Emphytheusis redeemed during marriage not included in community of acquests

The Court of Appeal, composed of Chief Justice Silvio Camilleri, Mr Justice Joseph A. Filletti and Mr Justice Geoffrey Valenzia, on January 17, 2011, in the case Angiolina Galea et vs Gerald Galea and Sandro Chetcuti et, held, among other things, that when a person acquired the utile dominum (ċens) before the marriage and subsequently redeemed the ċens during the marriage, there was consolidation of the utile dominium and the directum dominum. Notwithstanding the consolidation, the property remained part of his paraphernal property and did not enter the community of acquests.

The facts in this case were as follows:

Gerald Galea had inherited one half undivided share in ċens pertewu (perpetual emphyteusis) of a field in Żejtun before his marriage, but only redeemed the ground rent during his marriage. At issue was whether the field formed part of the community of acquests between spouses Angiolina Galea and Gerald Galea.

During his marriage on September 25, 1997 Gerald Galea entered a promise of sale agreement (konvenju) whereby he promised to sell and transfer to Sandro Chetcuti a field, known as Tas-Sumara or Ta’ Zunara in Żejtun, measuring 1,345 square metres, free and unemcumbered, without the knowledge and consent of his wife.

On December 3, 1998, Mrs Galea, now deceased, proceeded by filing legal proceedings against her husband (also deceased) and Sandro Chetcuti, requesting the court to declare null and void the konvenju dated September 25, 1997 in terms of article 1326 (1) of the Civil Code.

Spouses Angiolina and Gerald Galea were married on February 5, 1933, and between them any property which was acquired during the marriage formed part of the community of acquests.

Mrs Galea said she became aware of the konvenju after it had been signed, without her consent. It was stated that, as the field formed part of their community of acquests, the konvenju was an extraordinary act of administration which required the consent of both spouses in terms of articles 1322 (2) and 1322 (3) of the Civil Code.

Article 1326 (1) Civil Code provides that “acts which required the consent of both spouses but which were performed by one spouse without the consent of the other spouse could be annulled at the request of the latter spouse where such acts related to the alienation or constitution of a real or personal right over immovable property; and, where such acts related to movable property, they could only be annulled where the rights over them have been conferred by gratuitous title”,

Defendant Sandro Chetcuti in reply contested Mrs Galea’s legal action. He submitted, among other things, that the field was not part of their community of acquests. It was alleged that she knew that her husband had signed the konvenju and had never raised any objections. Opposition was made only after some time, when she realised that the price was too low and wished to cancel the agreement.

On October 3, 2008, the First Hall of the Civil Court decided in favour of Mrs Galea, declaring the konvenju to be null and void.

It considered that the parties agreed that Mr Galea had acquired the ċens perpetwu (the perpetual utile dominium) of the field. Thereafter, in the course of his marriage, the ċens was redeemed and, as a result, he became the absolute owner of the field.

The court maintained that it was not possible to apply the principles reflecting to the recovery of property to the redemption of ċens. In the case of redemption of the ċens, the title changed to absolute ownership. Article 1,494 of the Civil Code provides: “Emphyteusis is a contract whereby one of the contracting parties grants to the other, in perpetuity or for a time, a tenement for a stated yearly rent or ground-rent which the latter binds himself to pay to the former, either in money or in kind, as an acknowledgement of the tenure.”

The court said that, when Mr Galea redeemed the ċens, his title was converted to absolute ownership and this, during his marriage. The First Hall of the Civil Court maintained that the title of absolute ownership formed part of the community of acquests.

Reference was made to F. Massineo Manuale di Diritto Civite e Commerciale (9th Edition) page 573.

The court noted that an emphyteuta was not an owner. He only had the right to enjoy the property. In fact, if an emphyteuta did not perform his obligations, the ċens could be cancelled and the property could revert to the landlord.

The landlord (the directum dominus) was entitled to the ground rent. He had the right to the laudemuim (if applicable) as well as the right to rescind the ċens.

The court said Mrs Galea had not consented to the konvenju. Accordingly, under article 1326 (1) of the Civil Code, the konvenju could be annulled.

It held that Mr Galea had a credit against the community up to the value of the ċens (utile dominum) which belonged to him exclusively.

Aggrieved by the decision, Mr Chetcuti entered an appeal, calling for its revocation. He claimed that the court gave an incorrect decision, by concluding that the field was part of their community of acquests, and that the consent of the wife was necessary. Mr Chetcuti put forward the argument that the field was Mr Galea’s paraphernal property and, upon its redemption, it did not become property of the community of acquests.

On January 17, 2011, the Court of Appeal gave judgment by accepting the appeal and by revoking the decision of the First Hall of the Civil Court. It declared that the field did not comprise part of the community of acquests. The following reasons were given for the court’s decision.

If the field was part of the community of acquests, the wife’s consent was necessary. If her consent was not obtained, the konvenju could be rescinded. If, on the other hand, the property remained part of Mr Galea’s paraphernal property, the wife’s consent was not required.

Reference was made to case-law on recovery of property (irkupru). If, for instance, a tenement was transferred before the marriage subject to the right of reversion and if the property was recovered during the marriage, on the basis of rights pre-dating the marriage, the property did not enter the community of acquests. In E. Ciantar Vincenti vs M. G. Liberto et, dated April 25, 1938 the Court of Appeal held that, when a married woman recovered property (appertaining to her personal estate/paraphernal property), the tenement so recovered did not form part of the community of acquests.

The community of acquests only had a claim against the wife for the amount, which she incurred to recover her property. The Court of Appeal maintained that, when a person acquired the utile dominum (ċens) before the marriage and subsequently redeemed the ċens during the marriage, there was consolidation of the utile dominium and the directum dominum. The emphytiuta became the absolute owner, as a result of the title of utile dominum which he had acquired before the marriage.

In this respect, the court was of the opinion that, notwithstanding the consolidation, the property remained part of his paraphernal property.

The right of redemption was a personal right of Mr Galea and was part of his paraphernal property and therefore, on redemption, the property did not enter the community of acquests. The court said that, even in the context of emphyteusis, it should apply the principles enunciated by case-law relating to recovery (irkupra).

For these reasons, the Court of Appeal concluded that, since the field in question was paraphernal property of the late Mr Galea, his wife’s consent was not needed to validate the konvenju. The Court of Appeal held that the konvenju was still valid and effective at law, even without the wife’s signature.

Dr Grech Orr is a partner at Ganado & Associates.