VOL.

439, SEPTEMBER 30, 2004 649

Abalos vs. Macatangay, Jr.

*
G.R. No. 155043. September 30, 2004.

ARTURO R. ABALOS, petitioner, vs. DR. GALICANO S.

MACATANGAY, JR., respondent.

Civil Law; Contracts; Elements; Contracts, in general, require

the presence of three essential elements: (1) consent of the
contracting parties; (2) object certain which is the subject matter of
the contract; and (3) cause of the obligation which is established.—
Contracts, in general, require the presence of three essential
elements: (1) consent of the contracting parties; (2) object certain
which is the subject matter of the contract; and (3) cause of the
obligation which is established.
Same; Same; In a contract of sale, the seller must consent to
transfer ownership in exchange for the price, the subject matter
must be determinate, and the price must be certain in money or its
equivalent.—Until the contract is perfected, it cannot, as an
independent source of obligation, serve as a binding juridical
relation. In a contract of sale, the seller must consent to transfer
ownership in exchange for the price, the subject matter must be
determinate, and the price must be certain in money or its
equivalent. Being essentially consensual, a contract of sale is
perfected at the moment there is a meeting of the minds upon the
thing which is the object of the

_______________

* SECOND DIVISION.

650

650 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

contract and upon the price. However, ownership of the thing sold
shall not be transferred to the vendee until actual or constructive
delivery of the property.
Same; Same; An accepted unilateral promise which specifies
the thing to be sold and the price to be paid, when coupled with a
valuable consideration distinct and separate from the price, is
what may properly be termed a perfected contract of option.—An
accepted unilateral promise which specifies the thing to be sold
and the price to be paid, when coupled with a valuable
consideration distinct and separate from the price, is what may
properly be termed a perfected contract of option. An option
merely grants a privilege to buy or sell within an agreed time and
at a determined price. It is separate and distinct from that which
the parties may enter into upon the consummation of the option.
A perfected contract of option does not result in the perfection or
consummation of the sale; only when the option is exercised may
a sale be perfected. The option must, however, be supported by a
consideration distinct from the price.
Same; Same; As a rule, the holder of the option, after
accepting the promise and before he exercises his option, is not
bound to buy.—As a rule, the holder of the option, after accepting
the promise and before he exercises his option, is not bound to
buy. He is free either to buy or not to buy later. In Sanchez v.
Rigos we ruled that in an accepted unilateral promise to sell, the
promissor is not bound by his promise and may, accordingly,
withdraw it, since there may be no valid contract without a cause
or consideration. Pending notice of its withdrawal, his accepted
promise partakes of the nature of an offer to sell which, if acceded
or consented to, results in a perfected contract of sale.
Same; Same; Under the law, a void contract cannot be ratified
and the action or defense for the declaration of the inexistence of a
contract does not prescribe.—The nullity of the RMOA as a
contract of sale emanates not only from lack of Esther’s consent
thereto but also from want of consideration and absence of
respondent’s signature thereon. Such nullity cannot be obliterated
by Esther’s subsequent confirmation of the putative transaction
as expressed in the Contract to Sell. Under the law, a void
contract cannot be ratified and the action or defense for the
declaration of the inexistence of a contract does not prescribe. A
void contract produces no effect either

651

VOL. 439, SEPTEMBER 30, 2004 651

Abalos vs. Macatangay, Jr.

