Heirs of Go vs. Go (G.R. No. 157537; September 7, 2011)

CASE DIGEST: THE HEIRS OF PROTACIO GO, SR. v. ESTER L. SERVACIO and RITO B. GO. G.R. No. 157537; September 7, 2011.

FACTS: On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total area of 17,140 square meters situated in Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty three years later, or on March 29, 1999, Protacio, Jr. executed an Affidavit of Renunciation and Waiver, whereby he affirmed under oath that it was his father, Protacio Go, Sr. (Protacio, Sr.), not he, who had purchased the two parcels of land (the property). On November 25, 1987, Marta Barola Go died. She was the wife of Protacio, Sr. and mother of the petitioners. On December 28, 1999, Protacio, Sr. and his son Rito B. Go (joined by Ritos wife Dina B. Go) sold a portion of the property with an area of 5,560 square meters to Ester L. Servacio (Servacio) for ₱5,686,768.00. On March 2, 2001, the petitioners demanded the return of the property, but Servacio refused to heed their demand. After barangay proceedings failed to resolve the dispute, they sued Servacio and Rito in the Regional Trial Court in Maasin City, Southern Leyte (RTC) for the annulment of the sale of the property.

The petitioners averred that following Protacio, Jr.s renunciation, the property became conjugal property; and that the sale of the property to Servacio without the prior liquidation of the community property between Protacio, Sr. and Marta was null and void.

Servacio and Rito countered that Protacio, Sr. had exclusively owned the property because he had purchased it with his own money.

On October 3, 2002, the RTC declared that the property was the conjugal property of Protacio, Sr. and Marta, not the exclusive property of Protacio, Sr., because there were three vendors in the sale to Servacio (namely: Protacio, Sr., Rito, and Dina); that the participation of Rito and Dina as vendors had been by virtue of their being heirs of the late Marta; that under Article 160 of the Civil Code, the law in effect when the property was acquired, all property acquired by either spouse during the marriage was conjugal unless there was proof that the property thus acquired pertained exclusively to the husband or to the wife; and that Protacio, Jr.s renunciation was grossly insufficient to rebut the legal presumption.

Nonetheless, the RTC affirmed the validity of the sale of the property, holding that: "As long as the portion sold, alienated or encumbered will not be allotted to the other heirs in the final partition of the property, or to state it plainly, as long as the portion sold does not encroach upon the legitimate (sic) of other heirs, it is valid."

The RTCs denial of their motion for reconsideration prompted the petitioners to appeal directly to the Court on a pure question of law.

ISSUE: [1] Is Article 130 of the Family Code the applicable law?

[2] Is that the sale by Protacio, Sr., et al. to Servacio void for being made without prior liquidation?

HELD: Before applying such rules, however, the conjugal partnership of gains must be subsisting at the time of the effectivity of the Family Code. There being no dispute that Protacio, Sr. and Marta were married prior to the effectivity of the Family Code on August 3, 1988, their property relation was properly characterized as one of conjugal partnership governed by the Civil Code. Upon Martas death in 1987, the conjugal partnership was dissolved, pursuant to Article 175 (1) of the Civil Code, and an implied ordinary co-ownership ensued among Protacio, Sr. and the other heirs of Marta with respect to her share in the assets of the conjugal partnership pending a liquidation following its liquidation. The ensuing implied ordinary co-ownership was governed by Article 493 of the Civil Code, to wit:

Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

Protacio, Sr., although becoming a co-owner with his children in respect of Martas share in the conjugal partnership, could not yet assert or claim title to any specific portion of Martas share without an actual partition of the property being first done either by agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota in Martas share. Nonetheless, a co-owner could sell his undivided share; hence, Protacio, Sr. had the right to freely sell and dispose of his undivided interest, but not the interest of his co-owners. Consequently, the sale by Protacio, Sr. and Rito as co-owners without the consent of the other co-owners was not necessarily void, for the rights of the selling co-owners were thereby effectively transferred, making the buyer (Servacio) a co-owner of Martas share. This result conforms to the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so (quando res non valet ut ago, valeat quantum valere potest).

Article 105 of the Family Code, supra, expressly provides that the applicability of the rules on dissolution of the conjugal partnership is "without prejudice to vested rights already acquired in accordance with the Civil Code or other laws." This provision gives another reason not to declare the sale as entirely void. Indeed, such a declaration prejudices the rights of Servacio who had already acquired the shares of Protacio, Sr. and Rito in the property subject of the sale. DENIED.

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