MELANIA A. ROXAS, PETITIONER, VS. THE HON. COURT OF APPEALS AND ANTONIO M. CAYETANO, RESPONDENTS.

The only issue before Us is whether or not a husband, as the administrator
of the conjugal partnership, may legally enter into a contract of lease involving conjugal real property
without the knowledge and consent of the wife.

According to the Decision* rendered
by the respondent Court of Appeals, the pertinent facts of the case as alleged in plaintiff-petitioner’s complaint indicate:

“1.    That
plaintiff is of legal age, married
but living separately from husband, one of the defendants herein and presently
residing at No. 4 Ambrocia St., Quezon City; while defendant Antonio S. Roxas
is likewise of legal age and living separately from his wife, plaintiff herein,
with residence at No. 950 Quirino Highway, Novaliches, Quezon City where he may
be served with summons; and defendant Antonio M. Cayetano is of legal age and residing
at No. 28 Mariano Olondriz Street, BF Homes, Paranaque, Metro Manila where he
may be served with summons;

“2.    That only recently, plaintiff discovered that her estranged
husband, defendant Antonio S. Roxas, had entered into a contract of lease with defendant
Antonio M. Cayetano sometime on March 30, 1987 covering a portion of their
conjugal lot situated at 854 Quirino Highway, Novaliches, Quezon  City, described in T.C.T. No. 378197 (formerly
T.C.T. No. 23881) of the Land Registry for Quezon City without her previous
knowledge, much less her marital consent; xerox copy of which lease contract is
hereto attached as Annex ‘A’, and made an integral part hereof.

“3.    That on the same lot, plaintiff had planned to put up her flea
market with at least twenty (20) stalls and mini-mart for grocery and dry goods
items for which she had filed an application for the corresponding Mayor’s
Permit and Municipal License which had been approved since 1986, but when she
attempted to renew it for 1986, the same was disapproved last month due to the
complaint lodged by defendant Antonio M. Cayetano whose application for renewal
of Mayor’s Permit and License for the same business of putting up a flea
market, had been allegedly earlier approved;

“4.    That for the planning and initial construction of plaintiff’s
project to put up her own business of flea market and mini-mart grocery and wet
and dry stores which she had intended to operate partly by herself and lease
the rest of the twenty (20) stalls thereon, she had spent some P135,000.00 for
the said construction, including materials and labor, where she had expected to
earn as daily net income in the minimum amount of P500.00 daily;

“5.    That due to the illegal lease contract
entered into between the herein defendants and the resultant unlawful
deprivation of plaintiff from operating her own legitimate business on the same
lot of which she is a conjugal owner, plaintiff has been compelled to seek
redress and ventilate her grievance to the court for which she has to engage
the services of counsel with whom she agreed to pay as and for attorney’s fees
the sum of P10,000.00; plus the amount equivalent to 20% of whatever damages
may be awarded to her in addition to the sum of P500.00 per appearance in
court.

xxx                             xxx                               xxx

xxx                             xxx                               xxx

“Dated July 31, 1989 defendant Antonio M. Cayetano moved to
dismiss the complaint on the sole ground that the complaint states no cause of
action, to which an Opposition was filed by plaintiff (now petitioner herein),
while defendant Antonio S. Roxas, estranged husband of plaintiff?petitioner,
filed an answer.

“Confronted with the private respondent’s Motion to Dismiss,
on August 16, 1989, respondent Judge resolved said Motion by dismissing
plaintiff-petitioner’s complaint in its Order dated August 16, 1989, the dispositive portion of which
reads, as follows:

‘It is said that the test of sufficiency of the cause of action is whether admitting the facts alleged
to be true, the court could render a valid judgment in accordance with the
prayer in the complaint.  After examining
the material allegations in the complaint, the Court finds that the complaint
failed to satisfy the test of sufficiency.

‘WHEREFORE, the
complaint is dismissed for failure to state a sufficient cause of action.

‘IT IS SO ORDERED.’ (p. 2 Order, dated August 16, 1989).

“Plaintiff-petitioner filed a Motion for Reconsideration,
which was denied by respondent Judge in its Order dated September 29,
1989.” (Decision of Court of Appeals, pp. 1-4; Rollo, Annex ‘A’, pp. 26-29)

Petitioner directly
appealed the Decision of the lower court to the Supreme Court.

On November 27, 1989, the
Second Division of this Court referred this case to the Court of Appeals for
“proper determination and disposition.”

Respondent Court of
Appeals rendered judgment affirming in toto the Order of the
trial court.

Hence, this petition.

