PEOPLE BANK AND TRUST CO., PETITIONER AND APPELLANT, VS. THE REGISTER OF DEEDS FOR THE CITY OF MANILA, RESPONDENT AND APPELLEE.

The undisputed facts of the case may be summarized as follows:

On
October 26, 1933, Dominga Angeles, married to Manuel Sandoval who
resides in Palawan and from whom she lives separate and apart, executed
an instrument entitled “Agreement and Declaration of Trust” in favor of
the Peoples Bank and Trust Co. whereby she conveyed in trust her
paraphernal property consisting of three (3) parcels of land together
with two (2) buildings thereon, situated at Nos. 1989 and 1933 Juan
Luna, Manila, particularly described in transfer certificate of title
No. 21661 issued in her name. The said trust was constituted in order
that the lands would be subdivided into small lots; that said lots
would be sold either for cash or by installments; that the lands would
be sold either for case or by installments; that the trustee would
funds derived from the rents or sale thereof; that the trustee would
grant a loan of P10,000 with which to redeem the mortgage in question;
and that the said trustee would collect the rents to be derived from
said property while the lots remained unsold.

The instrument
was presented to the register of deeds for the City of Manila for
registration, which was denied by the said official. Whereupon the
People Bank and Trust Co. brought the matter in consulta
before the Court of First Instance of Manila, which on January 5, 1934,
sustained the action of the register of deeds and denied the
registration applied for.

The trial court based its decision
on the alleged ground that according to the terms of the contract the
trustee was authorized to collect the fruits of the paraphernal
property while the lots remained unsold or unalienated to other persons
in the manner above stated, and, inasmuch as under the provisions of
articles 1385 and 1401 (3) of the Civil Code such fruits are considered
conjugal partnership property, the management of which corresponds to
the husband, in accordance with article 1412 of the said Code, and said
husband did not intervene in nor give his consent to the instrument in
question, the same is null and void and, therefore, not susceptible of
registration.

The appellant contends that pursuant to the
provisions of article1387 of the Civil Code, as amended by section 1 of
Act No. 3922 of the Philippine Legistrature, the grantor Dominga Angles
did not need marital consent thereto and, therefore, the instrument is
valid and susceptible of registration.

The question raised in
the appeal does not require interpretation nor application of the
provisions of Act No. 3922, amending article 1387 of the Civil Code.
For the purposes of the decision it is taken for granted that, in
accordance with the provisions of articles 1385 and 1401 (3) of the
Civil Code, the fruits of the paraphernal property, which had been
conveyed in trust, belong to the conjugal partnership, the management
of which corresponds exclusively to the husband of the grantor (article
1412).

It should be borne in mind that according to the deed
of trust the grantor neither parts with nor conveys the rents of her
paraphernal property in favor of the trustee but merely authorizes it
to collect them during the time the lots remain unsold. The authority
thus conferred only constitutes a mere act of administration which
article 1384 expressly vents upon the grantor, in the instant case
involving paraphernal property which she has not delivered to her
husband before a notary, for the purpose conferring its management upon
him. The article in question reads as follows:

“ART.
1384. The wife shall have the management of the paraphernal property
unless she has delivered the same to her husband before a notary, for
the purpose of conferring its management upon him.

“In such
cases it shall be the duty of the husband to execute a mortgage for the
value of any personality which may be so delivered to him or otherwise
secure it in the manner prescribed with respect to dowry property.”

If
the grantor is legal adminatrix of the property in question, there can
be no question that she may, as she has done in this case, delegate
such power to other persons. To deny her such right would be tantamount
to converting her from the adminatrix thereof into a mere collector of
rents.

To the wife belongs the management of the fruits of
her paraphernal property, which has not been delivered to her husband
under the formalities prescribed by the law, while such fruits remain
unliquidated, on the ground that they answer for the necessary and
indispensable expenses incurred in the administration and preservation
of the property. Not till then does the husband acquire the right to
claim them for the conjugal partnership of which he is the sole
administrator. Applying this principle to the case under consideration,
it becomes evident that the grantor’s husband cannot claim the fruits
in question for their conjugal partnership until a liquidation thereof
has been made by her.

On the other hand, failure to comply with the requisite prescribed in article 1387 does not render the contract null and void ad initio
but merely voidable, and the right of action which may arise under such
circumstances exclusively belongs to the husband of his heirs.
Wherefore, even granting that such public instrument is defective, it
is, nevertheless, susceptible of registration.

