Introduction

In the Philippines, the process of annulment is a judicial declaration that a marriage is void from its inception due to specific grounds outlined in the Family Code of the Philippines (Executive Order No. 209, as amended). Unlike divorce, which dissolves a valid marriage, annulment treats the union as if it never existed legally. However, the proceedings can be protracted, often lasting several years, during which the spouses remain legally married. This interim period raises significant concerns for third parties, particularly buyers interested in acquiring property owned by one or both spouses.

The safety of purchasing property amid ongoing annulment proceedings hinges on the nature of the property regime, the requirement for spousal consent, potential post-annulment property settlements, and the risk of future legal challenges. Buyers must navigate these complexities to avoid title disputes, financial losses, or even the nullification of the sale. This article explores the legal intricacies under Philippine law, including the Family Code, Civil Code provisions on property, and relevant jurisprudence, to provide a comprehensive understanding of the risks and safeguards.

Legal Framework Governing Marital Property in the Philippines

Property Regimes in Marriage

Under Article 75 of the Family Code, absent a marriage settlement (prenuptial agreement), the default property regime for marriages celebrated after August 3, 1988, is the Absolute Community of Property (ACP). For marriages before that date, it is the Conjugal Partnership of Gains (CPG). In both regimes:

Absolute Community of Property (ACP): All properties owned by the spouses at the time of marriage and those acquired thereafter form part of the community property, except for specific exclusions like properties acquired by gratuitous title (e.g., inheritance or donation) or personal use items (Article 91).
Conjugal Partnership of Gains (CPG): Only properties acquired during the marriage through onerous title (e.g., purchase or labor) are conjugal, while pre-marital properties remain separate (Article 109).

Properties are presumed to be community or conjugal unless proven otherwise (Article 116, Family Code). This presumption is crucial because it affects how property can be disposed of during marriage, including annulment proceedings.

Annulment and Its Effects on Property

Annulment is governed by Articles 45 to 54 of the Family Code, with grounds including psychological incapacity, fraud, force, impotence, or serious sexually transmissible diseases. The petition is filed in the Regional Trial Court (RTC), and the process involves the Office of the Solicitor General and potentially the Public Prosecutor's Office.

Importantly, until the annulment decree becomes final and executory—after appeals and entry of judgment—the marriage subsists. Thus, the property regime remains intact, and dispositions of property must comply with marital rules. Upon annulment:

The marriage is void ab initio, but children are considered legitimate if conceived before the decree (Article 54).
Property is liquidated and divided: In ACP, net assets are divided equally unless otherwise agreed; in CPG, gains are computed and shared (Articles 102 and 129).
Donations propter nuptias (due to marriage) may be revoked if the annulment is based on certain grounds (Article 86).

However, transactions involving third parties during the proceedings are not automatically undone but may be subject to scrutiny.

Requirements for Disposition of Marital Property

Article 96 (ACP) and Article 124 (CPG) of the Family Code mandate that the administration and enjoyment of community or conjugal property belong to both spouses jointly. For acts of dominion or disposition, such as selling real property:

Written consent of the other spouse is required.
Without consent, the transaction is voidable at the instance of the non-consenting spouse, who has five years from knowledge of the sale to annul it (Article 173, Family Code, cross-referencing Civil Code provisions).
If the buyer is in good faith (unaware of the lack of consent), they may still face challenges, but bad faith could lead to additional liabilities.

The Supreme Court has clarified in cases like Guiang v. Court of Appeals (G.R. No. 125036, 1998) that sales without spousal consent are unenforceable or voidable, not void, emphasizing the protection of innocent third parties under certain conditions.

Risks Involved in Buying Property During Annulment Proceedings

Lack of Spousal Consent

The primary risk is purchasing from one spouse without the other's consent. Since the marriage is still valid, the non-consenting spouse can later seek to annul the sale, especially if the property is community or conjugal. This could result in:

Lis Pendens Annotation: During annulment, a notice of lis pendens (pending litigation) may be annotated on the property title under Section 14, Rule 13 of the Rules of Court. This warns potential buyers of ongoing litigation affecting the property, potentially deterring sales or complicating title transfer.
Post-Annulment Challenges: Even after annulment, the former spouse may claim the property in liquidation proceedings. If the sale occurred without consent, it could be set aside, forcing the buyer to return the property or face damages.

