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SECOND DIVISION
R E S O L U T I O N CARPIO, J.:
This is a consolidation of two separate petitions for review,c�fa1c�fac�fal�.w assailing the 7 July 2005 Decisionc�fa2c�fac�fal�.w and the 30 September 2005 Resolutionc�fa3c�fac�fal�.w of the Court of Appeals in CA-G.R. CV No. 74447.chanroblesvirtua|awlibary This case involves a 30,000 sq.m. parcel of land (property) covered by TCT No. 5357.c�fa4c�fac�fal�.w The property is situated in Malabon, Metro Manila and is registered in the name of Alfredo Gozon (Alfredo), married to Elvira Gozon (Elvira). On 23 December 1991, Elvira filed with the Cavite City Regional Trial Court (Cavite RTC) a petition for legal separation against her husband Alfredo. On 2 January 1992, Elvira filed a notice of lis pendens, which was then annotated onTCT No. 5357. On 31 August 1993, while the legal
separation case was still pending, Alfredo and Mario Siochi (Mario) entered
into an Agreement to Buy and Sellc�fa5c�fac�fal�.w
(Agreement) involving the property for the price of Meanwhile, on 29 June 1994, the Cavite RTC rendered a decisionc�fa6c�fac�fal�.w in the legal separation case, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered decreeing the legal separation between petitioner and respondent. Accordingly, petitioner Elvira Robles Gozon is entitled to live separately from respondent Alfredo Gozon without dissolution of their marriage bond. The conjugal partnership of gains of the spouses is hereby declared DISSOLVED and LIQUIDATED. Being the offending spouse, respondent is deprived of his share in the net profits and the same is awarded to their child Winifred R. Gozon whose custody is awarded to petitioner.chanroblesvirtua|awlibary Furthermore, said parties are required to mutually support their child Winifred R. Gozon as her needs arises. SO ORDERED.c�fa7c�fac�fal�.w As regards the property, the Cavite RTC held that it is deemed conjugal property.chanroblesvirtua|awlibary On 22 August 1994, Alfredo executed a Deed of Donation over the property in favor of their daughter, Winifred Gozon (Winifred). The Register of Deeds of Malabon, Gil Tabije, cancelledTCT No. 5357 and issued TCT No. M-10508c�fa8c�fac�fal�.w in the name of Winifred, without annotating the Agreement and the notice of lis pendens on TCT No. M-10508. On 26 October 1994, Alfredo, by virtue
of a Special Power of Attorneyc�fa9c�fac�fal�.w
executed in his favor by Winifred, sold the property to Inter-Dimensional Realty,
Inc. (IDRI) for Mario then filed with the Malabon Regional Trial Court (Malabon RTC) a complaint for Specific Performance and Damages, Annulment of Donation and Sale, with Preliminary Mandatory and Prohibitory Injunction and/or Temporary Restraining Order. On 3 April 2001, the Malabon RTC rendered a decision,c�fa13c�fac�fal�.w the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered as follows: 01. cralawOn the preliminary mandatory and prohibitory injunction: 1.1 The same is hereby made permanent by: 1.1.1 Enjoining defendants Alfredo Gozon, Winifred Gozon, Inter-Dimensional Realty, Inc. and Gil Tabije, their agents, representatives and all persons acting in their behalf from any attempt of commission or continuance of their wrongful acts of further alienating or disposing of the subject property; 1.1.2.Enjoining defendant Inter-Dimensional Realty, Inc. from entering and fencing the property; 1.1.3. Enjoining defendants Alfredo Gozon, Winifred Gozon, Inter-Dimensional Realty, Inc. to respect plaintiffs possession of the property. 02. The Agreement to Buy and Sell dated 31 August 1993, between plaintiff and defendant Alfredo Gozon is hereby approved, excluding the property and rights of defendant Elvira Robles-Gozon to the undivided one-half share in the conjugal property subject of this case. 03. The Deed of Donation dated 22 August 1994, entered into by and between defendants Alfredo Gozon and Winifred Gozon is hereby nullified and voided. 04. The Deed of Absolute Sale dated 26 October 1994, executed by defendant Winifred Gozon, through defendant Alfredo Gozon, in favor of defendant Inter-Dimensional Realty, Inc. is hereby nullified and voided. 05. Defendant Inter-Dimensional Realty, Inc. is hereby ordered to deliver its Transfer Certificate of Title No. M-10976 to the Register of Deeds of Malabon, Metro Manila. 06. The Register of Deeds of Malabon, Metro Manila is hereby ordered to cancel Certificate of Title Nos. 10508 in the name of Winifred Gozon and M-10976 in the name of Inter-Dimensional Realty, Inc., and to restore Transfer Certificate of Title No. 5357 in the name of Alfredo Gozon, married to Elvira Robles with the Agreement to Buy and Sell dated 31 August 1993 fully annotated therein is hereby ordered. 07. Defendant Alfredo Gozon is hereby ordered to deliver a Deed of Absolute Sale in favor of plaintiff over his one-half undivided share in the subject property and to comply with all the requirements for registering such deed. 08. Ordering defendant Elvira Robles-Gozon to sit with plaintiff to agree on the selling price of her undivided one-half share in the subject property, thereafter, to execute and deliver a Deed of Absolute Sale over the same in favor of the plaintiff and to comply with all the requirements for registering such deed, within fifteen (15) days from the receipt of this DECISION. 09.