against or in favor of anyone–it cannot create, modify or
extinguish the juridical relation to which it refers.
Same; Conjugal Partnership; Under the Civil Code, the
husband, as the administrator of the conjugal partnership, cannot
validly alienate or encumber any real property of the conjugal
partnership without the wife’s consent, and vise versa.—Under the
Civil Code, the husband is the administrator of the conjugal
partnership. This right is clearly granted to him by law. More, the
husband is the sole administrator. The wife is not entitled as of
right to joint administration.
Same; Same; The right of the husband or wife to one-half of
the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of the
marriage, when it is finally determined that, after settlement of
conjugal obligations, there are net assets left which can be divided
between the spouses or their respective heirs.—It has been held
that prior to the liquidation of the conjugal partnership, the
interest of each spouse in the conjugal assets is inchoate, a mere
expectancy, which constitutes neither a legal nor an equitable
estate, and does not ripen into title until it appears that there are
assets in the community as a result of the liquidation and
settlement. The interest of each spouse is limited to the net
remainder or “remanente liquido” (haber ganancial) resulting
from the liquidation of the affairs of the partnership after its
dissolution. Thus, the right of the husband or wife to one-half of
the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of the
marriage, when it is finally determined that, after settlement of
conjugal obligations, there are net assets left which can be divided
between the spouses or their respective heirs.
Same; Same; The sale by the husband of property belonging to
the conjugal partnership without the consent of the wife when
there is no showing that the latter is incapacitated is void ab initio
because it is in contravention of the mandatory requirements of
Article 166 of the Civil Code.—We ruled that the sale by the
husband of property belonging to the conjugal partnership
without the consent of the wife when there is no showing that the
latter is incapacitated is void ab initio because it is in
contravention of the mandatory requirements of Article 166 of the
Civil Code. Since Article 166 of the Civil Code requires the
consent of the wife before the husband may alienate or

652

652 SUPREME COURT REPORTS ANNOTATED

 Abalos vs. Macatangay, Jr.

encumber any real property of the conjugal partnership, it follows

that acts or transactions executed against this mandatory
provision are void except when the law itself authorizes their
validity.
Same; Same; As an exception, the husband may dispose of
conjugal property without the wife’s consent if such sale is
necessary to answer for conjugal liabilities mentioned in Articles
161 and 162 of the Civil Code.—As an exception, the husband may
dispose of conjugal property without the wife’s consent if such sale
is necessary to answer for conjugal liabilities mentioned in
Articles 161 and 162 of the Civil Code. In Tinitigan v. Tinitigan,
Sr., the Court ruled that the husband may sell property belonging
to the conjugal partnership even without the consent of the wife if
the sale is necessary to answer for a big conjugal liability which
might endanger the family’s economic standing. This is one
instance where the wife’s consent is not required and, impliedly,
no judicial intervention is necessary.
Same; Family Code; The Family Code now requires the
written consent of the other spouse, or authority of the court for the
disposition or encumbrance of conjugal partnership property
without which, the disposition or encumbrance shall be void.—The
Family Code has introduced some changes particularly on the
aspect of the administration of the conjugal partnership. The new
law provides that the administration of the conjugal partnership
is now a joint undertaking of the husband and the wife. In the
event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal partnership, the
other spouse may assume sole powers of administration. However,
the power of administration does not include the power to dispose
or encumber property belonging to the conjugal partnership. In all
instances, the present law specifically requires the written
consent of the other spouse, or authority of the court for the
disposition or encumbrance of conjugal partnership property
without which, the disposition or encumbrance shall be void.

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

     Tarriela, Tagao, Ona & Associates for petitioner.
653

VOL. 439, SEPTEMBER 30, 2004 653

Abalos vs. Macatangay, Jr.
     Rodolfo A. Espiritu for respondent.

TINGA, J.:

