G.R. No.

169900 March 18, 2010 However, despite repeated demands from Mario, Alfredo failed to comply
with these stipulations. After paying the ₱5 million earnest money as
MARIO SIOCHI, Petitioner, partial payment of the purchase price, Mario took possession of the
vs. property in September 1993. On 6 September 1993, the Agreement was
ALFREDO GOZON, WINIFRED GOZON, GIL TABIJE, INTER- annotated on TCT No. 5357.
DIMENSIONAL REALTY, INC., and ELVIRA GOZON, Respondents.
Meanwhile, on 29 June 1994, the Cavite RTC rendered a decision6 in the
x - - - - - - - - - - - - - - - - - - - - - - -x legal separation case, the dispositive portion of which reads:

G.R. No. 169977 WHEREFORE, judgment is hereby rendered decreeing the legal
separation between petitioner and respondent. Accordingly, petitioner
INTER-DIMENSIONAL REALTY, INC., Petitioner, Elvira Robles Gozon is entitled to live separately from respondent Alfredo
vs. Gozon without dissolution of their marriage bond. The conjugal
MARIO SIOCHI, ELVIRA GOZON, ALFREDO GOZON, and WINIFRED partnership of gains of the spouses is hereby declared DISSOLVED and
GOZON, Respondents. LIQUIDATED. Being the offending spouse, respondent is deprived of his
share in the net profits and the same is awarded to their child Winifred R.
Gozon whose custody is awarded to petitioner.
RESOLUTION
Furthermore, said parties are required to mutually support their child
CARPIO, J.:
Winifred R. Gozon as her needs arises.
This is a consolidation of two separate petitions for review,1 assailing the
SO ORDERED.7
7 July 2005 Decision2 and the 30 September 2005 Resolution3 of the
Court of Appeals in CA-G.R. CV No. 74447.
As regards the property, the Cavite RTC held that it is deemed conjugal
property.
This case involves a 30,000 sq.m. parcel of land (property) covered by
TCT No. 5357.4 The property is situated in Malabon, Metro Manila and is
registered in the name of "Alfredo Gozon (Alfredo), married to Elvira On 22 August 1994, Alfredo executed a Deed of Donation over the
Gozon (Elvira)." property in favor of their daughter, Winifred Gozon (Winifred). The
Register of Deeds of Malabon, Gil Tabije, cancelled TCT No. 5357 and
issued TCT No. M-105088 in the name of Winifred, without annotating the
On 23 December 1991, Elvira filed with the Cavite City Regional Trial
Agreement and the notice of lis pendens on TCT No. M-10508.
Court (Cavite RTC) a petition for legal separation against her husband
Alfredo. On 2 January 1992, Elvira filed a notice of lis pendens, which
was then annotated on TCT No. 5357. On 26 October 1994, Alfredo, by virtue of a Special Power of
Attorney9 executed in his favor by Winifred, sold the property to Inter-
Dimensional Realty, Inc. (IDRI) for ₱18 million.10 IDRI paid Alfredo ₱18
On 31 August 1993, while the legal separation case was still pending,
million, representing full payment for the property.11 Subsequently, the
Alfredo and Mario Siochi (Mario) entered into an Agreement to Buy and
Register of Deeds of Malabon cancelled TCT No. M-10508 and issued
Sell5 (Agreement) involving the property for the price of ₱18 million.
TCT No. M-1097612 to IDRI.
Among the stipulations in the Agreement were that Alfredo would: (1)
secure an Affidavit from Elvira that the property is Alfredo’s exclusive
property and to annotate the Agreement at the back of TCT No. 5357; (2) Mario then filed with the Malabon Regional Trial Court (Malabon RTC) a
secure the approval of the Cavite RTC to exclude the property from the complaint for Specific Performance and Damages, Annulment of
legal separation case; and (3) secure the removal of the notice of lis Donation and Sale, with Preliminary Mandatory and Prohibitory Injunction
pendens pertaining to the said case and annotated on TCT No. 5357. and/or Temporary Restraining Order.
On 3 April 2001, the Malabon RTC rendered a decision,13 the dispositive 05. Defendant Inter-Dimensional Realty, Inc. is hereby ordered to
portion of which reads: deliver its Transfer Certificate of Title No. M-10976 to the Register
of Deeds of Malabon, Metro Manila.
WHEREFORE, premises considered, judgment is hereby rendered as
follows: 06. The Register of Deeds of Malabon, Metro Manila is hereby
ordered to cancel Certificate of Title Nos. 10508 "in the name of
