[ G. R. No. 7397. December 11, 1916 ] 41 Phil. 713
[ G. R. No. 7397. December 11, 1916 ]
AMPARO NABLE JOSE ET AL., STANDARD OIL COMPANY OF NEW YORK AND CARMEN CASTRO, PLAINTIFFS AND APPELLANTS, VS. MARIANO NABLE JOSE ET AL., DEFENDANTS AND APPELLEES. D E C I S I O N
CARSON, J.:
The most important questions raised by the appeals in this case have to do with the power of the surviving husband, after the death of his wife, to sell or mortgage the community property acquired during coverture. In the course of these proceeding, as also in the course of the proceedings had in the case of Anson vs. Carrascoso and Roman Catholic Church of Nueva Caceres (R. G. No. 9048),[1] the power of the surviving husband in this regard is hotly contested, and the validity of such sales and mortages is drawn in question by the heirs of the deceased wife. The different judges who sat in these cases appear to have held widely divergent views in this regard, and it would appear that we can best dispose of the intricate and involved contentions of counsel in both cases by an examination of the nature and extent of the powers conferred upon the husband in the administration of the communal property (bienes gananciales), with special reference to the validity and effect of sales, mortgages, or pledges of such property executed by him after the death of his wife. In the cases of Alfonso vs. Natividad (6 Phil., 240); Enriquez vs. Victoria (10 Phil., 10); In re estate of Amancio (13 Phil., 297); and Rojas vs. Singson Tongson (17 Phil., 477) this court has definitely decided, “that when a conjugal partnership is dissolved by the death of the wife, the surviving husband, and not the judicial administrator appointed in the proceedings for the settlement of the wife’s estate, is entitled to the possession of the property of the conjugal partnership until he has liquidated its affairs; that the surviving husband is the administrator of the affairs of the conjugal partnership until they are finally settled and liquidated; and that the liquidation of the affairs of the partnership is to be conducted by him, as administrator in accordance with the provisions of articles 1418 to 1426 of the Civil Code.” Some Spanish commentators have suggested that upon the death of the husband or wife, the community continues between the survivor and the heirs of the deceased until partition has actually taken place, and that the latter are entitled to share in its acquisitions during its continuance. Some such doctrine seems to have been in the mind of the trial judge in the case of Anson vs. Carrascoso and Roman Catholic Church of Nueva Caceres (supra) now pending in this court. But this view was never generally accepted by the Spanish jurists, and an examination of the provisions of the Civil Code makes it clear that the authors of that body of laws did not contemplate any such extension of the life of the community. Gutierrez adopting the views of Matienzo says:
“The community partnership being as permanent as the state that produces it, there can be no doubt that the same causes influence it as marriage. The first of them is death. Some have believed that the community might continue to exist between the surviving spouse and the heirs of the deceased husband or wife; but, in the opinion of Matienzo, which appears to us to be well-founded, there are reasons for believing otherwise, to wit: (1) When the marriage is dissolved, the cause that brought about the community ceases, for the principles of an ordinary partnership are not applicable to this community, which is governed by special rules. (2) In the absence of the reasons that induced the legislator to establish it, the provisions of law governing the subject should cease to have any effect for the community of property is admissible and proper in so far as it conforms to unity of life, to the mutual affection between husband and wife, and serves as a recompense for the care of preserving and increasing the property; all of which terminates by the death of one of the partners. (3) The partnership having been created by law, it has no object and it is unsafe to extend it on pretext of tacit consent.” (Gutierrez, 3d Ed., vol. 1, p. 579.)
