VOL. 439, SEPTEMBER 30, 2004
649
Abalos vs. Macatangay, Jr.
*
G.R. No. 155043. September 30, 2004.
ARTURO R. ABALOS, petitioner, vs. DR. GALICANO
S. MACATANGAY, JR., respondent.
Civil Law; Contracts; Elements; Contracts, in general,
require the presence of three essential elements: (1) consent of
the contracting parties; (2) object certain which is the subject
matter of the contract; and (3) cause of the obligation which is
established.—Contracts, in general, require the presence of
three essential elements: (1) consent of the contracting
parties; (2) object certain which is the subject matter of the
contract; and (3) cause of the obligation which is established.
Same; Same; In a contract of sale, the seller must consent
to transfer ownership in exchange for the price, the subject
matter must be determinate, and the price must be certain in
money or its equivalent.—Until the contract is perfected, it
cannot, as an independent source of obligation, serve as a
binding juridical relation. In a contract of sale, the seller
must consent to transfer ownership in exchange for the price,
the subject matter must be determinate, and the price must
be certain in money or its equivalent. Being essentially
consensual, a contract of sale is perfected at the moment
there is a meeting of the minds upon the thing which is the
object of the
_______________
* SECOND DIVISION.
650
650
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
contract and upon the price. However, ownership of the thing
sold shall not be transferred to the vendee until actual or
constructive delivery of the property.
Same; Same; An accepted unilateral promise which
specifies the thing to be sold and the price to be paid, when
coupled with a valuable consideration distinct and separate
from the price, is what may properly be termed a perfected
contract of option.—An accepted unilateral promise which
specifies the thing to be sold and the price to be paid, when
coupled with a valuable consideration distinct and separate
from the price, is what may properly be termed a perfected
contract of option. An option merely grants a privilege to buy
or sell within an agreed time and at a determined price. It is
separate and distinct from that which the parties may enter
into upon the consummation of the option. A perfected
contract of option does not result in the perfection or
consummation of the sale; only when the option is exercised
may a sale be perfected. The option must, however, be
supported by a consideration distinct from the price.
Same; Same; As a rule, the holder of the option, after
accepting the promise and before he exercises his option, is not
bound to buy.—As a rule, the holder of the option, after
accepting the promise and before he exercises his option, is
not bound to buy. He is free either to buy or not to buy later.
In Sanchez v. Rigos we ruled that in an accepted unilateral
promise to sell, the promissor is not bound by his promise
and may, accordingly, withdraw it, since there may be no
valid contract without a cause or consideration. Pending
notice of its withdrawal, his accepted promise partakes of the
nature of an offer to sell which, if acceded or consented to,
results in a perfected contract of sale.
Same; Same; Under the law, a void contract cannot be
ratified and the action or defense for the declaration of the
inexistence of a contract does not prescribe.—The nullity of
the RMOA as a contract of sale emanates not only from lack
of Esther’s consent thereto but also from want of
consideration and absence of respondent’s signature thereon.
Such nullity cannot be obliterated by Esther’s subsequent
confirmation of the putative transaction as expressed in the
Contract to Sell. Under the law, a void contract cannot be
ratified and the action or defense for the declaration of the
inexistence of a contract does not prescribe. A void contract
produces no effect either
651
VOL. 439, SEPTEMBER 30, 2004
651
Abalos vs. Macatangay, Jr.
against or in favor of anyone–it cannot create, modify or
extinguish the juridical relation to which it refers.
Same; Conjugal Partnership; Under the Civil Code, the
husband, as the administrator of the conjugal partnership,
cannot validly alienate or encumber any real property of the
conjugal partnership without the wife’s consent, and vise
versa.—Under the Civil Code, the husband is the
administrator of the conjugal partnership. This right is
clearly granted to him by law. More, the husband is the sole
administrator. The wife is not entitled as of right to joint
administration.
