In Ko v. Aramburo, the Supreme Court clarified the intricacies of property ownership within marriages governed by the Old Civil Code, specifically concerning the sale of conjugal property without spousal consent. The Court held that while a husband cannot validly sell conjugal property without his wife’s consent, such a sale is not void but merely voidable, subject to a prescriptive period for annulment. This decision underscores the importance of understanding the legal framework in place at the time of property acquisition and the rights of each spouse in managing and disposing of marital assets.

Can a Forged Signature Nullify a Property Sale? Unraveling the Aramburo Family Dispute

The case revolves around seven parcels of land in Tabaco City, Albay, originally acquired by Spouses Simeon and Virginia Aramburo, along with Spouses Felix and Corazon Ko, from Spouses Eusebio and Epifania Casaul in 1970. A subsequent Deed of Cession was executed, granting a one-third pro-indiviso share of the properties to the heirs of Augusto Aramburo. However, Corazon Ko later consolidated the titles under her name, leading to a legal battle initiated by Virginia Aramburo and Augusto’s heirs, who claimed deprivation of their rightful shares. The dispute escalated over the validity of a Deed of Absolute Sale, purportedly signed by Virginia, conveying Simeon’s share to Corazon, which Virginia alleged was a forgery.

The central legal question before the Supreme Court was whether the Court of Appeals (CA) correctly affirmed the Regional Trial Court’s (RTC) decision declaring the parties as co-owners of the subject properties and whether the titles could be nullified and transferred to the parties according to their respective portions. This required a careful examination of property rights under the Old Civil Code, particularly concerning conjugal property and the effect of a sale made without the wife’s consent.

The Supreme Court began by emphasizing that the Old Civil Code, not the Family Code, governed the case because the relevant events occurred before the Family Code’s enactment in 1988. Under the Old Civil Code, specifically Article 160, property acquired during marriage is presumed to belong to the conjugal partnership unless proven otherwise. This presumption places the burden of proof on the party asserting exclusive ownership to provide strong, clear, and convincing evidence.

The Court affirmed the lower courts’ findings that Augusto’s heirs owned a one-third pro-indiviso share in the subject properties, based on the 1970 Deed of Cession. The petitioners’ argument that this deed was never implemented was rejected, as the Court found no reason to overturn the factual findings of the RTC and CA, which were supported by Corazon’s own testimony that she administered the properties on behalf of Augusto’s heirs. The Court emphasized the binding nature of factual findings by lower courts unless there is a clear showing of abuse, arbitrariness, or capriciousness.

Building on this principle, the Court then addressed Virginia Aramburo’s claim to another one-third portion of the properties. The petitioners argued that Virginia’s name on the Deed of Cession was merely descriptive of Simeon’s marital status, and that Simeon’s share was his exclusive property. However, the Court upheld the conclusion that this portion was indeed part of the conjugal properties, as it was acquired during the marriage and no sufficient evidence was presented to prove its exclusive character.

Article 160 of the Old Civil Code states: “All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.”

This legal presumption reinforces the idea that any asset acquired during the marriage is jointly owned, unless there is compelling evidence to the contrary. The Court found the petitioners’ evidence lacking in this regard. Even the registration of property under one spouse’s name does not negate its conjugal nature; the critical factor is when the property was acquired.

The Court then turned to the validity of the 1974 Deed of Absolute Sale, through which Simeon purportedly sold his share to Corazon. The Court deemed the sale of Augusto’s heirs’ one-third share void because Simeon had no right to sell property he did not own. It is a fundamental principle that one cannot transfer ownership of something one does not possess. As the maxim goes, “Nemo dat quod non habet,” meaning “no one gives what he doesn’t have.”

However, the alienation of the one-third portion commonly owned by Spouses Simeon and Virginia presented a different scenario. The Court clarified that under Article 166 of the Old Civil Code, such a sale without the wife’s consent is not void but merely voidable. This distinction is crucial because it affects the prescriptive period within which the sale can be challenged.

