Can husband and wife sell property to each other during the marriage?

No. The husband and the wife cannot sell property to each other, except:

(1) When a separation of property was agreed upon in the marriage settlements; or

(2) When there has been a judicial separation or property. (Art. 1490, Civil Code)


What are the reasons for the prohibition?
  1. If transfers or conveyances between spouses were allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in civil law (Calimlim-Canullas vs. Fortun);
  2. To prevent a spouse from defrauding his creditors by transferring his properties to the other spouse;
  3. To avoid a situation where the dominant spouse would unduly take advantage of the weaker spouse (Calimlim-Canullas vs. Fortun); and,
  4. To avoid an indirect violation of the prohibition against donations between spouses under Art. 133 of the Civil Code.

 What is the status of prohibited sales between spouses?

A sale between husband and wife in violation of Art. 1490 is inexistent and void from the beginning because such contract is expressly prohibited by law.
May the spouses themselves attack the validity of the sale?

The spouses themselves, since they are parties to an illegal act, cannot avail themselves of the illegality of the sale on the ground of pari delicto. (Modina vs CA, G.R. No. 109355, October 29, 1999)


Who can question the validity of the sale between spouses?

The only persons who can question the sale are the following:
  1. The heirs of the spouses who have been prejudiced;
  2. Prior creditors; and
  3. The State when it comes to the payment of the proper taxes due on the transactions. 
● Creditors who became such only after the transaction cannot attack the validity of the sale, for it cannot be said that they have been prejudiced by the transaction.

● The government is always an interested party to all matters involving taxable transactions and, needless to say, qualified to question their validity or legitimacy whenever necessary to block tax evasion. (Medina vs Collector of Internal Revenue, G.R. No. L-15113, January 28, 1961)


Does the prohibition apply to common-law spouses?

Yes. The proscription against sale of property between spouses applies even to common law relationships. So this Court ruled in Calimlim-Canullas v. Hon. Fortun, etc., et al.:

Anent the second issue, we find that the contract of sale was null and void for being contrary to morals and public policy. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. The sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects.

Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or purposes is contrary to law, morals, good customs, public order, or public policy are void and inexistent from the very beginning.

Article 1352 also provides that: Contracts without cause, or with unlawful cause, produce no effect whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public order, or public policy.

Additionally, the law emphatically prohibits the spouses from selling property to each other subject to certain exceptions. Similarly, donations between spouses during marriage are prohibited. And this is so because if transfers or conveyances between spouses were allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in civil law. It was also designed to prevent the exercise of undue influence by one spouse over the other, as well as to protect the institution of marriage, which is the cornerstone of family law. The prohibitions apply to a couple living as husband and wife without benefit of marriage, otherwise, “the condition of those who incurred guilt would turn out to be better than those in legal union.” (Calimlim-Canullas vs. Fortun, G.R. No. L-57499, June 22, 1984; Ching vs Goyanko, Jr., G.R. No. 165879, November 10, 2006)


What if the property has been conveyed subsequently to a third-party buyer in good faith and for value. Can the property be reconveyed to the common-law spouse-seller?

Although under Art. 1490 the husband and wife cannot sell property to one another as a rule which, for policy consideration and the dictates of morality require that the prohibition apply to common-law relationships, but when registered property has been conveyed subsequently to a third-party buyer in good faith and for value, then reconveyance is no longer available to common-law spouse-seller. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. (Gloria Cruz vs. Court of Appeals, G.R. No. 120122, November 6, 1997)


In what other instances do the prohibition relating to spouses selling to one another applicable?

The prohibition is applicable even to sales in legal redemption, compromises and renunciation.
Art. 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption, compromises and renunciations. (Civil Code)