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VICENTE G. VILLARANDA, petitioner, vs. Spouses HONORIO G. VILLARANDA and ANA MARIA Y. VILLARANDA; and COLORHOUSE LABORATORIES, INC.

, respondents. February 23, 2004 Topic: Ownership, administration and enjoyment disposition and encumbrance *Without the wifes consent, the husbands alienation or encumbrance of conjugal property prior to the effectivity of the Family Code is not void, but merely voidable.

CA held that the NCC provisions apply as the Deed of Exchange has been entered into prior to the enactment of the FC, hence, the absence of Anas signature on the Deed only made it voidable, not void. Since Ana was aware of the execution of the deed yet brought no action for its annulment within 10 years from its execution, her omission/refusal to rescind the deed, as well as joining her husband in filing the case against Vicente, gave rise to the conclusion that she assented to the Deed. CA also held that the spouses cause of action accrued from the moment Vicente refused to cause the transfer of title to Honorio, two months before the filing of the case.
(Extra: With respect to the capacity of the parties to enter into the Deed of Execution, CA held that the reckoning point was its moment of execution. Since Honorio only acquired his American citizenship in 1992, he may still own private lands.)

FACTS Petitioner and respondent, brothers, inherited from their parents a 471square meter land located in Divisoria, CDO (Divisoria lot). Honorio leased 124 sq m of the property while Vicente inherited 64.22 sq m of the property not leased to Honorio. In 1976, the brothers executed a Deed of Exchange (NOTE: Anas signature was not on the Deed.) Vicente agreed to convey his 64.22 sqm portion to Honorio in exchange for a 500 sqm property in Macasandig, CDO (Macasandig lot). Honorio then took possession of the Divisoria lot and constructed a building. In 1992, a subdivision plan was completed over the inherited lots, and a new title was issued in Vicentes name for the Divisoria sqm lot. Other heirs were also issued their own TCTs. Honorio and his wife Ana filed an action to compel Vicente to comply with his obligations under the Deed of Exchange, alleging that they could not fully use the Macasandig lot because Vicente had yet to delineate his undivided portion of the property. While the case was pending, Honorio conditionally sold the Divisoria lot to Colorhouse Laboratories, Inc. (Colorhouse - intervenor). RTC and CA in favor of respondents

ISSUE (na relevant sa topic) Whether the Deed of Exchange which was not signed by the wife of Honorio is valid and enforceable.

RULING Yes. Absence of the signature only makes the Deed voidable (Art. 166 NCC read with Art. 173) The Deed was entered into on July 6, 1976, while the FC took effect only on August 1988. As a rule, laws should be prospectively applied [] Thus, the NCC provisions are applicable to this case. The Macasandig lot was part of Honorio and Anas conjugal properties. The relevant provisions on the disposition of real properties of the conjugal partnership are the ff:
Article 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wifes consent. x x x

Article 173. 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, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of the property fraudulently alienated by the husband.

Reading Art. 166 in conjunction with Art. 173, the lack of consent on the wifes part will not make the husbands alienation or encumbrance of real property of the conjugal partnership void, but merely voidable. Thus the Deed is valid until and unless annulled. In this case, there was no evidence from the records showing any action to annul the transfer made by Honorio was brought by Ana within 10 years from the transaction questioned. Her right to bring an action to annul the contract has thus prescribed. Deed is valid and enforceable. (Papa v. Montenegro) the legal prohibition against the disposition of the conjugal property by one spouse was established for the benefit not of third persons but only of the other spouse, for whom the law desires to save the conjugal partnership from damages that might be caused. Not being the proper party, Vicente cannot avail himself of the remedy prescribed under Art. 173.

PETITON DENIED.