Same; Same; The right of the husband or wife to one-half
of the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of
the marriage, when it is finally determined that, after
settlement of conjugal obligations, there are net assets left
which can be divided between the spouses or their respective
heirs.—It has been held that prior to the liquidation of the
conjugal partnership, the interest of each spouse in the
conjugal assets is inchoate, a mere expectancy, which
constitutes neither a legal nor an equitable estate, and does
not ripen into title until it appears that there are assets in
the community as a result of the liquidation and settlement.
The interest of each spouse is limited to the net remainder or
“remanente liquido” (haber ganancial) resulting from the
liquidation of the affairs of the partnership after its
dissolution. Thus, the right of the husband or wife to one-half
of the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of
the marriage, when it is finally determined that, after
settlement of conjugal obligations, there are net assets left
which can be divided between the spouses or their respective
heirs.
Same; Same; The sale by the husband of property
belonging to the conjugal partnership without the consent of
the wife when there is no showing that the latter is
incapacitated is void ab initio because it is in contravention of
the mandatory requirements of Article 166 of the Civil Code.
—We ruled that the sale by the husband of property
belonging to the conjugal partnership without the consent of
the wife when there is no showing that the latter is
incapacitated is void ab initio because it is in contravention
of the mandatory requirements of Article 166 of the Civil
Code. Since Article 166 of the Civil Code requires the consent
of the wife before the husband may alienate or
652
652
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
encumber any real property of the conjugal partnership, it
follows that acts or transactions executed against this
mandatory provision are void except when the law itself
authorizes their validity.
Same; Same; As an exception, the husband may dispose
of conjugal property without the wife’s consent if such sale is
necessary to answer for conjugal liabilities mentioned in
Articles 161 and 162 of the Civil Code.—As an exception, the
husband may dispose of conjugal property without the wife’s
consent if such sale is necessary to answer for conjugal
liabilities mentioned in Articles 161 and 162 of the Civil
Code. In Tinitigan v. Tinitigan, Sr., the Court ruled that the
husband may sell property belonging to the conjugal
partnership even without the consent of the wife if the sale is
necessary to answer for a big conjugal liability which might
endanger the family’s economic standing. This is one
instance where the wife’s consent is not required and,
impliedly, no judicial intervention is necessary.
Same; Family Code; The Family Code now requires the
written consent of the other spouse, or authority of the court
for the disposition or encumbrance of conjugal partnership
property without which, the disposition or encumbrance shall
be void.—The Family Code has introduced some changes
particularly on the aspect of the administration of the
conjugal partnership. The new law provides that the
administration of the conjugal partnership is now a joint
undertaking of the husband and the wife. In the event that
one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal partnership,
the other spouse may assume sole powers of administration.
However, the power of administration does not include the
power to dispose or encumber property belonging to the
conjugal partnership. In all instances, the present law
specifically requires the written consent of the other spouse,
or authority of the court for the disposition or encumbrance
of conjugal partnership property without which, the
disposition or encumbrance shall be void.
PETITION for review on certiorari of a decision of the
Court of Appeals.
The facts are stated in the opinion of the Court.
Tarriela, Tagao, Ona & Associates for petitioner.
653
VOL. 439, SEPTEMBER 30, 2004
653
Abalos vs. Macatangay, Jr.
Rodolfo A. Espiritu for respondent.
TINGA, J.:
The instant petition seeks a reversal of the Decision of
the Court of Appeals in CA-G.R. CV No. 48355 entitled
“Dr. Galicano S. Macatangay, Jr. v. Arturo R. Abalos
and Esther Palisoc-Abalos,” promulgated on March 14,
2002. The appellate court reversed the trial court’s
decision which dismissed the action for specific
performance filed by respondent, and ordered
petitioner and his wife to execute in favor of herein
respondent a deed of sale over the subject property.
