On closing the sale of conjugal properties | Inquirer Business
Property rules

On closing the sale of conjugal properties

/ 05:25 AM November 05, 2022

(Conclusion)

ALEJO v. Spouses Cortez, et al. is another case that deals with the disposal or encumbrance of conjugal properties, pursuant to the Family Code.

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In this case, Spouses Jorge and Jacinta Leonardo are the registered owners of a parcel of land. Jorge’s father, Ricardo, approached his sister, Dolores Alejo, to negotiate its sale. Afterwards, Jacinta and Dolores executed a Kasunduan on this sale, in which Dolores shall pay a down payment and the balance of the purchase price in two installments.

Dolores paid the down payment and the first installment on the balance, upon which she was allowed to possess the subject land and introduce improvements thereon. Nevertheless, in his letters to Dolores, Jorge said that the Kasunduan had been executed without his knowledge and consent, and that Jacinta retracted her consent because of Dolores’ failure to comply with her obligations. Moreover, Jorge demanded that Dolores pay the remaining balance of the purchase price, failure of which shall cause its increase.

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This situation escalated to Jorge destroying the water pump and disconnecting the electricity at Dolores’ house. Dolores then offered to pay the remaining balance, which Jorge refused to accept and had instead filed cases for ejectment and annulment of sale, reconveyance and recovery of possession against her.

Pending the resolution of these cases, Spouses Leonardo sold their land to Spouses Ernesto Cortez and San Pedro. This constrained Dolores to file before the Regional Trial Court (RTC) the instant case for annulment of deed of sale and damages against Spouses Cortez and Leonardo.

The RTC ruled in favor of Dolores, declaring her as the rightful owner of the land by virtue of the Kasunduan. According to the RTC, while despite not providing his written consent to the Kasunduan, Jorge was deemed to have acquiesced and accepted it when he demanded Dolores to fulfill her obligations thereunder and allowed her to possess the land.

Upon appeal, the Court of Appeals had set aside the RTC’s findings. It found that the Kasunduan was void for lack of Jorge’s consent to, and acceptance of the terms.

To be sure, by imposing a new period within which Dolores was to pay the remaining balance and increasing the purchase price, Jorge qualifiedly accepted the Kasunduan. This qualified acceptance is tantamount to a counter-offer and thus, a rejection of the original offer.

Nevertheless, it found that Dolores was a possessor in good faith and was thus entitled to reimbursement for the useful improvements introduced on the land or to the increase in the value, at the option of Spouses Leonardo.

Dolores then filed before the Supreme Court a petition for review to assail the Court of Appeals’ findings. The Supreme Court denied her petition, declaring, among others, that any alienation or encumbrance of the conjugal property without the spouse’s written consent is void, pursuant to Article 124 of the Family Code. In this case, the Kasunduan was undeniably executed and signed by Jacinta alone, rendering it void.

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Nevertheless, pursuant to the same legal provision, the void Kasunduan still constitutes as a continuing offer from Jacinta and Dolores, and that Jorge had the option of either accepting or rejecting it before it was withdrawn by Jacinta, Dolores, or both.

In this regard, the Supreme Court upheld the Court of Appeals’ finding that Jorge’s acts only constituted his qualified acceptance of the terms of the Kasunduan. To be sure, Jorge’s letters to Dolores showed his outright and express repudiation of the Kasunduan, then eventually his counter-offer on the purchase price and the date of payment of the balance thereof.

According to the Supreme Court, Jorge’s counter-offer cannot be construed as evidence of his acceptance of the terms of the Kasunduan. It emphasized its previous rulings that where the spouse’s putative consent to the sale of the conjugal property appears in a separate document which does not contain the same terms as in the first document signed by the other spouse, a valid transaction could not have arisen.

Jorge’s letters or alleged participation in the negotiations for the sale of the land to Dolores cannot likewise be construed as ratification of the Kasunduan, considering that void contracts cannot be ratified under the law. The Family Code requires nothing less than a spouse’s written consent to the sale of conjugal property by the other spouse for its validity.

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TAGS: Business, column, conjugal property, property, Property Rules
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