Spousal Consent in Conjugal Property Disposition Under the Family Code

The Family Code requires both spouses to consent in writing before conjugal property can be sold or encumbered. A recent Supreme Court ruling in Siochi v. Gozon (G.R. No. 169900, March 18, 2010) shows how strictly this rule is applied — and what happens when a buyer fails to check the property's history.

The Facts of the Case

Alfredo Gozon and Elvira Gozon owned a 30,000-square-meter parcel of land in Malabon, registered under both their names. In December 1991, Elvira filed for legal separation. She also filed a notice of lis pendens, which was annotated on the title — a warning to anyone dealing with the property that a court case was pending.

While the legal separation case was ongoing, Alfredo entered into an Agreement to Buy and Sell with Mario Siochi for P18 million. The agreement required Alfredo to secure Elvira's affidavit that the property was his exclusive property, obtain court approval to exclude it from the legal separation case, and remove the lis pendens. Alfredo failed on all counts. Siochi paid P5 million as earnest money and took possession.

The court later ruled the property was conjugal and decreed legal separation. Alfredo then donated the property to their daughter Winifred, who gave him a special power of attorney to sell it to Inter-Dimensional Realty, Inc. (IDRI) for P18 million. The lis pendens and the agreement with Siochi were not annotated on the new titles.

The Legal Issue

The central question was whether Alfredo could validly dispose of the conjugal property without Elvira's written consent.

The Ruling

The Supreme Court held that the sale was void. Under Article 124 of the Family Code, when one spouse is unable to participate in the administration of conjugal property, the other spouse may assume sole administration — but this does not include the power to dispose of or encumber the property. That power requires either the court's authority or the written consent of the other spouse. Without it, the disposition is void.

The Court emphasized that the absence of one spouse's consent voids the entire sale, including the portion belonging to the spouse who made the sale. Even active participation in negotiations by the other spouse is not enough — the law requires written consent.

Siochi argued that the agreement was a continuing offer that Elvira could accept. The Court rejected this: the subsequent donation and sale clearly showed the offer had been withdrawn.

What Buyers Must Verify

The Court also ruled that IDRI was not a buyer in good faith. Its representative knew about the lis pendens and the legal separation case. Had IDRI made further inquiries, it would have discovered that the cancellation of the lis pendens was irregular — it was cancelled upon Alfredo's request without a court order or Elvira's verified petition, contrary to Section 77 of Presidential Decree No. 1529.

The Court also noted that Alfredo's donation to Winifred violated Article 125 of the Family Code, which prohibits one spouse from donating conjugal property without the other's consent.

A Note on Forfeiture

The Court corrected a lower court's error: in legal separation, the offending spouse forfeits only his share of the net profits of the conjugal partnership, not his share of the property itself. The Court cited Articles 63 and 43(2) of the Family Code, clarifying that what is forfeited is the increase in value between the market value at marriage and at dissolution, not the capital.

Practical Takeaways

• Both spouses must give written consent before selling or encumbering conjugal property. Oral agreement or participation is not enough.
• A sale without spousal consent is void — not merely voidable — and the entire transaction fails.
• Buyers must verify titles carefully. Knowledge of a lis pendens or pending case puts a buyer on notice to investigate further.
• Check how a lis pendens was cancelled. It requires a court order or a verified petition from the party who registered it.
• Donations of conjugal property by one spouse without the other's consent are also prohibited.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.