In cases prior to the Family Code’s effectivity, a husband’s alienation or encumbrance of conjugal property without the wife’s consent is not void, but merely voidable. This means the contract remains valid unless the wife takes legal action to annul it within a specific period. This ruling clarifies the rights of spouses regarding conjugal property and highlights the importance of timely legal action.

Brother’s Exchange: Can a Contract Without a Wife’s Signature Bind Conjugal Property?

This case, Villaranda v. Villaranda, arose from a Deed of Exchange between two brothers, Vicente and Honorio Villaranda. Vicente agreed to transfer his 64.22-square-meter share in a Divisoria property to Honorio in exchange for a 500-square-meter portion of Honorio’s property in Macasandig. Years after the deed’s execution, Honorio, joined by his wife Ana Maria, filed a case for specific performance, compelling Vicente to comply with the exchange. The central legal question revolved around the validity and enforceability of this Deed of Exchange, particularly because Ana Maria did not sign the agreement.

The resolution of this case hinged significantly on determining which set of laws applied. The Deed of Exchange was executed in 1976, prior to the effectivity of the Family Code in 1988. The Supreme Court held that the provisions of the Civil Code, not the Family Code, governed the transaction. Article 166 of the Civil Code states that the husband cannot alienate or encumber any real property of the conjugal partnership without the wife’s consent. However, this is qualified by Article 173, which grants the wife the right to seek annulment of the contract within ten years from the transaction.

“Article 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. x x x”

“Article 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.”

Building on this framework, the Court emphasized that the absence of the wife’s consent does not render the contract void ab initio, but merely voidable. Since Ana Maria did not file an action for annulment within ten years from the execution of the Deed, her right to do so had already prescribed. Therefore, the contract remained valid and enforceable. The Court distinguished this case from others where the wife herself was seeking the annulment. Vicente, as a third party, could not invoke the lack of consent to invalidate the agreement.

The petitioner, Vicente, also argued that the Deed of Exchange was never perfected because the specific 500-square-meter portion of the Macasandig property was not clearly identified. The Supreme Court dismissed this argument because it was raised for the first time on appeal. It is a settled rule that issues not brought before the lower courts cannot be raised at a later stage, except in certain circumstances, such as lack of jurisdiction or matters of public policy, none of which were present in this case. Therefore, the Court declined to consider this new argument.

Moreover, the court underscored the principle that laws are generally applied prospectively unless there is an express or implied intent for retroactive application. Given that the Family Code came into effect after the Deed of Exchange was executed, its provisions regarding spousal consent to property alienation were not applicable. Thus, the case was correctly decided based on the provisions of the Civil Code.

In essence, the Supreme Court affirmed the Court of Appeals’ decision, ordering Vicente to reconvey the Divisoria property to Honorio and to allow Vicente to choose his 500-square-meter portion of the Macasandig property. The decision highlights the importance of understanding the applicable laws at the time of the transaction and the significance of taking timely legal action to protect one’s rights.

FAQs

What was the central issue in this case?	The main issue was whether a Deed of Exchange of conjugal property, executed without the wife’s signature before the Family Code’s effectivity, was valid and enforceable.
Which law applied to the Deed of Exchange?	The Civil Code, specifically Articles 166 and 173, applied because the Deed was executed in 1976, prior to the effectivity of the Family Code.
What is the effect of the wife’s lack of consent under the Civil Code?	Under the Civil Code, the husband’s alienation of conjugal property without the wife’s consent is not void, but merely voidable.
What is the prescriptive period for the wife to annul the contract?	The wife has ten years from the transaction to file an action for annulment based on lack of consent.
Can a third party question the validity of the contract based on the lack of the wife’s consent?	No, the legal prohibition against disposition of conjugal property without the other spouse’s consent is for the benefit of the spouse, not third parties.
Why was the petitioner’s argument about the indeterminate object of the contract not considered?	The argument was raised for the first time on appeal and did not fall under any exceptions that would allow the court to consider it at that stage.
What was the final ruling of the Supreme Court?	The Supreme Court affirmed the Court of Appeals’ decision, upholding the validity and enforceability of the Deed of Exchange.
What does “voidable” mean in this context?	A voidable contract is valid unless and until it is annulled by a court due to a defect, such as lack of consent from one of the parties involved.

This case emphasizes the significance of understanding the legal landscape at the time a transaction occurs, especially concerning property rights within a marriage. It further highlights the critical importance of taking timely legal action to protect one’s interests, as the failure to do so may result in the loss of certain rights and remedies.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Vicente G. Villaranda v. Spouses Honorio G. Villaranda and Ana Maria Y. Villaranda, G.R. No. 153447, February 23, 2004