Calimlim-Canullas vs fortun

 The question frequently asked is the liability of the other spouse in case the
contracting spouse sells the common property.   It would depend if the other
spouse had knowledge and consent of the transaction. If the husband sold the
property without the consent and knowledge of the wife, then the sale is
void.  However, the transaction shall be considered as a continuing offer and
may be perfected upon acceptance of the other spouse. On the other hand, if
the husband sold the community property with the knowledge but without
the consent of the wife, the contract is merely annullable.  The wife has 5 years
from the date of the contract to go to court and seek the annulment of the
contract.
Facts:

Mercedes Canullas was married to Fernando Canullas, they have 5 children and lived in the residential
land in question which Fernando inherited the land from his father after his death in 1965.

In 1978, Fernando left his family and live with private respondent Corazon Daguines, during the
pendency of this case they were convicted Concubinage with a finality.

Fernando sold the property that he inherited from his father to Corazon for the amount of 2000 pesos,
since corazon was unable to possess the said property, she filed a complaint for quieting of title and
damages against Mercedes

However, Mercedes contented that the sale of the property with improvements was null and void since
it was a conjugal property and she did not gave her consent to her husband.

Respondent court through Judge fortun Rendered a decision declaring that Corazon was the lawful
owner of the property

Upon reconsideration prayed by Mercedes, the respondent Court amended its decision and resolved
that that the property and its improvements was entitled to Mercedes

Issue:

1.Whether or not the construction of a conjugal house on the exclusive property of the husband gave
the land the character of conjugal property?

2.Whether or not the sale of the property with improvements was valid?

Held:

• The determination of the first issue revolved around the interpretation to be given to the 2nd
paragraph of Art. 158 of the Civil Code: Buildings constructed at the expense of the partnership during
the marriage on land belonging to one of the spouses also pertain to the partnership, but the value of
the land shall be reimbursed to the spouse who owns the same.

• Under this provision, both the land and the building belong to the conjugal partnership but the
conjugal partnership is indebted to the husband for the value of the land. The spouse owning the lot
becomes a creditor of the conjugal partnership for the value of the lot, which would be reimbursed at
the liquidation of the conjugal partnership.

• Respondent Judge relied in the case of Maramba vs. Lozano, where it was held that the land
belonging to one of the spouses, upon which the spouses have built a house, becomes conjugal property
only when conjugal property is liquidated and indemnity paid to the owner of the land.

• However the court believes that the better rule is that enunciated by Mr. Justice JBL Reyes in
Padilla vs. Paterno:

o The conversion of the properties from paraphernal to conjugal assets would be deemed to
retroact to the time the conjugal buildings were first constructed thereon or at the very latest, to the
time immediately before the death of Narciso Padilla that ended the conjugal partnership. The can not
be considered to have become conjugal property only as of the time their values were paid to the estate
of the widow Concepcion Paterno because by that time the conjugal partnership no longer existed and it
could not acquire the ownership of said properties. The acquisition by the partnership of these
properties was, under the 1943 decision, subject to the suspensive condition that their values would be
reimbursed to the widow at the liquidation of the conjugal partnership; once paid, the effects of the
fulfillment of the condition should be deemed to retroact to the date the obligation was constituted.

• Hence, Fernando could not have alienated the house and lot to Corazon since Mercedes has not
given her consent to said sale.

2nd issue:

• Sale was null and void for being contrary to morals and public policy. The sale was made by a
husband in favor of a concubine after he had abandoned his family and left the conjugal home where his
wife and children lived and from whence they derived their support. Such sale was subversive of the
stability of the family, a basic social institution which public policy cherishes and protects.

• Art. 1409 of Civil Code: Contracts whose cause, object, or purpose is contrary to law, morals,
good customs, public order or public policy are void and inexistent from the beginning.

• Art. 1352 CC: Contracts without cause, or unlawful cause, produce no effect whatsoever. The
cause is unlawful if it is contrary to law, morals, good customs, public order, or public policy.

• Thus, the law prohibits the spouses from selling property to each other subject to certain
exceptions. Similarly, donations between spouses during marriage are prohibited, because if transfers or
con conveyances between spouses were allowed during marriage, that would destroy the system of
conjugal partnership, a basic policy in civil law.

• It was also designed to prevent the exercise of undue influence by one spouse over the other, as
well as to protect the institution of marriage, which is the cornerstone of family law.
• The prohibitions apply to couple living as husband and wife without the benefit of marriage,
otherwise the condition of those who incurred guilt would turn out to be better than those in legal
union.