Perez, Jr. vs. Perez-Senerpida

In a void marriage or common-law relationship governed by Article 147 of the Family Code, neither party may encumber or dispose by acts inter vivos of his or her share in property acquired during cohabitation without the consent of the other until after the termination of their cohabitation, and the prohibition on donations between spouses under Article 87 applies mutatis mutandis to such relationships.

Spouses Eliodoro Q. Perez and Adelita M. Perez were married on December 10, 1975, and had two children, Avegail and Adonis. Prior to this marriage, Eliodoro had been previously married and had several children, including Nicxon Perez, Sr., the father of petitioner Nicxon L. Perez, Jr. During the subsistence of the marriage between Eliodoro and Adelita, the former acquired a parcel of land with Adelita, registered in their names as spouses. In 1995, Adelita executed a Renunciation and Waiver of Rights (RWR) in favor of Eliodoro regarding this property. In 2004, Eliodoro donated the entire property to his grandson, Nicxon Jr. In 2005, the marriage was declared void ab initio due to psychological incapacity under Article 36 of the Family Code, and the decision became final and executory on July 6, 2005. Eliodoro died on June 28, 2008. Respondent Avegail, claiming prejudice to her legitime, subsequently filed suit to annul the RWR and the DoD.

• The Subject Property: Spouses Eliodoro Q. Perez and Adelita M. Perez, married on December 10, 1975, were registered owners of a 350-square-meter parcel of land located at Barangay Sta. Rita, Olongapo City, covered by Transfer Certificate of Title (TCT) No. T-7396. Out of this marriage were born Avegail Perez-Senerpida and Adonis Perez. Eliodoro had children from a previous marriage, including Nicxon Perez, Sr., father of petitioner Nicxon L. Perez, Jr.
• The Renunciation and Waiver: On October 29, 1995, Adelita executed a sworn statement denominated as Renunciation and Waiver of Rights (RWR) in favor of Eliodoro regarding the subject property, which was inscribed on TCT No. T-7396 on July 20, 2004. The RWR was executed without material consideration.
• The Donation to Nicxon: On July 27, 2004, Eliodoro executed a Deed of Donation (DoD) donating the subject property to his grandson, Nicxon L. Perez, Jr., without the conformity of Adelita. TCT No. T-7396 was cancelled and TCT No. 12547 was issued in Nicxon's name. On November 16, 2009, Nicxon executed a Real Estate Mortgage over the property in favor of Rolando Ramos.
• Nullity of Marriage Proceedings: On February 1, 2005, Eliodoro filed a petition for declaration of nullity of marriage under Article 36 of the Family Code against Adelita before the RTC of Olongapo City, Branch 73 (Civil Case No. 44-0-2005). On June 15, 2005, the RTC declared the marriage void ab initio. An Entry of Judgment was issued on July 11, 2005, stating the decision became final and executory on July 6, 2005. Eliodoro died on June 28, 2008.
• The Present Action: On September 30, 2010, Avegail filed a complaint for Annulment of Donation and Title with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction against Nicxon before the RTC of Olongapo City, Branch 72 (Civil Case No. 135-0-2010). She alleged that the RWR and DoD were prejudicial to her interest as they affected her future inheritance or legitime, and sought the annulment of both documents and the nullification of TCT No. T-12547.
• Annulment of Judgment Proceedings: On July 5, 2011, Adelita filed a petition for annulment of judgment (CA-G.R. SP No. 120119) before the CA seeking to nullify the Marriage Nullity Decision on the ground of lack of jurisdiction over her person and the subject matter. The CA referred the case to the RTC for reception of evidence, and subsequently denied the petition on September 22, 2015, finding that jurisdiction over Adelita's person was acquired through service of summons and that laches barred the petition. The Supreme Court (Second Division) denied Adelita's subsequent petition for review (G.R. No. 222230) on March 16, 2016.
• Lower Courts' Rulings: The RTC (Branch 72) rendered its Decision on February 24, 2015, annulling the RWR and DoD and ordering the cancellation of TCT No. T-12547, holding that the marriage between Eliodoro and Adelita was valid and subsisting at the time of Eliodoro's death, thus the ACP applied, and the RWR was void under Articles 87 and 89 of the Family Code, while the DoD was void under Article 98. The CA affirmed this ruling on April 7, 2017.

• Finality of the Nullity Decision: Petitioner maintained that the lower courts violated the rule on res judicata by failing to treat as final and executory the Marriage Nullity Decision in Civil Case No. 44-0-2005, which had become final on July 6, 2005, prior to Eliodoro's death on June 28, 2008.
• Applicable Property Regime: Petitioner argued that the lower courts erred in ruling that the absolute community of property (ACP) governed the relations between Eliodoro and Adelita despite the final decision declaring their marriage void ab initio. He contended that Article 147 of the Family Code, governing co-ownership in void marriages, was the applicable provision.
• Validity of the Donation: Petitioner asserted that the DoD executed by Eliodoro in his favor was valid, arguing that under Article 147, as co-owners, either party could donate or waive their respective shares provided the consent of either partner was obtained, or alternatively, that under Article 493 of the Civil Code, a co-owner could alienate his undivided share.

• Res Judicata and Finality: Respondent countered that the Marriage Nullity Decision had not attained finality at the time of Eliodoro's death, citing the pendency of the Annulment of Judgment Petition filed by Adelita, and thus the lower courts correctly treated the marriage as valid and subsisting until Eliodoro's death.
• Void Waiver and Donation: Respondent argued that the RWR was void as it constituted a prohibited waiver of absolute community property under Article 89 and a void donation between spouses under Article 87 of the Family Code. She maintained that the DoD was similarly void as a donation of community property executed without the consent of the other spouse under Article 98.
• Prejudice to Legitime: Respondent contended that the RWR and DoD were prejudicial to her interest as they impaired her future inheritance or legitime.