The instant petition seeks a reversal of the Decision of the

Court of Appeals in CA-G.R. CV No. 48355 entitled “Dr.
Galicano S. Macatangay, Jr. v. Arturo R. Abalos and
Esther Palisoc-Abalos,” promulgated on March 14, 2002.
The appellate court reversed the trial court’s decision
which dismissed the action for specific performance filed by
respondent, and ordered petitioner and his wife to execute
in favor of herein respondent a deed of sale over the subject
property.
Spouses Arturo and Esther Abalos are the registered
owners of a parcel of land with improvements located at
Azucena St., Makati City consisting of about three hundred
twenty-seven (327) square meters, covered by Transfer
Certificate of Title (TCT) No. 145316 of the Registry of
Deeds of Makati.
Armed with a Special Power of Attorney dated June 2,
1988, purportedly issued by his wife, Arturo executed a
Receipt and Memorandum of Agreement (RMOA) dated
October 17, 1989, in favor of respondent, binding himself to
sell to respondent the subject property and not to offer the
same to any other party within thirty (30) days from date.
Arturo acknowledged receipt of a check from respondent in
the amount of Five Thousand Pesos (P5,000.00),
representing earnest money for the subject property, the
amount of which would be deducted from the purchase
price of One Million Three Hundred Three Hundred
Thousand Pesos (P1,300,000.00). Further, the RMOA
stated that full payment would be effected as soon as
possession of the property shall have been turned over to
respondent.
Subsequently, Arturo’s wife, Esther, executed a Special
Power of Attorney dated October 25, 1989, appointing her
sister, Bernadette Ramos, to act for and in her behalf
relative to the transfer of the property to respondent.
Ostensibly, a marital squabble was brewing between
Arturo and Esther at the time and to protect his interest,
respondent caused the
654

654 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.
annotation of his adverse claim on the title of the spouses
to the property on November 14, 1989.
On November 16, 1989, respondent sent a letter to
Arturo and Esther informing them of his readiness and
willingness to pay the full amount of the purchase price.
The letter contained a demand upon the spouses to comply
with their obligation to turn over possession of the property
to him. On the same date, Esther, through her attorney-in-
fact, executed in favor of respondent, a Contract to Sell the
property to the extent of her conjugal interest therein for
the sum of six hundred fifty thousand pesos (P650,000.00)
less the sum already received by her and Arturo. Esther
agreed to surrender possession of the property to
respondent within twenty (20) days from November 16,
1989, while the latter promised to pay the balance of the
purchase price in the amount of one million two hundred
ninety thousand pesos (P1,290,000.00) after being placed in
possession of the property. Esther also obligated herself to
execute and deliver to respondent a deed of absolute sale
upon full payment.
In a letter dated December 7, 1989, respondent informed
the spouses that he had set aside the amount of One
Million Two Hundred Ninety Thousand Pesos
(P1,290,000.00) as evidenced by Citibank Check No.
278107 as full payment of the purchase price. He reiterated
his demand upon them to comply with their obligation to
turn over possession of the property. Arturo and Esther
failed to deliver the property which prompted respondent to
cause the annotation of another adverse claim on TCT No.
145316. On January 12, 1990, respondent filed a complaint
for specific performance with damages against petitioners.
Arturo filed his answer to the complaint while his wife was
declared in default.
The Regional Trial Court (RTC) dismissed the complaint
for specific performance. It ruled that the Special Power of
Attorney (SPA) ostensibly issued by Esther in favor of
Arturo was void as it was falsified. Hence, the court
concluded that the SPA could not have authorized Arturo
to sell the property
655

VOL. 439, SEPTEMBER 30, 2004 655

Abalos vs. Macatangay, Jr.

to respondent. The trial court also noted that the check

issued by respondent to cover the earnest money was
dishonored due to insufficiency of funds and while it was
replaced with another check by respondent, there is no
showing that the second check was issued as payment for
the earnest money on the property.
On appeal taken by respondent, the Court of Appeals
reversed the decision of the trial court. It ruled that the
SPA in favor of Arturo, assuming that it was void, cannot
affect the transaction between Esther and respondent. The
appellate court ratiocinated that it was by virtue of the
SPA executed by Esther, in favor of her sister, that the sale
of the property to respondent was effected. On the other
hand, the appellate court considered the RMOA executed
by Arturo in favor of respondent valid to effect the sale of
Arturo’s conjugal share in the property.
Dissatisfied with the appellate court’s disposition of the
case, petitioner seeks a reversal of its decision alleging
that:

I.

The Court of Appeals committed serious and manifest error when

it decided on the appeal without affording petitioner his right to
due process.

II.

The Court of Appeals committed serious and manifest error in

reversing and setting aside the findings of fact by the trial court.

III.

