BA FINANCE CORP. vs. CA, AUGUSTO YULO, LILY YULO SECURITY BANK vs. MAR TIERRA CORP.
CURITY BANK vs. MAR TIERRA CORP., WILFREDO MARTINEZ, MIGUEL LACSON AND
(G.R. No. L-61464, May 28, 1998)
GUTIERREZ, JR., J
FACTS:
Augusto Yulo secured a loan from the petitioner in the amount of P591,003.59 as evidenced
by a promissory note he signed in his own behalf and as a representative of A&L Industries.
Augusto presented an alleged special power of attorney executed by his wife, Lily Yulo, who
managed the business and under whose name the said business was registered, purportedly
authorized the husband to procure the loan and sign the promissory note. 2months prior the
procurement of the loan, Augusto left Lily and their children which in turn abandoned their
conjugal home. When the obligation became due and demandable, Augusto failed to pay the
same.
The petitioner prayed for the issuance of a writ of attachment alleging that said spouses were
guilty of fraud consisting of the execution of Deed of Assignment assigning the rights, titles
and interests over a construction contract executed by and between the spouses and A.
Soriano Corporation. The writ hereby prayed for was issued by the trial court and not
contented with the order, petitioner filed a motion for the examination of attachment debtor
alleging that the properties attached by the sheriff were not sufficient to secure the
satisfaction of any judgment which was likewise granted by the court.
ISSUE:
WON A&L Industries can be held liable for the obligations contracted by the husband.
HELD:
A&L Industries is a single proprietorship, whose registered owner is Lily Yulo. The said
proprietorship was established during the marriage and assets were also acquired during the
same. Hence, it is presumed that the property forms part of the conjugal partnership of the
spouses and be held liable for the obligations contracted by the husband. However, for the
property to be liable, the obligation contracted by the husband must have redounded to the
benefit of the conjugal partnership. The obligation was contracted by Augusto for his own
benefit because at the time he incurred such obligation, he had already abandoned his family
and left their conjugal home. He likewise made it appear that he was duly authorized by his
wife in behalf of the company to procure such loan from the petitioner. Clearly, there must
be the requisite showing that some advantage accrued to the welfare of the spouses.
Thus, the Court ruled that petitioner cannot enforce the obligation contracted by Augusto
against his conjugal properties with Lily. Furthermore, the writ of attachment cannot be
issued against the said properties and that the petitioner is ordered to pay Lily actual
damages amouting to P660,000.00.
RICARDO LOPA
(G.R. No. 143382, November 29, 2006)
CORONA, J
FACTS:
Respondent Mar Tierra Corporation, through its president, Wilfrido C. Martinez, applied for a
P12,000,000 credit accommodation with petitioner Security Bank and Trust Company.
Petitioner approved the application and entered into a credit line agreement with
respondent corporation. It was secured by an indemnity agreement executed by individual
respondents Wilfrido C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound
themselves jointly and severally with respondent corporation for the payment of the loan.
Respondent corporation was not able to pay all its debt balance as it suffered business
reversals, eventually ceasing operations. Petitioner filed a complaint against respondent corp
and individual respondents.
RTC issued a writ of attachment on all real and personal properties of respondent
corporation and individual respondent Martinez including the conjugal house and lot of the
spouses but it found that it did not redound to the benefit of his family, hence, it ordered the
lifting of the attachment on the conjugal house and lot of the spouses Martinez.
Petitioner appealed to CA. It affirmed RTC decision. Petitioned to SC.
ISSUE:
WON the conjugal partnership may be held liable for an indemnity agreement entered into
by the husband to accommodate a third party
HELD:
No. SC upheld the CA. Under Article 161(1) of the Civil Code, the conjugal partnership is liable
for “all debts and obligations contracted by the husband for the benefit of the conjugal
partnership.”
The court ruled in Luzon Surety Co., Inc. v. de Garcia that, in acting as a guarantor or surety
for another, the husband does not act for the benefit of the conjugal partnership as the
benefit is clearly intended for a third party.
In Ayala Investment and Development Corporation v. Court of Appeals, we ruled that, if the
husband himself is the principal obligor in the contract, i.e., the direct recipient of the money
and services to be used in or for his own business or profession, the transaction falls within
the term “obligations for the benefit of the conjugal partnership.” In other words, where the
husband contracts an obligation on behalf of the family business, there is a legal presumption
that such obligation redounds to the benefit of the conjugal partnership.
