Complete Separation of Property in the Subsequent Marriage

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STATEMENT OF THE CASE

This case involves a dispute between the Heirs of the late Apolinario Caburnay (petitioners) and the Heirs of Teodulo Sison (respondents). The petitioners claim that they entered into a sale agreement with Teodulo Sison regarding a parcel of land, but upon Teodulo’s death, the sale was not completed, and the respondents, after executing an extrajudicial settlement of the estate, transferred the property to Jesus Sison, one of the heirs. The petitioners seek to declare the sale valid, and the property title in Jesus' name null and void, asserting that they had partially paid for the property. Respondents argue that the sale was invalid due to lack of consent from Teodulo's second wife, Perla, and that the action is barred by prescription.

"In a nutshell, the present case involves a husband (Teodulo), who has married twice and has children (petitioners) from the first marriage. After the death of his first wife (Perpetua) and while married to his second wife (Perla), the husband entered into a contract wherein he sold property acquired in his first marriage without the consent of his second wife. Needless to say, the children from the first marriage did not also consent. Is the sale valid or void the Court is asked."

The Parties' Argument:

  • Petitioners’ Argument: They argue that the sale is valid to the extent of Teodulo’s undivided share, and the title should be transferred in their favor for the amount already paid. They assert that Teodulo’s share in the property was his separate property, which he could dispose of without the consent of his second wife, Perla.

  • Respondents’ Argument: They argue that the sale is void due to the lack of consent from Perla, Teodulo’s second wife, as the property was acquired during their marriage, making it conjugal property. They claim that the action is also barred by prescription and that the sale was never formalized by a deed of sale.

Factual Background

The petitioners allege that Teodulo sold a 7,768-square-meter property to Apolinario Caburnay in 1994, with an initial payment and a series of installments. However, Teodulo died before the balance of the sale was paid, and Apolinario's heirs were unable to finalize the transaction. The respondents executed an extrajudicial settlement, transferring the property to Jesus Sison, which led the petitioners to file a suit for specific performance and to nullify the transfer. The Regional Trial Court (RTC) (Lingayen, Pangasinan) dismissed the case, finding the sale void for lack of consent from Teodulo’s first wife, Perpetua. The Court of Appeals (CA) affirmed the RTC’s decision, holding that the property was subject to the absolute community property regime between Teodulo and Perla. The petitioners then filed a Petition for Review on Certiorari before the Supreme Court.

Lower Court Ruling:

The RTC dismissed the complaint for lack of merit, ruling that the sale was void due to the absence of consent from Teodulo’s first wife, Perpetua, as the property was presumed to be part of the conjugal property. The CA upheld the RTC decision, agreeing with respondents that the property belonged to the absolute community between Teodulo and Perla, which required Perla's consent for the sale.

Appellate Court Ruling:

The CA denied the petitioners' appeal and affirmed the RTC’s decision, concluding that the property was governed by the absolute community property regime between Teodulo and Perla, and that there was no evidence of Perla's consent to the sale. The CA ruled that the sale was void, and the petitioners' claim lacked merit.

Issues:

  1. Whether the CA misapplied Article 92 of the Family Code when it ruled that the sale of the property, acquired during the first marriage by the surviving husband (Teodulo), without the consent of the second spouse (Perla), is void.
  2. Whether the CA erred in ignoring the provisions of Articles 92, 103, and 145 of the Family Code, which authorize the surviving spouse to dispose of his share in the conjugal property without the consent of the second spouse.

SC Ruling

The Supreme Court partly granted the petition, ruling that the sale of the property between Teodulo and Apolinario was not entirely void. The Court found that Teodulo could dispose of his undivided share in the property, as it was part of his separate property, particularly after Perpetua’s death. The property relations between Teodulo and Perla were governed by the mandatory regime of complete separation of property under Article 130 of the Family Code, due to the lack of liquidation of the first marriage’s conjugal property.

Expanded Discussion: After the dissolution of Teodulo's marriage to his first wife, Perpetua, the mandatory regime of complete separation of property governed the property relations between Teodulo and his second wife, Perla. This regime applied due to the failure to liquidate the conjugal partnership between Teodulo and Perpetua within the required period, as mandated by the Family Code.

Under Article 130 of the Family Code, the conjugal partnership property must be liquidated within one year from the death of a spouse. If not liquidated, any disposition by the surviving spouse is considered void only to the extent of the co-owner's interest. In this case, since the conjugal property of Teodulo and Perpetua was not liquidated, Article 130 automatically imposed a regime of complete separation of property between Teodulo and Perla, allowing Teodulo to dispose of his share (9/16) in the property, but not the entire property.

As a result of this separation of property, Teodulo was allowed to dispose of his share in the conjugal property without needing Perla’s consent. Specifically, Article 145 of the Family Code provides that, under a complete separation of property regime, "each spouse shall own, dispose of, possess, administer, and enjoy his or her own separate estate, without need of the consent of the other." Thus, Teodulo’s undivided share in the property—his 9/16 portion—was considered his separate property, and he could freely dispose of it without requiring the approval of Perla, his second wife.

This rule is consistent with Article 493 of the Civil Code, which states that a co-owner may sell or dispose of their undivided share in a property, but only to the extent of their interest in the property. Since Teodulo’s undivided share in the subject property was his separate property, he was entitled to dispose of it as he saw fit, without needing the consent of the other co-owners, including Perla. Therefore, Teodulo’s sale of his share to Apolinario was valid as it pertained to his portion of the property, though the sale was not effective concerning the share of the other co-owners.

Legal Basis:

  • Family Code, Article 130: "Upon the termination of the marriage by death, the conjugal partnership property shall be liquidated in the same proceeding for the settlement of the estate of the deceased."
  • Family Code, Article 145: "Each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without need of the consent of the other."
  • Civil Code, Article 493: "Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it... But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership."

The Court emphasized that while the sale between Teodulo and Apolinario was valid to the extent of Teodulo’s undivided share, it was not effective regarding the share of the other co-owners. The Court cited jurisprudence supporting the validity of such sales to the extent of the selling co-owner's interest. Furthermore, the Court clarified that the mandatory regime of complete separation of property applied after the dissolution of the marriage between Teodulo and Perpetua, which allowed Teodulo to dispose of his separate property without needing Perla’s consent.

HEIRS OF THE LATE APOLINARIO CABURNAY, et al. vs. HEIRS OF TEODULO SISON, et al. G.R. No. 230934, December 02, 2020

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