Friday, December 16, 2011

Mario Siochi vs. Alfredo Gozon, Winifred Gozon, Elvira Gozon Inter-Deimensional Realty, Inc; GR No. 169900; March 18, 2010

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FACTS: Alfredo and Elvira are married. Winifred is their daughter. The property involved in this case is a 30,000 sq. m. lot in Malabon which is registered in the name of Alfredo. The property regime of the couple is conjugal partnership of gains.

Elvira filed for legal separation. B filed a notice of lis pendens over the title of the lot in Malabon.

While the legal separation case was still pending, Alfredo entered into an agreement with Mario who paid P5 million in earnest money and took possession of the property. Title still with notice of lis pendens.

Cavite RTC granted legal separation. CPG was dissolved and liquidated. Alfredo, the guilty spouse, did not receive his share in the net profits, which instead went to their daughter, Winifred. Cavite RTC ruled land in Malabon as conjugal property.

Alfred executed a Deed of Donation over the property in favour of Winifred. Malabon RTC issued new TCT in the name of Winifred without annotating the agreement between Alfredo and Mario Siochi, nor the notice of lis pendens filed by Elvira, the wife. Then, through an SPA, Winifred gave authority to her father, Alfred, to sell the lot. Alfred sold it to Inter-Dimensional Realty for P18 million. A TCT was issued to Inter-Dimensional Realty.

Mario filed a case with Malabon RTC (property was in Malabon) to Annul donation to Winifred, Annul the Sale to Inter-Dimensional, and to remove notice of lis pendens over title of land.

Malabon RTC upheld original agreement to buy and sell between Mario and Alfredo and declared void the sale by Alfredo and Winifred to Inter-Dimensional.

However, Court of Appeals said agreement between Mario and Alfredo is void because (1) it was entered into without the consent of Elvira, Alfredo’s wife; and, (2) Alfredo’s ½ undivided share has been forfeited in favour of Winifred by the grant of legal separation by the Cavite RTC. (Note these reasons given by the CA.)

ISSUES:

(1) Was the agreement between Mario and Alfredo valid? Mario argues that even if the sale to Mario was done without the consent of Elvira, the sale should be treated as a continuing offer which may be perfected by the acceptance of the other spouse before the offer is withdrawn. Mario alleges that Elvira’s conduct showed her acquiescence to the sale.

SC says the CA was right in declaring the sale between Mario and Alfredo as void. Under Art 124 of the Family Code, if one of the spouses was incapacitated or otherwise unable to participate in the administration of the properties, the other spouse may assume sole powers of administration. These powers, however do not include the power to dispose or encumber the properties which require a court order or the written consent of the other spouse. The agreement is void in its entirety, not just to the share of the husband, Alfredo. The Court however said that the CA erred in saying that the ½ undivided share of Alfredo was forfeited in favour of Winifred. As regards Mario’s contention that the Agreement is a continuing offer which may be perfected by Elvira’s acceptance before the offer is withdrawn, the fact that the property was subsequently donated by Alfredo to Winifred and then sold to IDRI clearly indicates that the offer was already withdrawn.

The Court said the CA erred in saying that Alfredo forfeited his ½ share in the conjugal property as a result of the grant of legal separation by the Cavite RTC. Art 63 (Effects of legal separation) in relation to Art 43(2) (Effects of termination of subsequent marriage) provides that the guilty spouse in legal separation forfeits his share in the net profits of the property. The Court said, “Clearly, what is forfeited in favor of Winifred is not Alfredo’s share in the conjugal partnership property but merely in the net profits of the conjugal partnership property.” Thus, as regards this point, the CA erred.

(2) Was the donation to Winifred valid?
No, the donation was not valid. Elvira’s consent was absent.

(3) Was the sale to Inter-Dimensional valid? Inter-Dimensional says it is a buyer in good faith. SC says no. Inter-Dimensional knew of the notice of lis pendens.

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