On the other hand, if the money or services are given to another person or entity and the
husband acted only as a surety or guarantor, the transaction cannot by itself be deemed an
obligation for the benefit of the conjugal partnership. It is for the benefit of the principal
debtor and not for the surety or his family.
In the case at bar, the principal contract, the credit line agreement between petitioner and
respondent corporation, was solely for the benefit of the latter. The accessory contract (the
indemnity agreement) under which individual respondent Martinez assumed the obligation
of a surety for respondent corporation was similarly for the latter’s benefit. Petitioner had
the burden of proving that the conjugal partnership of the spouses Martinez benefited from
the transaction. It failed to discharge that burden.
ARCADIO AND MARIA CARANDANG vs. HEIRS OF QUIRINO DE GUZMAN: MILAGROS,
VICTOR, REYNALDO, CYNTHIS AND QUIRINO, JR.
(G.R. No. 160347, November 29, 2006)
CHICO-NAZARIO, J
FACTS:
Spouses Carandang and the decedent Quirino de Guzman were stockholders and corporate
officers of Mabuhay Broadcasting System (MBS). The Carandangs have equities at 54 % while
Quirino has 46%.
When the capital stock of MBS was increased on November 26, 1983, the Carandangs
subscribed P345,000 from it, P293,250 from the said amount was loaned by Quirino to the
Carandangs. In the subsequent increase in MBS’ capital stock on March 3, 1989, the
Carandangs subscribed again to the increase in the amount of P93,750. But, P43,125 out of
the mentioned amount was again loaned by Quirino.
When Quirino sent a demand letter to the Carandangs for the payment of the loan,
the Carandangs refused to pay. They contend that a pre-incorporation agreement was
executed between Arcadio Carandang and Quirino, whereby Quirino promised to pay for the
stock subscriptions of the Arcadio without cost, in consideration for Arcadio’s technical
expertise, his newly purchased equipment, and his skill in repairing and upgrading
radio/communication equipment therefore, there is no indebtedness on the part of the
Carandangs.
Thereafter, Quirino filed a complaint seeking to recover the P336,375 total amount of the
loan together with damages. The RTC ruled in favor of Quirino and ordered the Carandangs
to pay the loan plus interest, attorney’s fees, and costs of suit. The Carandangs appealed the
trial court’s decision to the CA, but the CA affirmed the same. The subsequent Motion for
Reconsideration filed by the Carandangs were also denied. Hence, this appeal to the SC.
SPOUSES CARANDANG: Three of the four checks used to pay their stock subscriptions were
issued in the name of Milagros de Guzman, the decedent’s wife. Thus, Milagros should be
considered as an indispensable party in the complaint. Being such, the failure to join Milagros
as a party in the case should cause the dismissal of the action by reason of a jurisprudence
stating that: “(i)f a suit is not brought in the name of or against the real party in interest, a
motion to dismiss may be filed on the ground that the complaint states no cause of action."
ISSUE:
Whether or not the RTC should have dismissed the case for failure to state a cause of action,
considering that Milagros de Guzman, allegedly an indispensable party, was not included as a
party-plaintiff.
HELD:
No. Although the spouses Carandang were correct in invoking the aforementioned doctrine,
the ground set forth entails an examination of “whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all persons interested in such
outcome are actually pleaded.” The first query seeks to answer the question of whether
Milagros is a real party in interest, while the latter query is asking if she is an indispensable
party. Since the issue of this case calls for the definition of an indispensable party, invoking
the abovementioned doctrine is irrelevant to the case because the doctrine talks about a
‘real party in interest’ and not an ‘indispensable party’. Although it is important to take note
that an indispensable party is also a real party in interest.
*Definitions:
> Real party in interest – the party who stands to be benefited or injured by the judgment of
the suit, or the party entitled to the avails of the suit.
> Indispensable party – a party in interest without whom no final determination can be had
of an action
> Necessary party – one who is not indispensable but who ought to be joined as a party if
complete relief is to be accorded as to those already parties, or for a complete determination
or settlement of the claim subject of the action
> Pro-forma parties – those who are required to be joined as co-parties in suits by or against
another party as may be provided by the applicable substantive law or procedural rule.
