Abalos vs. Macatangay

A husband cannot validly alienate or encumber any real property of the conjugal partnership without the wife's consent; any such transaction is void, and the interest of each spouse in conjugal assets is merely inchoate and cannot be sold prior to the liquidation of the partnership.

Spouses Arturo and Esther Abalos were the registered owners of a parcel of land with improvements in Makati City. In 1989, amidst a marital squabble, Arturo entered into a transaction with Dr. Galicano Macatangay, Jr. to sell the property, executing a unilateral agreement and receiving a check. Conflicting documents regarding the wife's consent and the subsequent failure to transfer possession led Macatangay to file a legal action to compel the sale.

• Spouses Arturo and Esther Abalos were the registered owners of a 327-square meter parcel of land in Makati City covered by TCT No. 145316.
• On October 17, 1989, Arturo executed a Receipt and Memorandum of Agreement (RMOA) in favor of Macatangay, binding himself to sell the property and not offer it to others for 30 days.
• Arturo acknowledged receipt of a P5,000.00 check from Macatangay, described as earnest money to be deducted from the P1,300,000.00 purchase price.
• The RMOA did not bear the signature of Arturo's wife, Esther.
• On October 25, 1989, Esther purportedly executed a Special Power of Attorney (SPA) appointing her sister, Bernadette Ramos, to sell the property.
• On November 16, 1989, Esther (via her sister/attorney-in-fact) executed a separate Contract to Sell in favor of Macatangay covering her conjugal interest.
• Macatangay informed the spouses of his readiness to pay the balance and demanded possession, but the spouses failed to deliver the property.
• Macatangay filed a complaint for specific performance with damages.
• The RTC found that the check issued by Macatangay for the earnest money was dishonored for insufficiency of funds and that the SPA attributed to Esther was falsified.

• Petitioner claimed he was denied due process in the CA because his counsel was in the United States and failed to inform him of the proceedings.
• Petitioner argued the sale is void for lack of consent because the SPA purportedly executed by his wife was a forgery.
• Petitioner contended the RMOA was not perfected because the check for the earnest money was dishonored.
• Petitioner asserted there was no evidence that a second check issued by Respondent was intended to replace the dishonored earnest money.

• Respondent argued that the subject property is co-owned by the spouses and the sale was entered into freely and voluntarily.
• Respondent contended that the lack of the wife's consent in the RMOA was cured by her subsequent conveyance of interest through the Contract to Sell executed by her attorney-in-fact.
• Respondent claimed he was ready and willing to pay the full purchase price and had set aside funds for it.

• Procedural Issues:
  • Whether the petitioner was denied due process in the appellate proceedings due to his counsel's negligence.
• Substantive Issues:
  • Whether the Receipt and Memorandum of Agreement (RMOA) is a perfected contract of sale or a valid option contract.
  • Whether the petitioner can be compelled to convey the property despite the lack of his wife's consent to the RMOA.

• Procedural:
  • The Court ruled that the petitioner was not denied due process. The failure to participate in the appeal was due to the negligence of the petitioner and his counsel in ascertaining the status of the case, and a client is bound by the negligence of their counsel.
• Substantive:
  • The Court ruled that the RMOA was not a perfected contract of sale but a unilateral offer or option. Since it was not supported by consideration distinct from the price, it was not binding.
  • The Court held that the P5,000.00 paid was not "earnest money" (proof of perfection) but merely a guarantee of interest. Furthermore, the check bounced, and a check is not legal tender; thus, no valid tender of payment occurred.
  • The Court ruled the RMOA void because the husband cannot alienate conjugal property without the wife's consent (Article 166, Civil Code).
  • The Court declared that the wife's separate "Contract to Sell" could not ratify the RMOA because the terms were different, and there was no textual concordance between the documents signed separately by the spouses.
  • The Court concluded that the husband cannot be compelled to sell his "share" because the interest of a spouse in conjugal assets is inchoate and does not vest until the liquidation of the partnership.

• Nemo dat qui non habet — No one can give what he has not. The Court used this to explain that a husband cannot sell a specific portion of conjugal property before liquidation because his share is not yet determinate.
• Contract of Option — An accepted unilateral promise which specifies the thing to be sold and the price, coupled with valuable consideration distinct from the price. The Court applied this to classify the RMOA, finding it void for lack of separate consideration.
• Legal Tender Rule — A check is not legal tender and cannot constitute a valid tender of payment. The Court used this to invalidate the respondent's claim that he made a valid tender of payment to exact compliance.
• Inchoate Right in Conjugal Partnership — The interest of each spouse in the conjugal assets is a mere expectancy that does not ripen into title until liquidation. This principle prevented the forced sale of the husband's "half" of the property.
• Void Ab Initio (Sale without Spousal Consent) — Under Article 166 of the Civil Code, a sale of conjugal property by the husband without the wife's consent is void (subject to specific exceptions not present here).

• "Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation."
• "Settled is the rule that tender of payment must be made in legal tender. A check is not legal tender, and therefore cannot constitute a valid tender of payment."
• "The husband cannot alienate any real property of the conjugal partnership without the wife’s consent."
• "Nemo dat qui non habet. No one can give what he has not."

• Sanchez v. Rigos — Cited to support the rule that in an accepted unilateral promise to sell, the promissor may withdraw the offer if it is not supported by separate consideration.
• San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals — Cited to affirm that neither spouse can alienate their interest in the partnership or its property before the partnership is legally dissolved.
• Tinitigan v. Tinitigan, Sr. — Cited as an exception where a husband may sell conjugal property without consent to answer for a big conjugal liability (distinguished from the current case).
• Heirs of Elias Lorilla v. Court of Appeals — Cited to reiterate that a party is bound by the conduct, negligence, and mistakes of his counsel.

• Article 166, Civil Code — Prohibits the husband from alienating or encumbering real property of the conjugal partnership without the wife's consent.
• Article 1482, Civil Code — States that earnest money is proof of the perfection of the contract of sale; the Court ruled the P5,000 payment did not meet this definition.
• Article 124, Family Code — Cited to illustrate the current law which mandates joint administration and makes dispositions without written consent void.
• Article 1191, Civil Code — Referenced regarding the reciprocal nature of obligations and the requirement of valid tender of payment.