The Court of Appeals erred in ruling that a contract to sell is a

contract of sale, and in ordering petitioner to execute a registrable
1
form of deed of sale over the property in favor of respondent.

_______________

1 Rollo, pp. 21-22.

656

656 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

Petitioner contends that he was not personally served with

copies of summons, pleadings, and processes in the appeal
proceedings nor was he given an opportunity to submit an
appellee’s brief. He alleges that his counsel was in the
United States from 1994 to June 2000, and he never
received any news or communication from him after the
proceedings in the trial court were terminated. Petitioner
submits that he was denied due process because he was not
informed of the appeal proceedings, nor given the chance to
have legal representation before the appellate court.
We are not convinced. The essence of due process is an
opportunity to be heard. Petitioner’s failure to participate
in the appeal proceedings is not due to a cause imputable to
the appellate court but because of petitioner’s own neglect
in ascertaining the status of his case. Petitioner’s counsel is
equally negligent in failing to inform his client about the
recent developments in the appeal proceedings. Settled is
the rule that a party is bound2 by the conduct, negligence
and mistakes of his counsel. Thus, petitioner’s plea of
denial of due process is downright baseless.
Petitioner also blames the appellate court for setting
aside the factual findings of the trial court and argues that
factual findings of the trial court are given much weight
and respect when supported by substantial evidence. He
asserts that the sale between him and respondent is void
for lack of consent because the SPA purportedly executed
by his wife Esther is a forgery and therefore, he could not
have validly sold the subject property to respondent.
Next, petitioner theorizes that the RMOA he executed in
favor of respondent was not perfected because the check
representing the earnest money was dishonored. He adds
that there is no evidence on record that the second check
issued by

_______________

2 Heirs of Elias Lorilla v. Court of Appeals, 368 Phil. 638; 330 SCRA
429 (2000).

657

VOL. 439, SEPTEMBER 30, 2004 657

Abalos vs. Macatangay, Jr.

respondent was intended to replace the first check

representing payment of earnest money.
Respondent admits that the subject property is co-owned
by petitioner and his wife, but he objects to the allegations
in the petition bearing a relation to the supposed date of
the marriage of the vendors. He contends that the alleged
date of marriage between petitioner and his wife is a new
factual issue which was not raised nor established in the
court a quo. Respondent claims that there is no basis to
annul the sale freely and voluntarily entered into by the
husband and the wife.
 The focal issue in the instant petition is whether
petitioner may be compelled to convey the property to
respondent under the terms of the RMOA and the Contract
to Sell. At bottom, the resolution of the issue entails the
ascertainment of the contractual nature of the two
documents and the status of the contracts contained
therein.
Contracts, in general, require the presence of three
essential elements: (1) consent of the contracting parties;
(2) object certain which is the subject matter of the
contract; and3
(3) cause of the obligation which is
established.
Until the contract is perfected, it cannot, as an
independent source 4
of obligation, serve as a binding
juridical relation. In a contract of sale, the seller must
consent to transfer ownership in exchange for the price, the
subject matter must be determinate, and5
the price must be
certain in money or its equivalent. Being essentially
consensual, a contract of sale is perfected at the moment
there is a meeting of the minds upon the

_______________

3 ART. 1318, CIVIL CODE OF THE PHILIPPINES; Santos v. Heirs of

Jose Mariano and Erlinda Mariano-Villanueva, G.R. No. 143325, October
24, 2000, 344 SCRA 284.
4 Ang Yu v. Asuncion, G.R. No. 109125, December 2, 1994, 238 SCRA
602.
5 Heirs of Juan San Andres v. Rodriguez, 388 Phil. 571; 332 SCRA 769
(2000).

