SECOND DIVISION

[G.R. No. 155043. September 30, 2004]

ARTURO R. ABALOS, petitioner, vs. DR. GALICANO S. MACATANGAY,

JR., respondent.

DECISION
TINGA, J.:

The instant petition seeks a reversal of the Decision of the Court of Appeals in CA-
G.R. CV No. 48355 entitled Dr. Galicano S. Macatangay, Jr. v. Arturo R. Abalos and
Esther Palisoc-Abalos, promulgated on March 14, 2002. The appellate court reversed the
trial courts decision which dismissed the action for specific performance filed by
respondent, and ordered petitioner and his wife to execute in favor of herein respondent
a deed of sale over the subject property.
Spouses Arturo and Esther Abalos are the registered owners of a parcel of land with
improvements located at Azucena St., Makati City consisting of about three hundred
twenty-seven (327) square meters, covered by Transfer Certificate of Title (TCT) No.
145316 of the Registry of Deeds of Makati.
Armed with a Special Power of Attorney dated June 2, 1988, purportedly issued by
his wife, Arturo executed a Receipt and Memorandum of Agreement (RMOA) dated
October 17, 1989, in favor of respondent, binding himself to sell to respondent the subject
property and not to offer the same to any other party within thirty (30) days from
date. Arturo acknowledged receipt of a check from respondent in the amount of Five
Thousand Pesos (P5,000.00), representing earnest money for the subject property, the
amount of which would be deducted from the purchase price of One Million Three
Hundred Three Hundred Thousand Pesos (P1,300,000.00). Further, the RMOA stated
that full payment would be effected as soon as possession of the property shall have been
turned over to respondent.
Subsequently, Arturos wife, Esther, executed a Special Power of Attorney dated
October 25, 1989, appointing her sister, Bernadette Ramos, to act for and in her behalf
relative to the transfer of the property to respondent. Ostensibly, a marital squabble was
brewing between Arturo and Esther at the time and to protect his interest, respondent
caused the annotation of his adverse claim on the title of the spouses to the property on
November 14, 1989.
On November 16, 1989, respondent sent a letter to Arturo and Esther informing them
of his readiness and willingness to pay the full amount of the purchase price. The letter
contained a demand upon the spouses to comply with their obligation to turn over
possession of the property to him. On the same date, Esther, through her attorney-in-fact,
executed in favor of respondent, a Contract to Sell the property to the extent of her
conjugal interest therein for the sum of six hundred fifty thousand pesos (P650,000.00)
less the sum already received by her and Arturo. Esther agreed to surrender possession
of the property to respondent within twenty (20) days from November 16, 1989, while the
latter promised to pay the balance of the purchase price in the amount of one million two
hundred ninety thousand pesos (P1,290,000.00) after being placed in possession of the
property. Esther also obligated herself to execute and deliver to respondent a deed of
absolute sale upon full payment.
In a letter dated December 7, 1989, respondent informed the spouses that he had set
aside the amount of One Million Two Hundred Ninety Thousand Pesos (P1,290,000.00)
as evidenced by Citibank Check No. 278107 as full payment of the purchase price. He
reiterated his demand upon them to comply with their obligation to turn over possession
of the property.Arturo and Esther failed to deliver the property which prompted respondent
to cause the annotation of another adverse claim on TCT No. 145316. On January 12,
1990, respondent filed a complaint for specific performance with damages against
petitioners. Arturo filed his answer to the complaint while his wife was declared in default.
The Regional Trial Court (RTC) dismissed the complaint for specific performance. It
ruled that the Special Power of Attorney (SPA) ostensibly issued by Esther in favor of
Arturo was void as it was falsified. Hence, the court concluded that the SPA could not
have authorized Arturo to sell the property to respondent. The trial court also noted that
the check issued by respondent to cover the earnest money was dishonored due to
insufficiency of funds and while it was replaced with another check by respondent, there
is no showing that the second check was issued as payment for the earnest money on
the property.
On appeal taken by respondent, the Court of Appeals reversed the decision of the
trial court. It ruled that the SPA in favor of Arturo, assuming that it was void, cannot affect
the transaction between Esther and respondent. The appellate court ratiocinated that it
was by virtue of the SPA executed by Esther, in favor of her sister, that the sale of the
property to respondent was effected. On the other hand, the appellate court considered
the RMOA executed by Arturo in favor of respondent valid to effect the sale of Arturos
conjugal share in the property.
Dissatisfied with the appellate courts disposition of the case, petitioner seeks a
reversal of its decision alleging that:
I.

