39 Flores Vs Lind.docx

Mortgage of Conjugal Property without Marital Consent is Void (Flores v. Sps. Lindo Case Digest) G.R. No. 183984, April 13, 2011 Arturo Sarte Flores v. Sps. Enrico & Edna Lindo Mortgage of property within the community or the conjugal partnership is void if done without the consent of the other spouse. Nevertheless, the execution of special powers of attorney perfects the contract of mortgage. In other words, the SPA cures the defect of the mortgage. On the 31st day of October in the year 1995, the woman was able to obtain a loan secured by a Real Estate Mortgage over a real proper under her and his husband's name but without the consent of the former. Partial payments were made by her through checks but the same were dishonored. As a result, the creditor filed a complaint against her for foreclosure of the mortgage with damages. The second-level court dismissed the case as the mortgage was, in the eyes of the court a quo, void for having been executed without the necessary consent of the husband, despite the SPA executed later by the husband for the wife. It must be noted that the SPA was executed only a few days after the wife entered into the contract of loan with mortgage. The second-level court however ruled that the subsequent execution of the SPA cannot be made to retroact to the date of the execution of the real estate mortgage. ISSUE: Did the court commit any error in dismissing the case for foreclosure against the wife for the mortgage entered into without the husband's consent despite the fact that a subsequent SPA was executed in her favor? RULING: Yes, the court acted in error. The execution of the SPA can be considered as acceptance of the mortgage by the other spouse that perfected the contract or continuing offer. Both Article 96 and Article 124 of the Family Code provide that the powers of the administration do not include disposition or encumbrance without the written consent of the other spouse. Any disposition or encumbrance without the written consent shall be void. However, both provisions also state that “the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse x x x before the offer is withdrawn by either or both offerors.”