658

658 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

thing 6 which is the object of the contract and upon the

price. However, ownership of the thing sold shall not be
transferred to the vendee7
until actual or constructive
delivery of the property.
On the other hand, an accepted unilateral promise
which specifies the thing to be sold and the price to be paid,
when coupled with a valuable consideration distinct and
separate from the price, is what
8
may properly be termed a
perfected contract of option. An option merely grants a
privilege to buy or sell within an agreed time and at a
determined price. It is separate and distinct from that
which the parties may enter into upon the consummation
9
 9
of the option. A perfected contract of option does not result
in the perfection or consummation of the sale; 10
only when
the option is exercised may a sale be perfected. The option
must, however, 11
be supported by a consideration distinct
from the price.
Perusing the RMOA, it signifies a unilateral offer of
Arturo to sell the property to respondent for a price certain
within a period of thirty days. The RMOA does not impose
upon respondent an obligation to buy petitioner’s property,
as in fact it does not even bear his signature thereon. It is
quite clear that after the lapse of the thirty-day period,
without respondent having exercised his option, Arturo is
free to sell the property to another. This shows that the
intent of Arturo is merely to grant respondent the privilege
to buy the property within the period therein stated. There
is nothing in the

_______________

6 Laforteza v. Machuca, 389 Phil. 167; 333 SCRA 643 (2000).

7 Heirs of Quirico Seraspi and Purificacion Seraspi v. Court of Appeals,
387 Phil. 306; 331 SCRA 293 (2000).
8 Ang Yu v. Asuncion, supra note 4.
9 Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 332 Phil.
525; 264 SCRA 483 (1996).
10 Cavite Development Bank v. Lim, 381 Phil. 355; 324 SCRA 346
(2000).
11 De la Cavada v. Diaz, 37 Phil. 982 (1918), Beaumont v. Prieto, 41
Phil. 670 (1916).

659

VOL. 439, SEPTEMBER 30, 2004 659

Abalos vs. Macatangay, Jr.

RMOA which indicates that Arturo agreed therein to

transfer ownership of the land which is an essential
element in a contract of sale. Unfortunately, the option is
not binding upon the promissory since it12 is not supported
by a consideration distinct from the price.
As a rule, the holder of the option, after accepting the
promise and before he exercises his option, is not bound to
buy. He13is free either to buy or not to buy later. In Sanchez
v. Rigos we ruled that in an accepted unilateral promise to
sell, the promissor is not bound by his promise and may,
accordingly, withdraw it, since there may be no valid
contract without a cause or consideration. Pending notice of
its withdrawal, his accepted promise partakes of the nature
of an offer to sell which, if acceded or consented to, results
in a perfected contract of sale.
Even conceding for the nonce that respondent had
accepted the offer within the period stated and, as a
consequence, a bilateral contract of purchase and sale was
perfected, the outcome would be the same. To benefit from
such situation, respondent would have to pay or at least
make a valid tender of payment of the price for only then
could he exact
14
compliance with the undertaking of the
other party. This respondent failed to do. By his own
admission, he merely informed respondent spouses of his
readiness and willingness to pay. The fact that he had set
aside a check in the amount of One Million Two Hundred
Ninety Thousand Pesos (P1,290,000.00) representing the
balance of the purchase price could not help his cause.
Settled is the rule that tender of payment must be made in
legal tender. A check is not legal tender,15 and therefore
cannot constitute a valid tender of payment. Not having

_______________

12 Atkins, Kroll and Co., Inc. v. Cua Hian Tek, 102 Phil. 948.
13 150-A Phil. 714; 45 SCRA 368 (1972).
14 Article 1191, CIVIL CODE.
15 Cebu International Finance Corporation v. Court of Appeals, 374
Phil. 844; 316 SCRA 488 [1999]; Far East Bank & Trust Com

