FACTS:

Corazon is the sister of Virginia’s husband Simeon. Corazon and Simeon have another sibling, Augusto, who predeceased them. Virginia and the heirs of Augusto filed a Complaint for Recovery of Ownership with Declaration of Nullity and/or Alternatively Reconveyance and Damages with Preliminary Injunction against Corazon.

The complaint alleged that Virginia and Simeon, together with Corazon and her husband Felix, acquired the subject properties through a Deed of Cession.

They executed a Deed of Cession in favor of Augusto’s heirs, subject of which is the one-third pro-indiviso portion of the subject properties.

However, allegedly with the use of falsified documents, Corazon was able to have the entire subject properties transferred exclusively to her name, depriving her co-owners Virginia and Augusto’s heirs of their pro-indiviso share, as well as in the produce of the same.

Corazon insisted that only she and Simeon share one-half portion each of the subject properties. She alleged that Simeon sold and conveyed his entire one-half share in the co-owned properties in her favor. Hence, Corazon became the sole owner thereof and consequently, was able to transfer the titles of the same to her name.

During trial, it was established that Simeon and Virginia’s marriage had been on bad terms and they’ve been living separately. The trial court was highly suspicious that Virginia would sign a deed of sale, consenting to her husband’s decision to sell their conjugal assets to Corazon. Virginia vehemently disowned the signature appearing in the Deed of Absolute Sale.

Without the conformity of Virginia, according to the trial court, Simeon cannot alienate or encumber any real property of the conjugal partnership.

The trial court concluded, thus, that the Deed of Absolute Sale, being falsified, is not a valid instrument to transfer the one­ third share of the subject properties.

The trial court rendered a Decision (1) declaring the plaintiffs Virginia as owner of ONE-THIRD (1/3) portion of the subject property, and the heirs of Augusto as owners of ONE-THIRD (1/3) portion of the subject property, (2) cancelling the TCT’s in the name of Corazon, (3) that Corazon reimburse the plaintiffs TWO-THIRDS (2/3) of the produce of the properties, subject matter of this case from the time she appropriated it to herself in 1974 until such time as the 2/3 share are duly delivered to them, and (4) to pay damages in favor of the plaintiffs.

The trial court’s Decision was affirmed in toto by the CA.

 

ISSUE:

(1) Whether or not the parties are co-owners of the subject properties.

(2) Whether or not there was a valid sale between Corazon and Simeon.

(3) If co-ownership of the subject properties exist, whether or not the co-owners are entitled to the recovery of their share in the subject properties.

 

RULING:

The petition is partly meritorious.

(1) The law which governs the instant case is the Old Civil Code, not the Family Code.

Proceeding, thus, to the issue of ownership, We find no reason to depart from the RTC’s ruling as affirmed by the CA.

Augusto’s heirs own one-third pro-indiviso share in the subject properties

Respondents, (Augusto’s heirs) claim one-third of the subject properties.

We find no cogent reason to depart from the the courts a quo‘s findings as to the existence and effectivity of the Deed of Cession giving rights to Augusto’s children over the one-third portion of the subject property. 

Simeon’s heirs, which include Virginia, also own one-third pro-indiviso share in the subject properties

Respondent Virginia’s claim as to the other one-third portion of the subject properties is ultimately anchored upon the Deed of Cession.

We uphold the courts a quo‘s conclusion that one-third portion of the subject properties is indeed part of Simeon and Virginia’s conjugal properties.

In this case, the subject properties, having been acquired during the marriage, are still presumed to belong to Simeon and Virginia’s conjugal properties.

(2) We now proceed to determine the validity of the Deed of Absolute Sale executed by Simeon in favor of Corazon, covering one-half of the subject properties which was his purported share.

As for the one-third portion of the subject properties pertaining to Augusto’s heirs, We are one with the CA in ruling that the Deed of Absolute Sale is void as the said portion is owned by Augusto’s heirs as above-discussed and thus, Simeon had no right to sell the same.

It is basic that the object of a valid sales contract must be owned by the seller. Nemo dat quod non habet, as an ancient Latin maxim says. One cannot give what one does not have.

However, as to the one-third portion commonly-owned by Spouses Simeon and Virginia, Simeon’s alienation of the same through sale without Virginia’s conformity is merely voidable.

Article 166 of the Old Civil Code explicitly requires the consent of the wife before the husband may alienate or encumber any real property of the conjugal partnership except when there is a showing that the wife is incapacitated, under civil interdiction, or in like situations.

Accordingly, without Virginia’s conformity, the Deed of Absolute Sale between Simeon and Corazon purportedly covering one-half of the subject properties is voidable.

(3)

For the share of Augusto’s heirs, the sale of the same is void as the object of such sale, not being owned by the seller, did not exist at the time of the transaction. Being a void contract, thus, the CA correctly ruled that the action to impugn the sale of the same is imprescriptible.

As for the share pertaining to Simeon and Virginia, We must emphasize that the governing law in this case is the Old Civil Code. Under the said law, while the husband is prohibited from selling the commonly-owned real property without his wife’s consent, still, such sale is not void but merely voidable. Article 173 thereof gave Virginia 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 Simeon erroneously sold.

As far as Virginia is concerned, the Old Civil Code applies, and the CA erred in ruling that the subject Deed of Absolute Sale is void for the lack of the wife’s conformity thereto. The 10-year prescriptive period under Article 173 of the Old Civil Code should be applied in this case.

SUMMARY OF THE RULING:

In fine, while We uphold the courts a quo‘s findings that the parties herein are co-owners of the subject properties.

We reverse and set aside the said courts’ ruling, ordering the cancellation of titles of the entire subject properties and the transfer of the two-thirds portion of the same to the respondents.

While Augusto’s heirs are entitled to the recovery of their share in the subject properties, Virginia is only entitled to demand the value of her share therefrom pursuant to Article 173 of the Old Civil Code.