Thereafter, plaintiff is hereby ordered to pay defendant Alfredo Gozon the
balance of Four Million Pesos ( 10. Plaintiff is hereby ordered to pay the defendant Elvira Robles-Gozon the price they had agreed upon for the sale of her one-half undivided share in the subject property. 11. Defendants Alfredo Gozon, Winifred Gozon and Gil Tabije are hereby ordered to pay the plaintiff, jointly and severally, the following: 11.1 Two Million Pesos ( 11.2 One Million Pesos ( 11.3 Five Hundred Thousand Pesos ( 11.4 Four Hundred Thousand Pesos ( 11.5 One Hundred Thousand Pesos ( 11.6 The above awards are subject to set off of plaintiffs obligation in paragraph 9 hereof. 12. Defendants Alfredo Gozon and Winifred Gozon are hereby ordered to pay Inter-Dimensional Realty, Inc. jointly and severally the following: 12.1 Eighteen Million Pesos ( 12.2 One Million Pesos ( 12.3 Five Hundred Thousand Pesos ( 12.4 One Hundred Thousand Pesos ( 13. Defendants Alfredo Gozon and Winifred Gozon are hereby ordered to pay costs of suit. SO ORDERED.c�fa14c�fac�fal�.w On appeal, the Court of Appeals affirmed the Malabon RTCs decision with modification. The dispositive portion of the Court of Appeals Decision dated7 July 2005 reads: WHEREFORE, premises considered, the assailed decision dated April 3, 2001 of the RTC, Branch 74, Malabon is hereby AFFIRMED with MODIFICATIONS, as follows: 1. The sale of the subject land by defendant Alfredo Gozon to plaintiff-appellant Siochi is declared null and void for the following reasons: a) The conveyance was done without the consent of defendant-appellee Elvira Gozon; b) Defendant Alfredo Gozons one-half () undivided share has been forfeited in favor of his daughter, defendant Winifred Gozon, by virtue of the decision in the legal separation case rendered by the RTC, Branch 16, Cavite; 2.
Defendant Alfredo Gozon shall return/deliver to plaintiff-appellant Siochi the
amount of 3. Defendants Alfredo Gozon, Winifred Gozon and Gil Tabije are hereby ordered to pay plaintiff-appellant Siochi jointly and severally, the following: a) b) c) d) e) The awards of actual and compensatory damages are hereby ordered deleted for lack of basis. 4. Defendants Alfredo Gozon and Winifred Gozon are hereby ordered to pay defendant-appellant IDRI jointly and severally the following: a)
b)
c)
Defendant Winifred Gozon, whom the undivided one-half share of defendant Alfredo Gozon was awarded, is hereby given the option whether or not to dispose of her undivided share in the subject land. The rest of the decision not inconsistent with this ruling stands. SO ORDERED.c�fa15c�fac�fal�.w Only
Mario and IDRI appealed the decision of the Court of Appeals. In his petition,
Mario alleges that the Agreement should be treated as a continuing offer which
may be perfected by the acceptance of the other spouse before the offer is
withdrawn. Since Elviras conduct signified her acquiescence to the sale, Mario
prays for the Court to direct Alfredo and Elvira to execute a Deed of Absolute
Sale over the property upon his payment of On the other hand, IDRI alleges that it is a buyer in good faith and for value. Thus, IDRI prays that the Court should uphold the validity of IDRIs TCT No. M-10976 over the property. We find the petitions without merit. This case involves the conjugal property of Alfredo and Elvira. Since the disposition of the property occurred after the effectivity of the Family Code, the applicable law is the Family Code. Article 124 of the Family Code provides: Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husbands decision shall prevail, subject to the recourse to the court by the wife for a proper remedy, which must be availed of within five years from the date of the contract implementing such decision.chanroblesvirtua|awlibary 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 the powers of disposition or encumbrance which must have the 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. (Emphasis supplied) In this case, Alfredo was the sole administrator of the property because Elvira, with whom Alfredo was separated in fact, was unable to participate in the administration of the conjugal property. However, as sole administrator of the property, Alfredo still cannot sell the property without the written consent of Elvira or the authority of the court. Without such consent or authority, the sale is void.c�fa16c�fac�fal�.w The absence of the consent of one of the spouse renders the entire sale void, including the portion of the conjugal property pertaining to the spouse who contracted the sale.c�fa17c�fac�fal�.w Even if the other spouse actively participated in negotiating for the sale of the property, that other spouses written consent to the sale is still required by law for its validity.c�fa18c�fac�fal�.w The Agreement entered into by Alfredo and Mario was without the written consent of Elvira. Thus, the Agreement is entirely void. As regards Marios contention that the Agreement is a continuing offer which may be perfected by Elviras 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.chanroblesvirtua|awlibary However, we disagree with the finding of the Court of Appeals that the one-half undivided share of Alfredo in the property was already forfeited in favor of his daughter Winifred, based on the ruling of