660

660 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

made a valid tender of payment, respondent’s action for

specific performance must fail.
With regard to the payment of Five Thousand Pesos
(P5,000.00), the Court is of the view that the amount is not
earnest money as the term is understood in Article 1482
which signifies proof of the perfection of the contract of
sale, but merely a guarantee that respondent is really
interested to buy the property. It is not the giving of
earnest money, but the proof of the concurrence of all the
essential elements of the contract of sale
16
which establishes
the existence of a perfected sale. No reservation of
ownership on the part of Arturo is necessary since, as
previously stated, he has never agreed to transfer
ownership of the property to respondent.
Granting for the sake of argument that the RMOA is a
contract of sale, the same would still be void not only for
want of consideration and absence of respondent’s
signature thereon, but also for lack of Esther’s conformity
thereto. Quite glaring is the absence of the signature of
Esther in the RMOA, which proves that she did not give
her consent to the transaction initiated by Arturo. The
husband cannot alienate any real property
17
of the conjugal
partnership without the wife’s consent.
However, it was the Contract to Sell executed by Esther
through her attorney-in-fact which the Court of Appeals
made full use of. Holding that the contract is valid, the
appellate court explained that while Esther did not
authorize Arturo to sell the property, her execution of the
SPA authorizing her sister to sell the land to respondent
clearly shows her intention to convey her interest in favor
of respondent. In effect, the court declared that the lack of
Esther’s consent to the sale

_______________

pany v. Diaz Realty, Inc., G.R. No. 38588, August 23, 2001, 363 SCRA
659.
16 San Miguel Properties Philippines, Inc. v. Huang, 391 Phil. 636; 336
SCRA 737 (2000).
17 Article 166, CIVIL CODE.

661

VOL. 439, SEPTEMBER 30, 2004 661

Abalos vs. Macatangay, Jr.

made by Arturo was cured by her subsequent conveyance of

her interest in the property through her attorney-in-fact.
We do not share the ruling.
The nullity of the RMOA as a contract of sale emanates
not only from lack of Esther’s consent thereto but also from
want of consideration and absence of respondent’s
signature thereon. Such nullity cannot be obliterated by
Esther’s subsequent confirmation of the putative
transaction as expressed in the Contract 18
to Sell. Under the
law, a void contract cannot be ratified and the action or
defense for the declaration
19
of the inexistence of a contract
does not prescribe. A void contract produces no effect
either against or in favor of anyone–it cannot create,
modify20 or extinguish the juridical relation to which it
refers.
True, in the Contract to Sell, Esther made reference to
the earlier RMOA executed by Arturo in favor of
respondent. However, the RMOA which Arturo signed is
different from the deed which Esther executed through her
attorney-in-fact. For one, the first is sought to be enforced
as a contract of sale while the second is purportedly a
contract to sell only. For another, the terms and conditions
as to the issuance of title and delivery of possession are
divergent.
The congruence of the wills of the spouses is essential
for the valid disposition of conjugal property. Where the
conveyance is contained in the same document which bears
the conformity of both husband and wife, there could be no
question on the validity of the transaction. But when there
are two (2) documents on which the signatures of the
spouses separately appear, textual concordance of the
documents is indispensable. Hence, in this case where the
wife’s putative consent to

_______________

18 Article 1409, CIVIL CODE.

19 Article 1410, CIVIL CODE; Santos v. Santos, G.R. No. 133895,
October 2, 2001, 366 SCRA 395.
20 Gochan v. Young, G.R. No. 131889, March 12, 2001, 354 SCRA 207.

662

662 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

the sale of conjugal property appears in a separate

document which does not, however, contain the same terms
and conditions as in the first document signed by the
husband, a valid transaction could not have arisen.
Quite a bit of elucidation on the conjugal partnership of
gains is in order.
Arturo and Esther appear to have been married before
the effectivity of the Family Code. There being no
indication that they have adopted a different property
regime, their property relations would automatically be 21
governed by the regime of conjugal partnership of gains.
The subject land which had been admittedly acquired
during the marriage22 of the spouses forms part of their
conjugal partnership.
Under the Civil Code, the husband is the administrator
of the conjugal
23
partnership. This right is clearly granted to
him by law. More, the husband is the sole administrator. 24
The wife is not entitled as of right to joint administration.
The husband, even if he is statutorily designated as
administrator of the conjugal partnership, cannot validly
alienate or encumber any real property 25
of the conjugal
partnership without the wife’s consent. Similarly, the wife
cannot dispose of any property belonging to the conjugal
partnership without the conformity of the husband. The
law is explicit that the wife cannot bind the conjugal
partnership without
26
the husband’s consent, except in cases
provided by law.
More significantly, it has been held that prior to the
liquidation of the conjugal partnership, the interest of each
spouse in the conjugal assets is inchoate, a mere
expectancy, which

