Abalos vs.
Macatangay The husband cannot alienate
any real property of the
FACTS:
conjugal partnership without
Spouses Arturo and Esther Abalos, the wife's consent. Prior to
married before the enactment of the liquidation of the conjugal
the Family Code, owned a parcel partnership, the interest of
of land in Makati City as part of each spouse in the conjugal
their conjugal partnership. Arturo assets is inchoate and does
executed a Receipt and not become a vested right
Memorandum of Agreement until after the settlement of
(RMOA) to sell the property to the conjugal obligations.
respondent, Dr. Galicano S.
The Court emphasized that for a
Macatangay Jr., acting under a
valid disposition of conjugal
Special Power of Attorney (SPA)
property, the consent of both
from Esther. Later, Esther,
spouses is essential. In this case,
through her attorney-in-fact,
the RMOA and the Contract to Sell
executed a Contract to Sell her
were two separate documents
conjugal interest in the property
with different terms and
to the respondent. A dispute
conditions. Hence, a valid
arose, leading to this case.
transaction could not have arisen.
ISSUE: The Court also clarified the
principles of conjugal partnership
WON the RMOA, signed only by
of gains under the Civil Code and
Arturo, constituted a valid
highlighted the limitations on the
contract of sale, considering the
husband's power to dispose of
property belonged to the conjugal
conjugal property without the
partnership.
wife's consent.
WON Esther's Contract to Sell
As an exception, the husband
cured the lack of her consent in
may dispose of conjugal property
the earlier RMOA signed by
without the wife’s consent if such
Arturo.
sale is necessary to answer for
HELD: conjugal liabilities mentioned in
Articles 161 and 162 of the Civil
The Supreme Court ruled that:
Code.34 In Tinitigan v. Tinitigan,
The RMOA was not a valid Sr.,35 the Court ruled that the
contract of sale. It was a husband may sell property
unilateral offer by Arturo, lacking belonging to the conjugal
Esther's consent, and therefore partnership even without the
void. Esther's subsequent consent of the wife if the sale is
Contract to Sell did not ratify necessary to answer for a big
the void RMOA. A void contract conjugal liability which might
cannot be ratified. endanger the family’s economic
standing. This is one instance husband or the wife to one-half of
where the wife’s consent is not the conjugal assets does not vest
required and, impliedly, no judicial until the liquidation of the
intervention is necessary. conjugal partnership. Nemo dat
qui non habet. No one can give
what he has not.
Significantly, the Family Code has
introduced some changes
particularly on the aspect of the
administration of the conjugal
partnership. The new law provides
that the administration of the
conjugal partnership is now a joint
Homeowners Savings & Loan
undertaking of the husband and
Bank vs Miguela Dailo
the wife. In the event that one
spouse is incapacitated or FACTS:
otherwise unable to participate in
Spouses Dailo were married on
the administration of the conjugal
August 8, 1967 (hindi pa effective
partnership, the other spouse
ang family code; August 3, 1988
may assume sole powers of
naging effective) – so basically,
administration. However, the
CONJUGAL PARTNERSHIP OF
power of administration does not
GAINS pa nagogovern sa kanila.
include the power to dispose or
encumber property belonging to They purchased a house and lot
the conjugal partnership.36 In all located at San Pablo City from
instances, the present law Sandra DAlida. They had the tax
specifically requires the written declaration and deed of absolute
consent of the other spouse, or sale as instruments and proof of
authority of the court for the the said sale. However, the Deed
disposition or encumbrance of of Absolute Sale was executed
conjugal partnership property only in favor of Marcelino Dailo as
without which, the disposition or vendee – therefore Miguela was
encumbrance shall be void. not included in the said
document.
Inescapably, herein petitioner’s
action for specific performance Marcelino executed a SPA in favor
must fail. Even on the supposition of Lilibeth to authorize her to
that the parties only disposed of obtain a loan from HSLB to be
their respective shares in the secured by the said house and lot
property, the sale, assuming that in San Pablo City.
it exists, is still void for as
Lilibeth successfully obtained a
previously stated, the right of the
loan amounting to 300,000 so she
executed the Real Estate be made by the conjugal
Mortgage involving the house and partnership?
lot. All those steps were done
without the knowledge of Miguela.
