HEIRS OF CHRISTINA AYUSTE, PETITIONER, VS. COURT OF APPEALS AND VIENA MALABONGA, RESPONDENTS.

Heirs of Christina Ayuste versus Court of Appeals and Viena Malabonga

The Case

This is a petition for review on certiorari brought by the heirs of Christina Ayuste against the Court of Appeals and Viena Malabonga, arising from a complaint for annulment of sale, cancellation of title, and damages. Christina Ayuste sought to annul the sale of a conjugal house and lot that her husband, Rafael Ayuste, had executed in favor of Viena Malabonga without her consent. The case matters because it fixes the exact remedy and the exact prescriptive period for a wife whose husband disposes of conjugal real property without her consent, and it settles that the sale is voidable, not void, and that the wife's action must be brought during the marriage and within ten years from the transaction.

Procedural History

Christina Ayuste filed her complaint with the Regional Trial Court of Lucena City on March 2, 1990. The trial court rendered judgment on June 20, 1991, declaring the deed of absolute sale null and void, ordering Viena Malabonga to return possession of the house and lot, directing the Register of Deeds to cancel the transfer certificate of title issued in Malabonga's name and to issue a new one in the name of Christina Ayuste and her children, ordering Christina Ayuste to pay Malabonga 258,200 pesos for improvements and maintenance, and ordering Malabonga to pay rents at 2,700 pesos per month from March 1990 until possession is turned over. Both parties appealed. The Court of Appeals, in its decision dated January 23, 1995, reversed the trial court. It held that Christina Ayuste's action was barred by laches because she failed to file it during the existence of the marriage as required by Article 173 of the Civil Code, and it found Malabonga to be a buyer in good faith and for value. The heirs of Christina Ayuste, after her death on November 21, 1995 and their substitution in her stead, elevated the matter to the Supreme Court by petition for certiorari under Rule 45.

Facts

Christina Ayuste married Rafael Ayuste on September 24, 1961. Although the couple resided in Manila, they operated a machine shop in Barangay Iyam, Lucena City, which Rafael managed. To serve as his temporary residence while in Lucena, the couple purchased on August 26, 1982 a parcel of land with an area of 180 square meters, on which a residential house stood, situated at Yale Street, University Village, Barrio Ibabang Dupay, Lucena City, from spouses Pedro and Aida David. A deed of sale was executed and filed with the Register of Deeds of Lucena City, and on October 23, 1983, Transfer Certificate of Title No. T-42972 was issued in the name of Rafael T. Ayuste, married to Christina Ayuste.

On February 27, 1987, Rafael Ayuste executed a deed of absolute sale in favor of Viena Malabonga, selling the parcel of land for 40,000 pesos, which amount he acknowledged having received in the deed. On page 2 of this deed appears the signature of Christina Ayuste below the phrase "With my conformity." The deed was registered with the Register of Deeds of Lucena City on March 5, 1987, and Transfer Certificate of Title No. T-50046 was issued in the name of Viena Malabonga.

Rafael Ayuste died on October 13, 1989. In the course of an inventory of their properties, Christina Ayuste discovered that the title to the Lucena land was missing. She searched for it in her husband's office in Lucena City and learned from his employees about the sale of the house and lot to Viena Malabonga. On March 2, 1990, she filed her complaint, alleging that her signature on the deed of sale was forged and that her husband had sold the property without her knowledge and consent.

Issues

• Whether or not the sale of conjugal real property by the husband without the wife's consent is void or merely voidable.
• Whether or not the wife's action for annulment of that sale, filed after the husband's death although within ten years from the transaction, is barred for having been brought outside the period fixed by law.
• Whether or not the wife's lack of actual knowledge of the sale, because her husband concealed it from her, excuses the late filing of the action.

Applicable Provisions

Article 166 of the Civil Code provides:

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. If she refuses unreasonably to give her consent, the court may compel her to grant the same.

This is the prohibition that Rafael Ayuste violated when he sold the conjugal house and lot without Christina Ayuste's consent.

Article 173 of the Civil Code provides:

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 property fraudulently alienated by the husband.

This is the provision that supplies both the remedy of annulment and the two periods within which it must be exercised, and it is the provision on which the entire ruling turns.

Ruling

On the first issue, the Court held that a sale of real property of the conjugal partnership made by the husband without the consent of his wife is voidable, not void. The Court acknowledged that under Article 166 the husband cannot alienate conjugal real property without the wife's consent, but it pointed to Article 173 as the remedy the law itself provides, and it read that remedy as confirming that the contract is merely voidable. The Court stressed that there is no ambiguity in the wording of the law: where the law speaks in clear and categorical language, there is no room for interpretation, only application. The petitioners had argued that the sale was void under Article 1409 of the Civil Code as a contract expressly prohibited by law; the Court rejected that theory by treating Article 173 as the governing and specific provision.

On the second issue, the Court held that the action for annulment must be brought during the marriage and within ten years from the questioned transaction, and that both periods must concur. The deed of sale was executed on February 27, 1987, and Rafael Ayuste died on October 13, 1989, dissolving the marriage. Christina Ayuste filed her complaint only on March 2, 1990. Although the action was filed within ten years from the transaction, it was not brought during the existence of the marriage. The Court therefore held that the action was barred for having been filed out of time, and it affirmed the Court of Appeals.

On the third issue, the Court held that the wife's actual ignorance of the sale is not material. Registration of the sale with the Register of Deeds constitutes notice to the whole world. Since the deed was registered on March 5, 1987, Christina Ayuste is presumed to have constructive notice of the sale from that date. The purpose of the registration system is to afford a means of publicity so that persons dealing with real property may search the records and thereby acquire security against instruments whose execution has not been revealed to them.

Doctrine

A sale of conjugal real property executed by the husband without the wife's consent is voidable, not void, because Article 173 of the Civil Code supplies the wife's remedy of annulment. The wife's action for annulment must be brought during the marriage and within ten years from the transaction, and these two periods must concur; an action filed after the marriage has been dissolved by the husband's death is barred even if filed within the ten-year period. If the wife fails to exercise the right, she or her heirs may, after the dissolution of the marriage, demand only the value of the property fraudulently alienated. Registration of the deed with the Register of Deeds is constructive notice to the whole world, so the wife's claim that she learned of the sale only after her husband's death does not excuse the delay. For a bar candidate, the rule is stated in one line: the husband's unauthorized sale of conjugal realty is voidable, and the wife's action to annul it must be brought during the marriage and within ten years from the transaction.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, upholding the validity of the sale in favor of Viena Malabonga, with no pronouncement as to costs.

Remember This

Memorize this line: the husband's sale of conjugal realty without the wife's consent is voidable, and the wife's action to annul it must be brought during the marriage and within ten years from the transaction. Examiners use this case to test the distinction between a void and a voidable sale of conjugal property, the concurrence of the two periods under Article 173, and the rule that registration is constructive notice to the whole world.