the concurrence of the following elements: (1) cause, (2) object,
and (3) consent,[14] the last element being indubitably absent in the case at bar.

MANALO VS CAMAISA

FACTS: ma A. Jader-Manalo allegedly came across an advertisement placed by respondents, the Spouses
Norma Fernandez C. Camaisa and Edilberto Camaisa, in the Classified Ads Section of the newspaper BULLETIN
TODAY in its April, 1992 issue, for the sale of their ten-door apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated for the purchase through a real estate broker,
Mr. Proceso Ereno, authorized by respondent spouses.[1] Petitioner made a visual inspection of the said lots with
the real estate broker and was shown the tax declarations, real property tax payment receipts, location plans, and
vicinity maps relating to the properties.[2] Thereafter, petitioner met with the vendors who turned out to be
respondent spouses. She made a definite offer to buy the properties to respondent Edilberto Camaisa with the
knowledge and conformity of his wife, respondent Norma Camaisa in the presence of the real estate broker.[3] After
some bargaining, petitioner and Edilberto agreed upon the purchase price of P1,500,000.00 for the Taytay property
and P2,100,000.00 for the Makati property[4] to be paid on installment basis with downpayments of P100,000.00
and P200,000.00, respectively, on April 15, 1992. his agreement was handwritten by petitioner and signed
by Edilberto.[6] When petitioner pointed out the conjugal nature of the properties, Edilberto assured her of his wifes
conformity and consent to the sale.[7] The formal typewritten Contracts to Sell were thereafter prepared by
petitioner. The following day, petitioner, the real estate broker and Edilberto met in the latters office for the formal
signing of the typewritten Contracts to Sell.[8] After Edilberto signed the contracts, petitioner delivered to him two
checks, namely, UCPB Check No. 62807 dated April 15, 1992 for P200,000.00 and UCPB Check No. 62808 also
dated April 15, 1992 for P100,000.00 in the presence of the real estate broker and an employee
in Edilbertos office.[9] The contracts were given to Edilberto for the formal affixing of his wifes signature.
The following day, petitioner received a call from respondent Norma, requesting a meeting to clarify some
provisions of the contracts.[10] To accommodate her queries, petitioner, accompanied by her lawyer, met
with Edilberto and Norma and the real estate broker at Cafe Rizal in Makati.[11] During the meeting, handwritten
notations were made on the contracts to sell, so they arranged to incorporate the notations and to meet again for
the formal signing of the contracts.[12]
When petitioner met again with respondent spouses and the real estate broker at Edilbertos office for the
formal affixing of Normas signature, she was surprised when respondent spouses informed her that they were
backing out of the agreement because they needed spot cash for the full amount of the consideration. [13] Petitioner
reminded respondent spouses that the contracts to sell had already been duly perfected and Normas refusal to sign
the same would unduly prejudice petitioner. Still, Norma refused to sign the contracts prompting petitioner to file a
complaint for specific performance and damages against respondent spouses before the Regional Trial Court
of Makati, Branch 136 on April 29, 1992, to compel respondent Norma Camaisa to sign the contracts to sell.
HELD: he Court does not find error in the decisions of both the trial court and the Court of Appeals.
Petitioner alleges that the trial court erred when it entered a summary judgment in favor of respondent
spouses there being a genuine issue of fact. Petitioner maintains that the issue of whether the contracts to sell
between petitioner and respondent spouses was perfected is a question of fact necessitating a trial on the merits.
The Court does not agree. A summary judgment is one granted by the court upon motion by a party for an
expeditious settlement of a case, there appearing from the pleadings, depositions, admissions and affidavits that
there are no important questions or issues of fact involved, and that therefore the moving party is entitled to
judgment as a matter of law.[24] A perusal of the pleadings submitted by both parties show that there is no genuine
controversy as to the facts involved therein.
Both parties admit that there were negotiations for the sale of four parcels of land between petitioner and
respondent spouses; that petitioner and respondent Edilberto Camaisa came to an agreement as to the price and
the terms of payment, and a downpayment was paid by petitioner to the latter; and that respondent Norma
refused to sign the contracts to sell. The issue thus posed for resolution in the trial court was whether or not the
contracts to sell between petitioner and respondent spouses were already perfected such that the latter could no
longer back out of the agreement.
The law requires that the disposition of a conjugal property by the husband as administrator in appropriate
cases requires the written consent of the wife, otherwise, the disposition is void. Thus, 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 husbands decision shall prevail, subject to 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. (Underscoring ours.)
The properties subject of the contracts in this case were conjugal; hence, for the contracts to sell to be
effective, the consent of both husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her written consent to the sale. Even granting that
respondent Norma actively participated in negotiating for the sale of the subject properties, which she denied, her
written consent to the sale is required by law for its validity. Significantly, petitioner herself admits that Norma
refused to sign the contracts to sell. Respondent Norma may have been aware of the negotiations for the sale of
their conjugal properties. However, being merely aware of a transaction is not consent.[25]
Finally, petitioner argues that since respondent Norma unjustly refuses to affix her signatures to the contracts
to sell, court authorization under Article 124 of the Family Code is warranted.
The argument is bereft of merit. Petitioner is correct insofar as she alleges that if the written consent of the
other spouse cannot be obtained or is being withheld, the matter may be brought to court which will give such
authority if the same is warranted by the circumstances. However, it should be stressed that court authorization
under Art. 124 is only resorted to in cases where the spouse who does not give consent is incapacitated.[26] In this
case, petitioner failed to allege and prove that respondent Norma was incapacitated to give her consent to the
contracts. In the absence of such showing of the wifes incapacity, court authorization cannot be sought.
Under the foregoing facts, the motion for summary judgment was proper considering that there was no
genuine issue as to any material fact. The only issue to be resolved by the trial court was whether the contract to
sell involving conjugal properties was valid without the written consent of the wife.