_______________

21 ART. 119, CIVIL CODE.

22 ART. 160, CIVIL CODE.
23 ART. 165, CIVIL CODE.
24 Ysasi v. Hon. Fernandez, 132 Phil. 526; 23 SCRA 1079 (1968).
25 ART. 166, CIVIL CODE.
26 ART. 172, CIVIL CODE.

663

VOL. 439, SEPTEMBER 30, 2004 663

Abalos vs. Macatangay, Jr.

constitutes neither a legal nor an equitable estate, and does

not ripen into title until it appears that there are assets in
the community as a result of the liquidation and
settlement. The interest of each spouse is limited to the net
remainder or “remanente liquido” (haber ganancial)
resulting from the liquidation 27 of the affairs of the
partnership after its dissolution. Thus, the right of the
husband or wife to one-half of the conjugal assets does not
vest until the dissolution and liquidation of the conjugal
partnership, or after dissolution of the marriage, when it is
finally determined that, after settlement of conjugal
obligations, there are net assets left which can
28
be divided
between the spouses or their respective heirs.
In not a few cases, we ruled that the sale by the husband
of property belonging to the conjugal partnership without
the consent of the wife when there is no showing that the
latter is incapacitated is void ab initio because it is in
contravention of the29 mandatory requirements of Article 166
of the Civil Code. Since Article 166 of the Civil Code
requires the consent of the wife before the husband may
alienate or encumber any real property of the conjugal
partnership, it follows that acts or transactions executed
against this mandatory provision are 30
void except when the
law itself authorizes their validity.
Quite recently, in San Juan 31Structural and Steel
Fabricators, Inc. v. Court of Appeals, we ruled that neither
spouse could alienate in favor of another, his or her interest
in the partnership or in any property belonging to it, or ask
for partition of the properties before the partnership itself
had been

_______________

27 Nable Jose v. Nable Jose, 41 Phil. 713 (1916); Manuel v. Losano, 41

Phil. 855 (1918).
28 Quintos de Ansaldo v. Sheriff of Manila, 64 Phil. 115 (1937).
29 Nicolas v. Court of Appeals, No. L-37631, October 12, 1987, 154
SCRA 635; Garcia v. Court of Appeals, 215 Phil. 380; 130 SCRA 433
(1984); Tolentino v. Cardenas, 123 Phil. 517; 16 SCRA 720 (1966).
30 ART. 5, CIVIL CODE.
31 357 Phil. 631; 296 SCRA 631 (1998).

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664 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

legally dissolved. Nonetheless, alienation of the share of

each spouse in the conjugal partnership could be had after
separation of property of the spouses during the marriage
had been judicially decreed, upon their
32
petition for any of
the causes specified in33
Article 191 of the Civil Code in
relation to Article 214 thereof.
As an exception, the husband may dispose of conjugal
property without the wife’s consent if such sale is necessary
to answer for conjugal liabilities mentioned in Articles 161
and

_______________

32 ART. 191. The husband or the wife may ask for the separation of
property, and it shall be decreed when the spouse of the petitioner has
been sentenced to a penalty which carries with it civil interdiction, or has
been declared absent, or when legal separation has been granted.
In case of abuse of powers of administration of the conjugal partnership
property by the husband, or in case of abandonment by the husband,
separation of property may also be ordered by the court, according to the
provisions of Articles 167 and 178, No. 3.
In all these cases, it is sufficient to present the final judgment which
has been entered against the guilty or absent spouse.
 The husband and the wife may agree upon the dissolution of the
conjugal partnership during the marriage, subject to judicial approval. All
the creditors of the husband and of the wife, as well as of the conjugal
partnership, shall be notified of any petition for judicial approval of the
voluntary dissolution of the conjugal partnership, so that any such
creditors may appear at the hearing to safeguard his interests. Upon
approval of the petition for dissolution of the conjugal partnership, the
court shall take such measures as may protect the creditors and other
third persons.
After dissolution of the conjugal partnership, the provisions of Articles
214 and 215 shall apply. The provisions of this Code concerning the effect
of partition stated in Articles 498 to 501 shall be applicable.
33 ART. 214. Each spouse shall own, dispose of, possess, administer and
enjoy his or her own separate estate, without the consent of the other. All
earnings from any profession, business or industry shall likewise belong to
each spouse.