Spouses Arturo and Esther Abalos are the
registered owners of a parcel of land with
improvements located at Azucena St., Makati City
consisting of about three hundred twenty-seven (327)
square meters, covered by Transfer Certificate of Title
(TCT) No. 145316 of the Registry of Deeds of Makati.
Armed with a Special Power of Attorney dated June
2, 1988, purportedly issued by his wife, Arturo
executed a Receipt and Memorandum of Agreement
(RMOA) dated October 17, 1989, in favor of
respondent, binding himself to sell to respondent the
subject property and not to offer the same to any other
party within thirty (30) days from date. Arturo
acknowledged receipt of a check from respondent in the
amount of Five Thousand Pesos (P5,000.00),
representing earnest money for the subject property,
the amount of which would be deducted from the
purchase price of One Million Three Hundred Three
Hundred Thousand Pesos (P1,300,000.00). Further, the
RMOA stated that full payment would be effected as
soon as possession of the property shall have been
turned over to respondent.
Subsequently, Arturo’s wife, Esther, executed a
Special Power of Attorney dated October 25, 1989,
appointing her sister, Bernadette Ramos, to act for and
in her behalf relative to the transfer of the property to
respondent. Ostensibly, a marital squabble was
brewing between Arturo and Esther at the time and to
protect his interest, respondent caused the
654
654
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
annotation of his adverse claim on the title of the
spouses to the property on November 14, 1989.
On November 16, 1989, respondent sent a letter to
Arturo and Esther informing them of his readiness and
willingness to pay the full amount of the purchase
price. The letter contained a demand upon the spouses
to comply with their obligation to turn over possession
of the property to him. On the same date, Esther,
through her attorney-in-fact, executed in favor of
respondent, a Contract to Sell the property to the
extent of her conjugal interest therein for the sum of
six hundred fifty thousand pesos (P650,000.00) less the
sum already received by her and Arturo. Esther agreed
to surrender possession of the property to respondent
within twenty (20) days from November 16, 1989,
while the latter promised to pay the balance of the
purchase price in the amount of one million two
hundred ninety thousand pesos (P1,290,000.00) after
being placed in possession of the property. Esther also
obligated herself to execute and deliver to respondent a
deed of absolute sale upon full payment.
In a letter dated December 7, 1989, respondent
informed the spouses that he had set aside the amount
of One Million Two Hundred Ninety Thousand Pesos
(P1,290,000.00) as evidenced by Citibank Check No.
278107 as full payment of the purchase price. He
reiterated his demand upon them to comply with their
obligation to turn over possession of the property.
Arturo and Esther failed to deliver the property which
prompted respondent to cause the annotation of
another adverse claim on TCT No. 145316. On January
12, 1990, respondent filed a complaint for specific
performance with damages against petitioners. Arturo
filed his answer to the complaint while his wife was
declared in default.
The Regional Trial Court (RTC) dismissed the
complaint for specific performance. It ruled that the
Special Power of Attorney (SPA) ostensibly issued by
Esther in favor of Arturo was void as it was falsified.
Hence, the court concluded that the SPA could not
have authorized Arturo to sell the property
655
VOL. 439, SEPTEMBER 30, 2004
655
Abalos vs. Macatangay, Jr.
to respondent. The trial court also noted that the check
issued by respondent to cover the earnest money was
dishonored due to insufficiency of funds and while it
was replaced with another check by respondent, there
is no showing that the second check was issued as
payment for the earnest money on the property.
On appeal taken by respondent, the Court of
Appeals reversed the decision of the trial court. It
ruled that the SPA in favor of Arturo, assuming that it
was void, cannot affect the transaction between Esther
and respondent. The appellate court ratiocinated that
it was by virtue of the SPA executed by Esther, in
favor of her sister, that the sale of the property to
respondent was effected. On the other hand, the
appellate court considered the RMOA executed by
Arturo in favor of respondent valid to effect the sale of
Arturo’s conjugal share in the property.
Dissatisfied with the appellate court’s disposition of
the case, petitioner seeks a reversal of its decision
alleging that:
I.