Manresa, discussing the status of the community (so, ciedad) after dissolution of the conjugal relations makes the following comment:
“* * * The community terminates when the marriage is dissolved or annulled, or when during the marriage an agreement is entered into to divide the conjugal property. The conjugal partnership exists therefore so long as the spouse are legally united; the important thing is not exactly the bond, the tie formed by the marriage, but, the existence in the eyes of the law of the life in common. It is this life in common that creates common necessities and represents common efforts, the result of which should be that both partners should share in the profits. “When, for any cause, the conjugal partnership established upon the basis of the system of community property is dissolved, all the provisions of articles 1401 to 1416, based upon the existence of that partnership, cease to apply. “Consequently, whatever is acquired by the surviving spouse on the dissolution of the partnership by death or presumption of death, or by either of the spouse on termination of the partnership for other reasons and when this latter no longer exists, whether the acquisition be made by his or her labor or industry, or whether by onerous or by lucrative title, it forms a part of his or her own capital, in which the other consort, or his or her heirs, can claim no share. The fruits, as an accessory, follow the property; the buildings, the soil; the plantings, the land—all according to the general rules of accession. “Each interested party, or his or her successors in interest, fulfills the obligations that concern him or her (because there are no longer common charges), is responsible for his or her private debts, and, except during the period of administration, attends to the care, protection and preservation of his or her property; his or her own support and that of his or her children is a personal charge, without prejudice to the provisions contained in article 1430.”
See as to the general doctrine in this regard under the laws of Spain prior to the adoption of the Civil Code, 1 Burge Com. 421; Schmidt’s Civil Law of Spain and America, arts. 57, 58 et. al.; and Ballinger on Community Property, par. 217. What then are the relations between the surviving husband and the heirs of the deceased wife resulting from the dissolution of the conjugal partnership; and what are their respective rights, title or interest in and to the conjugal property? An attempt to give a comprehensive answer to this question would carry us far afield, and we shall not attempt to go beyond what seems necessary in the adjudication of the issues raised in the case pending before us, that is to say, the determination of the power of the husband to sell or mortgage the conjugal property pending the liquidation of the conjugal partnership. Article 1393 of the Civil Code provides that:
“The conjugal community shall always begin on the same day that the marriage is celebrated. “Any stipulation to the contrary shall be void.”
Article 1417 of that Code provides that:
“The conjugal community expires on the dissolution of the marriage or when it is declared null. “The consort who, on account of his or her bad faith, caused the nullity, shall not share any part of the property of the community. “The conjugal society shall also terminate in the cases specified in article 1433.”
Manresa in commenting on these articles says:
“The conjugal partnership begins, then, on the day and at the very moment of the celebration of the marriage; and the parties may not stipulate that it shall begin prior or subsequent thereto. * * *” (Vol. 9, p. 541.) “Death is the normal cause of its dissolution; all the rest are relatively rare. The heirs may enter into an ordinary partnership with the surviving spouse; the conjugal partnership is extinguished even against their will. “What is the moment that marks the dissolution of the partnership ? “In the case of death, there can be no doubt whatever.” (Vol. 9, pp. 675-676.)
It seems clear that unless the heirs join with the surviving husband in organizing an ordinary partnership, the law imposes or creates no such relationship, and there can be no doubt, also, that any such partnership as may be voluntarily created by them, must always be subject to the rights of creditors of the conjugal partnership to enforce the payment of the partnership debts in the manner and form prescribed by law. That the law does not create any such relationship between the heirs and the surviving spouse, as exists between the partners in any of the voluntary associations recognized in the civil or commercial codes, becomes at once apparent from an examination of their mutual relations, rights and obligations and their respective rights and interests in the property of the conjugal partnership as expressly defined by law. It is therefore extremely dangerous to attempt to ascertain the rights of the parties in a specific case by reasoning from analogy with ordinary partnerships. The relationship of the heirs to the surviving spouse, like the relationship of the conjugal partners during its existence, is sui generis, and must be sought first in the pertinent provisions of law defining and determining its nature and character before any attempt is made to find guidance in the rules of law governing ordinary coatracts of partnership (las reglas del contrato de sociedad). [Art. 1395, Civil Code.] The law in this connection is set forth in the Spanish Civil Code, examined together with the pertinent provisions of the Siete Partidas and the Novisima Recopilacion. The Civil Code providing the manner in which the affairs of the conjugal partnerships are to be liquidated prescribes:
“ART. 1424. After the deductions from the inventoried estate, specified in the three preceding articles have been made, the remainder of the same estate shall constitute the assets of the conjugal community.” “ART. 1426. The net remainder of the community property shall be divided, share and share alike, between the husband and the wife or their respective heirs.”