An example is provided by Section 4, Rule 3 of the Rules of Court:
Sec. 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except as provided
by law.
Pro-forma parties can either be indispensable, necessary or neither indispensable nor
necessary. The third case occurs if, for example, a husband files an action to recover a
property which he claims to be part of his exclusive property. The wife may have no legal
interest in such property, but the rules nevertheless require that she be joined as a party.
Quirino and Milagros de Guzman were married before the effectivity of the Family Code on 3
August 1988. As they did not execute any marriage settlement, the regime of conjugal
partnership of gains govern their property relations.
All property acquired during the marriage, whether the acquisition appears to have been
made, contracted or registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved. Credits are personal properties, acquired during the
time the loan or other credit transaction was executed. Therefore, credits loaned during the
time of the marriage are presumed to be conjugal property.
Assuming that the four checks are credits, they are assumed to be conjugal properties of
Quirino and Milagros. There being no evidence to the contrary, such presumption subsists. As
such, Quirino de Guzman, being a co-owner of specific partnership property, is certainly a
real party in interest.
Now, with regard to the discussion on the effect of non-inclusion of parties in the complaint
filed: in indispensable parties, when an indispensable party is not before the court, the action
should be dismissed. The absence of an indispensable party renders all subsequent
actuations of the court void, for want of authority to act, not only as to the absent parties but
even as to those present. For necessary parties, the non-inclusion of a necessary party does
not prevent the court from proceeding in the action, and the judgment rendered therein
shall be without prejudice to the rights of such necessary party. Non-compliance with the
order for the inclusion of a necessary party would not warrant the dismissal of the complaint.
Lastly, for pro-forma parties, the general rule under Section 11, Rule 3 must be followed:
such non-joinder is not a ground for dismissal. Hence, in a case concerning an action to
recover a sum of money, we held that the failure to join the spouse in that case was not a
jurisdictional defect. The non-joinder of a spouse does not warrant dismissal as it is merely a
formal requirement which may be cured by amendment.
Conversely, in the instances that the pro-forma parties are also indispensable or necessary
parties, the rules concerning indispensable or necessary parties, as the case may be, should
be applied. Thus, dismissal is warranted only if the pro-forma party not joined in the
complaint is an indispensable party.
Under Art. 147 of the Civil Code which was superceded by Art. 108 of the Family Code, the
conjugal partnership shall be governed by the rules on the contract of partnership. Thus,
Milagros is a co-owner of the subject personal property in this case – the credit incurred by
spouses Carandang. Being co-owners of the alleged credit, Quirino and Milagros de Guzman
may separately bring an action for the recovery thereof.
“In sum, in suits to recover properties, all co-owners are real parties in interest. However,
pursuant to Article 487 of the Civil Code and relevant jurisprudence, any one of them may
bring an action, any kind of action, for the recovery of co-owned properties. Therefore, only
one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-
owned property, is an indispensable party thereto. The other co-owners are not
indispensable parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is presumed to have been
filed for the benefit of all co-owners.”
Thus, Milagros de Guzman is not an indispensable party in the action for the recovery of the
allegedly loaned money to the spouses Carandang. As such, she need not have been
impleaded in said suit, and dismissal of the suit is not warranted by her not being a party
thereto.
2004
SPS. JOSEPHINE AND HENRY GO vs. LEONARDO YAMANE
(G.R. No. 160762, May 3, 2006)
PANGANIBAN, C.J.
FACTS:
Lot in Baguio City is registered in the name of Muriel Yamane, wife of Leonardo Yamane.
Atty. De Guzman who handled a case for wife and her sisters levied the said property to
satisfy the lien for attorney’s fees.
The RTC of Baguio City held that the subject parcel of land was the paraphernal property of
Muriel Yamane and not the conjugal property of the spouses. Leonardo Yamane, husband
filed a motion for reconsideration, which was denied. The case was brought to the Court of
Appeals.
The Court of Appeals reversed the decision of the RTC. The appellate court contends that,
“property acquired during marriage is presumed to be conjugal, unless the exclusive funds of
one spouse are shown to have been used for the purpose.”