• Finality of the Marriage Nullity Decision: Whether the lower courts violated the rule on res judicata by not treating as final and executory the earlier Decision in the declaration of nullity of marriage case (Civil Case No. 44-0-2005).
• Applicable Property Regime: Whether the lower courts erred in ruling that the property regime of Eliodoro and Adelita was covered by the absolute community of property despite the final decision declaring their marriage void ab initio.
• Validity of the Deed of Donation: Whether the Deed of Donation executed by Eliodoro in favor of Nicxon is valid.

• Finality of the Marriage Nullity Decision: The lower courts committed patent error in finding that the marriage between Eliodoro and Adelita remained valid and subsisting until Eliodoro's death. The Marriage Nullity Decision became final and executory on July 6, 2005, as confirmed by the Entry of Judgment and the subsequent CA Decision in the Annulment of Judgment Petition (CA-G.R. SP No. 120119), which was denied with finality by the Supreme Court in G.R. No. 222230. The March 5, 2012 Resolution of the CA in the annulment of judgment case referred the petition for reception of evidence; it did not operate to suspend the finality of the underlying nullity decision.
• Applicable Property Regime: Since the marriage was declared void ab initio prior to Eliodoro's death, the property regime was not the absolute community of property (ACP) under Chapter 4 of the Family Code, but was governed by Article 147, which establishes a co-ownership regime for parties living together without valid marriage. Article 89 (prohibiting waiver of ACP rights) was therefore inapplicable.
• Validity of the Renunciation and Waiver: The RWR was void under Article 87 of the Family Code, which prohibits donations between spouses and expressly extends this prohibition to "persons living together as husband and wife without a valid marriage." The RWR was without valuable consideration and partook of the nature of a donation. Even if construed as a sale, it would be void under Article 1490 of the Civil Code prohibiting sales between spouses.
• Validity of the Deed of Donation: The DoD was void. Article 147 creates a "special co-ownership" distinct from ordinary co-ownership under Article 493 of the Civil Code. While Article 493 permits a co-owner to alienate his undivided share, Article 147 expressly prohibits either party from encumbering or disposing by acts inter vivos of his or her share in property acquired during cohabitation without the consent of the other until after termination of the cohabitation. This prohibition applies to donations of the entire property as well as to individual shares. Consequently, Eliodoro could not validly donate the property to Nicxon without Adelita's consent.

• Special Co-ownership under Article 147: Article 147 of the Family Code establishes a special co-ownership regime for parties living together as husband and wife without benefit of marriage or under a void marriage. Unlike ordinary co-ownership under Article 493 of the Civil Code where a co-owner may freely alienate his undivided share, Article 147 imposes a restriction: neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation without the consent of the other until after the termination of their cohabitation. This restriction is intended to prevent the destruction of the relationship and to encourage the parties to legalize their union.
• Extension of Article 87 to Void Marriages: The prohibition on donations between spouses under Article 87 of the Family Code applies not only to validly married couples but also to "persons living together as husband and wife without a valid marriage." This is based on the rationale that the intimate relations in such unions place the weaker party under the will of the stronger, and the law seeks to prevent exploitation and undue influence. This doctrine traces its roots to Matabuena v. Cervantes (1971).
• Finality of Judgments and Annulment Thereof: A decision becomes final and executory as stated in the entry of judgment. A subsequent petition for annulment of judgment under Rule 47 does not suspend the finality of the original judgment unless a restraining order or injunction is issued. Laches and estoppel may bar a petition for annulment of judgment if the petitioner has utilized the judgment as a defense in other proceedings.

• "Article 147 creates an exception in the special co-ownership it recognizes between parties living together as husband and wife. As long as the cohabitation lasts and the co-ownership exists, no disposition inter vivos of such undivided share can be validly made by one party without the consent of the other."
• "The prohibition of this article also applies to the parties in what are called 'common law' marriages; otherwise, the condition of those who incurred guilt would turn out to be better than those in legal union."
• "If the parties are allowed to dispose of their shares in said properties like in a true co-ownership, it will destroy their relationship. The Family Code, as already stated, would like to encourage the parties to legalize their union some day and is just smoothing out the way until their relationship ripens into a valid union."

• Matabuena v. Cervantes, 148 Phil. 295 (1971): Controlling precedent establishing that the prohibition on donations between spouses applies to common-law relationships to prevent undue influence and exploitation; followed and reaffirmed.
• Bailon-Casilao v. Court of Appeals, 243 Phil. 888 (1988): Cited for the principle that a sale by a co-owner of the entire property affects only his own share, but distinguished in light of the special co-ownership under Article 147 of the Family Code.
• Paulmitan v. Court of Appeals, 290 Phil. 376 (1992): Cited for the rule that a sale by one co-owner without consent of others transfers only the seller's undivided share, but similarly distinguished in application of Article 147.

• Article 87, Family Code: Prohibits donations between spouses and extends this prohibition to persons living together without valid marriage.
• Article 89, Family Code: Prohibits waiver of rights in absolute community property during marriage except in case of judicial separation of property; deemed inapplicable to void marriages.
• Article 98, Family Code: Requires consent of both spouses for donation of community property; deemed inapplicable to void marriages under Article 147.
• Article 147, Family Code: Governs property relations in void marriages or common-law relationships, establishing co-ownership and imposing restrictions on disposition of shares.
• Article 1490, Civil Code: Prohibits sales between spouses, except when separation of property was agreed upon or judicially decreed.
• Article 493, Civil Code: Governs ordinary co-ownership, allowing alienation of undivided shares, but held to yield to Article 147 of the Family Code in cases of special co-ownership.

Peralta, C.J., Zalameda, Delos Santos, and Gaerlan, JJ.