From the express terms of these articles read together with the other provisions of the code touching the communal property, and more especially those which give to the husband the exclusive administration of the partnership property, it may fairly be deduced that prior to the liquidation, the interest of the wife, and in case of her death, of her heirs, is an interest inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement. The interest of the heirs like that of the wife herself is limited to “the net remainder” (remanente liquido) resulting from the liquidation of the affairs of the partnership after dissolution of the partnership; and until a liquidation has been had, it is impossible to say whether or not there will be a “net remainder” to be divided between the interested parties. Until the existence of a “net remainder” has been determined as a result of the liquidation, they can assert no claim of right or title in or to the communal property, which is placed in the exclusive possession and control of the husband as administrator. That this is the correct interpretation of the pertinent articles of the code, and that it was the law of Spain under the Partidas is maintained in a long line of decisions by the Supreme Court of Spain. (See decisions of March 4, 1867; February 11, 1870; May 8, 1873; March 1, 1874; December 23, 1875; March 2, 1881; May 11, 1889; September 29, 1891; January 28, 1898; April 7, 1900, and May 27, 1905, with which compare Roca vs. Banco Territorial y Agricola, 6 Porto Rico, 339; Amy vs. Amy, 15 Porto Rico, 387; and Packard vs. Arellanes, 17 Cal., 525.) We here insert a few extracts from some of these decisions which seem to go directly to the point of our inquiry.
“Although law 10, title 4, book 10, of the Novisima Recopilacion declares that, on account of a crime committed by the husband or the wife, the other spouse does not lose his or her property, nor his or her one-half of the community property acquired during the marriage up to the time of the conviction, yet, according to the constant rules laid down in the decisions of the supreme court, it is indispensable for the correct application of this provision to the community property, that the legal existence of such property be duly shown by means of the settlement of the affairs of the conjugal partnership when it is dissolved by the death of either of the spouses, by divorce, or by the civil interdiction of the husband, inasmuch as, until then, the latter is the lawful and exclusive administrator of the assets of that partnership.” (182, decision of May 8, 1873, 27 Jurisprudent Civil, 670.) “Considering that all the property of the conjugal partnership is directly liable for the fulfillment of the obligations and debts contracted in benefit of the said partnership, whether contracted jointly or by the husband alone as the lawful administrator, and so long as it is not proven that there was no intent to deceive; and “Considering that, in order to determine the kind and amount of such property, and, therefore, the right which each one of the consorts has to one-half of it, it is necessary that, after all the obligations have been met, there must be a balance remaining and this cannot be ascertained except upon the dissolution of the conjugal partnership, whether it occurs naturally or by operation of law, as has been repeatedly held by this supreme court. (Decision of February 11, 1870, 21 Jurisprudencia Civil, 211.) “Considering that law 5, title 17, Fourth Partida (cited as having been violated, on the supposition that the parents should guard and defend the adventitious property of their children) is not applicable to the case at bar, for the reason that the appellant, according to the findings of the trial court on the evidence and not excepted to, has not shown that at his mother’s death the conjugal partnership was liquidated, and that the house in question belonged to her as community property.” (Decision of December 23, 1875, 33 Jurisprudencia Civil, 35.) “Considering that, although the buildings constructed during coverture on land belonging to one of the spouses, the value of the land having been paid to the spouses who owned the same, are community property, as is likewise all the property acquired during the marriage, unless it be proven that it belongs to the husband or to the wife personally, it is a doctrine constantly asserted by this court, based formerly on the laws of the Novisima Recopilacion and now on the provisions of the Civil Code, that, in order to determine whether a conjugal partnership possesses community property, it is absolutely indispensable that the assets be first liquidated, because it is only after such a settlement that it may be ascertained together there is any remainder that will constitute community assets which should be awarded or adjudicated to those who are entitled to share therein; that as, in the present case, no liquidation was made to show whether after payment of the debts, charges and obligation of the partnership, there remained any property that should be turned over to the plaintiffs; and whether such property consisted in effect of a one-half interest in the house which they seek to recover, it is manifest, as set forth in the judgment of the lower court, that they have in no manner proven their ownership of a one-half interest in the house, which property they suppose to belong to Dona Agustina San Vicente and which they claim as her successors in interest; and “Considering, therefore, the right of ownership on which the action is founded has not been proven, and that without such proof the action cannot prosper, it is useless to discuss the remaining grounds of the appeal not related to the one above mentioned as they are insufficient to secure a reversal of the judgment.” (Decision of May 27, 1905, 101 Jurisprudence Civil, 475.) “Considering that, as repeatedly asserted by this supreme court, in order to find out whether a conjugal partnership has community property, it is indispensable that a liquidation first be made of all its assets, which was not done with respect