The Court of Appeals committed serious and manifest error when it decided on the
appeal without affording petitioner his right to due process.
II.

The Court of Appeals committed serious and manifest error in reversing and setting
aside the findings of fact by the trial court.
III.
The Court of Appeals erred in ruling that a contract to sell is a contract of sale, and in
ordering petitioner to execute a registrable form of deed of sale over the property in
favor of respondent. [1]

Petitioner contends that he was not personally served with copies of summons,
pleadings, and processes in the appeal proceedings nor was he given an opportunity to
submit an appellees brief. He alleges that his counsel was in the United States from 1994
to June 2000, and he never received any news or communication from him after the
proceedings in the trial court were terminated. Petitioner submits that he was denied due
process because he was not informed of the appeal proceedings, nor given the chance
to have legal representation before the appellate court.
We are not convinced. The essence of due process is an opportunity to be
heard. Petitioners failure to participate in the appeal proceedings is not due to a cause
imputable to the appellate court but because of petitioners own neglect in ascertaining
the status of his case. Petitioners counsel is equally negligent in failing to inform his client
about the recent developments in the appeal proceedings. Settled is the rule that a party
is bound by the conduct, negligence and mistakes of his counsel.[2] Thus, petitioners plea
of denial of due process is downright baseless.
Petitioner also blames the appellate court for setting aside the factual findings of the
trial court and argues that factual findings of the trial court are given much weight and
respect when supported by substantial evidence. He asserts that the sale between him
and respondent is void for lack of consent because the SPA purportedly executed by his
wife Esther is a forgery and therefore, he could not have validly sold the subject property
to respondent.
Next, petitioner theorizes that the RMOA he executed in favor of respondent was not
perfected because the check representing the earnest money was dishonored. He adds
that there is no evidence on record that the second check issued by respondent was
intended to replace the first check representing payment of earnest money.
Respondent admits that the subject property is co-owned by petitioner and his wife,
but he objects to the allegations in the petition bearing a relation to the supposed date of
the marriage of the vendors. He contends that the alleged date of marriage between
petitioner and his wife is a new factual issue which was not raised nor established in the
court a quo.Respondent claims that there is no basis to annul the sale freely and
voluntarily entered into by the husband and the wife.
The focal issue in the instant petition is whether petitioner may be compelled to
convey the property to respondent under the terms of the RMOA and the Contract to
Sell. At bottom, the resolution of the issue entails the ascertainment of the contractual
nature of the two documents and the status of the contracts contained therein.
Contracts, in general, require the presence of three essential elements: (1) consent
of the contracting parties; (2) object certain which is the subject matter of the contract;
and (3) cause of the obligation which is established.[3]
 Until the contract is perfected, it cannot, as an independent source of obligation, serve
as a binding juridical relation.[4] In a contract of sale, the seller must consent to transfer
ownership in exchange for the price, the subject matter must be determinate, and the
price must be certain in money or its equivalent.[5] Being essentially consensual, a contract
of sale is perfected at the moment there is a meeting of the minds upon the thing which
is the object of the contract and upon the price. [6] However, ownership of the thing sold
shall not be transferred to the vendee until actual or constructive delivery of the property.[7]
On the other hand, an accepted unilateral promise which specifies the thing to be
sold and the price to be paid, when coupled with a valuable consideration distinct
and separate fromthe price, is what may properly be termed a perfected contract of
option.[8] An option merely grants a privilege to buy or sell within an agreed time and at a
determined price. It is separate and distinct from that which the parties may enter into
upon the consummation of the option.[9] A perfected contract of option does not result in
the perfection or consummation of the sale; only when the option is exercised may a sale
be perfected.[10] The option must, however, be supported by a consideration distinct from
the price.[11]
Perusing the RMOA, it signifies a unilateral offer of Arturo to sell the property to
respondent for a price certain within a period of thirty days. The RMOA does not impose
upon respondent an obligation to buy petitioners property, as in fact it does not even bear
his signature thereon. It is quite clear that after the lapse of the thirty-day period, without
respondent having exercised his option, Arturo is free to sell the property to another. This
shows that the intent of Arturo is merely to grant respondent the privilege to buy the