01. On the preliminary mandatory and prohibitory injunction: Winifred Gozon" and M-10976 "in the name of Inter-Dimensional
Realty, Inc.," and to restore Transfer Certificate of Title No. 5357
1.1 The same is hereby made permanent by: "in the name of Alfredo Gozon, married to Elvira Robles" with the
Agreement to Buy and Sell dated 31 August 1993 fully annotated
therein is hereby ordered.
1.1.1 Enjoining defendants Alfredo Gozon,
Winifred Gozon, Inter-Dimensional Realty, Inc.
and Gil Tabije, their agents, representatives and 07. Defendant Alfredo Gozon is hereby ordered to deliver a Deed
all persons acting in their behalf from any attempt of Absolute Sale in favor of plaintiff over his one-half undivided
of commission or continuance of their wrongful share in the subject property and to comply with all the
acts of further alienating or disposing of the requirements for registering such deed.
subject property;
08. Ordering defendant Elvira Robles-Gozon to sit with plaintiff to
1.1.2. Enjoining defendant Inter-Dimensional agree on the selling price of her undivided one-half share in the
Realty, Inc. from entering and fencing the subject property, thereafter, to execute and deliver a Deed of
property; Absolute Sale over the same in favor of the plaintiff and to comply
with all the requirements for registering such deed, within fifteen
(15) days from the receipt of this DECISION.
1.1.3. Enjoining defendants Alfredo Gozon,
Winifred Gozon, Inter-Dimensional Realty, Inc. to
respect plaintiff’s possession of the property. 09. Thereafter, plaintiff is hereby ordered to pay defendant
Alfredo Gozon the balance of Four Million Pesos (₱4,000,000.00)
in his one-half undivided share in the property to be set off by the
02. The Agreement to Buy and Sell dated 31 August 1993,
award of damages in plaintiff’s favor.
between plaintiff and defendant Alfredo Gozon is hereby
approved, excluding the property and rights of defendant Elvira
Robles-Gozon to the undivided one-half share in the conjugal 10. Plaintiff is hereby ordered to pay the defendant Elvira Robles-
property subject of this case. Gozon the price they had agreed upon for the sale of her one-half
undivided share in the subject property.
03. The Deed of Donation dated 22 August 1994, entered into by
and between defendants Alfredo Gozon and Winifred Gozon is 11. Defendants Alfredo Gozon, Winifred Gozon and Gil Tabije are
hereby nullified and voided. hereby ordered to pay the plaintiff, jointly and severally, the
following:
04. The Deed of Absolute Sale dated 26 October 1994, executed
by defendant Winifred Gozon, through defendant Alfredo Gozon, 11.1 Two Million Pesos (₱2,000,000.00) as actual and
in favor of defendant Inter-Dimensional Realty, Inc. is hereby compensatory damages;
nullified and voided.
11.2 One Million Pesos (₱1,000,000.00) as moral
damages;
 11.3 Five Hundred Thousand Pesos (₱500,000.00) as 1. The sale of the subject land by defendant Alfredo Gozon to
exemplary damages; plaintiff-appellant Siochi is declared null and void for the following
reasons:
11.4 Four Hundred Thousand Pesos (₱400,000.00) as
attorney’s fees; and a) The conveyance was done without the consent of
defendant-appellee Elvira Gozon;
11.5 One Hundred Thousand Pesos (₱100,000.00) as
litigation expenses. b) Defendant Alfredo Gozon’s one-half (½) undivided
share has been forfeited in favor of his daughter,
11.6 The above awards are subject to set off of plaintiff’s defendant Winifred Gozon, by virtue of the decision in the
obligation in paragraph 9 hereof. legal separation case rendered by the RTC, Branch 16,
Cavite;
12. Defendants Alfredo Gozon and Winifred Gozon are hereby
ordered to pay Inter-Dimensional Realty, Inc. jointly and severally 2. Defendant Alfredo Gozon shall return/deliver to plaintiff-
the following: appellant Siochi the amount of ₱5 Million which the latter paid as
earnest money in consideration for the sale of the subject land;
12.1 Eighteen Million Pesos (₱18,000,000.00) which
constitute the amount the former received from the latter 3. Defendants Alfredo Gozon, Winifred Gozon and Gil Tabije are
pursuant to their Deed of Absolute Sale dated 26 October hereby ordered to pay plaintiff-appellant Siochi jointly and
1994, with legal interest therefrom; severally, the following:

12.2 One Million Pesos (₱1,000,000.00) as moral a) ₱100,000.00 as moral damages;

damages;
b) ₱100,000.00 as exemplary damages;
12.3 Five Hundred Thousand Pesos (₱500,000.00) as
exemplary damages; and c) ₱50,000.00 as attorney’s fees;

12.4 One Hundred Thousand Pesos (₱100,000.00) as d) ₱20,000.00 as litigation expenses; and
attorney’s fees.
e) The awards of actual and compensatory damages are
13. Defendants Alfredo Gozon and Winifred Gozon are hereby hereby ordered deleted for lack of basis.
ordered to pay costs of suit.
4. Defendants Alfredo Gozon and Winifred Gozon are hereby
SO ORDERED.14 ordered to pay defendant-appellant IDRI jointly and severally the
following:
On appeal, the Court of Appeals affirmed the Malabon RTC’s decision
with modification. The dispositive portion of the Court of Appeals’ a) ₱100,000.00 as moral damages;
Decision dated 7 July 2005 reads:
b) ₱100,000.00 as exemplary damages; and
WHEREFORE, premises considered, the assailed decision dated April 3,
2001 of the RTC, Branch 74, Malabon is hereby AFFIRMED with c) ₱50,000.00 as attorney’s fees.
MODIFICATIONS, as follows:
Defendant Winifred Gozon, whom the undivided one-half share of spouse or authorization by the court before the offer is withdrawn by
defendant Alfredo Gozon was awarded, is hereby given the option either or both offerors. (Emphasis supplied)
whether or not to dispose of her undivided share in the subject land.
In this case, Alfredo was the sole administrator of the property because
The rest of the decision not inconsistent with this ruling stands. Elvira, with whom Alfredo was separated in fact, was unable to participate
in the administration of the conjugal property. However, as sole
SO ORDERED.15 administrator of the property, Alfredo still cannot sell the property without
the written consent of Elvira or the authority of the court. Without such
Only Mario and IDRI appealed the decision of the Court of Appeals. In his consent or authority, the sale is void.16 The absence of the consent of one
petition, Mario alleges that the Agreement should be treated as a of the spouse renders the entire sale void, including the portion of the
continuing offer which may be perfected by the acceptance of the other conjugal property pertaining to the spouse who contracted the
spouse before the offer is withdrawn. Since Elvira’s conduct signified her sale.17Even if the other spouse actively participated in negotiating for the
acquiescence to the sale, Mario prays for the Court to direct Alfredo and sale of the property, that other spouse’s written consent to the sale is still
Elvira to execute a Deed of Absolute Sale over the property upon his required by law for its validity.18 The Agreement entered into by Alfredo
payment of ₱9 million to Elvira. and Mario was without the written consent of Elvira. Thus, the Agreement
is entirely void. As regards Mario’s contention that the Agreement is a
continuing offer which may be perfected by Elvira’s acceptance before
On the other hand, IDRI alleges that it is a buyer in good faith and for
the offer is withdrawn, the fact that the property was subsequently
value. Thus, IDRI prays that the Court should uphold the validity of IDRI’s
donated by Alfredo to Winifred and then sold to IDRI clearly indicates that
TCT No. M-10976 over the property.
the offer was already withdrawn.
We find the petitions without merit.
However, we disagree with the finding of the Court of Appeals that the
one-half undivided share of Alfredo in the property was already forfeited
This case involves the conjugal property of Alfredo and Elvira. Since the in favor of his daughter Winifred, based on the ruling of the Cavite RTC in
disposition of the property occurred after the effectivity of the Family the legal separation case. The Court of Appeals misconstrued the ruling
Code, the applicable law is the Family Code. Article 124 of the Family of the Cavite RTC that Alfredo, being the offending spouse, is deprived of
Code provides: his share in the net profits and the same is awarded to Winifred.

