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Art. 1397. The action for the annulment of Art. 1397. The action for the annulment of
contracts may be instituted by all who are contracts may be instituted by all who are
thereby obliged principally or subsidiarily. thereby obliged principally or subsidiarily.
However, persons who are capable cannot However, persons who are capable cannot
allege the incapacity of those with whom allege the incapacity of those with whom
they contracted; nor can those who they contracted; nor can those who
exerted intimidation, violence, or undue exerted intimidation, violence, or undue
influence, or employed fraud, or caused influence, or employed fraud, or caused
mistake base their action upon these flaws mistake base their action upon these flaws
of the contract. of the contract.
Art. 1399. When the defect of the contract Art. 234. Emancipation takes place by the
consists in the incapacity of one of the attainment of majority. Unless otherwise
parties, the incapacitated person is not provided, majority commences at the age
obliged to make any restitution except of twenty-one years.
insofar as he has been benefited by the Emancipation also takes place:
thing or price received by him.
(1) By the marriage of the minor; or
1. Necessaries (Arts. 1489 and 290); (2) By the recording in the Civil Register of
an agreement in a public instrument
Art. 1489. All persons who are authorized executed by the parent exercising parental
in this Code to obligate themselves, may authority and the minor at least eighteen
enter into a contract of sale, saving the years of age. Such emancipation shall be
modifications contained in the following irrevocable.
articles.
Art. 236. Emancipation for any cause shall
Art. 290; terminate parental authority over the
person and property of the child who shall
then be qualified and responsible for all
acts of civil life.
Firmly established in our civil law is the In January 1991, real estate broker Marta
doctrine that: “Every person must, in the K.Atanacio offered 2 lots located in
exercise of his rights and in the Parañaque to the petitioners. On February
performance of his duties, act with justice, 2, 1991, the petitioners met up with Elena
give everyone his due, and observe Parulan at the site of the property and
honesty and good faith.”[22] When a right showed them the following documents:
is exercised in a manner that does not (a.) Owner’s original copy of the TCT of the
conform with such norms and results in 2 lots; (b.) tax declarations; (c.) a copy of
damages to another, a legal wrong is the special power of attorney dated
January 7, 1991 executed by Dionisio
authorizing Elena to sell the property. The On March 19, 1991, TCT was cancelled and
petitioners paid P200,000.00 as earnest a new one was issued in the name of the
money for which Elena executed a petitioners. Elena did not turn over the
handwritten Receipt of Earnest Money duplicate owner’s copy of TCT as promised.
which stipulated that the peitioners would In due time, the petitioners learned that
pay an additional payment of P130, 000.00 the duplicate owner’s copy of TCT had been
on February 4, 1991; P650,000.00 on or all along in the custody of Atty. Jeremy Z.
before February 15, 1991 and P700, Parulan, who appeared to hold an SPA
000.00 on March 31, 1991 once Elena executed by his brother Dionisio
turned over the property. authorizing him to sell both lots. At
Atanacio’s instance, the petitioners met on
On February 4, 1991, the petitioners, March 25, 1991 with Atty. Parulan at the
accompanied by the broker, went to the Manila Peninsula. They were accompanied
Office of the Register of Deeds to verify the by one Atty. Olandesca. They recalled that
TCTs shown by Elena. There they Atty. Parulan “smugly demanded
discovered that one of the lots had been P800,000.00” in exchange for the duplicate
encumbered to Banco Filipino, but that the owner’s copy of TCT, because Atty. Parulan
encumbrance had been cancelled due to represented the current value of the
the full payment of the obligation. They property to be P1.5 million. As a counter-
noticed that the loan was effected through offer, however, they tendered
and SPA executed by Dionisio in favor of P250,000.00, which Atty. Parulan declined,
Elena. The other lot on the other hand had giving them only until April 5, 1991 to
an annotation of an existing mortgage in decide. Hearing nothing more from the
favor of Los Baños Rural Bank, with the petitioners, Atty. Parulan decided to call
same SPA with a court order authorizing them on April 5, 1991, but they informed
Elena to mortgage the lot to secure the him that they had already fully paid to
loan. Elena.