The Court acknowledged the established fact that Virginia’s signature on the Deed of Absolute Sale was a forgery, as determined by the NBI. This finding, coupled with the strained marital relationship between Simeon and Virginia at the time of the sale, further supported the conclusion that Virginia did not consent to the transaction. The fact that Simeon was living with Corazon in Tabaco City while Virginia resided in Manila raised further doubts about the validity of the sale.

However, because Virginia failed to initiate an action for annulment within the ten-year period prescribed by Article 173 of the Old Civil Code, her right to annul the sale had prescribed. Article 173 states that:

“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…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.”

This provision highlights the limited time frame within which a wife could challenge her husband’s unauthorized transactions under the Old Civil Code. After this period, her recourse is limited to claiming the value of the property.

The Court clarified the distinction between void and voidable contracts in the context of prescription. For the share of Augusto’s heirs, the sale was void from the beginning because Simeon did not own it. Actions to challenge void contracts are imprescriptible under Article 1410 of the New Civil Code, which states: “The action or defense for the declaration of the inexistence of a contract does not prescribe.”

In contrast, the sale of Simeon and Virginia’s conjugal share was merely voidable, subject to the prescriptive period under the Old Civil Code. Since Virginia’s action was filed beyond this period, the Court concluded that she could only demand the value of her share, not the annulment of the sale.

Ultimately, the Supreme Court affirmed the co-ownership of the subject properties, recognizing Augusto’s heirs’ right to recover their share. However, it modified the lower courts’ ruling by stating that Virginia was only entitled to the value of her share, due to the prescription of her right to annul the sale. This decision highlights the critical importance of understanding the applicable legal framework at the time of property transactions and the timely assertion of one’s rights.

FAQs

What was the key issue in this case?	The key issue was whether a sale of conjugal property by the husband without the wife’s consent under the Old Civil Code is void or merely voidable, and what remedies are available to the wife in either case.
What is the difference between a void and a voidable contract?	A void contract is invalid from the beginning and has no legal effect, whereas a voidable contract is valid until annulled by a court due to a defect, such as lack of consent.
What is the prescriptive period for annulling a voidable contract under the Old Civil Code?	Under Article 173 of the Old Civil Code, the wife had ten years from the date of the questioned transaction to ask the courts for annulment.
What happens if the wife fails to annul the contract within the prescriptive period?	If the wife fails to exercise her right to annul the contract within ten years, she or her heirs may, after the dissolution of the marriage, only demand the value of the property fraudulently alienated by the husband.
What law applies if the property was acquired before the Family Code took effect?	The Old Civil Code applies if the property was acquired before the effectivity of the Family Code on August 3, 1988.
What is the significance of the presumption of conjugality?	The presumption of conjugality means that all property acquired during the marriage is presumed to belong to the conjugal partnership unless proven otherwise by strong, clear, and convincing evidence.
What does “Nemo dat quod non habet” mean?	“Nemo dat quod non habet” is a Latin maxim meaning that one cannot give what one does not have, thus, a seller cannot transfer ownership of something they do not own.
How did the Court address the issue of forgery in this case?	The Court acknowledged the NBI’s finding that Virginia’s signature on the Deed of Absolute Sale was a forgery, supporting the conclusion that she did not consent to the sale.
What was the final outcome for Virginia Aramburo in this case?	Due to the prescription of her right to annul the sale, Virginia Aramburo was only entitled to demand the value of her one-third share in the subject properties.

In conclusion, Ko v. Aramburo serves as a reminder of the importance of understanding the specific laws governing property rights at the time of acquisition and the need for timely action to protect one’s interests. The distinction between void and voidable contracts, the presumption of conjugality, and the prescriptive periods for challenging unauthorized transactions all play critical roles in resolving property disputes within marriages.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ko v. Aramburo, G.R. No. 190995, August 9, 2017