to those that remained upon the death of Dona Alejandra de Llano, wife of Don Alejandro de la Sota; and “Considering that the San Fermin mine was acquired by the appellant’s father while the conjugal partnership existed, the record not showing in what manner it was purchased, since no inventory, accounting, partition, and adjudication of the estate left by the plaintiffs’ mother at her death, appears to have been made, there is no authority in law to warrant the holding that the mine in question is community property, or that it was properly or improperly sold by Don Alejandro de la Sota after the said conjugal partnership ceased to exist; for which reason the judgment absolving the defendant from the complaint does not violate law 1, title 20, of the Fuero de Vizcaya, nor law 1, title 4, book 10, of the Novisima Recopilacion, cited in grounds 1 and 2.” (Decision of March 1, 1884, 54 Jurisprudencia Civil, 358 and 361.) “Considering that an action for recovery of possession cannot prosper without the presentation of a title deed of conveyance establishing the ownership of the thing claimed; and “Considering that the acquisition of property during the conjugal partnership is not a sufficient title because, unless a liquidation first be made of the common assets, it cannot be affirmed that there exists any remainder that belongs in equal shares to the husband and wife; and “Considering that the judgment appealed from does not infringe the laws cited in the first and second assignments of error, for, although the said laws declare that the property acquired by the spouses during their marriage is conjugal property, this is understood to refer to the net amount remaining after the debts have been paid, said debts being preferred, and, therefore, as the hereditary lands were respected in the judgment of the lower court, and as the other lands claimed (and claim for which was disallowed), were not included among the hereditary property, the appeal is improper.” (Decision of May 11, 1889, 65 Jurisprudencia Civil, 698-700.) “Considering that the prescriptions established by the laws and doctrines invoked in the first two assignments can have no application until after the conjugal partnership has been dissolved by the death of one of the partners and it be ascertained by means of a liquidation whether after the satisfaction and payment of the partnership obligations and debts there remains any property to be divided between the surviving spouse and the successors in interest of the decedent, which remainder is what constitutes the community property out of which, in the case at bar, the adventitious property of the appellant minor would be determined; and “Considering that the laws and doctrines invoked in assignments 4, 5, and 7 are inapplicable and could not have been violated in the manner alleged, inasmuch as the parties having stipulated that no settlement had yet been made of the affairs of the conjugal partnership between Don Marcial Melian and Dona Carlota Chiappi, and it not having been ascertained in any other manner what property remained from said partnership to be divided between the interested parties, proof of the point in issue is assumed without taking into account on the other hand that in this suit it is a question not only of the acts, lawful or abusive, of the legal administrator of the common assets (and it can not be denied that Don Marcial Melian is such administrator), but also, and principally, of the validity or nullity of the contracts which were duly executed by and between him and third person; and “Considering that the articles of the Mortgage Law cited in the 5th and 6th assignments have not been violated, inasmuch as, (although in conformity with article 33 of the said Law, in force at the time of the execution of the “contracts, the annulment of which is requested in the complaint, the record of instruments or contracts which are null in accordance with law are not validated thereby) the defendants come within the excepted case of article 34, since they contracted with the person who, in the registry, appeared be entitled to encumber the property that he mortgaged, and it is no valid objection that when he did so his civil status differed from that he possessed when he recorded the property, because the law does not regard this circumstance as a sufficient cause to deprive third persons, holding an interest for value, of the legal warranty afforded them by the registry. (Decision published on March 2, 1881, 45 Jurisprudence, Civil, 419-420.) “Accepting the findings of fact and of law contained in the judgment appealed from, and, furthermore, considering that, although according to the title by which the rural property concerned in these proceedings was acquired it originally belonged to the conjugal partnership formed by Don Tomas Roca and his wife Dona Lucia Gregory, this circumstance by itself alone is not sufficient to warrant us in finding that it is community property and, therefore, that it should be equally divided between the surviving spouse and the heirs of the decedent, inasmuch as the record does not show that, upon the dissolution of the conjugal partnership by the death of the husband, a liquidation of the common assets and a division of the resultant net remainder were made between the parties in interest, and that to the plaintiff, as the heir of her deceased father, there was adjudicated the share claimed by her in the said property; she has therefore failed to establish her title of ownership,—an indispensable requisite for the bringing of this action. The legal provisions cited in the said judgment have been examined.” (Roca vs. Banco Territorial y Agricola, 6 Porto Rico, 339.) “The interest of the wife in the common property while the community exists is a mere expectancy, and after her death her interest constitutes neither a legal nor an equitable estate, and there is nothing for the probate court to act upon, consequently the same is not subject to administration under the laws for the settlement of the estates of deceased persons.” (Packard vs. Arellanes, 17 Cal., 525.)
