The Supreme Court has ruled that the unauthorized sale of conjugal property by one spouse, without the explicit consent of the other, is void. This decision underscores the importance of mutual consent in marital property rights, safeguarding the interests of both spouses. The ruling emphasizes that any transfer of property resulting from a fraudulently obtained power of attorney is legally null, protecting the rights of the spouse whose consent was bypassed.

Unraveling Deceit: Can a Forged Signature Void a Property Sale?

This case revolves around a contested property in Cavite, originally acquired by Jose Malabanan and his wife, Melinda. After Jose’s death, Melinda discovered that the property title had been transferred through a series of transactions initiated by a Special Power of Attorney (SPA) purportedly signed by both her and her deceased husband. Melinda challenged the validity of these transfers, claiming her signature on the SPA was forged and, therefore, the subsequent sale of the property was illegal. The central legal question is whether the forged signature on the SPA invalidates the property transfer, protecting Melinda’s rights as a spouse.

At the heart of the dispute is the nature of the property. Under the Civil Code, which governed the Malabanan’s marriage, any property acquired during the marriage is presumed to be conjugal, meaning it is jointly owned by both spouses. This presumption can only be overturned with clear, categorical, and convincing evidence. The burden of proof lies on the party claiming the property is not conjugal. In this case, respondents argued that the property was an advance on Jose’s inheritance or was purchased solely by Jose’s parents, therefore excluding it from the conjugal estate.

However, the Supreme Court found that the respondents failed to provide sufficient evidence to overcome the presumption of conjugality. Evidence presented by Melinda, such as the Deed of Absolute Sale listing Jose as married to Melinda and the issuance of the title during their marriage, supported the claim that the property was indeed conjugal. The court noted inconsistencies in the respondents’ claims, particularly regarding the source of funds for the property purchase and the circumstances surrounding the subsequent transfers. The inconsistencies undermined the credibility of their arguments and strengthened the presumption of conjugality.

A critical piece of evidence was the Special Power of Attorney (SPA) used to authorize the initial transfer of the property. Melinda argued, and an expert witness confirmed, that her signature on the SPA was forged. The Supreme Court emphasized that the unauthorized sale of conjugal property by one spouse, without the consent of the other, is void. Citing Bucoy v. Paulino, the Court reiterated that a contract conveying conjugal properties entered into by the husband without the wife’s consent may be annulled entirely:

As the statute now stands, the right of the wife is directed at “the annulment of any contract,” referring to real property of the conjugal partnership entered into by the husband “without her consent.”

Given the forged signature on the SPA, Jose lacked the authority to unilaterally dispose of the conjugal property. This rendered the subsequent transactions, including the transfer to the Montano Spouses, invalid. The Court also addressed the Montano Spouses’ claim of being innocent purchasers for value. The Court found that they failed to exercise due diligence in verifying the property’s ownership. This lack of diligence undermined their claim of good faith.

The Court considered that Melinda had always been in possession of the land, not respondent Ramon Malabanan who sold it. This fact should have prompted Dominador Montano to inquire further before purchasing the property. The court referenced Sigaya v. Mayuga, emphasizing that the rule protecting innocent purchasers does not apply when the buyer has knowledge of facts that would impel a reasonably cautious person to investigate further.

[T]his rule shall not apply when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation.

Because the Montano Spouses failed to conduct a reasonable inquiry, they could not claim the protection afforded to buyers in good faith. Building on this principle, the Court reaffirmed the importance of protecting the rights of spouses in conjugal property. Without proper consent, any transaction is deemed invalid, safeguarding the economic stability and familial harmony that the law seeks to protect.

FAQs

What was the key issue in this case?	The key issue was whether a forged signature on a Special Power of Attorney (SPA) invalidated the subsequent sale of conjugal property, thereby protecting the rights of the spouse whose signature was forged.
What is conjugal property?	Conjugal property refers to assets acquired by a husband and wife during their marriage, jointly owned by both spouses under the Civil Code.
What is a Special Power of Attorney (SPA)?	A Special Power of Attorney is a legal document authorizing a person (the agent) to act on behalf of another (the principal) in specific matters.
What happens when conjugal property is sold without one spouse’s consent?	Under the Civil Code, the sale of conjugal property by one spouse without the other’s consent is void, protecting the non-consenting spouse’s rights.
Who has the burden of proving whether property is conjugal or not?	The party claiming that property acquired during the marriage is not conjugal has the burden of proving it with clear and convincing evidence.
What does it mean to be an ‘innocent purchaser for value’?	An innocent purchaser for value is someone who buys property in good faith, without notice of any defects in the seller’s title, and pays a fair price for it.
What responsibility do buyers have to verify property ownership?	Buyers have a responsibility to exercise reasonable diligence in verifying the seller’s title and possession of the property, especially if there are any red flags.
What was the court’s decision in this case?	The Supreme Court ruled in favor of Melinda, declaring the Special Power of Attorney void due to the forged signature and reinstating the original title in her name.

This case serves as a crucial reminder of the legal safeguards in place to protect marital property rights and the significance of obtaining proper consent in property transactions. This underscores the importance of conducting thorough due diligence when purchasing property, especially when familial relationships are involved in the transaction. Ignoring these precautions can lead to significant legal and financial repercussions for all parties involved.

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: MELINDA M. MALABANAN vs. FRANCISCO MALABANAN, JR., ET AL., G.R. No. 187225, March 06, 2019