The Court of Appeals committed serious and manifest error
when it decided on the appeal without affording petitioner
his right to due process.
II.
The Court of Appeals committed serious and manifest
error in reversing and setting aside the findings of fact by the
trial court.
III.
The Court of Appeals erred in ruling that a contract to sell
is a contract of sale, and in ordering petitioner to execute a
registrable form
of deed of sale over the property in favor of
1
respondent.
_______________
1 Rollo, pp. 21-22.
656
656
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
Petitioner contends that he was not personally served
with copies of summons, pleadings, and processes in
the appeal proceedings nor was he given an
opportunity to submit an appellee’s brief. He alleges
that his counsel was in the United States from 1994 to
June 2000, and he never received any news or
communication from him after the proceedings in the
trial court were terminated. Petitioner submits that he
was denied due process because he was not informed of
the appeal proceedings, nor given the chance to have
legal representation before the appellate court.
We are not convinced. The essence of due process is
an opportunity to be heard. Petitioner’s failure to
participate in the appeal proceedings is not due to a
cause imputable to the appellate court but because of
petitioner’s own neglect in ascertaining the status of
his case. Petitioner’s counsel is equally negligent in
failing to inform his client about the recent
developments in the appeal proceedings. Settled is the
rule that a party is bound by
the conduct, negligence
2
and mistakes of his counsel. Thus, petitioner’s plea of
denial of due process is downright baseless.
Petitioner also blames the appellate court for
setting aside the factual findings of the trial court and
argues that factual findings of the trial court are given
much weight and respect when supported by
substantial evidence. He asserts that the sale between
him and respondent is void for lack of consent because
the SPA purportedly executed by his wife Esther is a
forgery and therefore, he could not have validly sold
the subject property to respondent.
Next, petitioner theorizes that the RMOA he
executed in favor of respondent was not perfected
because the check representing the earnest money was
dishonored. He adds that there is no evidence on
record that the second check issued by
_______________
2 Heirs of Elias Lorilla v. Court of Appeals, 368
Phil. 638; 330
SCRA 429 (2000).
657
VOL. 439, SEPTEMBER 30, 2004
657
Abalos vs. Macatangay, Jr.
respondent was intended to replace the first check
representing payment of earnest money.
Respondent admits that the subject property is coowned by petitioner and his wife, but he objects to the
allegations in the petition bearing a relation to the
supposed date of the marriage of the vendors. He
contends that the alleged date of marriage between
petitioner and his wife is a new factual issue which
was not raised nor established in the court a quo.
Respondent claims that there is no basis to annul the
sale freely and voluntarily entered into by the husband
and the wife.
The focal issue in the instant petition is whether
petitioner may be compelled to convey the property to
respondent under the terms of the RMOA and the
Contract to Sell. At bottom, the resolution of the issue
entails the ascertainment of the contractual nature of
the two documents and the status of the contracts
contained therein.
Contracts, in general, require the presence of three
essential elements: (1) consent of the contracting
parties; (2) object certain which is the subject matter of
the contract;3 and (3) cause of the obligation which is
established.
Until the contract is perfected, it cannot, as an
independent source
of obligation, serve as a binding
4
juridical relation. In a contract of sale, the seller must
consent to transfer ownership in exchange for the
price, the subject matter must be determinate, and the5
price must be certain in money or its equivalent.
Being essentially consensual, a contract of sale is
perfected at the moment there is a meeting of the
minds upon the
_______________
3
ART. 1318, CIVIL CODE OF THE PHILIPPINES; Santos v.
Heirs of Jose Mariano and Erlinda Mariano-Villanueva, G.R. No.
143325, October 24, 2000, 344 SCRA 284.
4 Ang Yu v. Asuncion, G.R. No. 109125, December 2, 1994, 238
SCRA 602.
5 Heirs of Juan San Andres v. Rodriguez, 388 Phil. 571; 332 SCRA
769 (2000).
