Domingo vs. Molina

Upon the death of a spouse, the conjugal partnership of gains is dissolved and an implied co-ownership arises among the surviving spouse and the heirs of the deceased pending liquidation and partition, entitling the surviving spouse to freely alienate his undivided interest in the conjugal property but obligating him to hold in trust for the other co-heirs any portion exceeding his share, which may only be recovered through an action for partition.

Spouses Anastacio and Flora Domingo, married prior to the effectivity of the Family Code, acquired a one-half undivided portion of a parcel of land in Camiling, Tarlac in 1951 as conjugal property. Flora died in 1968, leaving Anastacio and their children as heirs. In 1978, Anastacio executed a sale of his interest over the property to the spouses Genaro and Elena Molina to satisfy his debts. The sale was annotated on the Original Certificate of Title and later registered in 1995 under Transfer Certificate of Title No. 272967 in the names of the spouses Molina.

• The Conjugal Property: On June 15, 1951, spouses Anastacio and Flora Domingo acquired a one-half undivided portion of an 18,164 square meter parcel of land in Camiling, Tarlac, annotated on Original Certificate of Title (OCT) No. 16354. The spouses married before the effectivity of the Family Code on August 3, 1988, thus their property relation was governed by the conjugal partnership of gains.
• Dissolution of the Partnership: Flora died in 1968, ten years prior to the disputed transaction. The conjugal partnership was dissolved by her death, leaving Anastacio and their children, including petitioner Melecio Domingo, as heirs.
• The Sale to Spouses Molina: On September 10, 1978, Anastacio executed a deed of conveyance selling his interest over the subject property to the spouses Genaro and Elena Molina to answer for debts amounting to Php30,000.00. The document was annotated on the OCT, specifying that only the rights, interests, and participation of Anastacio Domingo pertaining to an undivided one-half portion were conveyed.
• Registration and Transfer: On May 19, 1995, the sale was registered under Transfer Certificate of Title (TCT) No. 272967, transferring the entire one-half undivided portion to the spouses Molina.
• The Complaint: On May 17, 1999, Melecio filed a Complaint for Annulment of Title and Recovery of Ownership, alleging that the property was merely given as collateral, that Flora's consent was necessary for any sale, that Genaro Molina falsified documents, and that he had occupied the property since Anastacio's death in 1986. The spouses Molina countered that they had been in possession prior to registration, paid real estate taxes, and that Melecio had knowledge of the sale as he accompanied Anastacio in previous loan transactions.
• Proceedings Below: The RTC dismissed the complaint, finding no fraud and ruling that Anastacio could dispose of conjugal property without Flora's consent when necessary to answer for conjugal liabilities. The CA affirmed, holding that Flora's death was immaterial as Anastacio sold only his rights, and that the action had prescribed.

• Invalidity for Lack of Consent: Melecio argued that the sale of land belonging to the conjugal partnership without the wife's consent is void, asserting that Flora's consent was required notwithstanding her death.
• Fraud and Absence of Document: Petitioner maintained that fraud attended the conveyance, evidenced by the absence of any document evidencing the alleged sale in the Register of Deeds, and alleged that Genaro Molina falsified the transfer documents.
• Prescription: Melecio claimed that the action had not yet prescribed.

• Constructive Delivery: Respondents argued that Anastacio had given the lot title in payment of the debt, constituting constructive delivery of the property itself pursuant to Article 1498, paragraph 2 of the Civil Code.
• Perfected Sale: The constructive delivery coupled with the spouses Molina's exercise of attributes of ownership, including possession and payment of taxes, perfected the sale and completed the transfer of ownership.
• Validity of Transfer: Respondents maintained that Anastacio validly transferred his undivided interest as surviving spouse and heir, and that the sale was annotated on the title specifically limited to his share.

• Validity of Sale by Surviving Spouse: Whether the sale of conjugal property by the surviving spouse without the deceased spouse's consent is valid and legal.
• Fraud in the Conveyance: Whether fraud attended the transfer of the subject property to the spouses Molina.

• Validity of Sale by Surviving Spouse: The conjugal partnership of gains was dissolved upon Flora's death in 1968 pursuant to Article 175(1) of the Civil Code (now Article 126(1) of the Family Code). Thereupon, an implied ordinary co-ownership arose among Anastacio and Flora's heirs with respect to the conjugal properties pending liquidation and partition. Under Article 493 of the Civil Code, each co-owner retains full ownership of his undivided share and may freely alienate it. Anastacio, as co-owner, possessed an actual and vested one-half undivided share as surviving spouse, plus his share as Flora's heir. The sale annotated on the OCT expressly limited the conveyance to Anastacio's rights and participation pertaining to an undivided one-half portion. Thus, the sale was valid as to Anastacio's undivided interest but void as to the shares of the other co-heirs. Pursuant to the principle quando res non valet ut ago, valeat quantum valere potest, the spouses Molina became co-owners to the extent of Anastacio's interest and trustees for the benefit of the other co-heirs as to any excess determined upon final liquidation. Melecio's proper recourse is an action for partition under Rule 69 of the Revised Rules of Court.
• Fraud in the Conveyance: Fraud was not established. The issue of fraud is factual in nature, requiring inquiry into evidentiary matters not permitted in a Rule 45 petition absent any of the recognized exceptions. The lower courts' finding that no fraud attended the sale, supported by the existence of a notarized deed of conveyance annotated on the OCT, is conclusive upon the Court.