Under the New Civil Code
(NCC) “Art. 165.  The husband is the
administrator of the conjugal partnership,” in view of the fact that the
husband is principally responsible for the support of the wife and the rest of
the family.  If the conjugal partnership
does not have enough assets, it is the husband’s capital that is responsible
for such support, not the paraphernal property. 
Responsibility should carry authority with it.

The husband is   not an  ordinary
administrator, for while a mere administrator has no right to dispose of, sell, or
otherwise alienate the property being administered, the husband can do
so in certain cases allowed by law.  He
is not required by law to render an accounting. 
Acts done under administration do not need the prior consent of the
wife.

However, administration does not include acts of ownership.  For while the husband can administer the
conjugal assets unhampered, he cannot alienate or encumber the conjugal realty.  Thus, under Art. 166 of NCC, “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 rule prevents
abuse on the part of the husband, and guarantees the rights of the wife, who is
partly responsible for the acquisition of the property, particularly the real
property.  Contracts entered into by the
husband in violation
of this prohibition are voidable and subject to annulment at the
instance of the aggrieved wife.  (Art.
173 of the Civil Code)

As stated in Black’s Law Dictionary, the word
“alienation” means “the transfer of the property and possession
of lands, tenements, or other things from one person to another x x x.  The act by which the title to real estate is
voluntarily assigned by one person to another and accepted by the latter, in
the form prescribed by law.  Cf. In re Enrhardt, U.S.D.C., 19F. 2d 406,
407 x x x x.” While encumbrance “has been defined to be every right
to, or interest in, the land
which may subsist in third persons, to the diminution of the value of the land,
but consistent with the passing of the fee by the conveyance; any (act) that
impairs the use or transfer of property or real estate x x x.” (42 C.J.S.,
p. 549).

The pivotal issue in this case is whether or not a lease is an
encumbrance and/or alienation within the scope of Art. 166 of the New Civil Code.

Under
Art. 1643 of the New Civil Code “In the lease of things, one of the
parties binds himself to give to another the enjoyment or use of a thing for a
price certain, and for a period which may be definite or indefinite.  However, no lease for more than ninety-nine
years shall be valid.” Under the law, lease is a grant of use and
possession:  it is not only a grant of
possession as opined by the Court of
Appeals.  The right to possess does not
always include the right to use.  For
while the bailee in the contract of deposit holds the property in trust, he is
not granted by law the right to make use of the property in deposit.

In the contract of lease, the lessor transfers his right of use
in favor of the lessee.  The lessor’s
right of use is impaired, therein.  He
may even be ejected by the lessee if the lessor uses the leased realty.  Therefore, lease is a burden on the land, it
is an encumbrance on the
land.  The opinion of the Court of
Appeals that lease is not an encumbrance is not supported by law.  The concept of encumbrance includes lease,
thus “an encumbrance is sometimes construed broadly to include not only
liens such as mortgages and taxes, but also attachment, LEASES, inchoate dower
rights, water rights, easements, and other RESTRICTIONS on USE.”
(Capitalization is Ours) (533 Pacific Reporter [second series] 9, 12).

Moreover, lease is not only an encumbrance but also a
“qualified alienation, with the lessee becoming, for all legal intents and
purposes, and subject to its terms, the owner of the thing affected by the
lease.” (51 C C.J.S., p. 522)

Thus, the joinder of the wife, although unnecessary for an oral
lease of conjugal realty which does not exceed one year in duration, is
required in a lease of conjugal realty for a period of more than one year, such
a lease being considered a conveyance and encumbrance within the provisions of
the Civil Code requiring the joinder of the wife in the instrument by which real
property is conveyed or encumbered (See also 41 C.J.S., p. 1149).  In case the wife’s consent is not secured by
the husband as required by law, the wife has the remedy of filing an action for
the annulment of the contract.  Art. 173
of the Civil Code states “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 x x x.”

In the case at bar, the allegation in paragraph 2 of the
complaint, indicates that petitioner’s estranged husband, defendant Antonio S.
Roxas had entered into a contract of lease with defendant Antonio M. Cayetano
without her marital consent being
secured as required by law under Art. 166 of the Civil Code.  Petitioner, therefore, has a cause of action
under Art. 173 to file a case for annulment of the contract of lease entered
into without her consent.  Petitioner has
a cause of action not only against her husband but also against the lessee,
Antonio M. Cayetano, who is a party to the contract of lease.

PREMISES CONSIDERED, the decision of the Court of
Appeals is hereby SET ASIDE and this case is hereby REMANDED to the Regional
Trial Court for further proceedings.

SO ORDERED.

Melencio-Herrera, (Chairman), Padilla, Sarmiento, and Regalado, JJ., concur.

* Penned by Justice Jorge S.
Imperial, and concurred in by Justices Reynato S. Puno and Artemon D. Luna