Homeowners Savings Bank Vs DAILO

FACTS: Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, 1967. During their
marriage, the spouses purchased a house and lot situated at Barangay San Francisco, San Pablo City from a certain
Sandra Dalida. The subject property was declared for tax assessment purposes under Assessment of Real Property
No. 94-051-2802. The Deed of Absolute Sale, however, was executed only in favor of the late Marcelino Dailo, Jr.
as vendee thereof to the exclusion of his wife.[3] On December 1, 1993, Marcelino Dailo, Jr. executed a Special
Power of Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the latter to obtain a loan from petitioner
Homeowners Savings and Loan Bank to be secured by the spouses Dailos house and lot in San Pablo City. Pursuant
to the SPA, Gesmundo obtained a loan in the amount of P300,000.00 from petitioner. As security therefor,
Gesmundo executed on the same day a Real Estate Mortgage constituted on the subject property in favor of
petitioner. The abovementioned transactions, including the execution of the SPA in favor of Gesmundo, took place
without the knowledge and consent of respondent.[4]
Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial foreclosure
proceedings on the mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in
favor of petitioner as the highest bidder. After the lapse of one year without the property being redeemed,
petitioner, through its vice-president, consolidated the ownership thereof by executing on June 6, 1996 an Affidavit
of Consolidation of Ownership and a Deed of Absolute Sale. In the meantime, Marcelino Dailo, Jr. died on
December 20, 1995. In one of her visits to the subject property, respondent learned that petitioner had already
employed a certain Roldan Brion to clean its premises and that her car, a Ford sedan, was razed because Brion
allowed a boy to play with fire within the premises.
Claiming that she had no knowledge of the mortgage constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222 (97)
for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and Damages against petitioner. In the latters Answer with
Counterclaim, petitioner prayed for the dismissal of the complaint on the ground that the property in question was
the exclusive property of the late Marcelino Dailo, Jr.
HELD: First, petitioner takes issue with the legal provision applicable to the factual milieu of this case. It
contends that Article 124 of the Family Code should be construed in relation to Article 493 of the Civil Code, which
states:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination of the co-
ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses
jointly. . . .
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. . . .
Petitioner argues that although Article 124 of the Family Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse
from exercising full ownership over the portion of the conjugal property pertaining to him under the concept of co-
ownership.[12] Thus, petitioner would have this Court uphold the validity of the mortgage to the extent of the late
Marcelino Dailo, Jr.s share in the conjugal partnership.
In Guiang v. Court of Appeals,[13] it was held that the sale of a conjugal property requires the consent of both
the husband and wife.[14] In applying Article 124 of the Family Code, this Court declared that the absence of the
consent of one renders the entire sale null and void, including the portion of the conjugal property pertaining to the
husband who contracted the sale. The same principle in Guiang squarely applies to the instant case. As shall be
discussed next, there is no legal basis to construe Article 493 of the Civil Code as an exception to Article 124 of the
Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the absence of a marriage
settlement, the system of relative community or conjugal partnership of gains governed the property relations
between respondent and her late husband.[15] With the effectivity of the Family Code on August 3, 1988, Chapter 4
on Conjugal Partnership of Gainsin the Family Code was made applicable to conjugal partnership of gains already
established before its effectivity unless vested rights have already been acquired under the Civil Code or other
laws.[16]
The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino
Dailo, Jr. even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership,
where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate
properties and those acquired by either or both spouses through their efforts or by chance. [17] Unlike the absolute
community of property wherein the rules on co-ownership apply in a suppletory manner,[18] the conjugal
partnership shall be governed by the rules on contract of partnership in all that is not in conflict with what is
expressly determined in the chapter (on conjugal partnership of gains) or by the spouses in their marriage
settlements.[19] Thus, the property relations of respondent and her late husband shall be governed, foremost, by
Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the rules on partnership under
the Civil Code. In case of conflict, the former prevails because the Civil Code provisions on partnership apply only
when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the knowledge and consent of his wife,
Marcelino Dailo, Jr. constituted a real estate mortgage on the subject property, which formed part of their conjugal
partnership. By express provision of Article 124 of the Family Code, in the absence of (court) authority or written
consent of the other spouse, any disposition or encumbrance of the conjugal property shall be void.
The aforequoted provision does not qualify with respect to the share of the spouse who makes the disposition
or encumbrance in the same manner that the rule on co-ownership under Article 493 of the Civil Code does. Where
the law does not distinguish, courts should not distinguish.[20] Thus, both the trial court and the appellate court are
correct in declaring the nullity of the real estate mortgage on the subject property for lack of respondents consent.
Second, petitioner imposes the liability for the payment of the principal obligation obtained by the late
Marcelino Dailo, Jr. on the conjugal partnership to the extent that it redounded to the benefit of the family. [21]
 Under Article 121 of the Family Code, [T]he conjugal partnership shall be liable for: . . . (3) Debts and
obligations contracted by either spouse without the consent of the other to the extent that the family may have
been benefited; . . . . For the subject property to be held liable, the obligation contracted by the late Marcelino
Dailo, Jr. must have redounded to the benefit of the conjugal partnership. There must be the requisite showing
then of some advantage which clearly accrued to the welfare of the spouses. Certainly, to make a conjugal
partnership respond for a liability that should appertain to the husband alone is to defeat and frustrate the avowed
objective of the new Civil Code to show the utmost concern for the solidarity and well-being of the family as a
unit.[22]
The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with
the creditor-party litigant claiming as such.[23] Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he
who denies, must prove).[24] Petitioners sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr.
to finance the construction of housing units without a doubt redounded to the benefit of his family, without
adducing adequate proof, does not persuade this Court. Other than petitioners bare allegation, there is nothing
from the records of the case to compel a finding that, indeed, the loan obtained by the late Marcelino Dailo, Jr.
redounded to the benefit of the family. Consequently, the conjugal partnership cannot be held liable for the
payment of the principal obligation.
In addition, a perusal of the records of the case reveals that during the trial, petitioner vigorously asserted
that the subject property was the exclusive property of the late Marcelino Dailo, Jr. Nowhere in the answer filed
with the trial court was it alleged that the proceeds of the loan redounded to the benefit of the family. Even on
appeal, petitioner never claimed that the family benefited from the proceeds of the loan. When a party adopts a
certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do
so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice
and due process.[25] A party may change his legal theory on appeal only when the factual bases thereof would not
require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue
raised in the new theory.[26]