Husband’s name appeared on the Transfer Certificate of Title (TCT) and the Deed of Absolute
Sale. Both documents indicate that Muriel was married to Leonardo Yamane.
ISSUE:
Whether the nature of the property is conjugal or paraphernal
HELD:
Property purchased by spouses during the existence of their marriage is presumed to be
conjugal in nature, unless it be proved that it pertains exclusively to the husband or to the
wife. (Article 160)
The nature of a property, whether conjugal or paraphernal, is determined by law and not by
the will of one of the spouses.
The mere registration of a property in the name of one spouse does not destroy its conjugal
nature. Conjugal property cannot be held liable for the personal obligation contracted by one
spouse, unless some advantage of benefit is shown to have accrued to the conjugal
partnership.
The CA committed no error in declaring that the parcel of land belonged to the conjugal
partnership of Spouses Murieland Leonardo Yamane. They acquired it from Eugene Pucay on
February 27, 1967, or specifically during the marriage. We then follow the rule that proof of
the acquisition of the subject property during a marriage suffices to render the statutory
presumption operative. It is clear enough that the presently disputed piece of land pertains
to the conjugal partnership.
The contract or transaction between Atty. De Guzman and the Pucay sisters appears to have
been incurred for the exclusive interest of the latter. Muriel was acting privately for her
exclusive interest when she joined her two sisters inhiring the services of Atty. De Guzman to
handle a case for them. Accordingly, whatever expenses were incurred by Muriel in the
litigation for her and her sisters' private and exclusive interests, are her exclusive
responsibility and certainly cannot be charged against the contested conjugal property. This
piece of land may not be used to pay for her indebtedness, because her obligation has not
been shown to be one of the charges against the conjugal partnership.
The power of the court in executing judgments extends only to properties unquestionably
belonging to the judgment debtor alone. In this case, therefore, the property -- being
conjugal in nature -- cannot be levied upon. Petition is DENIED.

ALFREDO AND ENCARNACION CHING vs. CA AND ALLIED BANKING CORP.
(G.R. No. 124642, February 23, 2004)
CALLEJO, SR., J
FACTS:
The Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of P9,000,000 from the
Allied Banking Corporation (ABC). As an added security for the said loan, Alfredo Ching,
together with Emilio Tañedo and Chung Kiat Hua, executed a continuing guaranty with the
ABC binding themselves to jointly and severally guarantee the payment of all the PBMCI
obligations owing to the ABC. The PBMCI defaulted in the payment of all its loans. Hence, the
ABC filed a complaint for sum of money with prayer for a writ of preliminary attachment.
Citing as one of the grounds for the writ was the fraud defendants employed in incurring the
obligations by representing themselves as having the financial capacity to pay the loan when
in fact they did not have such capacity. In the meantime, on July 26, 1983, the deputy sheriff
of the trial court levied on attachment the100,000 common shares of Citycorp stocks in the
name of Alfredo Ching. On November 16, 1993,Encarnacion T. Ching, assisted by her husband
Alfredo Ching, filed a Motion to Set Aside the levy on attachment. She alleged inter alia that
the 100,000 shares of stocks levied on by the sheriff were acquired by her and her husband
during their marriage out of conjugal funds after the Citycorp Investment Philippines was
established in 1974. She, likewise, alleged that being the wife of Alfredo Ching, she wasa
third-party claimant entitled to file a motion for the release of the properties. She attached
therewith acopy of her marriage contract with Alfredo Ching.
utmost concern for the solidarity and well being of the family as a unit. The husband,
therefore, is denied the power to assume unnecessary and unwarranted risks to the
financial stability of the conjugal partnership. In this case, the private respondent failed to
prove that the conjugal partnership of the petitioners was benefited by the petitioner-
husband's act of executing a continuing guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of loan was between the private
respondent and the PBMCI, solely for the benefit of the latter. No presumption can be
inferred from the fact that when the petitioner-husband entered into an accommodation
agreement or a contract of surety, the conjugal partnership would thereby be benefited. The
private respondent was burdened to establish that such benefit redounded to the conjugal
partnership.
