Article 124 of the Family Code of the Philippines

Article 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (165a)

Acts of Administration.

A spouse may perform acts of administration alone over their properties without the consent of the other.

Joint management or administration does not require that the husband and the wife always act together.

Each spouse may validly exercise full power of management alone, subject to the intervention of the court in proper cases as provided in this article.

While the husband and wife are joint administrators, however, the decision of the husband prevails in case of conflict.

However, the wife has a recourse by going to court to prevent the implementation of such decision. She must do so within five (5) years from the date of contract implementing such decision; otherwise, it would prescribe and the contract would become binding.

Effect of Divorce.

When the American husband of a Filipina obtains a divorce pursuant to his national law, he loses his standing to sue as her husband and can no longer exercise control over the conjugal assets. He is estopped by his own representation before said court from asserting his right over the alleged conjugal party. (Van Dorn vs. Judge Romilli, Jr., 139 SCRA 139)

Husband, as administrator of the conjugal partnership, cannot lease property without wife's consent.

Administration does not include acts of ownership. 

For while the husband can administer the conjugal assets unhampered, he cannot alienate or encumber the conjugal realty. 

Under Art. 166 of NCC "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 the wife's consent..."

Sale by the wife of the conjugal assets.

The sale by the spouse of the conjugal assets without the consent of the other is void. 

Even if the spouse consented in the negotiation, but refused to give consent in the perfection of the contract, the sale would also be void.

Under the law, any sale, mortgage, encumbrance made by one spouse without the consent of the other is void, but the law likewise says that it may be perfected upon acceptance by the other spouse or authorization by the court. 

While as a rule, a void contract cannot be ratified, this is an exception. Article 5 of the Civil Code supports this law when it provided that "acts executed against provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity".

Sale of properties of the conjugal partnership needs the consent of the spouses; otherwise, void. 

The issue in the case of Spouses Antonio and Luzviminda Guiang vs. CA, et al. (G.R. No. 125172, June 26, 1998, 95 SCAD 264) was the validity of the sale of a conjugal property by the husband without the wife's consent. 

While the wife was in Manila looking for a job, the husband sold the property in question, hence, the wife questioned the validity of the sale.

The Supreme Court ruled that the sale was void, in accordance with Article 124, as it was done without the wife's consent.

Article 173, NCC provided that the wife may, within 10 years from the transaction ask for annulment of the sale, but this was not carried over in the Family Code. Hence, any alienation or encumbrance made after August 3, 1988 is void if it is without the consent of the other spouse.

Remedy of a spouse who wants to sell a property when her spouse is incapacitated due to sickness.

The law provides that the wife who assumes sole powers of administration has the powers and duties as a guardian under the Rules of Court. (Rule 93)

Consequently, a spouse who desires to sell real property, as such administrator of the conjugal property, must observe the procedure for the sale of the ward's estate required under judicial guardians under Rule 95 of the revised Rules of Court (Selling and Encumbering Property of Ward).

The spouse of the incompetent should file a petition for appointment as guardian over the person and properties of the spouse and following the rules, file a motion for leave to sell properties pursuant to Rule 95.

Mortgage of conjugal property by husband without consent of the wife is void.

The law provides that if there is a sale or encumbrance of a conjugal property is void if without the consent of the other spouse and the nullity is total even if we consider the fact that upon the dissolution of the marital relationship, they would divide the properties equally.

The regime of conjugal property of gains is a special type of partnership. The husband and the wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance.

The conjugal partnership shall be governed by the rules on contract of partnership, so long as it is not in conflict with what is expressly determined in this chapter (Chapter 4 - Conjugal Partnership of Gains) or by the the spouses in their marriage settlements.

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Case Digest

G.R. No. 92245             June 26, 1991

MELANIA A. ROXAS, petitioner,
vs.
THE HON. COURT OF APPEALS and ANTONIO M. CAYETANO, respondents.

PONENTE: Paras, J.