Having found that the heirs of the wife have no direct title or interest in or to the communal property, as such, until a liquidation has been had and distribution made of the “net remainder,” it becomes necessary to ascertain the precise status of this property after the dissolution. of the partnership by the death of the wife and pending the liquidation. Under the decisions of this Court and those of the Supreme Court of Spain hereinbefore cited, it has been definitely settled that during this period the conjugal property remains in the exclusive possession of the husband as administrator, charged with the liquidation and settlement of the estate. But for the purposes of the case now pending before us it becomes important to determine the nature of his powers as such administrator, and the limitations, if any, which are set upon his disposition and control of the property thus intrusted to his possession. Here again there is danger of confusion and error if any attempt is made to reason from a supposed analogy between his powers and those of an ordinary administrator or trustee. The only safe guide is the law which defines his duties and prescribes the mode in which they are to be performed. The law prescribes his duties with relation to the conjugal property, which consist substantially of the preparation of an inventory, the payment of the debts, and the distribution of the net remainder. But how the debts shall be paid and how the “net remainder” of the property shall be distributed the law does not attempt to direct. Articles 1418 to 1421, Civil Code. “The object to be accomplished is fixed, but the means of accomplishment,” which “are as varied as the circumstances’ and discretions of men” are not indicated. To secure the object in view, he has the exclusive possession and control of the property, and in the performance of his duties, he is not subjected to the guidance or control of the courts (as is the ordinary administrator of the estate of a deceased person) except of course when fraud upon the rights of creditors or the heirs is alleged and proven. The duty to pay the debts and obligations of the partnership imposed in Article 1423 of the Code carries with it by necessary implication the right to realize the funds necessary for that purpose from the property charged with the debts. But the law nowhere prescribes how this shall be done or what property shall be sold or mortgaged, or in what order the debts shall be paid, or what compromises or settlements the liquidator may accept, or how the debts shall be ascertained. Since he is personally liable for the debts, he may pay all or any part of them from his personal funds, and reimburse himself from the partnership property. No judicial authorization or approval of such sales is required, whether the property sold is real or personal. In a word, the husband, as liquidator, is left absolutely free, in the exercise of his uncontrolled discretion, to provide for the payment of the debts from the partnership funds, in such manner as he sees fit. Such powers in the disposition of the partnership property necessarily carry with them the power to make a good and valid title to both real and personal property, otherwise the full value of the property sold would seldom be realized, and in many instances the power to sell would be wholly illusory. We conclude therefore that the husband, acting as liquidator of the conjugal partnership, and charged with the payment of the community debts, may sell or mortgage all or any part of the conjugal property, real or personal, in the fulfillment of the duties imposed upon him and give good and valid title to the purchaser or mortgagee. It would be inconsistent with the breadth and power of the discretion conferred upon the husband to hold that purchasers from him of personal or real estate should be required, at their peril, to ascertain whether sales made by him are made in good faith for the purpose of the payment of the debts of the partnership, or to require such purchasers to see that the purchase price is in fact applied to the payment of such debts. The purchaser has the right to assume that in disposing of the property, the husband, as administrator, is proceeding according to law. And this is true even though the purchaser knows that the husband intends to apply the money for the payment of his own personal debts contracted after the dissolution of the partnership because, as we have said already, the husband