• Implied Co-ownership Upon Dissolution of Conjugal Partnership — Upon the death of a spouse, the conjugal partnership of gains is dissolved and the conjugal properties fall under the regime of co-ownership among the surviving spouse and the heirs of the deceased spouse until final liquidation and partition. The surviving spouse possesses an actual and vested one-half undivided share of the properties, which does not consist of determinate and segregated properties until liquidation and partition.
• Alienation of Undivided Interest by Co-owner — Under Article 493 of the Civil Code, a co-owner may alienate, assign, or mortgage his undivided interest in the co-owned property, but the effect of such alienation is limited to the portion which may be allotted to him in the division upon termination of the co-ownership.
• _Partial Validity of Sale (Quando Res Non Valet)_ — When a co-owner sells the entire property or a portion exceeding his share, the sale is valid as to his specific share and void as to the excess. The buyer becomes a trustee for the benefit of the other co-owners with respect to the invalid portion, and the other heirs are not barred by prescription or laches in recovering their shares.
• Remedy of Co-heirs — The appropriate recourse of co-owners whose consent was not secured in a sale of the entire property or undivided shares is an action for partition under Rule 69 of the Revised Rules of Court, not an action for annulment of title.

• "The conjugal partnership of Anastacio and Flora was dissolved when Flora died in 1968, pursuant to Article 175 (1) of the Civil Code (now Article 126 (1) of the Family Code)."
• "An implied ordinary co-ownership ensued among Flora's surviving heirs, including Anastacio, with respect to Flora's share of the conjugal partnership until final liquidation and partition; Anastacio, on the other hand, owns one-half of the original conjugal partnership properties as his share, but this is an undivided interest."
• "Thus, Anastacio, as co-owner, cannot claim title to any specific portion of the conjugal properties without an actual partition being first done either by agreement or by judicial decree. Nonetheless, Anastacio had the right to freely sell and dispose of his undivided interest in the subject property."
• "[O]nly the rights, interests and participation of Anastacio Domingo, married to Flora Dela Cruz, is hereby sold, transferred, and conveyed unto the said vendees for the sum of ONE THOUSAND PESOS (P1,000.00) which pertains to an undivided one-half (1/2) portion..." — Description from the annotated deed of sale.
• "The spouses Molina would be a trustee for the benefit of the co-heirs of Anastacio in respect of any portion that might belong to the co-heirs after liquidation and partition."

• Taningco v. Register of Deeds of Laguna, G.R. No. L-15242, June 29, 1962 — Established that properties of a dissolved conjugal partnership fall under co-ownership among the surviving spouse and heirs of the deceased until liquidation, with the surviving spouse having a vested one-half undivided share.
• Heirs of Protacio Go, Sr. v. Servacio, G.R. No. 15737, September 7, 2011 — Applied the principle that buyers of property exceeding the seller's share become trustees for the benefit of the other heirs, and that the proper remedy is an action for partition.
• Fuentes v. Court of Appeals, G.R. No. 109849, February 26, 1997 — Cited for the ten exceptions allowing review of factual findings in Rule 45 petitions.

• _Article 105, Family Code — Governs conjugal partnerships of gains established before the Family Code's effectivity, applying Chapter 4 provisions without prejudice to vested rights acquired under prior laws.
• _Article 126(1) [formerly Article 175(1)], Family Code and Civil Code respectively — Provides that the conjugal partnership of gains terminates upon the death of either spouse.
• _Article 130, Family Code — Requires liquidation of conjugal partnership property upon termination of marriage by death and voids dispositions made without liquidation after the lapse of the prescribed period, subject to the vested rights exception.
• _Article 493, Civil Code — Grants co-owners the right to alienate their undivided interest, limiting the effect of alienation to the portion allotable to the alienating co-owner upon division.
• _Rule 69, Revised Rules of Court — Governs actions for partition, the proper remedy for co-owners seeking to recover their shares from a sale effected without their consent.

Antonio T. Carpio (Chairperson), Mariano C. Del Castillo, Jose Catral Mendoza, Marvic M.V.F. Leonen.