property within the period therein stated. There is nothing in the RMOA which indicates
that Arturo agreed therein to transfer ownership of the land which is an essential element
in a contract of sale. Unfortunately, the option is not binding upon the promissory since it
is not supported by a consideration distinct from the price.[12]
As a rule, the holder of the option, after accepting the promise and before he
exercises his option, is not bound to buy. He is free either to buy or not to buy
later. In Sanchez v. Rigos[13]we ruled that in an accepted unilateral promise to sell, the
promissor is not bound by his promise and may, accordingly, withdraw it, since there may
be no valid contract without a cause or consideration. Pending notice of its withdrawal,
his accepted promise partakes of the nature of an offer to sell which, if acceded or
consented to, results in a perfected contract of sale.
Even conceding for the nonce that respondent had accepted the offer within the
period stated and, as a consequence, a bilateral contract of purchase and sale was
perfected, the outcome would be the same. To benefit from such situation, respondent
would have to pay or at least make a valid tender of payment of the price for only then
could he exact compliance with the undertaking of the other party. [14] This respondent
failed to do. By his own admission, he merely informed respondent spouses of his
readiness and willingness to pay. The fact that he had set aside a check in the amount of
One Million Two Hundred Ninety Thousand Pesos (P1,290,000.00) representing the
balance of the purchase price could not help his cause.Settled is the rule that tender of
payment must be made in legal tender. A check is not legal tender, and therefore cannot
constitute a valid tender of payment.[15] Not having made a valid tender of payment,
respondents action for specific performance must fail.
With regard to the payment of Five Thousand Pesos (P5,000.00), the Court is of the
view that the amount is not earnest money as the term is understood in Article 1482 which
signifies proof of the perfection of the contract of sale, but merely a guarantee that
respondent is really interested to buy the property. It is not the giving of earnest money,
but the proof of the concurrence of all the essential elements of the contract of sale which
establishes the existence of a perfected sale.[16] No reservation of ownership on the part
of Arturo is necessary since, as previously stated, he has never agreed to transfer
ownership of the property to respondent.
Granting for the sake of argument that the RMOA is a contract of sale, the same
would still be void not only for want of consideration and absence of respondents
signature thereon, but also for lack of Esthers conformity thereto. Quite glaring is the
absence of the signature of Esther in the RMOA, which proves that she did not give her
consent to the transaction initiated by Arturo. The husband cannot alienate any real
property of the conjugal partnership without the wifes consent. [17]
However, it was the Contract to Sell executed by Esther through her attorney-in-fact
which the Court of Appeals made full use of. Holding that the contract is valid, the
appellate court explained that while Esther did not authorize Arturo to sell the property,
her execution of the SPA authorizing her sister to sell the land to respondent clearly shows
her intention to convey her interest in favor of respondent. In effect, the court declared
that the lack of Esthers consent to the sale made by Arturo was cured by her subsequent
conveyance of her interest in the property through her attorney-in-fact.
We do not share the ruling.
The nullity of the RMOA as a contract of sale emanates not only from lack of Esthers
consent thereto but also from want of consideration and absence of respondents
signature thereon. Such nullity cannot be obliterated by Esthers subsequent confirmation
of the putative transaction as expressed in the Contract to Sell. Under the law, a void
contract cannot be ratified[18] and the action or defense for the declaration of the
inexistence of a contract does not prescribe.[19] A void contract produces no effect either
against or in favor of anyoneit cannot create, modify or extinguish the juridical relation to
which it refers.[20]
True, in the Contract to Sell, Esther made reference to the earlier RMOA executed
by Arturo in favor of respondent. However, the RMOA which Arturo signed is different
from the deed which Esther executed through her attorney-in-fact. For one, the first is
sought to be enforced as a contract of sale while the second is purportedly a contract to
sell only. For another, the terms and conditions as to the issuance of title and delivery of
possession are divergent.
The congruence of the wills of the spouses is essential for the valid disposition of
conjugal property. Where the conveyance is contained in the same document which bears
the conformity of both husband and wife, there could be no question on the validity of the
transaction. But when there are two documents on which the signatures of the spouses
separately appear, textual concordance of the documents is indispensable. Hence, in this
case where the wifes putative consent to the sale of conjugal property appears in a
separate document which does not, however, contain the same terms and conditions as