HELD:
When the loan reached maturity,
it remained unpaid. Consequently, Yes. Article 124 is applicable in
the petitioner initiated this case. The provisions of Art.
extrajudicial foreclosure 493 provides for the co-owner of
proceedings on the mortgaged a property to have full ownership
property and then a certificate of of his part and he/she has the
sale was issued to the HSLB as right to dispose it as he/she
the highest bidder. wants.
After a year, the redemption of In this case, Marcelino as a co-
the property has not taken place owner can do what he wants in
yet, but the HSLB, through their the property, like what he had
vice-president, finalized the done, to mortgage it.
consolidation of ownership by
On the other hand, Art. 124
executing an Affidavit of
provides for the joint
Consolidation of Ownership and a
administration of conjugal
Deed of Absolute Sale on June 6,
properties. HSLB says that the
1996.
framers could not have intended
Miguela then claimed that she that the co-owner spouse cannot
had no knowledge of the exercise his full rights because of
mortgage of the said property, the bar in Article 124.
which he further argued to be a
There is no marriage settlement
conjugal in nature. So, she filed
between Miguela and her dead
before the RTC of San Pablo City 3
spouse, so their property regime
civil cases against HSLB i.e,
is automatically conjugal
Nullity of Real Estate Mortgage
partnership of gains or CPG.
and Certificate of Sale, Affidavit of
Consolidation of Ownership, Deed If there is no consent as to the
of Sale, Reconveyance with Prayer action of one spouse with regards
for Preliminary Injunction and to the administration of the
Damages. property, the same is void.
In this case, No. The HSLB says
payment of the principal
WON the Article 124 of the Family
obligation on the mortgage should
Code is in effect in this instant
be made by the conjugal
case?
partnership because the loan
WON payment of the principal redounded to the benefit of the
obligation on the mortgage should family under Article 121 of the
Family Code. But the burden of Thereafter, SJSSF claims that the
proof lies with the HSLB, on the refusal of MSC to transfer the
one who alleges that the needed documents incur moral
mortgage benefited the conjugal and nominal damages amounting
partnership. HSLB alleges that the to 500k plus 100k for exemplary,
loan was used to finance the and 100k for lost opportunities.
construction of housing units but They also added their expenses
it was not adequately proven. on legal matters.
Also, since they kept on saying
In their defense, Motorich Sales
that Marcelino owned the
Corporation and Nenita Lee
property in his individual capacity,
Gruenberg argued that the
it cannot be admitted that the
agreement referenced in
money was used for his family.
paragraph 3 of the amended
complaint was not validly
executed, as it lacked the
SAN JUAN STRUCTURAL AND
signature of Motorich's President
STEEL vs. CA
and Chairman, Reynaldo
FACTS: Gruenberg. The defendants stated
that the plaintiff-appellant was
SJSSF filed an amended complaint
aware that both signatures were
alleging that on Feb 14, 1989,
required, as shown in a copy of
they entered into an agreement
the Transfer of Rights presented
with Motorich Sales Corporation to
when the agreement was signed.
transfer ownership of a parcel of
The plaintiff drafted the
land in Acropolis Green
agreement and insisted that Mrs.
Subdivisions, Quezon City. As part
Gruenberg accept the PHP
of the agreement, SJSSF paid
100,000 as earnest money. The
100k as down payment and the
defendants also claimed that,
remaining balance was agreed to
even if the agreement were
be paid on or before March 2
enforceable, the plaintiff-
1989.
appellant failed to make payment
However, on March 1, Andres, the by March 2, 1989, as agreed. Mrs.
president of the SJSSF, sent a Gruenberg and the plaintiff-
letter through Linda, requesting a appellant had an understanding
calculation of the outstanding that the Transfer of Rights would
balance. only be signed upon receiving a
cash payment. If paid by check,
They scheduled a meeting with
the parties had agreed to meet at
MSC’s treasurer, Nenita but the
a designated bank to cash the
same did not attend. So they
check and complete the Transfer
have served repeated demands
of Rights. However, the plaintiff-
for the execution of the Transfer
appellant notified Mrs. Gruenberg
of Rights or Deed of Assignment.
