The Supreme Court clarified that while a contract deemed void due to lack of spousal consent cannot be enforced, it can still serve as evidence to determine what each party provided, ensuring fairness and preventing unjust enrichment. This means that even if a sale of conjugal property is invalidated because one spouse didn’t consent, the court can still look at the sale document to decide how much money should be returned. This protects both parties involved, ensuring that neither is unfairly disadvantaged when a deal falls apart. The decision underscores the principle that courts will strive to restore equity, even when a contract is unenforceable.

Forged Signatures and Faulty Sales: Who Bears the Brunt of a Bad Bargain?

In the case of Tomas P. Tan, Jr. v. Jose G. Hosana, the central issue revolved around a piece of conjugal property sold by Milagros Hosana to Tomas Tan, Jr. without the explicit consent of her husband, Jose. The sale was facilitated through a Special Power of Attorney (SPA), which Jose later claimed to be forged. When Jose returned from working in Japan, he discovered that Milagros had sold their house and lot to Tomas. He immediately filed a complaint to annul the sale, cancel the title transfer, and seek reconveyance of the property. Tomas, on the other hand, argued that he was a buyer in good faith and for value, relying on the SPA presented by Milagros.

The Regional Trial Court (RTC) ruled in favor of Jose, declaring the SPA and the subsequent sale null and void. Tomas appealed to the Court of Appeals (CA), which affirmed the RTC’s decision but modified the judgment by ordering Jose and Milagros to reimburse Tomas the amount of P200,000.00, representing the purchase price stated in the deed of sale. Tomas then elevated the case to the Supreme Court, contesting the amount of reimbursement. He claimed he had actually paid P700,000.00 for the property, not the P200,000.00 stated in the voided deed of sale. This discrepancy formed the crux of the appeal before the Supreme Court.

The Supreme Court framed the primary legal questions as whether the deed of sale could be used as a basis for determining the consideration paid, and whether Tomas’ testimony was sufficient to prove the actual purchase price. The Court emphasized that factual questions, such as the actual amount paid, are generally not within its purview in a petition for review on certiorari. The Court acknowledged exceptions to this rule, such as when the lower court’s findings are based on speculation or misappreciation of facts. However, the Court found that none of these exceptions applied in this case.

Building on this principle, the Court underscored the burden of proof in civil cases. The party making allegations must prove them by a preponderance of evidence. Tomas bore the burden of proving that he paid P700,000.00 for the property. According to the court, the CA correctly found that Tomas had not provided sufficient evidence to substantiate his claim. The Court stated that “[i]n civil cases, the basic rule is that the party making allegations has the burden of proving them by a preponderance of evidence.” The Court then cited Ramos v. Obispo, G.R. No. 193804, February 27, 2013, 692 SCRA 240, 248.

Regarding the admissibility of the void deed of sale as evidence, the Court clarified the distinction between the force and effect of a void contract and its admissibility as evidence. The Court noted that “[w]hile the terms and provisions of a void contract cannot be enforced since it is deemed inexistent, it does not preclude the admissibility of the contract as evidence to prove matters that occurred in the course of executing the contract, i.e., what each party has given in the execution of the contract.” The Court held that the deed of sale could be used to ascertain the truthfulness of the consideration stated and its actual payment, not to enforce its terms.

Furthermore, the Court addressed Tomas’ argument that the deed of sale was not specifically offered to prove the actual consideration. The Court pointed out that Tomas himself had offered the deed of sale to prove its execution and the regularity of the sale. The Court stated, “The offer of the deed of sale to prove its regularity necessarily allowed the lower courts to consider the terms written therein to determine whether all the essential elements for a valid contract of sale are present, including the consideration of the sale.” This effectively meant that the lower courts were within their rights to consider the consideration in the Deed of Sale.

The Supreme Court emphasized that the notarized deed of sale is a public document and serves as prima facie evidence of the facts stated within it. The Court further cited Sps. Santos v. Sps. Lumbao, G.R. No. 169129, March 28, 2007, 519 SCRA 408, 426. Because Tomas failed to present sufficient evidence to rebut the stated consideration of P200,000.00, the Court upheld the CA’s decision. The Court determined that the P200,000.00 stated in the contract was the figure that should be used to offset unjust enrichment.

The ruling highlights that while a contract may be void, the principle of unjust enrichment dictates that parties should be restored to their original positions. As the Supreme Court emphasized, unjust enrichment exists “when a person unjustly retains a benefit at the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity, and good conscience.” Because of this, the Court affirmed that Tomas was to be reimbursed the original amount in the Deed of Sale.

FAQs

What was the key issue in this case?	The key issue was whether a void contract of sale could be used to determine the amount of reimbursement due to the buyer when the sale was invalidated due to lack of spousal consent.
Why was the original sale declared void?	The sale was declared void because the property was conjugal, and the husband’s consent was not validly obtained; his signature on the Special Power of Attorney was allegedly forged.
What is ‘unjust enrichment’ and how did it apply here?	Unjust enrichment occurs when someone benefits unfairly at another’s expense. In this case, Jose had to return the purchase price to Tomas to prevent him from unfairly retaining the benefit of the sale.
What did Tomas claim he actually paid for the property?	Tomas claimed he paid P700,000.00 for the property, despite the deed of sale stating the purchase price as P200,000.00.
Why did the court only order reimbursement of P200,000.00?	The court ordered reimbursement of P200,000.00 because Tomas failed to provide sufficient evidence to prove that he actually paid P700,000.00.
Can a void contract ever be used as evidence in court?	Yes, a void contract can be admitted as evidence to prove facts that occurred during its execution, such as the amount of consideration paid, even if the contract itself is unenforceable.
What is ‘prima facie evidence’?	Prima facie evidence is evidence that is sufficient to establish a fact unless rebutted. In this case, the notarized deed of sale was prima facie evidence of the purchase price.
Who has the burden of proving payment in a civil case?	The party claiming to have made a payment has the burden of proving it. Tomas, in this case, had the burden of proving he paid P700,000.00.

In conclusion, the Supreme Court’s decision in Tan v. Hosana underscores the importance of spousal consent in the sale of conjugal property and clarifies the role of void contracts as evidence in preventing unjust enrichment. The ruling provides guidance on the burden of proof in civil cases and the admissibility of evidence, ensuring fairness and equity in property disputes.

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: TOMAS P. TAN, JR. VS. JOSE G. HOSANA, G.R. No. 190846, February 03, 2016