665

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Abalos vs. Macatangay, Jr.

34 35
162 of the Civil Code. In Tinitigan v. Tinitigan, Sr., the
Court ruled that the husband may sell property belonging
to the conjugal partnership even without the consent of the
wife if the sale is necessary to answer for a big conjugal
liability which might endanger the family’s economic
standing. This is one instance where the wife’s consent is
not required and, impliedly, no judicial intervention is
necessary.
Significantly, the Family Code has introduced some
changes particularly on the aspect of the administration of
the conjugal partnership. The new law provides that the
administration of the conjugal partnership is now a joint
under-

_______________

34 ART. 161. The conjugal partnership shall be liable for:

(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same purpose,
in the cases where she may legally bind the partnership;
(2) Arrears or income due, during the marriage, from obligations which
constitute a charge upon property of either spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the marriage upon the
separate property of either the husband or the wife; major repairs shall not be
charged to the partnership;
 (4) Major or minor repairs upon the conjugal partnership property;
(5) The maintenance of the family and the education of the children of both
husband and wife, and of legitimate children of one of the spouses;
(6) Expenses to permit the spouses to complete a professional, vocational or
other course.

ART. 162. The value of what is donated or promised to the common

children by the husband, only for securing their future or the finishing of a
career, or by both spouses through a common agreement shall also be
charged to the conjugal partnership, when they have not stipulated that it
is to be satisfied from the property of one of them, in whole or in part.
35 No. L- 45418, October 30, 1980, 100 SCRA 619.

666

666 SUPREME COURT REPORTS ANNOTATED

Abalos vs. Macatangay, Jr.

taking of the husband and the wife. In the event that one
spouse is incapacitated or otherwise unable to participate
in the administration of the conjugal partnership, the other
spouse may assume sole powers of administration.
However, the power of administration does not include the
power to dispose or encumber
36
property belonging to the
conjugal partnership. In all instances, the present law
specifically requires the written consent of the other
spouse, or authority of the court for the disposition or
encumbrance of conjugal partnership property without 37
which, the disposition or encumbrance shall be void.
Inescapably, herein petitioner’s action for specific
performance must fail. Even on the supposition that the
parties only disposed of their respective shares in the
property, the sale, assuming that it exists, is still void for
as previously stated, the right of the husband or the wife to
one-half of the conjugal assets does not vest until the
liquidation of the conjugal partnership. Nemo dat qui non
habet. No one can give what he has not.
WHEREFORE, the appealed Decision is hereby
REVERSED and SET ASIDE. The complaint in Civil Case
No. 90-106 of the Regional Trial Court of Makati is ordered
DISMISSED. No pronouncement as to costs.
SO ORDERED.

          Puno (Chairman), Austria-Martinez and Callejo,

Sr., JJ., concur.
     Chico-Nazario, J., On Leave.

Judgment reversed and set aside, complaint dismissed.

 Note.—Even granting that the wife actually
participated in negotiating for the sale of the properties,
her written con-

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36 ART. 124, FAMILY CODE OF THE PHILIPPINES.

37 Ibid.

667

VOL. 439, SEPTEMBER 30, 2004 667

Allied Domecq Phil., Inc. vs. Villon

sent to the sale is required by law for its validity. Being

merely aware of a transaction is not consent. (Jader-
Manalo vs. Camaisa, 374 SCRA 498 [2002])

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