may pay the partnership debts out of his private funds and reimburse himself from the partnership property. So far as the purchaser is concerned, he has the right to assume that when the husband liquidates or sells partnership property and applies the proceeds to the payment of his personal debts, the transaction is merely the means adopted by the husband to reimburse himself for payments of partnership indebtedness theretofore made out of the husband’s private funds. It has been suggested that the power of the husband to sell real or personal property and to give good and valid title thereto may also be inferred from the uncontrolled discretion which is claimed for the husband in determining whether he will distribute the property in kind, or sell all the property, and after payment of debts, distribute the net remainder in cash. We do not deem it necessary, however, to discuss or decide the questions involved in this contention, because for the purposes of the cases now pending before us, the power of the husband-administrator to sell the property for the payment of debts affords a sufficient foundation for the conclusion that he has the implied power to give good and valid title to any property in his possession and control as exclusive administrator of the community property. Merely for purposes of comparison we here insert an extract from a decision of the Supreme, Court of Texas touching the powers of the surviving spouse in that state in the administration of the community property, which is of special interest because in that state the laws of Spain with reference to the conjugal partnership, as those laws were formerly extended to Mexico and Texas prior to the annexation, have been adopted by statutory enactment with certain modifications such as the requirement of bond and qualification under the statute and the like. In Leatherwood vs. Arnold (66 Texas, 416-7) the court, speaking through Robertson, Justice, said:
“By qualifying under the statute the survivor acquires over the whole community estate the same right of management, control, and disposition possessed by the managing partner during the life of the partnership. He is a trustee of a unique character, being the owner in his own right of one-half the trust estate. How the trust shall be executed the law has not attempted to direct. His duty is defined in the conditions of his bond, to pay the debts and distribute the remainder, and here arises the difference between the survivor as trustee and other trustees. The object to be accomplished is fixed, but the means of accomplishment are as varied as the circumstances and the discretions of men. He may sell all the property, pay all the debts, and distribute the remainder in money. He may sell only enough to pay the debts and divide what is left in kind. He may force every creditor, or none, or any number of them to resort to their legal remedies. He may use his own means in paying the debts, and reimburse himself by an appropriation or sale of the assets of the estate. It results, necessarily from his unbridled discretion and unlimited power, that he cannot be required to account as other trustees. Trustees must generally account for every item of the trust estate. But the responsibility of the survivor can only be fixed by aggregates. * * * Inquiring into the details of his administration is inconsistent with the breadth of his power and discretion. * * * He is debited with the value of the estate and its revenues, and credited with disbursements, and must account to creditors or distributees for the remainder. The surviving husband is personally liable for community debts. If he has extinguished the community interest in a given item of community property, it is still subject to community debts, because the community debt is also his individual debt. * * * The surviving wife does not owe the community debts. When she lifts the community charge upon the property in her hands the property is hers as unqualifiedly as if she had bought it with her separate means at an execution sale of it for the payment of a community debt. While she had no power over the community during her husband’s life, and is not personally liable for the debts, yet, when the wife survives and qualifies under the statute, she is vested with the same power and discretion in execution of the trust assumed that the husband had during life to manage, control, and dispose of the community as the head of the connubial firm.”
