The Supreme Court affirmed that the sale of conjugal property requires the consent of both spouses. If one spouse sells without the other’s consent, the sale is void. This protects the rights of both parties in a marriage, ensuring neither can unilaterally dispose of assets acquired during their union. This ruling underscores the importance of verifying spousal consent in property transactions.

The Forged Signature: Unraveling a Conjugal Property Dispute

This case, Titan Construction Corporation v. Manuel A. David, Sr. and Martha S. David, revolves around a disputed sale of conjugal property. Manuel and Martha David, married in 1957, acquired a property in Quezon City. Years later, after a de facto separation, Martha sold the property to Titan Construction without Manuel’s knowledge or consent, relying on a Special Power of Attorney (SPA) purportedly signed by Manuel. Manuel challenged the sale, claiming the SPA was a forgery, leading to a legal battle over the validity of the sale and the protection of conjugal rights. The central question before the court was whether the sale was valid, considering the alleged forged SPA and the lack of spousal consent.

The Civil Code of the Philippines, specifically Article 160, establishes a fundamental principle: all property acquired during a marriage is presumed to belong to the conjugal partnership unless proven otherwise. Article 153 further clarifies that property acquired by onerous title (i.e., through a purchase) during the marriage, using common funds, is conjugal property. These provisions were carried over to the Family Code, with Article 116 explicitly stating that property acquired during marriage is presumed conjugal, regardless of whose name it’s registered under, unless proven otherwise. Titan argued that the property was Martha’s exclusive property, citing Manuel’s alleged lack of financial capacity to contribute to the purchase and Martha’s role in the original acquisition. However, the court, citing Spouses Castro v. Miat, held that Manuel wasn’t required to prove his contribution; the presumption of conjugality stands unless Titan could provide sufficient evidence to the contrary.

Since the property was deemed conjugal, its sale required the consent of both spouses. Article 165 of the Civil Code designates the husband as the administrator of the conjugal partnership, but Article 172 mandates the husband’s consent for the wife to bind the conjugal partnership, except as provided by law. Similarly, Article 124 of the Family Code dictates that disposition of conjugal property requires written consent from both spouses; otherwise, the disposition is void. The absence of Manuel’s consent became a critical point in invalidating the sale, hinging on the validity of the Special Power of Attorney (SPA). The court then proceeded to analyze whether the SPA was valid, ultimately impacting Titan’s claim to the property.

The Regional Trial Court (RTC) determined that the signature on the SPA was not Manuel’s, relying on expert testimony and Manuel’s denial. The RTC pointed out that the genuineness of the SPA was questionable because it lacked Manuel’s residence certificate and wasn’t registered with the Quezon City Register of Deeds, violating Section 64 of Presidential Decree No. 1529. Titan argued that the RTC gave undue weight to the expert testimony and that handwriting analysis isn’t conclusive. However, the court emphasized that its ruling wasn’t solely based on the expert’s testimony but also on Manuel’s direct denial of signing any document authorizing the sale. The court also noted Titan’s initial attempt to seek another handwriting expert’s opinion, which it later withdrew, further undermining its claim.

The court emphasized that factual findings of trial courts, especially regarding witness credibility, are binding and conclusive when affirmed by the Court of Appeals (CA). This underscored the importance of the trial court’s assessment of Manuel’s credibility in denying his signature on the SPA. Despite the notarization of the SPA, the court found defects that undermined its authenticity. The absence of Manuel’s Community Tax Certificate details, coupled with his testimony and the expert’s analysis, provided clear and convincing evidence to overcome the presumption of due execution for notarized documents. Thus, the SPA was deemed spurious and void, further supporting the nullification of the sale.

Even if the SPA were valid, the Court questioned Titan’s good faith in the transaction. The Transfer Certificate of Title (TCT) indicated Martha’s marital status, yet the Deed of Sale omitted this information. Titan’s representative even inquired about Manuel’s absence from the deed, suggesting awareness of potential consent issues. Furthermore, Titan advanced Martha P500,000.00 to redeem the property from a mortgage without proper due diligence, actions that deviated from typical prudent buyer behavior. These circumstances suggested that Titan was not a buyer in good faith, reinforcing the decision to invalidate the sale. Finally, Titan’s belated claim for reimbursement from Martha was deemed procedurally improper. The argument, raised for the first time on appeal, violated Martha’s right to due process, as no cross-claim was filed against her. The court clarified that the decision did not preclude Titan from pursuing a separate action against Martha to recover the purchase price.

FAQs

What was the key issue in this case?	The key issue was whether the sale of conjugal property by one spouse, purportedly authorized by a Special Power of Attorney (SPA), was valid without the other spouse’s genuine consent.
What is conjugal property?	Conjugal property refers to assets acquired by a married couple during their marriage through their combined efforts or funds, governed by specific provisions in the Family Code.
What happens if one spouse sells conjugal property without the other’s consent?	According to Article 124 of the Family Code, the sale is void without the written consent of both spouses, protecting the rights of each party in the marital partnership.
What is a Special Power of Attorney (SPA)?	A Special Power of Attorney (SPA) is a legal document authorizing one person (the agent) to act on behalf of another (the principal) in specific matters.
What is the effect of a forged SPA?	A forged SPA is invalid and has no legal effect, meaning any transaction conducted under it is also void because there was no valid authorization.
What does it mean to be a buyer in good faith?	A buyer in good faith is someone who purchases property without knowledge of any defects in the seller’s title or any claims against the property, entitling them to certain legal protections.
How does the court determine if a party is a buyer in good faith?	The court considers factors like due diligence, awareness of potential issues, and adherence to standard business practices to determine if a buyer acted in good faith.
What is the significance of notarization of a document?	Notarization creates a prima facie presumption that the document was duly executed, but this presumption can be overcome by clear and convincing evidence to the contrary.
Can a party raise a new issue for the first time on appeal?	Generally, no. Issues not raised in the trial court cannot be raised for the first time on appeal, as it deprives the opposing party of the opportunity to present evidence and argument on that issue.

This case reaffirms the necessity of spousal consent in the disposition of conjugal property and emphasizes the importance of verifying the authenticity of legal documents, like a Special Power of Attorney, before engaging in property transactions. It serves as a reminder to exercise due diligence to ensure you are dealing with the rightful owner with legal rights to sell the property. Failure to do so could have significant legal and financial ramifications.

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: TITAN CONSTRUCTION CORPORATION VS. MANUEL A. DAVID, SR. AND MARTHA S. DAVID, G.R. No. 169548, March 15, 2010