G.R. No. 241699 - Tuazon vs. Fuentes

Case Summary (G.R. No. 241699)

Key Dates and Procedural Posture

Nullity-of-marriage proceeding: RTC decision authorizing sale on August 24, 2012; judgment declaring marriage null and void attained finality on October 31, 2012, and liquidation of the common properties (including the subject property) was thereafter included. Notice to vacate served by Fuentes: August 8, 2014. RTC approved contract to sell to PCGSLAI: September 8, 2014. Trial court (Branch 260, RTC, Parañaque City) Decision declaring leases null and void: December 14, 2015. Court of Appeals Decision affirming the RTC: April 6, 2018; CA Resolution: August 1, 2018. Petition for review on certiorari to the Supreme Court under Rule 45; final disposition by the Supreme Court: August 4, 2021. Applicable constitutional framework: 1987 Philippine Constitution (decision rendered post-1990).

Applicable Law and Legal Standards

Primary statutory provision applied: Article 124 of the Family Code (on administration, disposition, and encumbrance of conjugal/absolute community property). Procedural rules invoked: Rule 45 (petition for review on certiorari), Section 2, Rule 19 (intervention) of the Rules of Court, and court-annexed mediation / judicial dispute resolution rules as reflected in the 2020 Guidelines (A.M. No. 19-10-20-SC) concerning permissive referral to court-annexed mediation (CAM) and judicial dispute resolution (JDR). Controlling legal principle: disposition or encumbrance of conjugal/common property requires either the written consent of the other spouse or court authority when one spouse is incapacitated or unable to participate in administration; absent such consent or authority, the disposition is void.

Factual Background — Ownership, Occupation, and Prior Proceedings

Tuazon and Fuentes were registered co-owners of the subject parcels and the DM Building. The DM Building was occupied by two entities owned by Tuazon and his family: World Wiser and Jerzon (Jerzon had been ordered closed by the Philippine Overseas Employment Administration prior to later events). During the nullity-of-marriage proceedings, the RTC authorized Fuentes to sell the common properties to pay support pendente lite; sale of the subject property to PCGSLAI ensued pursuant to court order and later liquidation.

Factual Background — Leases, Unlawful Detainer, and Nullity Complaint

Fuentes sent a notice to vacate World Wiser on August 8, 2014. Petitioners relied on lease contracts executed by Tuazon in favor of World Wiser and Jerzon covering July 1, 2012 to July 1, 2022 as their defense in an unlawful detainer action. Fuentes then filed a separate complaint seeking declaration of nullity/annulment of the lease contracts on the ground that they were executed by the husband without the written consent of the wife.

Petitioners’ Defenses and Procedural Contentions

Petitioners argued that Fuentes had knowledge of the leases before the unlawful detainer case and that her inaction amounted to implied consent. They claimed Tuazon acted as co-administrator and, because Fuentes allegedly no longer resided in the conjugal home and failed to participate in administration, his decision should prevail. Procedurally, petitioners sought referral to judicial dispute resolution; the RTC denied this request, reasoning that the validity of the leases—which involved property already subject to a court-ordered liquidation—was not amenable to compromise. Petitioners also asserted a denial of due process because World Wiser and Jerzon were not parties to the nullity-of-marriage proceedings.

Trial Court Ruling (RTC)

The RTC rendered judgment on December 14, 2015, declaring both contracts of lease (Tuazon–World Wiser and Tuazon–Jerzon, each for the term July 1, 2012 to July 1, 2022) null and void for lack of the required written consent of Fuentes. The RTC ordered that copies of its decision be furnished to the Registry of Deeds of Pasay City where the subject property is situated. The court denied the request to refer the case to judicial dispute resolution and found no sufficient evidence to warrant defendants’ claimed relief.

Court of Appeals Ruling

The CA affirmed the RTC. It credited Fuentes’s persistent position that she did not enter into any lease with petitioners and observed that the exclusive administration and possession of the subject property had been awarded to Fuentes during the nullity proceedings. The CA relied on the Family Code (it cited Article 96 and related cases in its analysis) to conclude that leases of common property executed without the written consent of the other spouse are void; it treated a lease of common property exceeding one year as a conveyance or encumbrance requiring joinder of the wife. The CA also rejected petitioners’ due process and mediation-related claims, noting petitioners’ repeated failures to appear in court-annexed mediation and the Mediator’s Report indicating settlement was unlikely.

Motion to Intervene by PCGSLAI

PCGSLAI moved to intervene as the registered owner under the approved contract to sell. The Supreme Court denied the motion for lack of merit, applying Rule 19, Section 2 of the Rules of Court which requires that a motion to intervene be filed before rendition of judgment by the trial court. PCGSLAI’s motion was belated and failed to justify the delay, especially where the RTC had approved the contract to sell as early as September 8, 2014—prior to Fuentes’s filing of the instant suit.

Supreme Court’s Analysis — Family Code and Controlling Precedent

The Supreme Court affirmed the CA and RTC, applying Article 124 of the Family Code. The Court reiterated the clear and mandatory rule that administration may be joint and the husband’s decision may prevail in disagreements, but powers of disposition or encumbrance require either the other spouse’s written consent or court authority when one spouse is incapacitated or unable to participate; absent such consent or authority, disposition or encumbrance is void. The Court cited controlling jurisprudence (including Jader-Manalo v. Camaisa and Alejo v. Sps. Cortez) establishing that mere knowledge of a transaction by the non-signing spouse does not constitute consent and that the statutory requirement of written consent is unequivocal and not subject to substitution by implied consent.

