G.R. No. 165420; June 30, 2005
CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A. TULIAO, CORAZON A. JALECO and LILIA A. OLAYON, petitioners, vs. SPOUSES ANTONIO PADUA and EUGENIA PADUA, respondents.

FACTS

Petitioner Concepcion Ainza alleged she purchased one-half of an undivided portion of a conjugal property from her daughter, respondent Eugenia Padua, and Eugenia’s husband, Antonio, in April 1987 for P100,000.00. No formal deed was executed, but a receipt was signed by Eugenia, and possession was delivered to Concepcion’s attorney-in-fact. Respondents later subdivided the property and obtained new titles in their names alone. Concepcion filed a complaint for partition and annulment of titles. The Regional Trial Court ruled in her favor, upholding the validity of the sale.
The Court of Appeals reversed the trial court, declaring the sale null and void. It applied Article 124 of the Family Code, ruling that the sale of conjugal property required the written consent of the husband, Antonio, which was absent. It ordered the return of the purchase price to Concepcion.

ISSUE

Whether there was a valid contract of sale between Eugenia Padua and Concepcion Ainza concerning the conjugal property.

RULING

The Supreme Court granted the petition and reinstated the trial court’s decision, holding the sale valid and enforceable. The legal logic proceeds as follows: First, a contract of sale was perfected by mere consent, as there was a meeting of the minds on the object and price, and it was consummated by full payment and delivery of possession. The receipt signed by Eugenia and Antonio’s own admission provided sufficient evidence, taking the oral contract out of the Statute of Frauds, which applies only to executory agreements.
Second, while the property was conjugal and the sale by the wife without the husband’s consent was voidable under the applicable Civil Code provisions, the right to annul such a contract is subject to prescription. The sale occurred in April 1987. Under Article 1145 of the Civil Code, an action based upon an oral contract must be commenced within six years. Alternatively, even under the ten-year period for annulment of contracts under Article 173, the period had lapsed. Antonio Padua failed to institute any action for annulment within the prescribed period from 1987. Consequently, his right to challenge the sale was extinguished by prescription, rendering the contract binding and enforceable. The Court of Appeals erred in applying the Family Code retroactively, as it would impair Concepcion’s vested rights acquired under the Civil Code regime.