658
658
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
thing 6which is the object of the contract and upon the
price. However, ownership of the thing sold shall not
be transferred to the vendee 7 until actual or
constructive delivery of the property.
On the other hand, an accepted unilateral promise
which specifies the thing to be sold and the price to be
paid, when coupled with a valuable consideration
distinct and separate from the price, is what 8may
properly be termed a perfected contract of option. An
option merely grants a privilege to buy or sell within
an agreed time and at a determined price. It is
separate and distinct from that which the parties may
9
enter into upon the consummation of the option. A
perfected contract of option does not result in the
perfection or consummation of the sale; only
when the
10
option is exercised may a sale be perfected. The option
must, however, be supported
by a consideration
11
distinct from the price.
Perusing the RMOA, it signifies a unilateral offer of
Arturo to sell the property to respondent for a price
certain within a period of thirty days. The RMOA does
not impose upon respondent an obligation to buy
petitioner’s property, as in fact it does not even bear
his signature thereon. It is quite clear that after the
lapse of the thirty-day period, without respondent
having exercised his option, Arturo is free to sell the
property to another. This shows that the intent of
Arturo is merely to grant respondent the privilege to
buy the property within the period therein stated.
There is nothing in the
_______________
6 Laforteza v. Machuca, 389 Phil. 167; 333 SCRA 643 (2000).
7 Heirs
of Quirico Seraspi and Purificacion Seraspi v. Court of
Appeals, 387 Phil. 306; 331 SCRA 293 (2000).
8 Ang Yu v. Asuncion, supra note 4.
9
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.,
332 Phil. 525; 264 SCRA 483 (1996).
10 Cavite Development Bank v. Lim, 381 Phil. 355; 324 SCRA 346
(2000).
11 De la Cavada v. Diaz, 37 Phil. 982 (1918), Beaumont v. Prieto,
41 Phil. 670 (1916).
659
VOL. 439, SEPTEMBER 30, 2004
659
Abalos vs. Macatangay, Jr.
RMOA which indicates that Arturo agreed therein to
transfer ownership of the land which is an essential
element in a contract of sale. Unfortunately, the option
is not binding upon the promissory since it is not
12
supported by a consideration distinct from the price.
As a rule, the holder of the option, after accepting
the promise and before he exercises his option, is not
bound to buy. He is free either
to buy or not to buy
13
later. In Sanchez v. Rigos we ruled that in an
accepted unilateral promise to sell, the promissor is
not bound by his promise and may, accordingly,
withdraw it, since there may be no valid contract
without a cause or consideration. Pending notice of its
withdrawal, his accepted promise partakes of the
nature of an offer to sell which, if acceded or consented
to, results in a perfected contract of sale.
Even conceding for the nonce that respondent had
accepted the offer within the period stated and, as a
consequence, a bilateral contract of purchase and sale
was perfected, the outcome would be the same. To
benefit from such situation, respondent would have to
pay or at least make a valid tender of payment of the
price for only then could he exact
compliance with the
14
undertaking of the other party. This respondent failed
to do. By his own admission, he merely informed
respondent spouses of his readiness and willingness to
pay. The fact that he had set aside a check in the
amount of One Million Two Hundred Ninety Thousand
Pesos (P1,290,000.00) representing the balance of the
purchase price could not help his cause. Settled is the
rule that tender of payment must be made in legal
tender. A check is not legal tender, and therefore
15
cannot constitute a valid tender of payment. Not
having
_______________
12 Atkins, Kroll and Co., Inc. v. Cua Hian Tek, 102 Phil. 948.
13 150-A Phil. 714; 45 SCRA 368 (1972).
14 Article 1191, CIVIL CODE.
15 Cebu
International Finance Corporation v. Court of Appeals,
374 Phil. 844; 316 SCRA 488 [1999]; Far East Bank & Trust Com
660
660
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
made a valid tender of payment, respondent’s action
for specific performance must fail.