in the first document signed by the husband, a valid transaction could not have arisen.
Quite a bit of elucidation on the conjugal partnership of gains is in order.
Arturo and Esther appear to have been married before the effectivity of the Family
Code. There being no indication that they have adopted a different property regime, their
property relations would automatically be governed by the regime of conjugal partnership
of gains.[21]
The subject land which had been admittedly acquired during the marriage of the
spouses forms part of their conjugal partnership.[22]
Under the Civil Code, the husband is the administrator of the conjugal
partnership. This right is clearly granted to him by law.[23] More, the husband is the sole
administrator. The wife is not entitled as of right to joint administration.[24]
The husband, even if he is statutorily designated as administrator of the conjugal
partnership, cannot validly alienate or encumber any real property of the conjugal
partnership without the wifes consent.[25] Similarly, the wife cannot dispose of any property
belonging to the conjugal partnership without the conformity of the husband. The law is
explicit that the wife cannot bind the conjugal partnership without the husbands consent,
except in cases provided by law.[26]
More significantly, it has been held that prior to the liquidation of the conjugal
partnership, the interest of each spouse in the conjugal assets is inchoate, a mere
expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen
into title until it appears that 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 or remanente
liquido (haber ganancial) resulting from the liquidation of the affairs of the partnership
after its dissolution.[27] Thus, the right of the husband or wife to one-half of the conjugal
assets does not vest until the dissolution and liquidation of the conjugal partnership, or
after 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.[28]
In not a few cases, we ruled that the sale by the husband of property belonging to the
conjugal partnership without the consent of the wife when there is no showing that the
latter is incapacitated is void ab initio because it is in contravention of the mandatory
requirements of Article 166 of the Civil Code.[29] Since Article 166 of the Civil Code requires
the consent of the wife before the husband may alienate or encumber any real property
of the conjugal partnership, it follows that acts or transactions executed against this
mandatory provision are void except when the law itself authorizes their validity. [30]
Quite recently, in San Juan Structural and Steel Fabricators, Inc. v. Court of
Appeals,[31] we ruled that neither spouse could alienate in favor of another, his or her
interest in the partnership or in any property belonging to it, or ask for partition of the
properties before the partnership itself had been legally dissolved. Nonetheless,
alienation of the share of each spouse in the conjugal partnership could be had after
separation of property of the spouses during the marriage had been judicially decreed,
upon their petition for any of the causes specified in Article 191 [32] of the Civil Code in
relation to Article 214[33] thereof.
As an exception, the husband may dispose of conjugal property without the wifes
consent if such sale is necessary to answer for conjugal liabilities mentioned in Articles
161 and 162 of the Civil Code.[34] In Tinitigan v. Tinitigan, Sr.,[35] the Court ruled that the
husband may sell property belonging to the conjugal partnership even without the consent
of the wife if the sale is necessary to answer for a big conjugal liability which might
endanger the familys economic standing. This is one instance where the wifes consent is
not required and, impliedly, no judicial intervention is necessary.
Significantly, the Family Code has introduced some changes particularly on the
aspect of the administration of the conjugal partnership. The new law provides that the
administration of the conjugal partnership is now a joint undertaking of the husband and
the wife. In the event that one spouse is incapacitated or otherwise unable to participate
in the administration of the conjugal partnership, the other spouse may assume sole
powers of administration. However, the power of administration does not include the
power to dispose or encumber property belonging to the conjugal partnership. [36] In all
instances, the present law specifically requires the written consent of the other spouse,
or authority of the court for the disposition or encumbrance of conjugal partnership
property without which, the disposition or encumbrance shall be void. [37]
Inescapably, herein petitioners action for specific performance must fail. Even on the
supposition that the parties only disposed of their respective shares in the property, the
sale, assuming that it exists, is still void for as previously stated, the right of the husband
or the wife to one-half of the conjugal assets does not vest until the liquidation of the
conjugal partnership. Nemo dat qui non habet. No one can give what he has not.
WHEREFORE, the appealed Decision is hereby REVERSED and SET ASIDE. The
complaint in Civil Case No. 90-106 of the Regional Trial Court of Makati is ordered
DISMISSED. No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, and Callejo, Sr., JJ., concur.
Chico-Nazario, J., on leave.

