G.R. No. L-7397, December 11, 1916
AMPARO NABLE JOSE, ET AL., STANDARD OIL COMPANY OF NEW YORK and CARMEN CASTRO, plaintiffs-appellants, vs. MARIANO NABLE JOSE, ET AL., defendants-appellees.

FACTS:
This case involves the validity of mortgages executed by Mariano Nable Jose over properties of the conjugal partnership after the death of his wife, Paz Borja. Upon his wife’s death, Mariano mortgaged several parcels of land (registered in his name) and personal property to Amparo Nable Jose, Asuncion N. Jose, and the Standard Oil Company of New York. The heirs of Paz Borja contested these transactions, arguing that the surviving husband lacked the power to alienate or encumber the community property after the dissolution of the partnership by death. The lower court declared portions of the mortgages invalid and excluded certain properties from being subject to the encumbrances.

ISSUE:
What is the nature and extent of the power of a surviving husband to administer, sell, or mortgage the conjugal partnership property after the death of his wife, pending the liquidation of the partnership affairs?

RULING:
The Supreme Court reversed and modified the lower court’s decision, upholding the validity of the mortgages in question. The Court ruled:

1. Upon the death of the wife, the conjugal partnership is dissolved immediately. The community does not continue between the survivor and the heirs of the deceased. The cause for the communitythe marital unionceases to exist.

2. The surviving husband is the lawful administrator of the conjugal partnership property pending its liquidation. He has the exclusive right to take possession of and administer the community assets until the affairs of the partnership are settled, in accordance with Articles 1418 to 1426 of the Civil Code.

3. The interest of the wife (and consequently her heirs) in the community property is a mere expectancy. It is an inchoate interest that does not constitute a legal or equitable estate. The heirs acquire no vested title to any specific property until after the liquidation of the partnership and the determination that there are net assets (ganancias) distributable to the estate of the deceased wife.

4. Given his role as administrator, the surviving husband has the power to execute necessary acts of administration, which can include mortgaging partnership property. The mortgages executed by Mariano Nable Jose, the registered owner of the properties, were valid. Third parties (the mortgagees) who relied on the registry of property are protected.

5. The lower court’s orders were modified as follows:
All properties mortgaged to Amparo N. Jose, et al., and the Standard Oil Company were declared subject to the payment of said mortgages.
The payment of the mortgage in favor of Amparo and Asuncion N. Jose was limited to the proceeds of the specific property mortgaged to them.
The personal property mortgaged to Standard Oil Company was also ordered sold to satisfy the mortgage.
The orders for Standard Oil Company to return money to the heirs of Paz Borja and to other parties were reversed, as the company received payments rightfully under its mortgage and there was no evidence it collected rents from properties awarded to said heirs.

The decision of the lower court was reversed and modified accordingly. The portion of the judgment relating to appellant Carmen Castro was affirmed.