With regard to the payment of Five Thousand Pesos
(P5,000.00), the Court is of the view that the amount is
not earnest money as the term is understood in Article
1482 which signifies proof of the perfection of the
contract of sale, but merely a guarantee that
respondent is really interested to buy the property. It
is not the giving of earnest money, but the proof of the
concurrence of all the essential elements of the
contract of sale
which establishes the existence of a
16
perfected sale. No reservation of ownership on the
part of Arturo is necessary since, as previously stated,
he has never agreed to transfer ownership of the
property to respondent.
Granting for the sake of argument that the RMOA
is a contract of sale, the same would still be void not
only for want of consideration and absence of
respondent’s signature thereon, but also for lack of
Esther’s conformity thereto. Quite glaring is the
absence of the signature of Esther in the RMOA, which
proves that she did not give her consent to the
transaction initiated by Arturo. The husband cannot
alienate any real property17of the conjugal partnership
without the wife’s consent.
However, it was the Contract to Sell executed by
Esther through her attorney-in-fact which the Court of
Appeals made full use of. Holding that the contract is
valid, the appellate court explained that while Esther
did not authorize Arturo to sell the property, her
execution of the SPA authorizing her sister to sell the
land to respondent clearly shows her intention to
convey her interest in favor of respondent. In effect,
the court declared that the lack of Esther’s consent to
the sale
_______________
pany v. Diaz Realty, Inc., G.R. No. 38588, August 23, 2001, 363
SCRA 659.
16 San Miguel Properties Philippines, Inc. v. Huang, 391 Phil. 636;
336 SCRA 737 (2000).
17 Article 166, CIVIL CODE.
661
VOL. 439, SEPTEMBER 30, 2004
661
Abalos vs. Macatangay, Jr.
made by Arturo was cured by her subsequent
conveyance of her interest in the property through her
attorney-in-fact.
We do not share the ruling.
The nullity of the RMOA as a contract of sale
emanates not only from lack of Esther’s consent
thereto but also from want of consideration and
absence of respondent’s signature thereon. Such nullity
cannot be obliterated by Esther’s subsequent
confirmation of the putative transaction as expressed
in the Contract to 18Sell. Under the law, a void contract
cannot be ratified and the action or defense for the
declaration
of the inexistence of a contract does not
19
prescribe. A void contract produces no effect either
against or in favor of anyone–it cannot create, modify
20
or extinguish the juridical relation to which it refers.
True, in the Contract to Sell, Esther made reference
to the earlier RMOA executed by Arturo in favor of
respondent. However, the RMOA which Arturo signed
is different from the deed which Esther executed
through her attorney-in-fact. For one, the first is
sought to be enforced as a contract of sale while the
second is purportedly a contract to sell only. For
another, the terms and conditions as to the issuance of
title and delivery of possession are divergent.
The congruence of the wills of the spouses is
essential for the valid disposition of conjugal property.
Where the conveyance is contained in the same
document which bears the conformity of both husband
and wife, there could be no question on the validity of
the transaction. But when there are two (2) documents
on which the signatures of the spouses separately
appear, textual concordance of the documents is
indispensable. Hence, in this case where the wife’s
putative consent to
_______________
18 Article 1409, CIVIL CODE.
19 Article 1410, CIVIL CODE; Santos v. Santos, G.R. No. 133895,
October 2, 2001, 366 SCRA 395.
20 Gochan v. Young, G.R. No. 131889, March 12, 2001, 354 SCRA
207.
662
662
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
the sale of conjugal property appears in a separate
document which does not, however, contain the same
terms and conditions as in the first document signed
by the husband, a valid transaction could not have
arisen.
Quite a bit of elucidation on the conjugal
partnership of gains is in order.
Arturo and Esther appear to have been married
before the effectivity of the Family Code. There being
no indication that they have adopted a different
property regime, their property relations would
automatically be governed
by the regime of conjugal
21
partnership of gains. The subject land which had been
admittedly acquired during the marriage of
the
22
spouses forms part of their conjugal partnership.
