196 Heirs of Aguilar-Reyes v Mijares

Disposition and Encumbrance Aug 28, 2003 YNARES-SANTIAGO, J

Under the regime of the Civil Code, the alienation or encumbrance of a conjugal real property requires the
consent of the wife. The absence of such consent renders the entire transaction merely voidable and not
void. The wife may, during the marriage and within ten years from the transaction questioned, bring an action
for the annulment of the contract entered into by her husband without her consent.

FACTS

 Vicente and Ignacia Reyes got married in 1960, and had been separated de facto since 1974.
 1983: Vicente sold the subject property to Sps Mijares without Ignacia’s knowledge.
 Vicente also claimed that Ignacia had died, and that their five minor children were the only heirs to the
subject property.
 He filed a petition for administration and appointment of Guardian. The court then granted him the
guardianship of their children and authorized him to sell the property.
 1984: Ignacia found out about the sale and the misrepresentation of Vicente.
 Ignacia demanded from the Sps Mijares the return of her share of the subject property.
 Due to failure to settle the matter with the Sps Mijares, she filed a complaint for annulment of sale
between the Sps Mijares and Vicente.
 Sps Mijares defense is that they are purchasers in good faith and that the sale was valid because it was
duly approved by the court.
 Vicente’s defense is that he only sold his share of the property.
 RTC rendered a decision declaring the sale of lot void with respect to the share of Ignacia.
o It held that the purchase price of the lot was P110,000.00 and ordered Vicente to return ½
thereof or P55,000.00 to respondent spouses.
 Ignacia filed a motion for modification of the decision praying that the sale be declared void in its
entirety and that the respondents be ordered to reimburse to her the rentals they collected on the
apartments
 Both Ignacia and respondent spouses appealed to CA. Pending the appeal.
o Ignacia died and she was substituted by her compulsory heirs.

RATIO

What is the status of the sale made by the Vicente without the consent of Ignacia?
VOIDABLE. Articles 166 and 173 of the Civil Code were the governing laws at the time the assailed sale
was contracted.

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 property fraudulently alienated
by the husband.

In the case at bar, it is clear that the lot is a conjugal property of Ignacia and Vicente havingbeen
purchased using the conjugal funds of the spouses during the subsistence of their
marriage. Therefore, the sale of said lot to the Mijares spouses, without the knowledge and consent of
Ignacia Reyes, is voidable. The action to annul the sale made on 1983 was filed on 1986 which is within
the prescriptive period under Article 173.

The TC also correctly annulled the sale in its entirety. In Bucoy v. Paulino, 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. 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.
o The rule in the first sentence of Article 173 revokes Baellovs. Villanueva and Coque vs. Navas Sioca,
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 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 161have 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.

The Court also finds that respondent spouses are not purchasers in good faith. They already know
about the discrepancies and irregularities in the death certificate presented by Vicente. The said errors
should have prompted them to question the sale and pertaining documents. The Deed of Sale executed
by Vicente and respondents was annulled. The guilty husband is asked to pay damages to Mijares
spouses and to his children (petitioners).