1/2/2020
The requirement of consent of spouse for acts involving the disposal of assets acquired while the owner was under a common law marriage (“CLM”), which is generally required for married couples, is a matter of great controversy due to the lack of express legal provisions.
Article 1.647, items I, III and IV, of the Brazilian Civil Code (“CC”) expressly prohibits spouses from (i) disposing of real property acquired in the course of the marriage; (ii) granting a suretyship or a guarantee, or (iii) donating any common property, without the consent of the other spouse, unless they are married under a full separation of assets regime. This concept of assets has been widened, by doctrine and jurisprudence, to encompass shares and other securities, as well as other securities.
In 2017, the Brazilian Federal Supreme Court ruled that CLM should be granted with the same legal protections ensured to married couples, for succession purposes. As a result, various lawsuits have been filed seeking annulment of sale of common property made without the other partner’s consent, with due application of Article 1.647 of the CC, also to CLM.
Some Brazilian courts, however, understand that the consent of spouse is not required when the party engaging in one of the transactions listed in Article 1.647 of the CC is under a CLM, as such rule would constitute a restriction on the rights of that party and, in absence of an express legal provision, could not be applied by analogy to the existing rule applicable for married couples.
Moreover, the CLM is not constituted by means of a formal act (and neither is publicly recorded), which conditions do both take place in the case of a marriage. Thus, as the existence of a CLM is difficult to prove, some courts understand that a consent requirement could compromise the legal certainty of business transactions, since a good faith buyer could be surprised with a lawsuit in the future seeking the annulment of a transaction, filed by the a CLM partner of the seller.
It is important to highlight that the new Civil Procedure Code of 2015 (“2015 CPC”) provides that Consent of Spouse in the CLM context is now mandatory in cases in which one of the partners is a plaintiff or defendant in a court proceeding involving property or family rights (Article 1.647, item II, of the CC), as long as the CLM existence is duly proven in the lawsuit proceeding (Article 73, par. 3, of the 2015 CPC).
From our perspective, we believe it is not possible to ignore the existence of a CLM partner in the cases listed in Art. 1.647 of the CC, mainly because there is an undeniable trend to equate marriage with CLM, for all legal purposes.
Therefore, in spite of the lack of an express legal provision, we consider that consent of spouse is, in principle, necessary for any acts involving the disposal of assets, whenever an ongoing CLM is in place, including in the event of donations and merger and acquisition operations, since there are no grounds anymore, for treating spouses and CLM partners differently.