SOLEDAD LACSON, ET AL., vs. ABELARDO DIAZ
(G.R. No. L-19346, May 31, 1965)
BARRERA, J

ISSUE/RULING:
1) Do the 100,000 shares of stock in the name of Alfredo Ching belong to the
conjugal partnership?
YES. Article 160 of the New Civil Code provides that all the properties acquired during the
marriage are presumed to belong to the conjugal partnership; unless it be proved that it
pertains exclusively to the husband, or to the wife. As long as the properties were acquired
by the parties during the marriage, they are presumed to be conjugal in nature. In fact, even
when the manner in which the properties were acquired does not appear, the presumption
will still apply, and the properties will still be considered conjugal. In this case, the evidence
adduced by the petitioners in the RTC is that the 100,000 shares of stocks in the Citycorp
Investment Philippines were issued to and registered in its corporate books in the name of
the petitioner-husband when the said corporation was incorporated on May 14, 1979. This
was done during the subsistence of the marriage of the petitioner-spouses. The shares of
stocks are, thus, presumed to be the conjugal partnership property of the petitioners. The
private respondent failed to adduce evidence that the petitioner-husband acquired the
stocks with his exclusive money. The barefaced fact that the shares of stocks were registered
in the corporate books of Citycorp Investment Philippines solely in the name of the
petitioner-husband does not constitute proof that the petitioner-husband, not the conjugal
partnership, owned the same.

2) Is the conjugal partnership liable for the payment of the liability? EFREN PANA vs. HEIRS OF JUANITE, SR. AND JUANITE, JR.
NO. For the conjugal partnership to be liable for a liability that should appertain to the (G.R. No. 164201, December 10, 2012)
husband alone, there must be a showing that some advantages accrued to the spouses.
Certainly, to make a conjugal partnership responsible for a liability that should appertain ABAD, J
alone to one of the spouses is to frustrate the objective of the New Civil Code to show the FACTS:
The prosecution accused Efren Pana, his wife Melencia, and others of murder before
the Regional Trial Court of Surigao City, and eventually a decision was rendered acquitting
Efren of the charge for insufficiency of evidence but finding Melencia and another person
guilty as charged and was sentenced to death. The Supreme Court affirmed RTC’s decision
but modified the penalty to Reclusion Perpetua. As for the monetary awards, the court
affirmed the award of civil indemnity and moral damages but deleted the award for actual
damages for lack of evidentiary basis. In its place the court made an award of php15, 000
each by way of temperate damages. In addition, the court awarded Php50, 000.00 exemplary
damages per victim to be paid solidarily by them. The decision became executory of October
1, 2001.
Upon motion for execution by the heirs of the deceased, the RTC ordered the issuance of the
writ resulting in the levy of real properties registered in the names of Efren and Melencia.
Subsequently, a notice of levy and a notice of sale on execution were issued. On April 3,
2002, Efren and his wife Melecia filed a motion to quash the writ of execution claiming that
the properties levied were conjugal assets and
not paraphernal of Melecia. On September 16, 2002, the RTC denied the motion. Thespouses
moved for reconsideration but the RTC denied the same. In this case, it is submitted that
Efren and Melencia were married when the Civil Code was still in effect. They did not execute
a pre-nuptial agreement, hence CPG governed their property relations. However, both RTC
and CA held that property regime changed into ACP when family code took effect it reason
out that Art. 256 of the Family Code provides that the Code shall have retroactive effect in so
far as it does not prejudice or impair vested or acquired rights in accordance with the Civil
Code or other laws.
Both the RTC and the Court of the Appeals are in error on this point. While it is true that the
personal stakes of each spouses in their conjugal assets are inchoate or unclear prior to
the liquidation of the conjugal partnership of gains and, therefore none of them can be said
to have acquired vested rights in specific assets , it is evident that Article 256 of the Family
Code does not intend to reach back and automatically convert into absolute community
of property relations all conjugal partnership of gains that existed before 1988 excepting only
those with prenuptial agreements.
ISSUE:
Whether or not the conjugal properties of spouses Efren and Melencia can be levied and
executed upon for the satisfaction of Melencia’s civil liability in the aforesaid murder case.
HELD:
YES, provided that the conditions under Article 121 of the Family Code have been covered.
First of all, the Supreme Court explained that it is clear from the facts that Efren and
Melencia were married when the Civil code was still the operative law on marriages.