about the availability of the check 1. Was there a valid contract
only after banking hours, of sale between Petitioner
preventing the transaction from and Motorich?
proceeding. 2. May the doctrine of
piercing the veil of
corporate fiction be applied
The Court of Appeals upheld the to Motorich?
trial court's decision to dismiss
HELD:
the complaint. However, the
appellate court modified the The Supreme Court denied the
decision by ordering Nenita Lee petition and affirmed the Court of
Gruenberg to refund the ₱100,000 Appeals’ decision.
downpayment to the petitioner.
The Court ruled there was no valid
The Court of Appeals found that contact due to the absence of
there was no evidence that Nenita proper authorization from
Lee Gruenberg, the treasurer of Motorich’s board for Gruenberg to
Motorich Sales Corporation, was sell the property. No proof showed
authorized by the corporation to that Gruenberg had such
sell the land in question. authority or that the agreement
was ratified by Motorich.
Gruenberg's signature on the
agreement was insufficient to The Court rejected piercing the
bind Motorich. corporate veil, emphasizing that
Motorich is not a close corporation
The petitioner should have been
and that there was no evidence of
aware of this, as the sale of
fraudulent or illegal activities
corporate property requires
designed to use corporate fiction
authorization from the board of
for illegitimate purposes.
directors.
The petitioner, being the owner of
several corporations, should have DOCTRINE:
been knowledgeable about
Authority of Corporate Officers: A
corporate matters.
corporate officer must have
The Court of Appeals also found explicit authorization from the
that there was no evidence that board of directors to bind the
Nenita Lee Gruenberg corporation in real estate
misrepresented herself as being transactions.
authorized to sell the property.
Corporate Veil: The corporate veil
may be pierced only when it is
used to commit fraud, illegality, or
ISSUE:
to shield inequity.
Valid Contracts: For a contract Corporation vs. Hon. Reyes –
involving a piece of land to be Presiding Judge of Manila)
valid, the agent’s authority must
The principle of piercing the veil
be in writing.
of corporate fiction, and the
Under the doctrine of "piercing resulting treatment of two related
the veil of corporate fiction," the corporations as one and the same
court looks at the corporation as a juridical person with respect to a
mere collection of individuals or given transaction, is basically
an aggregation of persons applied only to determine
undertaking business as a group, established liability; [34]
it is not
disregarding the separate juridical available to confer on the court a
personality of the corporation jurisdiction it has not acquired, in
unifying the group. Another the first place, over a party not
formulation of this doctrine is impleaded in a case. Elsewise
that when two business put, a corporation not impleaded
enterprises are owned, in a suit cannot be subject to the
conducted and controlled by court's process of piercing the veil
the same parties, both law of its corporate fiction. In that
and equity will, when situation, the court has not
necessary to protect the acquired jurisdiction over the
rights of third parties, corporation and, hence, any
disregard the legal fiction proceedings taken against that
that two corporations are corporation and its property
distinct entities and treat would infringe on its right to due
them as identical or as one process. Aguedo Agbayani, a
and the same. recognized authority on
Commercial Law, stated as much:
While a corporation may exist for
any lawful purpose, the law will
regard it as an association of
persons or, in case of two 23. Piercing the veil of corporate
corporations, merge them into entity applies to determination of
one, when its corporate legal liability not of jurisdiction.
entity is used as a cloak for fraud This is so because the
or illegality. This is the doctrine of doctrine of piercing the veil of
piercing the veil of corporate corporate fiction comes to
fiction. To disregard the play only during the trial of
separate juridical personality the case after the court has
of a corporation, the already acquired jurisdiction
wrongdoing must be over the corporation. Hence,
established clearly and before this doctrine can be
convincingly. It cannot be applied, based on the evidence
presumed. (Kukan International presented, it is imperative that
the court must first have was not valid and could not be
jurisdiction over the corporation. x legally enforced.
x x (Emphasis supplied.)
