Pelayo vs. Perez

A wife's signature as an instrumental witness to a deed of sale involving conjugal property constitutes implied marital consent, validating the husband's disposition thereof; additionally, the lack of such consent renders the contract merely voidable, not void ab initio.

Spouses David and Lorenza Pelayo faced threats from illegal occupants of their agricultural land. To address this, they engaged Melki Perez, an activist feared by many, to drive out the squatters. In consideration of these services and a sum of money, David executed a Deed of Absolute Sale conveying the land to Perez. Lorenza signed the deed only as an instrumental witness on the third page. Registration was denied by the Register of Deeds due to Lorenza's missing signatures on the first and second pages. Perez demanded she sign the remaining pages, but she refused, prompting the filing of a complaint for specific performance.

• The Transaction: On January 11, 1988, David Pelayo conveyed two parcels of agricultural land to Melki Perez via a Deed of Absolute Sale. Lorenza, David's wife, signed the deed only as an instrumental witness on the third page. The Register of Deeds denied registration due to Lorenza's missing signatures on the first and second pages.
• The Conflict: Perez demanded Lorenza sign the remaining pages, but she refused. Perez subsequently filed a complaint for specific performance. Petitioners moved to dismiss, citing Section 6 of R.A. No. 6657, which required contracts executed prior to the law's effectivity to be registered within three months to be valid.
• The First Appeal: The RTC granted the motion to dismiss. The CA reversed in CA-G.R. SP No. 38700, interpreting Sections 4 and 70 of R.A. No. 6657 to allow the sale of private agricultural land within the landowner's retained area provided the transferee's total landholding did not exceed five hectares. Because the land was only 1.3 hectares and the failure to register was due to Lorenza's refusal, the CA held the sale valid and remanded the case.
• The Trial on Remand: Petitioners claimed the deed was simulated to frighten squatters, intentionally omitting Lorenza's signature to prevent registration. Perez countered that the lots compensated his services as attorney-in-fact against the squatters, and that David later requested the Register of Deeds to ignore transactions concerning the title, which Perez had misplaced. The RTC found the deed null and void for lack of marital consent and actual consideration, treating it merely as evidence of a P10,000 debt.
• The Second Appeal: The CA reversed the RTC, finding implied marital consent from Lorenza's witness signature, sufficient consideration, and upholding the deed's validity. Petitioners failed to file an appellees' brief due to counsel's illness. Their motion for reconsideration was denied for being filed out of time and lacking meritorious arguments.

• CARL Non-Registration: Petitioners argued that the deed of sale is void for failing to comply with Section 6 of R.A. No. 6657, which requires registration within three months of the law's effectivity.
• Lack of Marital Consent: Petitioners maintained that the CA erred in finding implied marital consent, asserting that Article 166 of the Civil Code requires the wife's explicit consent to alienate conjugal property.
• Prohibition on Agents: Petitioners contended that the sale is void under Article 1491(2) of the Civil Code, which prohibits agents from purchasing property entrusted to them by their principal.
• Lack of Consideration: Petitioners claimed the deed was simulated and fictitious, arguing that the P10,000 adjudged by the trial court was merely remuneration for services, not consideration for a sale.
• Denial of Due Process: Petitioners asserted they should have been allowed to file their appellees' brief, as their counsel's illness prevented timely filing.

• CARL Validity: Respondent countered that the CA already ruled in the first appeal that the sale is valid under R.A. No. 6657 because the land is within the retained area and the transferee's landholding does not exceed five hectares; non-registration was due to Lorenza's unjustified refusal to sign.
• Marital Consent and Consideration: Respondent argued that the CA correctly held that Lorenza's signature as a witness implied her consent and that sufficient consideration existed for the sale.
• Procedural Default: Respondent maintained that the CA correctly denied the motion for reconsideration, as it was filed beyond the reglementary period and failed to cite any errors in the CA decision.

• CARL Registration: Whether the deed of sale is void for failure to comply with the three-month registration period under R.A. No. 6657.
• Marital Consent: Whether the deed of sale is void for lack of the wife's marital consent.
• Prohibition on Agents: Whether the deed of sale is void under Article 1491(2) of the Civil Code prohibiting agents from purchasing property entrusted to them.
• Consideration: Whether the deed of sale is void for lack of consideration.