Property Classification Disputes

Buyers may assume the property is separate (e.g., inherited), but the presumption of conjugality (Article 116) requires proof otherwise. If the seller misrepresents this, the buyer risks involvement in partition suits post-annulment.

Fraud or Collusion

If the sale is part of an attempt to dissipate assets to prejudice the other spouse (e.g., to avoid equitable division), it could be deemed fraudulent under Article 1381 of the Civil Code. The aggrieved spouse may file an action for rescission within four years.

Title and Registration Issues

Under the Torrens system (Presidential Decree No. 1529), buyers must ensure the title is clean. However, ongoing annulment may reveal hidden claims, leading to adverse possession claims or reconveyance actions. In Heirs of Dela Cruz v. Heirs of Cruz (G.R. No. 162890, 2005), the Court upheld the voidability of sales without consent, highlighting buyer diligence.

Financial and Emotional Costs

Litigation to defend the purchase can be costly, involving attorney's fees, court costs, and potential loss of property value. Moreover, if the annulment involves child custody or support, property sales might be scrutinized for impacting minor children's interests (Article 102).

Protections and Best Practices for Buyers

Due Diligence Requirements

To mitigate risks, buyers should:

Verify Marital Status: Request the Certificate of No Marriage (CENOMAR) or annulment petition documents to confirm proceedings.
Obtain Spousal Consent: Insist on a notarized Special Power of Attorney or joint deed of sale signed by both spouses.
Check Title Annotations: Conduct a title search at the Registry of Deeds for lis pendens or adverse claims.
Secure Affidavits: Require the seller to provide an affidavit declaring the property as separate, with supporting evidence like deeds of donation or inheritance documents.
Involve Legal Counsel: Engage a lawyer to review the transaction, possibly including a hold-harmless agreement.

Good Faith Purchaser Doctrine

Under Article 1544 of the Civil Code, a buyer in good faith who registers the sale first acquires better rights. However, knowledge of the annulment proceedings may negate good faith, as per Abrigo v. De Vera (G.R. No. 154409, 2004), where the Court emphasized actual or constructive notice.

Judicial Approval in Certain Cases

If the annulment court has issued orders on property administration (e.g., under Article 36 for psychological incapacity cases), sales may require court approval to ensure fairness.

Alternative Options

Wait for Finality: Postpone purchase until the annulment is final and property partitioned.
Buy from Both Spouses: Structure the deal to involve both parties.
Title Insurance: Though not common in the Philippines, consider insurance for title defects.

Relevant Jurisprudence

Philippine courts have addressed similar issues:

In Aguirre v. Aguirre (G.R. No. 170325, 2008), the Supreme Court ruled that dispositions during separation proceedings (analogous to annulment) without consent are voidable, protecting buyers who act in good faith but allowing annulment by the aggrieved spouse.
Homeowners Savings & Loan Bank v. Dailo (G.R. No. 153802, 2005) affirmed that mortgage or sale without consent is unenforceable against the community property.
Partido v. Court of Appeals (G.R. No. 129204, 2001) highlighted that buyers must inquire into the seller's authority, especially in marital disputes.

These cases underscore that while sales are not automatically invalid, they carry inherent vulnerabilities.

Conclusion

Buying property during ongoing annulment proceedings in the Philippines is fraught with legal pitfalls, primarily due to the subsisting marriage and property regime rules. The absence of spousal consent, potential for post-annulment liquidation, and risk of fraudulent conveyance can jeopardize the buyer's title and investment. However, through rigorous due diligence, verification of consents, and adherence to legal safeguards, buyers can enhance the safety of such transactions. Ultimately, consulting with a family law expert is indispensable to navigate this complex landscape, ensuring compliance with the Family Code and protecting against unforeseen liabilities. In a jurisdiction where family ties and property rights are deeply intertwined, caution remains the buyer's best ally.