Void disposition

A husband or wife is prohibited from gratuitously disposing the property acquired during their marriage. The question in this case is whether such prohibition is applicable to properties acquired during a common law relationship or during cohabitation of a man and woman without a valid marriage or under a void marriage.

The property involved here is a 350-square meter lot covered by Transfer Certificate of Title (TCT) No. 7594 registered in the name of Rolly and Mely who have two children, Rica and Rico. Prior to his marriage to Mely, Rolly was married and had several children, one of whom was Joey, who sired a son Jerry.

Twenty years after Rolly and Mely got married, Mely executed a Renunciation and Waiver of Rights (RAWR) in favor of her husband Rolly covering the said lot which was inscribed in the TCT. Then Rolly donated said parcel of land to Jerry without the conformity of Mely. So TCT No. 7594 was cancelled and a new TCT No. 128 59 was issued in the name of Jerry.

Subsequently, Jerry mortgaged said land in favor of Johnny. Later on, Rolly obtained a decision from the Regional Trial Court (RTC) declaring his marriage to Mely void ab initio which became final and executory. Then Rolly died. So, an Extrajudicial Settlement of Estate with Waiver was executed and signed by his legitimate children and compulsory heirs.

Thereafter, Rica filed before the RTC an action for Annulment of the Deed of Donation and title of Jerry, alleging that she is one of the children of the late Rolly and Mely and that the said Deed was executed solely by Rolly on the basis of the RWR executed by her mother Mely, both of which are clearly prejudicial to her interest because it affected her future inheritance or legitime.

In reply, Jerry denied that Rolly’s wife Mely is still part owner of the property and that even if she is part owner, she has no more right thereon when she executed the RWR. Jerry also denied that undue influence was exerted upon Rolly when the latter signed the Deed of Donation.

He also claimed that the RWR and the Deed of Donation do not violate the ban on the gratuitous disposition of the property between husband and wife as the marriage between Rolly and Mely has already been declared void.

The RTC, however, ruled in favor of Rica and annulled both the Renunciation and Waiver of Rights and the Deed of Donation. This decision was affirmed by the Court of Appeals (CA), which ruled that every donation or grant of gratuitous advantage between the spouses during the marriage shall be void.

Jerry, however, appealed said ruling and contended that the lower courts erred in applying Article 89 of the Family Code (FC) which provides in part that “no waiver of rights, interests, shares and effects of the absolute community of property during the marriage can be made except in case of judicial separation of property.” He contended that this Article 89 cannot justify the nullification of Mely’s RWR and Deed of Donation since Mely and Rolly were not validly married.

Jerry cited Article 147 of the FC as the applicable provision, and the rules on co-ownership govern the property acquired during cohabitation or “common law” marriage of Rolly and Mely. So, Jerry argued that the subject property is presumed to have been obtained by their joint efforts work or industry and was owned by them in equal shares pursuant to Article 147 of the FC.

Thus, Jerry contended that the RWR is valid because Rolly and Mely are mere co-owners of the property so either of them could donate or waive their respective shares therein as long as the consent of either partner was obtained.

The Supreme Court (SC),  however, ruled that Jerry is not correct in this regard. According to the SC, while both the CA and the RTC correctly ruled that the RWR is void based on Article 87 of the FC, their reliance on the provision of the Article that “every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void” is incorrect because they erroneously believed that the marriage between Rolly and Mely was valid and subsisting until Rolly’s death.

In this case, the marriage between Rolly and Mely was judicially declared void ab initio, pursuant to Article 36 of the FC. So it is not correct to rule that said marriage is valid and subsisting until Rolly’s death, because it is void from the beginning. Thus, the provision of Article 87 that squarely applies to this case is that which says that “the prohibition shall apply to persons living together as husband and wife without a valid marriage.” Given this express prohibition under Article 87 of the FC, the RWR executed by Mely in favor of Rolly in respect of the subject property is void.

Even assuming that the marriage between Rolly and Mely was valid at the time the RWR was executed and it had valuable and material consideration, it will still be void because the sale between the spouses during their marriage is proscribed by Article 1490 of the Civil Code, which provides that “the husband and wife cannot sell property to each other except: (1) when a separation of property was agreed upon or (2) when there has been judicial separation of property under Article 191.”

To conclude therefore, while the Court finds merit in Jerry’s contention that the lower courts in the present case erred in finding that the property regime between Rolly and Mely was governed by the Absolute Community Property as their marriage subsisted until Rolly died, the Deed of Donation to him of the subject property is nonetheless void as this is prohibited by Article 147 of the Family Code.

So the nullification of the RWR, the Deed of Donation and the new title in the name of Jerry is affirmed (Perez, Jr. vs Perz-Senerpida etc, G.R. 233365, March 24, 2021).