Not an iota of legality

Joe and Fannie had seven beautiful children. The couple acquired a lot. But since they were Chinese citizens at the time, the property was registered in the name of their aunt, Sulpi.

Years later, Sulpi executed a deed of sale over the property in favor of Joe. In turn, Joe executed allegedly a deed of sale over the property in favor of his common-law-wife, Chin. A new title was issued in Chin’s name.

After Joe’s death, the seven beautiful children discovered that ownership of the property had already been transferred in the name of Chin. They had the purported signature of their father in the deed of sale verified by the Philippine National Police Crime Laboratory, which found the same to be a forgery.

Q: Is the sale of Joe to Chin valid?

A: No. Article 1490. 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.

The proscription against sale of property between spouses applies even to common law relationships. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. The sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects.

Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or purposes is contrary to law, morals, good customs, public order, or public policy are void and inexistent from the very beginning. Article 1352 also provides that: “Contracts without cause, or with unlawful cause, produce no effect whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public order, or public policy.”

Additionally, the law emphatically prohibits the spouses from selling property to each other subject to certain exceptions. Similarly, donations between spouses during marriage are prohibited. And this is so because if transfers or conveyances between spouses were allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in civil law.

It was also designed to prevent the exercise of undue influence by one spouse over the other, as well as to protect the institution of marriage, which is the cornerstone of family law.

The prohibitions apply to a couple living as husband and wife without benefit of marriage, otherwise, “the condition of those who incurred guilt would turn out to be better than those in legal union.” Those provisions are dictated by public interest and their criterion must be imposed upon the will of the parties.

Q: Was a trust relationship created between Joe and Chin considering Articles 1448 and 1450 of the Civil Code?

A: No. Article 1448 provides that “(t) here is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary.

However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.”

Meanwhile Article 1459 of the Civil Code states that “ (i)f the price of a sale of property is loaned or paid by one person for the benefit of another and the conveyance is made to the lender or payor to secure the payment of the debt, a trust arises by operation of law in favor of the person to whom the money is loaned or for whom it is paid. The latter may redeem the property and compel a conveyance thereof to him.

The above provisions cannot be made to apply because Chin’s claim that it was she who provided the purchase price is uncorroborated. Her allegation that she may be considered as the breadwinner of the family and that there was proof that she earned a living do not conclusively clinch her claim.

More importantly, the nullification of the sale is anchored on its illegality per se, it being violative of the above-cited Articles 1352, 1409 and 1490 of the Civil Code. (Source: Chin vs. Goyanko, G.R. No. 165879, November 10, 2006)

The author is the Dean of Lyceum of the Philippines University; chair of the Philippine Association of Law Schools; and founder of Mawis Law Office