Under the Civil Code, the husband is the
administrator of the conjugal partnership.
This right is
23
clearly granted to him by law. More, the husband is
the sole administrator. The 24wife is not entitled as of
right to joint administration.
The husband, even if he is statutorily designated as
administrator of the conjugal partnership, cannot
validly alienate or encumber any real property of the
25
conjugal partnership without the wife’s consent.
Similarly, the wife cannot dispose of any property
belonging to the conjugal partnership without the
conformity of the husband. The law is explicit that the
wife cannot bind the conjugal partnership without26the
husband’s consent, except in cases provided by law.
More significantly, it has been held that prior to the
liquidation of the conjugal partnership, the interest of
each spouse in the conjugal assets is inchoate, a mere
expectancy, which
_______________
21 ART. 119, CIVIL CODE.
22 ART. 160, CIVIL CODE.
23 ART. 165, CIVIL CODE.
24 Ysasi v. Hon. Fernandez, 132 Phil. 526; 23 SCRA 1079 (1968).
25 ART. 166, CIVIL CODE.
26 ART. 172, CIVIL CODE.
663
VOL. 439, SEPTEMBER 30, 2004
663
Abalos vs. Macatangay, Jr.
constitutes neither a legal nor an equitable estate, and
does not ripen into title until it appears that there are
assets in the community as a result of the liquidation
and settlement. The interest of each spouse is limited
to the net remainder or “remanente liquido” (haber
ganancial) resulting from the liquidation of
the affairs
27
of the partnership after its dissolution. Thus, the
right of the husband or wife to one-half of the conjugal
assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after
dissolution of the marriage, when it is finally
determined that, after settlement of conjugal
obligations, there are net assets left which can be
28
divided between the spouses or their respective heirs.
In not a few cases, we ruled that the sale by the
husband of property belonging to the conjugal
partnership without the consent of the wife when there
is no showing that the latter is incapacitated is void ab
initio because it is in contravention of the mandatory
29
requirements of Article 166 of the Civil Code. Since
Article 166 of the Civil Code requires the consent of the
wife before the husband may alienate or encumber any
real property of the conjugal partnership, it follows
that acts or transactions executed against this
mandatory provision are void30 except when the law
itself authorizes their validity.
Quite recently, in San Juan Structural
and Steel
31
Fabricators, Inc. v. Court of Appeals, we ruled that
neither spouse could alienate in favor of another, his or
her interest in the partnership or in any property
belonging to it, or ask for partition of the properties
before the partnership itself had been
_______________
27 Nable Jose v. Nable Jose, 41 Phil. 713 (1916); Manuel v. Losano,
41 Phil. 855 (1918).
28 Quintos de Ansaldo v. Sheriff of Manila, 64 Phil. 115 (1937).
29 Nicolas v. Court of Appeals, No. L-37631, October 12, 1987, 154
SCRA 635; Garcia v. Court of Appeals, 215 Phil. 380; 130 SCRA 433
(1984); Tolentino v. Cardenas, 123 Phil. 517; 16 SCRA 720 (1966).
30 ART. 5, CIVIL CODE.
31 357 Phil. 631; 296 SCRA 631 (1998).
664
664
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
legally dissolved. Nonetheless, alienation of the share
of each spouse in the conjugal partnership could be had
after separation of property of the spouses during the
marriage had been judicially decreed, upon their
32
petition for any of the causes specified in33 Article 191
of the Civil Code in relation to Article 214 thereof.
As an exception, the husband may dispose of
conjugal property without the wife’s consent if such
sale is necessary to answer for conjugal liabilities
mentioned in Articles 161 and
_______________
32 ART. 191. The husband or the wife may ask for the separation
of property, and it shall be decreed when the spouse of the petitioner
has been sentenced to a penalty which carries with it civil
interdiction, or has been declared absent, or when legal separation
has been granted.