The presumption, absent any evidence to the contrary, is that they were married under the
regime of conjugal partnership of gains. Furthermore, Article 119 of the Civil Code provides
that the future spouses main in marriage settlements agree upon absolute or relative
community or conjugal partnership of gains or upon a complete separation of property, or
upon any other regime. The family code itself provides in Article 76 that marriage
settlements cannot be modified except prior to marriage, and clearly, under this situation,
the spouses cannot modify their regime. Post marriage modification of settlements can take
place only where (a) the absolute community or conjugal partnership was dissolved and
liquidated upon a decree of legal separation; (b) the spouses who were legally separated
reconciled and agreed to revive their former property regime; (c)judicial separation
of property had been had on the ground that a spouse abandons the other without just
cause or fails to comply with his obligations to the family; (d) there was judicial separation of
property under article 135; (e) the spouses jointly filed a petition for the voluntary dissolution
of their absolute community or conjugal partnership of gains. None of these circumstances
exists in this case.
SPS. RICKY WONG AND ANITA CHAN vs. IAC AND ROMARICO HENSON
(G.R. No. 70082, August 19, 1991)
FERNAN, C.J.
FACTS:
Romario Henson married Katrina on January 1964. They had 3 children however, even during
the early years of their marriage, the spouses had been most of the time living separately.
During the marriage or on about January 1971, the husband bought a parcel of land in
Angeles from his father using the money borrowed from an officemate. Sometime in June
1972, Katrina entered an agreement with Anita Chan where the latter consigned the former
pieces of jewelry valued at P321,830.95. Katrina failed to return the same within the 20 day
period thus Anita demanded payment of their value. Katrina issued in September 1972,
check of P55,000 which was dishonored due to lack of funds. The spouses Anita Chan and
Ricky Wong filed action for collection of the sum of money against Katrina and her husband
Romarico. The reply with counterclaim filed was only in behalf of Katrina. Trial court ruled in
favor of the Wongs then a writ of execution was thereafter issued upon the 4 lots in Angeles
City all in the name of Romarico Henson married to Katrina Henson. 2 of the lots were sold
at public auction to Juanito Santos and the other two with Leonardo Joson. A month before
such redemption, Romarico filed an action for annulment of the decision including the writ
and levy of execution.
ISSUE:
WON debt of the wife without the knowledge of the husband can be satisfied through the
conjugal property.
HELD:
The spouses had in fact been separated when the wife entered into the business deal with
Anita. The husband had nothing to do with the business transactions of Katrina nor
authorized her to enter into such. The properties in Angeles were acquired during the
marriage with unclear proof where the husband obtained the money to repay the loan.
Hence, it is presumed to belong in the conjugal partnership in the absence of proof that they
are exclusive property of the husband and even though they had been living separately. A
wife may bind the conjugal partnership only when she purchases things necessary for
support of the family. The writ of execution cannot be issued against Romarico and the
execution of judgments extends only over properties belonging to the judgment debtor. The
conjugal properties cannot answer for Katrina’s obligations as she exclusively incurred the
latter without the consent of her husband nor they did redound to the benefit of the family.
There was also no evidence submitted that the administration of the partnership had been
transferred to Katrina by Romarico before said obligations were incurred. In as much as the
decision was void only in so far as Romarico and the conjugal properties concerned, Spouses
Wong may still execute the debt against Katrina, personally and exclusively.

DAVID PELAYO AND LOREZA PELAYO vs. MELKI PEREZ
(G.R. No. 141323, June 8, 2005)
AUTRIA-MARTINEZ, J
FACTS:
David Pelayo through a Deed of Absolute Sale executed a deed of sale and transferred to
Melki Perez two parcel of agricultural lands. Loreza Pelayo and another one whose signature
is eligible witnesses such execution of deed.
Loreza signed only on the third page in the space provided for witnesses, as such, Perez
application was denied.
Perez asked Loreza to sign on the first and should pages of the deed of sale but she refused.
He then filed a complaint for specific performance against the Pelayo spouses.
The spouses moved to dismiss the complaint on the ground for lack of marital consent as
provided by art166 of the Civil Code.
ISSUE:
Whether or not the deed of sale was null and void for lack of marital consent.