Fuentes Vs ROCA

FACTS: Sabina Tarroza owned a titled 358-square meter lot in Canelar, Zamboanga City. On October 11, 1982 she
sold it to her son, Tarciano T. Roca (Tarciano) under a deed of absolute sale. But Tarciano did not for the meantime
have the registered title transferred to his name. Six years later in 1988, Tarciano offered to sell the lot to
petitioners Manuel and Leticia Fuentes (the Fuentes spouses). They arranged to meet at the office of Atty. Romulo
D. Plagata whom they asked to prepare the documents of sale. They later signed an agreement to sell that Atty.
Plagata prepared dated April 29, 1988, which agreement expressly stated that it was to take effect in six months.
The agreement required the Fuentes spouses to pay Tarciano a down payment of P60,000.00 for the transfer of the
lots title to him. And, within six months, Tarciano was to clear the lot of structures and occupants and secure the
consent of his estranged wife, Rosario Gabriel Roca (Rosario), to the sale. Upon Tarcianos compliance with these
conditions, the Fuentes spouses were to take possession of the lot and pay him an additional P140,000.00
or P160,000.00, depending on whether or not he succeeded in demolishing the house standing on it. If Tarciano
was unable to comply with these conditions, the Fuentes spouses would become owners of the lot without any
further formality and payment.

The parties left their signed agreement with Atty. Plagata who then worked on the other requirements of the
sale. According to the lawyer, he went to see Rosario in one of his trips to Manila and had her sign an affidavit of
consent. As soon as Tarciano met the other conditions, Atty. Plagata notarized Rosarios affidavit
in Zamboanga City. On January 11, 1989 Tarciano executed a deed of absolute sale. In favor of the Fuentes
spouses. They then paid him the additional P140,000.00 mentioned in their agreement. A new title was issued in
the name of the spouses who immediately constructed a building on the lot. On January 28, 1990 Tarciano passed
away, followed by his wife Rosario who died nine months afterwards.

HELD: ificantly, Rosarios specimen signatures were made at about the time that she signed the supposed
affidavit of consent. They were, therefore, reliable standards for comparison. The Fuentes spouses presented no
evidence that Rosario suffered from any illness or disease that accounted for the variance in her signature when
she signed the affidavit of consent. Notably, Rosario had been living separately from Tarciano for 30 years since
1958. And she resided so far away in Manila. It would have been quite tempting for Tarciano to just forge her
signature and avoid the risk that she would not give her consent to the sale or demand a stiff price for it.

What is more, Atty. Plagata admittedly falsified the jurat of the affidavit of consent. That jurat declared
that Rosario swore to the document and signed it in ZamboangaCity on January 11, 1989 when, as Atty. Plagata
testified, she supposedly signed it about four months earlier at her residence in Paco, Manila on September 15,
1988. While a defective notarization will merely strip the document of its public character and reduce it to a private
instrument, that falsified jurat, taken together with the marks of forgery in the signature, dooms such document as
proof of Rosarios consent to the sale of the land. That the Fuentes spouses honestly relied on the notarized
affidavit as proof of Rosarios consent does not matter. The sale is still void without an authentic consent.
 Second. Contrary to the ruling of the Court of Appeals, the law that applies to this case is the Family
Code, not the Civil Code. Although Tarciano and Rosario got married in 1950, Tarciano sold the conjugal property
to the Fuentes spouses on January 11, 1989, a few months after the Family Code took effect on August 3, 1988.