FACTS:

• The Petitioner, Melania Roxas is married to Antonio Roxas, herein respondent, but they are already estranged and living separately.

• Melania discovered that Antonio Roxas leased to Respondent Antonio Cayetano sometime on March 30, 1987 their conjugal lot in 854 Quirino Highway, Novaliches, Quezon City without her knowledge and consent. 

• On the same lot, Melania had planned to put up her flea market with at least twenty (20) stalls and mini-mart for grocery and dry goods items for which she had filed an application for the corresponding Mayor's Permit and Municipal License which had been approved since 1986, but when she attempted to renew it, the same was disapproved due to the complaint lodged by Antonio Cayetano, whose application for renewal of Mayor's Permit and License for the same business of putting up a flea market, had been allegedly earlier approved.

• Melania filed a case before the Regional Trial Court of Quezon City praying for the annulment of the contract of lease between her husband Antonio and Antonio Cayetano.

• Cayetano moved to dismiss the complaint on the sole ground that the complaint states no cause of action, to which an Opposition was filed by Melania, while defendant Antonio S. Roxas, estranged husband of plaintiff-petitioner, filed an answer. The RTC judge dismissed Melania's complaint.

ISSUE:

                Whether or not a husband, as the administrator of the conjugal partnership, may legally enter into a contract of lease involving conjugal real property without the knowledge and consent of the wife.

HELD:

          No. The Supreme Court held that even if the husband is not an ordinary administrator, administration does not include acts of ownership. For while the husband can administer the conjugal assets unhampered, he cannot alienate or encumber the conjugal realty. Thus, under Art. 166 of NCC "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 wife's consent. If she refuses unreasonably to give her consent, the court may compel her to grant the same." This rule prevents abuse on the part of the husband, and guarantees the rights of the wife, who is partly responsible for the acquisition of the property, particularly the real property. Contracts entered into by the husband in violation of this prohibition are voidable and subject to annulment at the instance of the aggrieved wife. (Art. 173 of the Civil Code)


               As stated in Black's Law Dictionary, the word "alienation" means "the transfer of the property and possession of lands, tenements, or other things from one person to another ... The act by which the title to real estate is voluntarily assigned by one person to another and accepted by the latter, in the form prescribed by law." While encumbrance "has been defined to be every right to, or interest in, the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance; any (act) that impairs the use or transfer of property or real estate..."

               The pivotal issue in this case is whether or not a lease is an encumbrance and/or alienation.

               Under Art. 1643 of the New Civil Code "In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite...." 

               Therefore, lease is not only a grant of possession, but also a grant of use. It is a burden or an encumbrance on the land. The concept of encumbrance includes lease, thus "an encumbrance is sometimes construed broadly to include not only liens such as mortgages and taxes, but also attachment, leases, inchoate dower rights, water rights, easements, and other RESTRICTIONS on USE."

               Moreover, lease is not only an encumbrance but also a qualified alienation, with the lessee becoming, for all legal intents and purposes, and subject to its terms, the owner of the thing affected by the lease.

               Thus, in case the wife's consent is not secured by the husband as required by law, the wife has the remedy of filing an action for the annulment of the contract.

               In this case, the petitioner's estranged husband, defendant Antonio Roxas had entered into a contract of lease with defendant Antonio Cayetano without her marital consent being secured as required by law under Art. 166 of the Civil Code. Petitioner, therefore, has a cause of action under Art. 173 to file a case for annulment of the contract of lease entered into without her consent. Petitioner has a cause of action not only against her husband but also against the lessee, Antonio Cayetano, who is a party to the contract of lease.

               The decision of the Court of Appeals was set aside and the case was remanded to the Regional Trial Court for further proceedings.

References:

• Albano, E. (2017).Family Code of the Philippines, pp. 38-39. Quezon City, Philippines: Central Books Supply, Inc.
• Arellano Law Fovndation. (2019). The LAWPHiL Project. Philippine Jurisprudence. Retrived October 2019, from https://lawphil.net/judjuris/juri1989/jan1989/ gr_79955_1989.html