By Atty. Eduardo T. Reyes III
More than the other kinds of partnership, whether in law, in life, or business, property relations in a marriage are heavily reliant on the trust that the spouses have on each other.
The aim of the Family Code is to commingle as much properties of the spouses as possible in the hope that their personal relationship will become more harmonious by embracing the idea that “what’s mine is yours, and what’s yours is mine”.
Article 116 of the Family Code states that “[a]ll property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved”.
The presumption of joint ownership by husband and wife is compelling. In the recent case of TCLC v. Balandra, G.R. No. 247646, which came down on March 29, 2023, it was concluded that:
“Here, the records are bereft of any strong, clear, and convincing evidence presented by respondent that the mortgaged properties were his exclusive properties. In his comment to the subject petition, respondent even admitted that the mortgaged properties are their conjugal properties”.
This leads us to the next question.
Given the strong legal presumption of joint ownership by the spouses, can the wife alone mortgage their common property without her husband’s consent?
The answer is found in Article 124 of the Family Code which considers any “encumbrance or disposition” by only one of the spouses, without the consent of the other, as void.
And in the realm of civil law, a void contract cannot be cured or ratified by a belated consent or approbation by the party concerned.
However, Article 124 of the Family Code envisages a different kind of void contract that is entered into by one spouse only. The transaction shall be held in suspended animation such that it shall constitute as a “continuing offer” until withdrawn by the spouse/s from the third party he/ she has dealt with.
Thus, for instance, when the husband belatedly agrees to the transaction, prior to the withdrawal by the spouse/s, then the “frozen” transaction that his wife entered into, shall be thawed and will be perfected. As explained by the Supreme Court:
“The contemplated encumbrance or disposition, albeit categorized as a “void” transaction, is further characterized distinctly from void contracts under Article 1409 of the Civil Code that are deemed inexistent and, consequently, incapable of ratification. Notably, void dispositions under Article 124 of the Family Code are expressly deemed as a continuing offer which may be perfected and accepted by consent of the previously non-consenting spouse. In Spouses Cueno v. Spouses Bautista the Court noted the special nature of the void transactions under the Family Code, i.e., they can become binding contracts upon the acceptance by the other spouse or authorization by the court before the continuing offers are withdrawn by either or both spouses. In other words, a void contract under Article 124 of the Family, while not capable of ratification, is distinctively susceptible of perfection through acceptance by the nonconsenting spouse. (TCLC v. Balandra, G.R. No. 247646. March 29, 2023).
This new decision of the Supreme Court confirms the view that while generally, in contracts law, a void contract cannot be ratified; yet in Family law, given the special kind of partnership that the spouses have, a belated approval by the non-transacting spouse can cure an otherwise void contract.
(The author is the senior partner of ET Reyes III & Associates– a law firm based in Iloilo City. He is a litigation attorney, a law professor, MCLE lecturer, bar reviewer and a book author. His website is etriiilaw.com).
