[ G.R. No. 246445, March 02, 2021 ]
SPOUSES EULALIO CUENO AND FLORA BONIFACIO CUENO, PETITIONERS, VS. SPOUSES EPIFANIO AND VERONICA BAUTISTA, SPOUSES RIZALDO AND ANACITA BAUTISTA, SPOUSES DIONILO AND MARY ROSE BAUTISTA, SPOUSES ROEL AND JESSIBEL B. SANSON, AND SPOUSES CALIXTO AND MERCEDITA B. FERNANDO, RESPONDENTS.
CONCURRING OPINION
PERLAS-BERNABE, J.:
I concur.
Pursuant to Article 166, in relation to Article 173 of the New Civil Code, contracts entered into by the husband involving the alienation or encumbrance of real property belonging to the conjugal property without the wife's consent are not null and void but are merely voidable or annullable.
To be sure, Articles 166 and 173 of the New Civil Code respectively read:
Article 166. 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.
Article 173. 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.
Case law instructs that "[a] void or inexistent contract may be defined as one which lacks, absolutely either in fact or in law, one or some of the elements which are essential for its validity. It is one which has no force and effect from the very beginning, as if it had never been entered into; it produces no effect whatsoever either against or in favor of anyone. Quod nullum est nullum producit effectum.1 Article 1409 of the New Civil Code explicitly states that void contracts also cannot be ratified; neither can the right to set up the defense of illegality be waived."2 As such, an action for the declaration of nullity of contract is imprescriptible.3
On the other hand, a voidable contract is one where consent is vitiated by lack of legal capacity of one of the contracting parties, or by mistake, violence, intimidation, undue influence, or fraud. It is valid until annulled. Otherwise stated, a voidable contract is binding on all the contracting parties – meaning that it produces legal effects – until the same is annulled and set aside by a court of law.4
Article 166 of the New Civil Code should be read in conjunction with Article 173 of the same Code which provides for a remedy in favor of the wife of the husband who alienates or encumbers a real property belonging to the conjugal partnership without the former's consent. In particular:
Article 173. 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.
As stated above, the wife's remedy to seek the annulment of a contract whereby a husband alienates or encumbers real property belonging to the conjugal partnership without the wife's consent may only be availed of "during the marriage and within ten 10 years from the transaction questioned." To my mind, the time-bound nature of the remedy under Article 173 (in contrast to an imprescriptible remedy to assail void contracts) demonstrates the contract's voidable character since if an action is not timely instituted within the period provided, the contracting parties' rights and obligations arising from the same, albeit entered into in violation of Article 166 of the New Civil Code, will remain valid and binding. Indeed, the possibility of recognizing the rights and obligations under a contract not assailed within the provided prescriptive period is conceptually incompatible with the nature of a void contract, whereby no legal rights and obligations may be recognized regardless of whatever period has passed.
Moreover, it is well to point out that under Article 173, "[the non-consenting wife] or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband." The legal recompense accorded under this provision is based on the value of the property alienated by the husband. Should the contract of alienation entered in violation of Article 166 be considered null and void, then the law should not have provided for an alternative recompense to the wife which is based on the value of the property subject of such alienation. By allowing the wife to demand the value of property fraudulently alienated by the husband, the contract entered into by the husband and the third-party buyer subsists, which feature is, once more, incompatible with the nature of a contract that is null and void.
At this juncture, it is well to stress that the characterization of an Article 166 contract is limited to marriages celebrated during the effectivity of the New Civil Code provisions on the property relations between spouses,5 i.e., from August 30, 1950 to August 2, 1988. As for marriages celebrated from August 3, 1988 onwards - or during the effectivity of the Family Code – such contracts are explicitly deemed void ab initio, pursuant to Articles 966 and 1247 of the Family Code.
In this case, the records show that the marriage between the husband, Eulalio Cueno (Eulalio), and the wife, Flora Bonifacio Cueno (Flora), was celebrated during the effectivity of the New Civil Code, and that they acquired the subject property in the 1960s. As such, the questioned sale of the subject property falls within the purview of Articles 166 and 173 of the New Civil Code. Since the questioned sale occurred in the 1960s and Flora only filed a complaint in 2008, it is clear that she failed to seek the annulment of the questioned sale entered into by Eulalio within the ten (10)-year period provided for under Article 173 of the same Code. Pursuant thereto, Flora's right of action is already barred by the statute of limitations, and her only remedy is to demand the value of the property alienated by Eulalio after the dissolution of their marriage. Again, the contract, albeit entered into by Eulalio with the buyer, Isidro Bonifacio, in violation of Article 166, remains valid and binding, which therefore negates the conclusion that the same is a void contract.
ACCORDINGLY, I vote to DENY the petition.
Footnotes
1 "That which is a nullity produces no effect." (Spouses Tan v. Bantegui, 510 Phil. 434, 447 (2005), citing Ballentine, Law Dictionary with Pronunciations 1948, p. 1077)
2 Fullido v. Grilli, 781 Phil. 840, 852-853 (2016); citations omitted.
3 Leonardo v. Court of Appeals, 481 Phil. 520, 538 (2004), citing Article 1410 of the Civil Code.
4 See id.; citations omitted.
5 See Articles 118 to 215, Title VI, Book I of the New Civil Code.
6 Article 96 of the Family Code reads:
Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (Emphasis and underscoring supplied)
7 Article 124 of the Family Code reads:
Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (Emphasis and underscoring supplied)
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