When Tarciano married Rosario, the Civil Code put in place the system of conjugal partnership of gains on their
property relations. While its Article 165 made Tarciano the sole administrator of the conjugal partnership, Article
166[17] prohibited him from selling commonly owned real property without his wifes consent. Still, if he sold the
same without his wifes consent, the sale is not void but merely voidable. Article 173 gave Rosario the right to have
the sale annulled during the marriage within ten years from the date of the sale. Failing in that, she or her heirs
may demand, after dissolution of the marriage, only the value of the property that Tarciano fraudulently
sold. Thus:

Art. 173. The wife may, during the marriage, and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this right, she or her
heirs, after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.

But, as already stated, the Family Code took effect on August 3, 1988. Its Chapter 4 on Conjugal
Partnership of Gains expressly superseded Title VI, Book I of the Civil Code on Property Relations Between
Husband and Wife.[18] Further, the Family Code provisions were also made to apply to already existing conjugal
partnerships without prejudice to vested rights.[19] Thus:

Art. 105. x x x The provisions of this Chapter shall also apply to conjugal partnerships
of gains already established between spouses before the effectivity of this Code,
without prejudice to vested rights already acquired in accordance with the Civil Code or
other laws, as provided in Article 256. (n)

Consequently, when Tarciano sold the conjugal lot to the Fuentes spouses on January 11, 1989, the law that
governed the disposal of that lot was already the Family Code.

In contrast to Article 173 of the Civil Code, Article 124 of the Family Code does not provide a period within
which the wife who gave no consent may assail her husbands sale of the real property. It simply provides that
without the other spouses written consent or a court order allowing the sale, the same would be void. Article 124
thus provides:
Art. 124. x x x 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. x x x

Under the provisions of the Civil Code governing contracts, a void or inexistent contract has no force and
effect from the very beginning. And this rule applies to contracts that are declared void by positive provision of
law,[20] as in the case of a sale of conjugal property without the other spouses written consent. A void contract is
equivalent to nothing and is absolutely wanting in civil effects. It cannot be validated either by ratification or
prescription.[21]

But, although a void contract has no legal effects even if no action is taken to set it aside, when any of its
terms have been performed, an action to declare its inexistence is necessary to allow restitution of what has been
given under it.[22] This action, according to Article 1410 of the Civil Code does not prescribe. Thus:

Art. 1410. The action or defense for the declaration of the inexistence of a contract
does not prescribe.

Here, the Rocas filed an action against the Fuentes spouses in 1997 for annulment of sale and
reconveyance of the real property that Tarciano sold without their mothers (his wifes) written consent. The passage
of time did not erode the right to bring such an action.

Besides, even assuming that it is the Civil Code that applies to the transaction as the CA held, Article 173
provides that the wife may bring an action for annulment of sale on the ground of lack of spousal consent during
the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought in
1997 fell within 10 years of the January 11, 1989 sale. It did not yet prescribe.
 The Fuentes spouses of course argue that the RTC nullified the sale to them based on fraud and that,
therefore, the applicable prescriptive period should be that which applies to fraudulent transactions, namely, four
years from its discovery. Since notice of the sale may be deemed given to the Rocas when it was registered with
the Registry of Deeds in 1989, their right of action already prescribed in 1993.

But, if there had been a victim of fraud in this case, it would be the Fuentes spouses in that they appeared
to have agreed to buy the property upon an honest belief that Rosarios written consent to the sale was
genuine. They had four years then from the time they learned that her signature had been forged within which to
file an action to annul the sale and get back their money plus damages. They never exercised the right.

If, on the other hand, Rosario had agreed to sign the document of consent upon a false representation
that the property would go to their children, not to strangers, and it turned out that this was not the case, then she
would have four years from the time she discovered the fraud within which to file an action to declare the sale
void. But that is not the case here. Rosario was not a victim of fraud or misrepresentation. Her consent was simply
not obtained at all. She lost nothing since the sale without her written consent was void. Ultimately, the Rocas
ground for annulment is not forgery but the lack of written consent of their mother to the sale. The forgery is
merely evidence of lack of consent.

