G.R. No. L-17083; July 31, 1962
TEODORICA REINARES, plaintiff-appellant, vs. JOSE ARRASTIA and LIBERTY T. HIZON, defendants, LIBERTY T. HIZON, defendant-appellee.

FACTS

Plaintiff Teodorica Reinares and defendant Jose Arrastia are spouses. On June 25, 1958, the husband, Arrastia, sold several conjugal sugar lands to defendant Liberty T. Hizon. The plaintiff wife filed a complaint against both, alleging the sale was executed without her consent, for a grossly inadequate price, and in fraud of her conjugal share. She emphasized the properties were the partnership’s sole assets and her husband owned no other property, making the sale prejudicial to her rights. She sought annulment of the sale, recovery of the properties, and damages.
Defendant Hizon moved to dismiss the complaint for failure to state a cause of action. She argued that under the applicable old Civil Code provisions, the husband had absolute authority to alienate conjugal property without spousal consent, and any claim for prejudice could only arise after liquidation of the conjugal partnership. The trial court granted the motion, ruling the wife’s consent was unnecessary for properties acquired before the new Civil Code and that the issue of inadequate price and prejudice could not be raised against the buyer at that stage.

ISSUE

Whether the trial court correctly dismissed the complaint for failure to state a cause of action against defendant-appellee Liberty T. Hizon.

RULING

No. The Supreme Court reversed the order of dismissal and remanded the case for trial on the merits. The legal logic is anchored on the procedural standard for a motion to dismiss based on failure to state a cause of action. The sufficiency of a complaint is tested solely on the strength of its factual allegations, which are deemed hypothetically admitted for the purpose of the motion. The complaint here sufficiently alleged facts constitutive of a cause of action: the properties were conjugal, the sale was made without the wife’s consent, the price was grossly inadequate, the sale prejudiced her share as it comprised the partnership’s only assets, and the buyer acted in bad faith with knowledge of these circumstances. These allegations of fraud and prejudice, while contested by the defense, are precisely matters requiring proof in a full trial. The Court clarified that Article 1413 of the old Civil Code, while granting the husband administration powers, explicitly prohibited alienations made in fraud of the wife from prejudicing her. The averments in the complaint directly invoked this exception. The lower court erred in considering extrinsic matters, like an option to sell presented during the hearing on the motion, which went beyond the pleadings. The complaint furnished a sufficient basis for the action to be maintained, making dismissal premature.