MARIA B. CHING, PETITIONER, VS. JOSEPH C. GOYANKO, JR., EVELYN GOYANKO, JERRY GOYANKO, IMELDA GOYANKO, JULIUS GOYANKO, MARY ELLEN GOYANKO AND JESS GOYANKO, RESPONDENTS.

Ching versus Goyanko

The Case

This is a petition for review brought by Maria Ching against the children of her common-law husband, Joseph Goyanko, Senior. The children sued to recover a parcel of land in Cebu City that their father had conveyed to Ching, his mistress, while his marriage to their mother was still subsisting. The case matters because it settles a question every reviewee must be able to answer cold: may a man sell conjugal property to his concubine, and if he does, what is the effect of that sale? The Supreme Court answers that such a conveyance is void from the beginning, and that the prohibition against sales between spouses reaches even couples living together without the benefit of marriage.

Procedural History

The children of Joseph Goyanko, Senior filed a complaint for recovery of property and damages with the Regional Trial Court of Cebu City. They prayed that the deed of sale in favor of Ching be nullified, together with the transfer certificate of title issued in her name, and that a new title be issued in their father's name. The trial court dismissed the complaint. It found the signature of the father on the deed to be genuine, preferred the testimony of the notary public over the two document examiners, and held that the Torrens title in Ching's name was indefeasible and could not be attacked collaterally.

The children appealed to the Court of Appeals. The appellate court reversed the trial court. It declared the deed of sale and the transfer certificate of title null and void, holding that the property was conjugal and that the sale by a husband to his concubine was contrary to morals and public policy. Ching then came to the Supreme Court by petition for review, assigning grave errors on the part of the Court of Appeals.

Facts

Joseph Goyanko and Epifania dela Cruz were married on December 30, 1947, and had seven children, who are the respondents in this case. The respondents claimed that in 1961 their parents acquired a 661 square meter property on F. Cabahug Street in Cebu City, but because the parents were Chinese citizens at the time, the property was registered in the name of their aunt, Sulpicia Ventura.

On May 1, 1993, Sulpicia executed a deed of sale over the property in favor of Goyanko. A few months later, on October 12, 1993, Goyanko executed a deed of sale over the same property in favor of Maria Ching, his common-law wife. A transfer certificate of title was then issued in Ching's name.

Goyanko died on March 11, 1996. After his death, his children discovered that ownership had already been transferred to Ching. They had their father's purported signature on the deed of sale verified by the Philippine National Police Crime Laboratory, which found the signature to be a forgery. Ching defended herself by claiming that she was the actual owner because it was her money that paid the purchase price, and she presented the notary public who testified that Goyanko appeared before him and signed the document.

Issues

• Whether or not the Court of Appeals erred in applying the prohibition against conveyances between legitimate and common-law spouses to the sale of the subject property to Ching.
• Whether or not an implied trust under the Civil Code could validly arise between the common-law spouses, such that the conveyance to Ching as trustee would not violate the prohibition.
• Whether or not the respondents should be allowed to abandon their original theory of forgery and shift to the theory that the sale is contrary to public policy.

Applicable Provisions

Article 1352 of the Civil Code provides:

Contracts without cause, or with unlawful cause, produce no effect whatever. The cause is unlawful if it is contrary to law, morals, good customs, public order or public policy.

This is the provision that makes the cause of the sale unlawful, because the buyer was the seller's concubine.

Article 1409 of the Civil Code provides:

The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction; (4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.

This provision supplies the consequence: the sale is inexistent and void from the beginning, and cannot be ratified.

Article 1490 of the Civil Code provides:

The husband and wife cannot sell property to each other, except: (1) When a separation of property was agreed upon in the marriage settlements; or (2) When there has been a judicial separation of property under Article 191.

This is the prohibition whose policy the Court extends to common-law relationships.

Ruling

On the first issue, the Court held that the Court of Appeals did not err. The proscription against sales of property between spouses applies even to common-law relationships. The Court relied on its earlier ruling in Calimlim-Canullas versus Fortun, where a sale by a husband to his concubine after abandoning his family was held null and void for being contrary to morals and public policy. The Court explained that the prohibition exists because transfers between spouses during the marriage would destroy the system of conjugal partnership, and because it prevents undue influence by one spouse over the other. The prohibition applies to a couple living as husband and wife without the benefit of marriage, otherwise, as the Court put it, the condition of those who incurred guilt would turn out to be better than those in legal union. Since the conveyance was made by Goyanko in favor of his common-law wife, it was null and void.

On the second issue, the Court was not persuaded by Ching's argument that an implied trust arose between Goyanko as trustee and herself as beneficiary. Her testimony that she provided the purchase price was uncorroborated. That she may have been the breadwinner of the family, and that there was proof she earned a living, did not conclusively clinch her claim.

On the third issue, the Court likewise ruled against Ching. As a general rule, a party may not freely and substantially change the theory of the case, so as not to put the other party at an undue disadvantage. But here Ching was not denied the chance to refute the allegations against her, because the nullification of the sale rested on its illegality per se, as violative of Articles 1352, 1409 and 1490 of the Civil Code.

Doctrine

A sale of property by a husband to his concubine or common-law wife is void from the beginning, because its cause is contrary to morals and public policy under Article 1352, and it is an inexistent contract under Article 1409 that cannot be ratified. The prohibition in Article 1490 against sales between spouses extends to couples living together without the benefit of marriage, on the reasoning that the condition of those who incurred guilt must not turn out to be better than those in legal union. The policy behind the prohibition is to protect the conjugal partnership, to prevent undue influence by one spouse over the other, and to safeguard the institution of marriage and the stability of the family. A claim of implied trust between common-law spouses will not defeat the prohibition where the claim that the beneficiary paid the purchase price is uncorroborated.

Disposition

The petition was denied for lack of merit, with costs against the petitioner, so the Court of Appeals decision nullifying the deed of sale and the transfer certificate of title stood.

Remember This

Memorize the line that the condition of those who incurred guilt would turn out to be better than those in legal union, for that is the reason the ban on sales between spouses reaches common-law couples. Examiners use this case to test Article 1490 of the Civil Code, the void nature of a sale to a concubine under Articles 1352 and 1409, and the rule against changing one's theory on appeal.