The petitioners and the broker next Thus, on April 15, 1991, Dionisio, through
inquired about the mortgage and the court Atty. Parulan, commenced an action (Civil
order at the Los Baños Rural Bank. There, Case No. 91-1005 entitled Dionisio Z.
they met with Atty. Zarate, related that the Parulan, Jr., represented by Jeremy Z.
bank had asked for the court order because Parulan, as attorney in fact, v. Ma. Elena
the lot involved was conjugal property. Parulan, Sps. Rex and Coney Aggabao),
praying for the declaration of the nullity of
Following their verification, the petitioners the deed of absolute sale executed by Ma.
delivered P130,000.00 as additional down Elena, and the cancellation of the title
payment on February 4, 1991; and issued to the petitioners by virtue thereof.
P650,000.00 to the Los Baños Rural Bank In turn, the petitioners filed on July 12,
on February 12, 1991, which then released 1991 their own action for specific
the owner’s duplicate copy of TCT to them. performance with damages against the
respondents. Both cases were consolidated
On March 18, 1991, the petitioners for trial and judgment in the RTC.
delivered the final amount of P700,000.00
to Elena, who executed a deed of absolute On July 26, 2000, the Regional Trial Court
sale in their favor. However, Elena did not (RTC), Branch 136, in Makati City annulled
turn over the owner’s duplicate copy of the the deed of absolute sale executed in favor
TCT claiming that said copy was in the of the petitioners covering two parcels of
possession of a relative who was then in registered land the respondents owned for
Hongkong. She assured them that the want of the written consent of respondent
owner’s duplicate copy of TCT would be husband Dionisio Parulan, Jr. The CA
turned over after a week. affirmed the RTC decision.
ISSUE: “Article 124. The administration and
enjoyment of the conjugal partnership
Which between Article 173 of the Civil Code property shall belong to both spouses
and Article 124 of the Family Code should jointly. In case of disagreement, the
apply to the sale of the conjugal property husband’s decision shall prevail, subject to
executed without the consent of Dionisio? recourse to the court by the wife for proper
remedy, which must be availed of within
HELD: five years from the date of the contract
implementing such decision.
Article 124, Family Code, applies to sale of
conjugal properties made after the In the event that one spouse is
effectivity of the Family Code incapacitated or otherwise unable to
participate in the administration of the
RATIO: conjugal properties, the other spouse may
assume sole powers of administration.
The petitioners submit that Article 173 of These powers do not include disposition or
the CivilCode, not Article 124 of the Family encumbrance without authority of the court
Code, governed the property relations of or the written consent of the other spouse.
the respondents because they had been In the absence of such authority or
married prior to the effectivity of the Family consent, the disposition or encumbrance
Code; and that the second paragraph of shall be void. However, the transaction
Article 124 of the Family Code should not shall be construed as a continuing offer on
apply because the other spouse held the the part of the consenting spouse and the
administration over the conjugal property. third person, and may be perfected as a
They argue that notwithstanding his binding contract upon the acceptance by
absence from the country Dionisio still held the other spouse or authorization by the
the administration of the conjugal property court before the offer is withdrawn by
by virtue of his execution of the SPA in either or both offerors.”
favor of his brother; and that even Thirdly, according to Article 256 of the
assuming that Article 124 of the Family Family Code, the provisions of the Family
Code properly applied, Dionisio ratified the Code may apply retroactively provided no
sale through Atty. Parulan’s counter-offer vested rights are impaired. In Tumlos v.
during the March 25, 1991 meeting. Fernandez, the Court rejected the
petitioner’s argument that the Family Code
To start with, Article 25427 the Family did not apply because the acquisition of the
Code has expressly repealed several titles contested property had occurred prior to
under the Civil Code, among them the the effectivity of the Family Code, and
entire Title VI in which the provisions on pointed out that Article 256 provided that
the property relations between husband the Family Code could apply retroactively if
and wife, Article 173 included, are found. the application would not prejudice vested
or acquired rights existing before the
Secondly, the sale was made on March 18, effectivity of the Family Code. Herein,
1991, or after August 3, 1988, the however, the petitioners did not show any
effectivity of the Family Code. The proper vested right in the property acquired prior
law to apply is, therefore, Article 124 of the to August 3, 1988 that exempted their
Family Code, for it is settled that any situation from the retroactive application of
alienation or encumbrance of conjugal the Family Code.