Third. The Fuentes spouses point out that it was to Rosario, whose consent was not obtained, that the
law gave the right to bring an action to declare void her husbands sale of conjugal land. But here, Rosario died in
1990, the year after the sale. Does this mean that the right to have the sale declared void is forever lost?

The answer is no. As stated above, that sale was void from the beginning. Consequently, the land
remained the property of Tarciano and Rosario despite that sale. When the two died, they passed on the ownership
of the property to their heirs, namely, the Rocas.[23] As lawful owners, the Rocas had the right, under Article 429 of
the Civil Code, to exclude any person from its enjoyment and disposal.

In fairness to the Fuentes spouses, however, they should be entitled, among other things, to recover from
Tarcianos heirs, the Rocas, the P200,000.00 that they paid him, with legal interest until fully paid, chargeable
against his estate.

Further, the Fuentes spouses appear to have acted in good faith in entering the land and building
improvements on it. Atty. Plagata, whom the parties mutually entrusted with closing and documenting the
transaction, represented that he got Rosarios signature on the affidavit of consent. The Fuentes spouses had no
reason to believe that the lawyer had violated his commission and his oath. They had no way of knowing
that Rosario did not come to Zamboanga to give her consent. There is no evidence that they had a premonition
that the requirement of consent presented some difficulty. Indeed, they willingly made a 30 percent down payment
on the selling price months earlier on the assurance that it was forthcoming.

Further, the notarized document appears to have comforted the Fuentes spouses that everything was
already in order when Tarciano executed a deed of absolute sale in their favor on January 11, 1989. In fact, they
paid the balance due him. And, acting on the documents submitted to it, the Register of Deeds of Zamboanga City
issued a new title in the names of the Fuentes spouses. It was only after all these had passed that the spouses
entered the property and built on it. He is deemed a possessor in good faith, said Article 526 of the Civil Code, who
is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.

As possessor in good faith, the Fuentes spouses were under no obligation to pay for their stay on the
property prior to its legal interruption by a final judgment against them.[24] What is more, they are entitled under
Article 448 to indemnity for the improvements they introduced into the property with a right of retention until the
reimbursement is made. Thus:

Art. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in Articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case, he
shall pay reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof. (361a)

The Rocas shall of course have the option, pursuant to Article 546 of the Civil Code, [25] of indemnifying the
Fuentes spouses for the costs of the improvements or paying the increase in value which the property may have
acquired by reason of such improvements.
Eight years later in 1997, the children of Tarciano and Rosario, namely, respondents Conrado G. Roca, Annabelle R.
Joson, and Rose Marie R. Cristobal, together with Tarcianos sister, Pilar R. Malcampo, represented by her son, John
Paul M. Trinidad (collectively, the Rocas), filed an action for annulment of sale and reconveyance of the land
against the Fuentes spouses before the Regional Trial Court (RTC) of Zamboanga City in Civil Case 4707. The
Rocas claimed that the sale to the spouses was void since Tarcianos wife, Rosario, did not give her consent to
it. Her signature on the affidavit of consent had been forged. They thus prayed that the property be reconveyed to
them upon reimbursement of the price that the Fuentes spouses paid Tarciano.[6]

The spouses denied the Rocas allegations. They presented Atty. Plagata who testified that he personally
saw Rosario sign the affidavit at her residence in Paco, Manila, on September 15, 1988. He admitted, however, that
he notarized the document in Zamboanga City four months later on January 11, 1989.[7] All the same, the Fuentes
spouses pointed out that the claim of forgery was personal to Rosario and she alone could invoke it. Besides, the
four-year prescriptive period for nullifying the sale on ground of fraud had already lapsed.

Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. Comparing Rosarios standard
signature on the affidavit with those on various documents she signed, the Rocas expert testified that the
signatures were not written by the same person. Making the same comparison, the spouses expert concluded that
they were.