Thus far we have not considered the effect of misconduct or fraud upon the transactions of the surviving husband as administrator and liquidator. The husband may fail or refuse to liquidate the partnership; or he may sell the partnership property and misappropriate the proceeds; or he may apply the proceeds to the payment of his personal debts contracted after the marriage, not by way of reimbursement for the amount of the debts of the partnership theretofore paid by him out of his private funds, but in fraud of the rights of the heirs. Under such circumstances what are the respective rights of the parties, and what is the effect of the misconduct of the administrator upon his transactions with third persons? The law expressly imposes upon the husband the duty of liquidating the affairs of the partnership without delay (desde luego). It follows therefore that any interested person may institute the proper proceedings to compel him to perform that duty, and that he will be liable to such person for any loss or damage entailed by his neglect to do that which the law expressly prescribes and for any fraud committed by him with relation to the property while he is charged with its administration. While we have said that pending the liquidation the heirs have no direct interest in the partnership property in the nature of an estate either legal or equitable, there can be no doubt that they have an interest in the liquidation of the partnership; and such an interest that they may compel the husband to discharge his duty in that regard; hold him responsible for any fraud upon their rights of which he may be guilty; and, doubtless, restrain him from the commission of such frauds in any case wherein they can establish the intent to commit a fraud. They have no power to interfere with him in the exercise of his sound discretion in the discharge of his duties as administrator, nor can they invoke the aid of the courts to that end. He is the exclusive administrator and the manner in which he shall discharge his trust is left to his uncontrolled discretion wherever and whenever he undertakes to exercise that discretion. But the commission of fraud is not an exercise of discretion, and the courts are always open to protect and relieve the blameless victims of fraud when their jurisdiction is invoked in appropriate proceedings. But what are the effects upon the transactions of the husband with third parties of the perpetration of such frauds, or the attempt to perpetrate such frauds on the rights of the heirs? Manifestly, where third persons are in connivance with the husband-administrator or knowingly lend their aid or countenance, directly or indirectly, to the commission of such fraud, the court will see to it that they will not profit by their misconduct, and the fraud to which they are parties will vitiate and annul all such transaction. The case is different, however, with innocent third person dealing with the husband in good faith, and with no knowledge of his misconduct in the discharge of his duties as administrator. The law clothes the surviving husband with the exclusive possession and all the insignia of the power of disposal of the partnership property. It imposes upon him the duty and the right to sell all or any part of the property, which, in the exercise of his uncontrolled discretion, he may deem necessary in the performance of his duties as liquidator. It follows, that notwithstanding the possibility that the husband may have it in mind to make away with the proceeds of the sale and thus defraud the heirs, the purchaser in good faith must be held to take a good and valid title which cannot be set aside thereafter upon proof that in making the sale, or in the use made of the proceeds, the husband liquidator acted in fraud of the rights of the heirs. The heirs must seek their remedy against their father, who is accountable to them for their share of the “net remainder” of the partnership property, after the affairs of the partnership have been liquidated. The doctrine of caveat emptor has no application since it would be inconsistent with the nature and scope of the powers of the husband-administrator, to hold that purchasers of partnership property must look beyond the insignia of power to dispose of the property and ascertain, at their peril, whether in making the sale he is proceeding in the due performance :bf his duties as such administrator. It has been suggested that the doctrine thus announced leaves the infant children of the deceased wife at the mercy of the husband, since he, as their father, is their natural guardian, and in the event of the commission of fraud on their rights, they have no power to protect themselves or to enforce their rights until they come of age. It may be that there is need of some legislation which would require the husband to qualify and to give bond for the due performance of his duties, or that he be required to secure judicial sanction of all sales of real and even personal property when there are infant heirs entitled to share in the distribution of the haber ganancial (net remainder of the conjugal property after liquidation.) But that is a question for the legislator and no such legislation has been enacted in this jurisdiction. Express provision is made in the Spanish Codes for the protection of the wife’s interests with relation to dotal and paraphernal property under administration of the husband, by the requirement of special mortgages (hipotecas especiales) or the establishment of legal mortgages (hipotecas legates), article 1384, Civil Code; articles 168, 169, Mortgage Code: so also express provision is made for the protection of the interest of minors whose estate is administered by their father, by requiring judicial authorization for the sale of real estate, article 164 of Civil Code; and the fact that no such provisions are made with relation to conjugal property under the administration of the husband, either before or after the death of his wife, quite clearly discloses the intention of the legislator to entrust the