G.R. No. L-15113, January 28, 1961
Topics:
Taxable sales
Doctrines:
Contracts that are in violation of Article 1490 of the Civil Code are void and unenforceable..
Summary:
After being married, the petitioner started making concessions to the government, and his wife started working as a lumber trader. The petitioner sold logs to his wife from 1949 until 1952. The CIR regarded Mrs. Medina’s transactions as the petitioner’s initial sales taxable under the NIRC based on the theory that the sales are void and null. The claimed premarital agreement of complete property separation was first made public in the petitioner’s petition for reconsideration.
Facts:
After being married, the petitioner started making concessions to the government, and his wife started working as a lumber trader. The petitioner sold logs to his wife from 1949 until 1952. The CIR regarded Mrs. Medina’s transactions as the petitioner’s initial sales taxable under the NIRC based on the theory that the sales are void and null. The claimed premarital agreement of complete property separation was first made public in the petitioner’s petition for reconsideration.
Issue:
Is the petitioner’s sales to his wife qualified as his original taxable sales?
Ruling:
It appears that the petitioner and his wife did not have any property or a business of their own at the time of their marriage, which would have truly compelled them to engage into the alleged property agreement. Second, it is patently absurd to claim that the separation of property agreement was registered in the Registry of Property three months prior to the wedding because such a prenuptial agreement could not be in effect prior to the wedding and would be automatically nullified if the union was dissolved. Third, despite their assertion that the ante nuptial contract existed, the couple, oddly enough, did not abide by its purported provisions. He did not first claim the existence of the putative property separation agreement until July 1954. The petitioner claims that the agreement was actually registered, but the Day Book of the Register of Deeds, which book was among those preserved from the effects of the war, did not demonstrate that the disputed document was among those recorded therein. The wife is allowed to conduct business and is responsible for any problems that arise as a result. However, the transactions that are allowed are those that are made with strangers and do not count as exceptions to the Article 1490 prohibitions against sales between spouses. Contracts that are in violation of Article 1490 of the Civil Code are void and unenforceable. The Collector correctly ignored the petitioner’s sales to his wife as void transactions in his tax assessments, which treated the wife’s sales conducted through the couple’s common agent, Mariano Osorio, as taxable sales. The Court made no mistakes in sustaining that position.