ABALOS VS. MACATANGAY, JR.

439 SCRA 649 (30 September 2004)

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Facts: Spouses H and W were married prior to the adoption
of the Family Code. They are registered owners of a parcel
of land. Armed with a Special Power of Attorney purportedly
issued by W (W claims it was falsified), H executed a Receipt
and Memorandum of agreement (RMOA) in favor of B,
binding himself to sell the property to B and not to offer to
others within 30 days. Within 30 days, B informed H & W his
willingness to pay the full purchase price. W, executed in
favor of B, a Contract to Sell the property to the extent of her
conjugal interest for $650K. H and W failed to deliver the
property.
Issue: Whether or not the RMOA is valid.Whether or not the
Contract to Sell executed by W is valid.
Ruling: The RMOA and Contract to Sell are not valid. In the
absence of a marriage settlement, the system of conjugal
partnership of gains governed the relations between H and
W as they were married prior to the adoption of the Family
Code. By express provision of Article 124 of the Family
Code, in the absence of (court) authority or written consent
of the other spouse, any disposition or encumbrance of the
conjugal property shall be void.
Significantly, it has been held that prior to the liquidation of

the conjugal partnership, the interest of each spouse in the

conjugal asset is inchoate, a mere expectancy, which
constitutes neither a legal nor an equitable estate, and does
not ripen into title until it appears there are assets in the
community as a result of the liquidation and settlement. The
interest of each spouse is limited to the net remainder
resulting from the liquidation of the affairs of the partnership
after its dissolution. Thus, the right of the husband or wife to
one-half of the conjugal asset does not vest until the
dissolution and liquidation of the conjugal partnership, or
after the dissolution of the marriage, when it is finally
determined that, after settlement of conjugal obligations,
there are net assets left which can be divided between the
spouses or their respective heirs.