the Cavite RTC in the legal separation case.The Court of Appeals misconstrued the ruling of the Cavite RTC that Alfredo, being the offending spouse, is deprived of his share in the net profits and the same is awarded to Winifred.chanroblesvirtua|awlibary The Cavite RTC ruling finds support in the following provisions of the Family Code: Art. 63. The decree of legal separation shall have the following effects: (1)The spouses shall be entitled to live separately from each other, but the marriage bonds shall not be severed; (2)The absolute community or the conjugal partnership shall be dissolved and liquidated but the offending spouse shall have no right to any share of the net profits earned by the absolute community or the conjugal partnership, which shall be forfeited in accordance with the provisions of Article 43(2); (3)The custody of the minor children shall be awarded to the innocent spouse, subject to the provisions of Article 213 of this Code; and The offending spouse shall be disqualified from inheriting from the innocent spouse by intestate succession. Moreover, provisions in favor of the offending spouse made in the will of the innocent spouse shall be revoked by operation of law. Art. 43. The termination of the subsequent marriage referred to in the preceding Article shall produce the following effects: x x x (2) The absolute community of property or the conjugal partnership, as the case may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith, his or her share of the net profits of the community property or conjugal partnership property shall be forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a previous marriage or, in default of children, the innocent spouse; (Emphasis supplied) Thus, among the effects of the decree of legal separation is that the conjugal partnership is dissolved and liquidated and the offending spouse would have no right to any share of the net profits earned by the conjugal partnership. It is only Alfredos share in the net profits which is forfeited in favor of Winifred. Article 102(4) of the Family Code provides that [f]or purposes of computing the net profits subject to forfeiture in accordance with Article 43, No. (2) and 63, No. (2), the said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution. Clearly, what is forfeited in favor of Winifred is not Alfredos share in the conjugal partnership property but merely in the net profits of the conjugal partnership property.chanroblesvirtua|awlibary With regard to IDRI, we agree with the Court of Appeals in holding that IDRI is not a buyer in good faith. As found by the RTC Malabon and the Court of Appeals, IDRI had actual knowledge of facts and circumstances which should impel a reasonably cautious person to make further inquiries about the vendors title to the property. The representative of IDRI testified that he knew about the existence of the notice of lis pendens on TCT No. 5357 and the legal separation case filed before the Cavite RTC. Thus, IDRI could not feign ignorance of the Cavite RTC decision declaring the property as conjugal. Furthermore, if IDRI made further inquiries, it would have known that the cancellation of the notice of lis pendens was highly irregular.Under Section 77 of Presidential Decree No. 1529,c�fa19c�fac�fal�.w the notice of lis pendens may be cancelled (a) upon order of the court, or (b) by the Register of Deeds upon verified petition of the party who caused the registration of the lis pendens. In this case, the lis pendens was cancelled by the Register of Deeds upon the request of Alfredo. There was no court order for the cancellation of the lis pendens. Neither did Elvira, the party who caused the registration of the lis pendens, file a verified petition for its cancellation.chanroblesvirtua|awlibary Besides, had IDRI been more prudent before buying the property, it would have discovered that Alfredos donation of the property to Winifred was without the consent of Elvira. Under Article 125c�fa20c�fac�fal�.w of the Family Code, a conjugal property cannot be donated by one spouse without the consent of the other spouse.Clearly, IDRI was not a buyer in good faith.chanroblesvirtua|awlibary Nevertheless, we find it proper to
reinstate the order of the Malabon RTC for the reimbursement of the WHEREFORE, we DENY the petitions. We AFFIRM the 7 July 2005 Decision of the Court of Appeals in CA-G.R. CV No. 74447 with the following MODIFICATIONS: (1) We DELETE the portions regarding the forfeiture of Alfredo Gozons one-half undivided share in favor of Winifred Gozon and the grant of option to Winifred Gozon whether or not to dispose of her undivided share in the property; and (2) We ORDER Alfredo Gozon and Winifred Gozon
to pay Inter-Dimensional Realty, Inc. jointly and severally the Eighteen
Million Pesos ( SO ORDERED.chanroblesvirtua|awlibary ANTONIO T. CARPIO Associate Justice WE CONCUR: ARTURO D. BRION Associate Justice MARIANO C. DEL CASTILLOROBERTO A. ABAD Associate JusticeAssociate Justice JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.chanroblesvirtua|awlibary ANTONIO T. CARPIO Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the DivisionChairpersons Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice cralawEndnotes:
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