Supreme Court’s Analysis — Knowledge Is Not Consent; Procedural and Equitable Considerations

Applying precedent, the Court found it immaterial that Fuentes may have been aware that World Wiser and Jerzon occupied the property; she did not give written consent and did not sign the contracts. Tuazon’s c

Case Syllabus (G.R. No. 241699)

Nature of the Case and Relief Sought

Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision dated April 6, 2018 and the Resolution dated August 1, 2018 of the Court of Appeals (CA) in CA-G.R. CV No. 107826.
Underlying relief sought by respondent Myra V. Fuentes in the trial court: declaration of nullity/annulment of contracts of lease executed by her husband, Dennis T. Uy Tuazon, without her written consent.
Petitioners (Tuazon, World Wiser International, Inc., and Jerzon Manpower and Trading, Inc.) sought reversal of the RTC and CA rulings which declared the questioned lease contracts null and void.

Antecedent Facts (as summarized by the Court of Appeals)

Dennis T. Uy Tuazon (Tuazon) and Myra V. Fuentes (Fuentes) are registered co-owners of two parcels of land covered by TCT Nos. 146276 and 146277 located at 2004 F.B. Harrison corner San Juan Streets, Pasay City, upon which the DM Building (subject property) was constructed.
Pending nullity of marriage proceedings in Branch 260, RTC, Parañaque City, the RTC in Civil Case No. 07-0142 (Decision dated August 24, 2012) authorized Fuentes to sell the subject property and other common properties to pay for support pendente lite for Fuentes and their adoptive daughter.
Pursuant to the court order, the subject property was sold to Philippine Coast Guard Savings and Loan Association, Inc. (PCGSLAI), and after the judgment declaring the marriage null and void attained finality on October 31, 2012, the liquidation of the subject property was included.
The subject property was occupied by two companies owned by Tuazon and his family: World Wiser and Jerzon.
On August 8, 2014, Fuentes sent World Wiser a notice to vacate the subject property; Jerzon had already been ordered closed by the POEA and was no longer occupying the property.
On September 8, 2014, the RTC approved the contract to sell between Fuentes and PCGSLAI and directed execution of the contract of sale.
Fuentes filed an unlawful detainer suit against World Wiser for refusal to vacate; in defense World Wiser presented lease contracts purportedly executed by Tuazon in favor of World Wiser (July 1, 2012 to July 1, 2022) and lease contracts between Tuazon and Jerzon.
Fuentes thereafter filed a complaint for declaration of nullity/annulment of the alleged lease contracts on the ground that they were executed without her written consent as co-owner/spouse.
Petitioners contended the contracts were valid despite the absence of Fuentes’s written consent, asserting that Fuentes no longer resided in the conjugal home and had failed to participate in administration of common properties; hence Tuazon’s decision as husband and co-administrator should prevail.

Procedural History

Case referred to court-annexed mediation, but returned to the RTC for non-appearance of the parties.
Petitioners requested referral to judicial dispute resolution (JDR); the RTC denied the request, reasoning the validity of the lease contracts could not be the subject of a compromise agreement because the properties were already covered by a court-decreed liquidation proceeding.
RTC, Branch 260, Parañaque City, rendered a Decision on December 14, 2015 declaring the two lease contracts (Tuazon–World Wiser; Tuazon–Jerzon) null and void, and ordered copies furnished to the Registry of Deeds of Pasay City.
Petitioners appealed to the Court of Appeals (CA-G.R. CV No. 107826); the CA, in a Decision dated April 6, 2018, affirmed the RTC and denied petitioners’ appeal. A subsequent CA Resolution dated August 1, 2018 is also assailed.
Petitioners elevated the case to the Supreme Court via the present petition for review on certiorari.

Ruling of the Regional Trial Court (December 14, 2015)

The RTC found the complaint meritorious and declared both contracts of lease executed by Dennis Uy Tuazon (one in favor of World Wiser International, Inc., the other in favor of Jerzon Manpower and Trading, Inc.) covering the DM Building for the period July 1, 2012 to July 1, 2022 as NULL and VOID.
The RTC found no sufficient evidence presented by defendants to warrant relief prayed for by them.
The RTC ordered that copies of the Decision be furnished to the Registry of Deeds of Pasay City.

Ruling of the Court of Appeals (April 6, 2018; affirmed August 1, 2018)

The CA affirmed the RTC’s declaration that the lease contracts executed by Tuazon without Fuentes’s written consent were void.
The CA noted Fuentes consistently maintained she did not enter into any lease contract with petitioners.
The CA observed the RTC in the nullity of marriage proceeding had awarded exclusive administration and possession of the subject property to Fuentes as of September 8, 2014, and that Fuentes had already filed an unlawful detainer suit against World Wiser prior to that date.
Citing Article 96 of the Family Code (as referenced) and related jurisprudence, the CA applied the rule that under the regime of absolute community of property the alienation of common property requires the written consent of the other spouse or the authority of the court; otherwise disposition or encumbrance is void.
The CA further applied the principle that a lease of common property for more than one year is a conveyance/encumbrance requiring the joinder/consent of the wife in the instrument.
On the JDR/mediation issue, the CA found no denial of due process: petitioners actively participated throughout the proceedings, had opportunities to raise defenses and objections, and the Mediator’s Report indicated parties were not amenable to settlement due to repeated failures to appear.
The CA concluded petitioners’ failure to attend mediation demonstrated negligence and disregard of rules a