[1] Rollo, pp. 21-22.

[2] Heirs of Elias Lorilla v. Court of Appeals, 368 Phil. 638 (2000).
ART. 1318, CIVIL CODE OF THE PHILIPPINES; Santos v. Heirs of Jose Mariano and Erlinda Mariano-
[3]

Villanueva, G.R. No. 143325, October 24, 2000, 344 SCRA 284.
[4] Ang Yu v. Asuncion, G.R. No. 109125, December 2, 1994, 238 SCRA 602.
[5] Heirs of Juan San Andres v. Rodriguez, 388 Phil. 571 (2000).
[6] Laforteza v. Machuca, 389 Phil. 167 (2000).
[7] Heirs of Quirico Seraspi and Purificacion Seraspi v. Court of Appeals, 387 Phil. 306 (2000).
[8] Ang Yu v. Asuncion, Supra note 4.
[9] Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 332 Phil. 525 (1996).
[10] Cavite Development Bank v. Lim, 381 Phil. 355 (2000).
[11]
De la Cavada v. Diaz, 37 Phil. 982 (1918), Beaumont v. Prieto, 41 Phil. 670 (1916).
[12] Atkins, Kroll and Co., Inc. v. Cua Hian Tek, 102 Phil. 948.
[13] 150-A Phil. 714 (1972).
[14] Article 1191, CIVIL CODE.
Cebu International Finance Corporation v. Court of Appeals, 374 Phil. 844; Far East Bank & Trust
[15]

Company v. Diaz Realty, Inc., G.R. No. 38588, August 23, 2001, 363 SCRA 659.
[16] San Miguel Properties Philippines, Inc. v. Huang, 391 Phil. 636 (2000).
[17] Article 166, CIVIL CODE.
[18]
Article 1409, CIVIL CODE.
[19] Article 1410, CIVIL CODE; Santos v. Santos, G.R. No. 133895, October 2, 2001, 366 SCRA 395.
[20]
Gochan v. Young, G.R. No. 131889, March 12, 2001, 354 SCRA 207.
[21] ART. 119, CIVIL CODE.
[22] ART. 160, CIVIL CODE.
[23] ART. 165, CIVIL CODE.
[24] Ysasi v. Hon. Fernandez, et.al., 132 Phil. 526 (1968).
[25] ART. 166, CIVIL CODE.
[26] ART. 172, CIVIL CODE.
[27] Nable Jose v. Nable Jose, 41 Phil. 713 (1916); Manuel v. Losano, 41 Phil. 855 (1918).
[28] Quintos de Ansaldo v. Sheriff of Manila, 64 Phil. 115 (1937).
Nicolas v. Court of Appeals, No. L-37631, October 12, 1987, 154 SCRA 635; Garcia v. Court of Appeals,
[29]

215 Phil. 380 (1984); Tolentino v. Cardena, 123 Phil. 517 (1966).
[30] ART. 5, CIVIL CODE.
[31] 357 Phil 631 (1998).
ART. 191. The husband or the wife may ask for the separation of property, and it shall be decreed when
[32]

the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction, or has
been declared absent, or when legal separation has been granted.
In case of abuse of powers of administration of the conjugal partnership property by the husband,
or in case of abandonment by the husband, separation of property may also be ordered by the court,
according to the provisions of Articles 167 and 178, No. 3.
In all these cases, it is sufficient to present the final judgment which has been entered against the
guilty or absent spouse.
The husband and the wife may agree upon the dissolution of the conjugal partnership during the
marriage, subject to judicial approval. All the creditors of the husband and of the wife, as well as of the
conjugal partnership, shall be notified of any petition for judicial approval of the voluntary dissolution of the
conjugal partnership, so that any such creditors may appear at the hearing to safeguard his interests. Upon
approval of the petition for dissolution of the conjugal partnership, the court shall take such measures as
may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of Articles 214 and 215 shall apply. The
provisions of this Code concerning the effect of partition stated in Articles 498 to 501 shall be applicable.
ART. 214. Each spouse shall own, dispose of, possess, administer and enjoy his or her own separate
[33]

estate, without the consent of the other. All earnings from any profession, business or industry shall likewise
belong to each spouse.
[34] ART. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and
those contracted by the wife, also for the same purpose, in the cases where she may legally bind the
partnership;
(2) Arrears or income due, during the marriage, from obligations which constitute a charge upon property
of either spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the marriage upon the separate property of either
the husband or the wife; major repairs shall not be charged to the partnership;
(4) Major or minor repairs upon the conjugal partnership property;
(5) The maintenance of the family and the education of the children of both husband and wife, and of
legitimate children of one of the spouses;
(6) Expenses to permit the spouses to complete a professional, vocational or other course.
ART. 162. The value of what is donated or promised to the common children by the husband, only for
securing their future or the finishing of a career, or by both spouses through a common agreement shall
also be charged to the conjugal partnership, when they have not stipulated that it is to be satisfied from the
property of one of them, in whole or in part.
[35] No. L- 45418, October 30, 1980, 100 SCRA 619.
[36] ART. 124, FAMILY CODE OF THE PHILIPPINES.
[37] Ibid.