What we have heretofore stated find support in the following commentaries of Manresa:

“Fortunately
there is already a decision of the Supreme Court to that effect. The
doctrine is sufficiently explicit. A married woman, actually living
separate from her husband, leases her paraphernal property, collects
rents and appoints administrators property, collects rents and appoints
adminstrators thereof, without martial consent. The husband claims that
such acts demand his permission as an indispensable requisite. The
trial court absolves the wife and, upon the appeal, it is held, on
November 8, 1898, that the management of paraphernal property conferred
upon the wife by article 1384 of the Civil Code carries with it the
power to enter into contracts regarding the same, subject only to the
limitation contained in article 1387, the wife personally defraying the
expenses incurred therein as a consequence, without prejudice to the
liabilities to which such property is subject, in accordance with the
provisions of article 1385.

“Later, the decision of October
16, 1918, held that the management of the paraphernal property by the
wife should be conducted in accordance with the provisions of article
1384 of the Civil Code, which only differs from the former law in that
for such acts and contracts executed in connection with said management
the wife does not need martial consent. This management should not be
understood as limited by the law merely to gathering fruits and
collecting rents and interest thereon and delivering them to the
husband, for that would be tantamount to converting the wife from an
adminatrix, into a mere collector of rents of the manifold acts
embraced by the administration, and which, on the other hand, is
compatible with the provisions of article 1385.

“Finally,
the decision of January 14, 1928, ratifies this same doctrine and holds
that the prohibition contained in article 1387 cannot, from its very
nature, be interpreted except in a restrictive manner, by reason of
which the wife may legally perform every act not intended to alienate,
mortgage or otherwise encumber her paraphernal property, she being
authorized to execute contracts arising from the administration of an
estate, and consequently to obtain loans, without marital consent, for
the benefit of said property.

“From the foregoing, we may
conclude that, although the Civil Code has not solved this question at
issue explicitly and definitely, the most logical interpretation that
can be given to article 1384, in connection with article 1387, is that
which grants the wife complete freedom in the management of her
paraphernal property and renders marital consent as unnecessary, except
for acts expressly started in articles 1387, 995 and 1053. The
exceptions contained in articles 61 and 1263, although vague and broad
in scope, agree with this solution inasmuch as in the last analysis hey
admit of cases in which a married woman does not need marital consent.
Such broadness leaves enough ground to suppose that the aforesaid cases
include the management granted the wife by article 1384.

* * * * * * *

“The consent of the husband has the same meaning in article 1387 as in
all the other articles of the Code which demand this requisite. It does
not merely fill up any defect in the capacity of a woman to contract
and bind herself. It is a very personal power granted the head of the
family to maintain good order therein, as affirmed by the Registry
Office, or to avoid loss or damages that the conjugal partnership might
suffer without such intervention, as affirmed by the Supreme Court.
(Resolution of January 24, 1898, and decisions of June 27, 1866, and
January 30, 1872.)

* * * * * * *

“Article
62 declares null and void the acts executed by the wife without the
consent of her husband in cases where such consent is a necessary
requisite. However, according to the legal provision just considered,
only the husband and his heir may avoid such acts, which is but logical
and natural, considering the spirit of the legal provision in question.
From the foregoing and applying the Civil Marriage Law and the former
laws which accepted the same doctrine, the Supreme Court, in its
decisions of June 27, 1862, held the acts performed by a married woman
without permission of her husband are null and void but merely
voidable, at the instance of the husband of her heirs, on the ground
that the legal prohibition in question was not established in favor of
third persons but with a different end or purpose, that is, in favor of
the husband whom the law wants to protect from possible damages to the
conjugal partnership of which he is the head.

“After
the Civil Code went into effect, the General Registry Office accepted
the same doctrine and even considered acts and contracts, executed by a
marriage woman without permission of her husband, susceptible of
registration as long as such circumstance was stated in the record, to
serve as notice to third persons who might later contract with regard
to the same property. (Resolutions of November 23, 1892 and August 22,
1894.) It would seem that this doctrine is contradicted by those
established on January 24, 1898, March 29, 1901, and April 21, 1908,
but the principal question raised in the first case was whether or not
the husband could authorize as third person to give such consent, while
in the second and third cases no statement was made to the effect that
the contracts was not registerable, nor much less null and void, but
that the deed was not extended by the notary, who instituted the
appeal, in accordance with the provisions of the law. On March 31,
1898, the General Registry Office reiterated its views in favor of
registration nowithstanding the lack of the requisite of marital
consent.”

Wherefore, the
decision appealed from is hereby reversed, and the register of deeds
for the City of Manila is hereby ordered to register the instrument in
question, upon payment of the corresponding legal fees, without special
pronouncement as to the costs. So ordered.

Malcolm, Villa-Real, Hull, and Goddard, JJ., concur.