Art. 124. The administration and enjoyment of the conjugal partnership The Cavite RTC ruling finds support in the following provisions of the
property shall belong to both spouses jointly. In case of disagreement, Family Code:
the husband’s decision shall prevail, subject to the recourse to the court
by the wife for a proper remedy, which must be availed of within five
Art. 63. The decree of legal separation shall have the following effects:
years from the date of the contract implementing such decision.
(1) The spouses shall be entitled to live separately from each
In the event that one spouse is incapacitated or otherwise unable to
other, but the marriage bonds shall not be severed;
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do not
include the powers of disposition or encumbrance which must have the (2) The absolute community or the conjugal partnership shall
authority of the court or the written consent of the other spouse. In the be dissolved and liquidated but the offending spouse shall
absence of such authority or consent, the disposition or encumbrance have no right to any share of the net profits earned by the
shall be void. However, the transaction shall be construed as a continuing absolute community or the conjugal partnership, which shall
offer on the part of the consenting spouse and the third person, and may be forfeited in accordance with the provisions of Article
be perfected as a binding contract upon the acceptance by the other 43(2);
 (3) The custody of the minor children shall be awarded to the Cavite RTC. Thus, IDRI could not feign ignorance of the Cavite RTC
innocent spouse, subject to the provisions of Article 213 of this decision declaring the property as conjugal.
Code; and
Furthermore, if IDRI made further inquiries, it would have known that the
The offending spouse shall be disqualified from inheriting from the cancellation of the notice of lis pendens was highly irregular. Under
innocent spouse by intestate succession. Moreover, provisions in favor of Section 77 of Presidential Decree No. 1529,19 the notice of lis
the offending spouse made in the will of the innocent spouse shall be pendens may be cancelled (a) upon order of the court, or (b) by the
revoked by operation of law. Register of Deeds upon verified petition of the party who caused the
registration of the lis pendens. In this case, the lis pendens was cancelled
Art. 43. The termination of the subsequent marriage referred to in the by the Register of Deeds upon the request of Alfredo. There was no court
preceding Article shall produce the following effects: order for the cancellation of the lis pendens. Neither did Elvira, the party
who caused the registration of the lis pendens, file a verified petition for
xxx its cancellation.

(2) The absolute community of property or the conjugal partnership, as Besides, had IDRI been more prudent before buying the property, it
the case may be, shall be dissolved and liquidated, but if either spouse would have discovered that Alfredo’s donation of the property to Winifred
contracted said marriage in bad faith, his or her share of the net profits of was without the consent of Elvira. Under Article 12520 of the Family Code,
the community property or conjugal partnership property shall be forfeited a conjugal property cannot be donated by one spouse without the
in favor of the common children or, if there are none, the children of the consent of the other spouse. Clearly, IDRI was not a buyer in good faith. 1avv phi 1

guilty spouse by a previous marriage or, in default of children, the

innocent spouse; (Emphasis supplied) Nevertheless, we find it proper to reinstate the order of the Malabon RTC
for the reimbursement of the ₱18 million paid by IDRI for the property,
Thus, among the effects of the decree of legal separation is that the which was inadvertently omitted in the dispositive portion of the Court of
conjugal partnership is dissolved and liquidated and the offending spouse Appeals’ decision.
would have no right to any share of the net profits earned by the conjugal
partnership. It is only Alfredo’s share in the net profits which is forfeited in WHEREFORE, we DENY the petitions. We AFFIRM the 7 July 2005
favor of Winifred. Article 102(4) of the Family Code provides that "[f]or Decision of the Court of Appeals in CA-G.R. CV No. 74447 with the
purposes of computing the net profits subject to forfeiture in accordance following MODIFICATIONS:
with Article 43, No. (2) and 63, No. (2), the said profits shall be the
increase in value between the market value of the community property at (1) We DELETE the portions regarding the forfeiture of Alfredo
the time of the celebration of the marriage and the market value at the Gozon’s one-half undivided share in favor of Winifred Gozon and
time of its dissolution." Clearly, what is forfeited in favor of Winifred is not the grant of option to Winifred Gozon whether or not to dispose of
Alfredo’s share in the conjugal partnership property but merely in the net her undivided share in the property; and
profits of the conjugal partnership property.
(2) We ORDER Alfredo Gozon and Winifred Gozon to pay Inter-
With regard to IDRI, we agree with the Court of Appeals in holding that Dimensional Realty, Inc. jointly and severally the Eighteen Million
IDRI is not a buyer in good faith. As found by the RTC Malabon and the Pesos (₱18,000,000) which was the amount paid by Inter-
Court of Appeals, IDRI had actual knowledge of facts and circumstances Dimensional Realty, Inc. for the property, with legal interest
which should impel a reasonably cautious person to make further computed from the finality of this Decision.
inquiries about the vendor’s title to the property. The representative of
IDRI testified that he knew about the existence of the notice of lis SO ORDERED.
pendens on TCT No. 5357 and the legal separation case filed before the