In case of abuse of powers of administration of the conjugal
partnership property by the husband, or in case of abandonment by
the husband, separation of property may also be ordered by the
court, according to the provisions of Articles 167 and 178, No. 3.
In all these cases, it is sufficient to present the final judgment
which has been entered against the guilty or absent spouse.
The husband and the wife may agree upon the dissolution of the
conjugal partnership during the marriage, subject to judicial
approval. All the creditors of the husband and of the wife, as well as
of the conjugal partnership, shall be notified of any petition for
judicial approval of the voluntary dissolution of the conjugal
partnership, so that any such creditors may appear at the hearing to
safeguard his interests. Upon approval of the petition for dissolution
of the conjugal partnership, the court shall take such measures as
may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of
Articles 214 and 215 shall apply. The provisions of this Code
concerning the effect of partition stated in Articles 498 to 501 shall
be applicable.
33
ART. 214. Each spouse shall own, dispose of, possess,
administer and enjoy his or her own separate estate, without the
consent of the other. All earnings from any profession, business or
industry shall likewise belong to each spouse.
665
VOL. 439, SEPTEMBER 30, 2004
665
Abalos vs. Macatangay, Jr.
34
35
162 of the Civil Code. In Tinitigan v. Tinitigan, Sr.,
the Court ruled that the husband may sell property
belonging to the conjugal partnership even without the
consent of the wife if the sale is necessary to answer
for a big conjugal liability which might endanger the
family’s economic standing. This is one instance where
the wife’s consent is not required and, impliedly, no
judicial intervention is necessary.
Significantly, the Family Code has introduced some
changes particularly on the aspect of the
administration of the conjugal partnership. The new
law provides that the administration of the conjugal
partnership is now a joint under_______________
34 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. 162. The value of what is donated or promised to the
common children by the husband, only for securing their future or
the finishing of a career, or by both spouses through a common
agreement shall also be charged to the conjugal partnership, when
they have not stipulated that it is to be satisfied from the property of
one of them, in whole or in part.
35 No. L- 45418, October 30, 1980, 100 SCRA 619.
666
666
SUPREME COURT REPORTS ANNOTATED
Abalos vs. Macatangay, Jr.
taking of the husband and the wife. In the event that
one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal
partnership, the other spouse may assume sole powers
of
administration.
However,
the
power
of
administration does not include the power to dispose or
encumber 36property belonging to the conjugal
partnership.
In all instances, the present law
specifically requires the written consent of the other
spouse, or authority of the court for the disposition or
encumbrance of conjugal partnership property without
37
which, the disposition or encumbrance shall be void.
Inescapably, herein petitioner’s action for specific
performance must fail. Even on the supposition that
the parties only disposed of their respective shares in
the property, the sale, assuming that it exists, is still
void for as previously stated, the right of the husband
or the wife to one-half of the conjugal assets does not
vest until the liquidation of the conjugal partnership.
Nemo dat qui non habet. No one can give what he has
not.
WHEREFORE, the appealed Decision is hereby
REVERSED and SET ASIDE. The complaint in Civil
Case No. 90-106 of the Regional Trial Court of Makati
is ordered DISMISSED. No pronouncement as to costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez and
Callejo, Sr., JJ., concur.
Chico-Nazario, J., On Leave.
Judgment
dismissed.
reversed
and
set
aside,
complaint
Note.—Even granting that the wife actually
participated in negotiating for the sale of the
properties, her written con_______________
36 ART. 124, FAMILY CODE OF THE PHILIPPINES.
37 Ibid.
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VOL. 439, SEPTEMBER 30, 2004
667
Allied Domecq Phil., Inc. vs. Villon
sent to the sale is required by law for its validity.
Being merely aware of a transaction is not consent.
(Jader-Manalo vs. Camaisa, 374 SCRA 498 [2002])
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