property made during the effectivity of the
Family Code is governed by Article 124 of Fourthly, the petitioners failed to
the Family Code. substantiate their contention that Dionisio,
while holding the administration over the
Article 124 of the Family Code provides: property, had delegated to his brother,
Atty. Parulan, the administration of the Art. 133. Every donation between the
property, considering that they did not spouses during the marriage shall be void.
present in court the SPA granting to Atty. This prohibition does not apply when the
Parulan the authority for the donation takes effect after the death of the
administration. donor.
Nonetheless, we stress that the power of Neither does this prohibition apply to
administration does not include acts of moderate gifts which the spouses may give
disposition or encumbrance, which are acts each other on the occasion of any family
of strict ownership. As such, an authority rejoicing.
to dispose cannot proceed from an
authority to administer, and vice versa, for Art. 1490. The husband and the wife
the two powers may only be exercised by cannot sell property to each other, except:
an agent by following the provisions on
agency of the Civil Code (from Article 1876 (1) When a separation of property
to Article 1878). Specifically, the apparent was agreed upon in the marriage
authority of Atty. Parulan, being a special settlements; or
agency, was limited to the sale of the
property in question, and did not include or (2) When there has been a judicial
extend to the power to administer the separation or property under Article
property. 191.
Lastly, the petitioners’ insistence that Atty. Art. 1492. The prohibitions in the two
Parulan’s making of a counter-offer during preceding articles are applicable to sales in
the March 25, 1991 meeting ratified the legal redemption, compromises and
sale merits no consideration. Under Article renunciations.
124 of the Family Code, the transaction
executed sans the written consent of
Dionisio or the proper court order was void;
hence, ratification did not occur, for a void
contract could not be ratified. On the other CASE:
hand, we agree with Dionisio that the void MEDINA V. COLLECTOR, 1 SCRA 302;
sale was a continuing offer from the
petitioners and Ma. Elena that Dionisio had FACTS:
the option of accepting or rejecting before Antonio Medina and Antonia Rodriguez
the offer was withdrawn by either or both married in 1944 without any property.
Ma. Elena and the petitioners. The last Antonio later acquired forest concessions in
sentence of the second paragraph of Article Isabela. In 1949, Antonia engaged in
124 of the Family Code makes this clear, lumber business. From 1949 to 1952,
stating that in the absence of the other Antonio sold all his logs to Antonia. Antonia
spouse’s consent, the transaction should in turn sold the products in Manila through
be construed as a continuing offer on the an agent.
part of the consenting spouse and the third
person, and may be perfected as a binding Upon assessment of their taxes, the
contract upon the acceptance by the other Collector of Internal Revenue considered
spouse or upon authorization by the court the sale from Antonio to Antonia as null and
before the offer is withdrawn by either or void, thus, an additional tax of about
both offerors. 4,553.54 was assessed.
2. Between Spouses (Arts. 133, 1490, The spouses protested the assessment
1492) – claiming that they had a prenuptial
agreement pf complete separation of
properties.
3. Attorneys - Fabillo v. lAC, 195 S 28
ISSUE: (1991).
Was the sale between Antonio and Antonia 4. Judges
valid?
D. SALES BY
HELD: ADMINISTRATORS/EXECUTORS - Lee
No. The validity of the prenuptial v. RTC, G.R. No. 146006, February 23,
agreement was declared by the court null 2004
because of material inconsistencies a) the
prenuptial agreement was said to be
executed 3 months before the marriage; b)
the spouses did not have any property
before the marriage which would compel
them into entering into the agreement c)
they did not act in accordance to the said
agreement.
3. Applicability to Common-Law
Spouses (Art. 133);