Moreover, RTC also ruled that
while the petitioner could pursue
recovery of the loan from Edna
Flores vs. Spouses Lindo
personally, this required a
FACTS: separate action. The court
explained it did not have
Edna Lindo obtained a 400k loan
jurisdiction over personal actions,
on Oct 31 1995 from Flores set to
which must be filed in the location
be payable on Dec 1 with 3%
where either the plaintiff or
monthly interest if not paid on the
defendant resides, on the basis of
agreed upon date.
the Revised Rules on Civil
Edna, then executed a Deed of Procedure.
Real Estate Mortgage covering a
However, Flores was not satisfied
property of Spouses Lindo. Edna
and filed a motion for
also signed a promissory note and
reconsideration but it was also
the Deed representing her and
denied.
her husband.
On September 8, 2004, the
Thereafter, Edna issued 3 checks
petitioner filed a Complaint for
as partial payment to Flores but
Sum of Money with Damages
the same were all dishonored
against the respondents, which
because of insufficient funds. As a
was assigned to Branch 42 of the
result, Flores filed a complaint for
RTC, Manila, and designated as
Foreclosure of Mortgage with
Civil Case No. 04-110858.
Damages against the
respondents. The case was sent The respondents filed an Answer
to RTC of Manila. with Affirmative Defenses and
Counterclaims, acknowledging the
RTC rendered a decision stating
loan but asserting it was only
the Flores was not entitled to a
₱340,000. They also claimed that
judicial foreclosure. The court
Enrico was not involved in the
found that Edna had signed the
loan as he did not sign the
Deed of Mortgage without
agreement. They requested the
Enrico’s consent or authority.
case’s dismissal based on
Specifically, Edna signed the
improper venue, res judicata, and
document on October 31, 1995,
forum-shopping, referring to the
but the official SPA was done on
RTC, Branch 33’s earlier Decision.
November 4, 1995. Because
On March 7, 2005, the
Enrico’s authorization came after
respondents filed a Motion to
the deed was already signed, the
Dismiss, arguing res judicata and
court decided that the mortgage
lack of cause of action.
ISSUE: WON the CA’s decision is to participate in the
correct. administration of the conjugal
properties, the other spouse may
HELD:
assume sole powers of
No. Having considered the rule administration. These powers do
that a mortgagee-creditor has a not include disposition or
single cause of action against a encumbrance without authority of
mortgagor-debtor, that is, to the court or the written consent
recover the debt; and that he has of the other spouse. In the
the option of either filing a absence of such authority or
personal action for collection of consent the disposition or
sum of money or instituting a real encumbrance shall be
action to foreclose on the void. However, the transaction
mortgage security. These shall be construed as a
remedies are indeed mutually continuing offer on the part of
exclusive. However, in this case, the consenting spouse and
the Supreme Court made a pro the third person, and may be
hac vice decision (applicable only perfected as a binding
to this case and as an exception contract upon the acceptance
to the rule) which allows Flores to by the other spouse or
recover via a personal action authorization by the court
despite his prior filing of a real before the offer is withdrawn
action to recover the by either or both
indebtedness. This procedural offerors. (Emphasis supplied)
rule cannot be outweighed by the
Thus it is clear, the mortgage was
rule on unjust enrichment. Here,
void at the outset but it was
Edna admitted her liability of
ratified when a month later,
indebtedness.
Enrico executed a special power
Further, the ruling of the Manila of attorney authorizing Edna to
RTC Branch 33 is erroneous when mortgage the subject property.
it ruled that the mortgage (So I guess this is an exception to
between Edna and Flores is the rule that “no void act can be
invalid. It is true that a disposition ratified.”)
(or in this case a mortgage, which
is an act of strict dominion) of a
conjugal property by one spouse Alejo vs. Cortez
without the consent of the other
spouse is VOID. However, under
the second paragraph of Article
124 of the Family Code:
In the event that one spouse is
incapacitated or otherwise unable
