2025 Civil Law, Q16

A and B got married in 1991 without a pre-nuptial agreement. In 1997, A forged B’s signature on the promissory note covering the loan she obtained from P Commercial Bank (PCB) for her printing business. She also forged his signature on the real estate mortgage constituted over three parcels of land which were acquired during their marriage. A subsequently failed to pay the loan, so PCB foreclosed the mortgage. The three parcels of land were sold to PCB, the highest bidder. Upon learning of the mortgage and sale, B filed a complaint to nullify the real estate mortgage and cancel the certificate of sale, contending that the same were void since he did not consent to the real estate mortgage. Is B correct? Reason(s).

Quick check

Under Article 96 of the Family Code, what is the legal status of an encumbrance of community property executed by one spouse without the written consent of the other?

In the absence of a marriage settlement, what property regime automatically governs spouses married in 1991?

What is the legal effect of a forged signature of a spouse on a real estate mortgage covering community land?

What happens to an extrajudicial foreclosure sale originating from a void mortgage on community property?

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Why was B entitled to the cancellation of the certificate of sale issued to P Commercial Bank?

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1. Community Property Encumbrance
Under Article 96 of the Family Code, the administration and enjoyment of the absolute community property belong to both spouses jointly. Any disposition or encumbrance of community property by one spouse without the written consent of the other spouse, or authority of the court, is void from the beginning. Unlike under the Civil Code regime where unauthorized dispositions were merely voidable, the Family Code strictly mandates joint consent or court authorization for any valid alienation or encumbrance of community assets.

2. Forged Spousal Consent
When one spouse forges the signature of the other spouse on a real estate mortgage covering community property, the required written consent of the non-consenting spouse is completely absent. A forged signature does not produce any legal effect and cannot supply the consent mandated by law. Consequently, a real estate mortgage executed by one spouse through forgery is null and void in its entirety, as it lacks an essential requirement for the valid encumbrance of community property under Article 96.

3. Void Foreclosure Sale
A void mortgage confers no right, title, or interest upon the mortgagee bank. Because the underlying real estate mortgage constituted over community property without spousal consent is null and void ab initio, all subsequent proceedings based thereon—including the extrajudicial foreclosure sale and the certificate of sale issued to the highest bidder—are likewise null and void. The nullity of the mortgage infects the foreclosure proceedings, entitling the non-consenting spouse to judicial cancellation of the certificate of sale.

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