conjugal property to the husband as exclusive administrator, with full and practically untrammelled power to deal with it as he may deem best, provided only that he does not deal with or dispose of it in fraud of the rights of his wife or her heirs. And it would appear that rather than trammel the exclusive possession of the husband-administrator with restrictions in the exercise of his sound discretion in the disposition and control of the conjugal property, in order to anticipate possible instances of fraud on the rights of the wife or her children, the legislator has seen fit to remit the wife and the children to their remedies against the husband and father in any case wherein such fraud is alleged and proven, and innocent purchasers for value have acquired title to all or any part of such property. In the case at bar, the husband-administrator of the affairs of the conjugal partnership with his first wife, long after her death and after he had married a second time, executed a mortgage in favor of the Standard Oil Company on certain property, real and personal, to assure the payment of certain obligations assumed by him as agent of the company after the death of his first wife. It appears that a large part of this property was acquired during the first marriage, in the exclusive possession of the husband as administrator of the affairs of the conjugal partnership which has never been liquidated. It appears also that the title to all this property was in the name of the husband, the title to the real estate being registered in his name. It appears also that the Standard Oil Company had no knowledge at the time of the execution of the mortgage of the existence of a prior marriage, or that the mortgaged property was held by the husband as administrator of the conjugal property acquired during the former marriage. We think that it must be clear from what has been said already, that whatever claims the children of the deceased wife may have against their father, they can not successfully challenge the validity of the mortgage to the Standard Oil Company. In accepting the mortgage the company relied (as it had a right to do) upon the fact that the title to all of this property was in the name of the husband, and that he was clothed with all the insignia of power to dispose of it by sale or mortgage. The company had no means of ascertaining with certainty whether this property was or was not the individual property of the husband or conjugal property of the first or the second marriage. As a matter of fact, the company did not know that this property was a part of the conjugal property of the first marriage, but even had the company been advised of that fact, it had the right to assume, in the absence of any indication to the contrary, that the husband was acting within his rights as exclusive administrator and that he had authority to sell, mortgage or otherwise dispose of it, either for the purpose of securing funds for the payment of the partnership debts, or to reimburse himself for the payment of such debts from his own personal funds. The trial court recognized the right of the children to intervene in this action and to have the mortgage of the conjugal property declared invalid as to their interest therein, which he held to amount to a one-half undivided interest in the mortgage property. But from what has been said it is clear that the trial court erred in recognizing the claims of the heirs of the first wife of Mariano Nable Jose to a one-half undivided share of the specific property mortgaged by him to the Standard Oil Company, which was alleged to be a part of the conjugal property acquired by the conjugal partnership composed of Mariano Nable Jose and his first wife; and further, that the trial court erred in declaring the mortgage invalid in so far as it affects the one-half undivided share of said property, which the court erroneously held to be the property of these heirs, and in rendering a money judgment in their favor for the sum of P750 on account of rents and the proceeds of the sale of a part of these properties as set forth in the final section of the judgment entered in the court below. As to the other matters in dispute between the various parties to this action we deem it sufficient to say that after full consideration of the record and of the arguments of counsel we hold: First. That the trial court properly held that the proceeds of the sale of the property described in the mortgage executed in favor of Amparo and Asuncion Nable Jose should be applied first to the payment of the credit of the said Amparo and Asuncion Nable Jose, and second, to the payment of the credit of the Standard Oil Company which holds a second mortgage on said property. Second. That the trial court erred in failing to limit the right of the said Amparo and Asuncion Nable Jose to first payment from the proceeds of the sale of the property mortgaged to them. Third. That the trial court erred in failing to hold that the proceeds of the sale of all the remaining properties mortgaged to the Standard Oil Company should be applied on the judgment of the Standard Oil Company. Fourth. That the trial court should have included in its order for the sale of the mortgaged property the personal as well as the real property described in the mortgage. Fifth. That except as hereinbefore indicated the disposing part of the judgment entered in the court below as set forth in the numbered paragraphs one to seven inclusive, found at the end of the opinion filed by the trial judge, satisfactorily disposes of the contentions of the various parties to this litigation. We conclude that the judgment entered by the trial judge should be reversed, and that the record should be returned to the court below, where a new judgment will be entered disposing of the contentions of the various parties to this litigation as hereinbefore indicated, and providing for the sale of the mortgaged property in the form and upon the conditions prescribed by law. So ordered. Arellano, C. J., Trent, and Araullo, JJ., concur.