Prescription and laches

In the sale of a conjugal property, the lack of consent of a spouse has a different effect, depending on whether the sale was made before or after the effectivity of the Family Code. This is illustrated in this case of the spouses Andy and Mila.

Andy was awarded a parcel of land with an area of 520.20 square meters as part of the government’s housing program at the time. Title to the said property (TCT 107534) was issued in the name of Andy and Mila after full payment for the property was received by the government housing authority then known as the PHHC.

Even with the issuance of the title, neither Andy nor Mila nor their children took possession of the property. It was Atty. De Leon and his children who took possession of said property in 1966 and are in actual physical possession of it up to the present. The owner’s duplicate copy of the title over the property given by the PHHC to Andy was also in the possession of Atty. De Leon, who had made considerable improvements thereon, including the residential house where his family resides. The realty taxes had been paid by Atty. De Leon although in the name of Andy, but all the official receipts of tax payments are kept by Atty. De Leon.

On 1983, Andy died and it was only after his burial that Mila and her two children found out that in 1982, TCT 107534 was already cancelled and in lieu thereof, TCT No 2909121 was issued in the name of Mila, the eldest child of Atty. De Leon who then started paying the taxes thereon.

Upon diligent inquiry, Mila and her children discovered that the cancellation of TCT 107534 in favor of TCT 2909121 was based on three sets of documents: (1) irrevocable special power of attorney dated Feb. 14, 1963 executed by Andy and Mila in favor of Mely, appointing the latter as their attorney-in-fact with express power to sign, execute and acknowledge any contract of disposition of said property; (2) a similar irrevocable power of attorney executed by Mely in favor of Atty. De Leon, together with a Deed of Absolute Sale wherein Mely sold the property to Atty. De Leon. It was by virtue of these documents that Atty. De Leon subsequently transferred TCT No. 107534, which was in his possession, to his daughter in whose favor TCT No. 2909121 was issued.

As it turned out, Andy assigned his rights to the property to Mely when he could no longer comply with the monthly installment. And Mely in turn sold her rights to Atty. De Leon who transferred the title to his daughter as he was already in possession of the TCT 107534. But Mila did not know or consent to the same and that her signatures were forged, especially the Special Power of Attorney in favor of Mely where the forgery was so blatant as to be remarkably noticeable to the naked eye.

But, after consulting several lawyers, Mila and her children filed a complaint against Atty. De Leon and his daughter as well as Mely and the Register of Deeds seeking the annulment of the TCT and all its derivative titles and the re-conveyance of the property to them.

They contended that Mila’s lack of consent rendered the SPAs and the deeds of assignment and sale null and void or inexistent and actions for declaration of non-existence of a contract does not prescribe. Were they correct?

No. The provision declaring as void any alienation or encumbrance made by the husband without the wife’s consent is found in the Family Code which took effect on Aug. 3, 1988. All the events and transactions in this case occurred before the Family Code (FC) took effect. So the provisions of the New Civil Code (NCC), not the FC, still govern these transactions.

Under Article 173 of the NCC, the wife may, during the marriage and within 10 years from the transaction questioned, ask the courts for the annulment of any contract the husband entered into without her consent when such consent is required… The plain meaning of the phrase “may be annulled by the wife” is that such alienation is not void but only annullable or voidable; and that the action must be filed during the marriage and within 10 years from the transaction in question.

In this case, Andy died in April 1983, thereby terminating his marriage with Mila. On the other hand, the transactions in this case happened in 1963 and 1964 while the transfer of the title in the name of Atty. De Leon’s daughter occurred in 1982. So the action filed by Mila and her children in 1995 was no longer during the marriage and within 10 years from the transactions in question.

Considering that Mila failed to exercise her right to file the annulment of sale within the prescribed period, she is now barred from questioning the validity thereof or questioning the validity of the subsequent transfers from Mely to Atty. De Leon and from the latter to his daughter. Therefore, title to the property can no longer be re-conveyed to her by reason of prescription and laches (Heirs of Hernandez, Sr. vs. Mingoa, Sr., G.R.146548, Dec. 18, 2009 608 SCRA 394).