• CARL Registration: The issue is barred by the law of the case. The prior CA ruling in CA-G.R. SP No. 38700, which became final and executory, already established that the sale is valid under R.A. No. 6657 and that failure to register did not invalidate it.
• Marital Consent: The deed is not void for lack of marital consent. Lorenza's signature as an instrumental witness constitutes implied consent, as a wife's consent need not be explicit if her acts demonstrate approval. Furthermore, under Articles 166 and 173 of the Civil Code, lack of marital consent renders the contract merely voidable, not void ab initio, and it remains valid until annulled by the wife in an action brought within ten years, which Lorenza failed to do.
• Prohibition on Agents: The sale is not invalid under Article 1491(2). The prohibition against agents purchasing entrusted property does not apply if the principal consents. By signing the deed in favor of the agent, the principal gave consent, removing the transaction from the prohibition.
• Consideration: The sale possesses sufficient consideration. Petitioners admitted that respondent's services against squatters served as consideration, supplemented by the P10,000 acknowledged in the deed. Inadequacy of price does not void a contract absent fraud, mistake, or undue influence, none of which were proven, especially against a lawyer-petitioner presumed to know the contents of what he signed.

• Law of the Case — An opinion delivered on a former appeal becomes the controlling legal rule between the same parties in the same case on subsequent appeals, so long as the facts remain the same, whether correct on general principles or not. Applied to bar relitigation of the CARL registration issue, which had been settled in the first appeal.
• Implied Marital Consent — A wife's consent to the husband's disposition of conjugal property does not always have to be explicit or set forth in a particular document; it may be inferred from acts demonstrating approval, such as signing as an instrumental witness with full awareness of the transaction.
• Voidable Nature of Contracts Lacking Marital Consent — Under Articles 166 and 173 of the Civil Code, a husband's alienation of conjugal real property without the wife's consent is merely voidable, not void ab initio, and is valid until annulled in an action brought by the wife within ten years from the transaction.
• Exception to Article 1491(2) Civil Code — The prohibition against agents purchasing property entrusted to them does not apply if the principal gives consent to the sale.

• "A wife’s consent to the husband’s disposition of conjugal property does not always have to be explicit or set forth in any particular document, so long as it is shown by acts of the wife that such consent or approval was indeed given."
• "Courts cannot follow one every step of his life and extricate him from bad bargains, protect him from unwise investments, relieve him from one-sided contracts, or annul the effects of foolish acts... There must be, in addition, a violation of the law, the commission of what the law knows as an actionable wrong, before the courts are authorized to lay hold of the situation and remedy it."

• Cucueco vs. Court of Appeals, G.R. No. 139278 — Followed. Defined the law of the case doctrine, applied to preclude relitigation of the CARL registration issue.
• Distajo vs. Court of Appeals, G.R. No. 112954 — Followed. Established that the prohibition in Article 1491(2) against agents purchasing entrusted property does not apply if the principal consents.
• Buenaventura vs. Court of Appeals, G.R. No. 126376 — Followed. Held that inadequacy of price does not annul a contract absent fraud, mistake, or undue influence.
• Abalos vs. Philex Mining Corporation, G.R. No. 140374 — Followed. Stated that a judgment that attains finality becomes immutable and unalterable.

• Article 166, Civil Code — Prohibits the husband from alienating or encumbering conjugal real property without the wife's consent. Applied to determine that lack of consent renders the contract voidable, not void.
• Article 173, Civil Code — Allows the wife to annul the husband's contract entered into without her consent within ten years. Applied to show that the contract remains valid until annulled by the wife, which she failed to do.
• Article 1491(2), Civil Code — Prohibits agents from purchasing property whose administration or sale has been entrusted to them, unless the principal consents. Applied to validate the sale because the principal's consent was given.
• Sections 4 and 70, R.A. No. 6657 (Comprehensive Agrarian Reform Law) — Regulates the sale of private agricultural land, limiting it to retained areas and a five-hectare ceiling for transferees. Interpreted in the first appeal as not invalidating the subject sale.
• Section 3(d), Rule 131, Rules of Court — Presumption that a person takes ordinary care of his concerns. Applied to presume Lorenza understood the ramifications of signing the deed.

Reynato S. Puno (On Official Leave), Romeo J. Callejo, Sr., Dante O. Tinga, Minita V. Chico-Nazario