HELD:
Under Art 173, in relation to Art166, both of the NCC, W/C was still in effect on January 11,
1988 when the deed in question was executed, the lack of marital consent to the disposition
of conjugal property does not make the contract viol of initio but Merely violable. Said
provisions of law provide:
Art 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under
civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber
any real property of the conjugal property w/o the wife’s consent. It she refuses
unreasonably to give her consent, the court may compel her to grant the same.
Art 173. The wife may during the marriage and w/in 10 years the transaction questioned, ask
the court for the annulment of any contract of the husband w/c tends to defraud her or
impair interest in the conjugal partnership property. Should the wife fail to exercise this right
she her heir, after the dissolution of the marriage may demand the value of property
fraudulently alienated by the husband.
HOMEOWNERS SAVINGS AND LOAN BANK vs. MIGUELA DAILO
(G.R. No. 153802, March 11, 2005)
TINGA, J
FACTS:
Miguela Dailo and Marcelino Dailo, Jr were married on August 8, 1967. During their marriage
the spouses purchased a house and lot situated at San Pablo City from a certain Dalida. The
subject property was declared for tax assessment purposes The Deed of Absolute Sale,
however, was executed only in favor of the late Marcelino Dailo, Jr. as vendee thereof to the
exclusion of his wife.
Marcelino Dailo, Jr. executed a Special Power of Attorney (SPA) in favor of one Gesmundo,
authorizing the latter to obtain a loan from petitioner Homeowners Savings and Loan Bank to
be secured by the spouses Dailo’s house and lot in San Pablo City. Pursuant to the SPA,
Gesmundo obtained a loan from petitioner. As security therefor, Gesmundo executed on the
same day a Real Estate Mortgage constituted on the subject property in favor of petitioner.
The abovementioned transactions, including the execution of the SPA in favor of Gesmundo,
took place without the knowledge and consent of respondent.[
Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial
foreclosure proceedings on the mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of petitioner as the highest bidder. After the lapse of
one year without the property being redeemed, petitioner consolidated the ownership
thereof by executing an Affidavit of Consolidation of Ownership and a Deed of Absolute Sale.
In the meantime, Marcelino Dailo, Jr. died. In one of her visits to the subject property,
Miguela learned that petitioner had already employed a certain Brion to clean its premises
and that her car, a Ford sedan, was razed because Brion allowed a boy to play with fire within
the premises.
Claiming that she had no knowledge of the mortgage constituted on the subject property,
which was conjugal in nature, respondent instituted with the RTC San Pablo City a Civil Case
for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of
Ownership, Deed of Sale, Reconveyance with Prayer for Preliminary Injunction and Damages
against petitioner. In the latter’s Answer with Counterclaim, petitioner prayed for the
dismissal of the complaint on the ground that the property in question was the exclusive
property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision declaring the said documents null
and void and further ordered the defendant is ordered to reconvey the property subject of
this complaint to the plaintiff, to pay the plaintiff the sum representing the value of the car
which was burned, the attorney’s fees, moral and exemplary damages.
The appellate court affirmed the trial court’s Decision, but deleted the award for damages
and attorney’s fees for lack of basis. Hence, this petition
ISSUE/RULING:
1) WON THE MORTGAGE CONSTITUTED BY THE LATE MARCELINO DAILO, JR. ON THE
SUBJECT PROPERTY AS CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED
SHARE.
NO. Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal partnership property shall
belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of disposition or encumbrance
which must have the authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. . . .
In applying Article 124 of the Family Code, this Court declared that the absence of the
consent of one renders the entire sale null and void, including the portion of the conjugal
property pertaining to the husband who contracted the sale.
Respondent and the late Marcelino. were married on August 8, 1967. In the absence of a
marriage settlement, the system of relative community or conjugal partnership of gains
governed the property relations between respondent and her late husband. With the
effectivity of the Family Code on August 3, 1988, Chapter 4 on Conjugal Partnership of Gains
in the Family Code was made applicable to conjugal partnership of gains already established
before its effectivity unless vested rights have already been acquired under the Civil Code or
other laws.
The rules on co-ownership do not even apply to the property relations of respondent and the
late Marcelino even in a suppletory manner. The regime of conjugal partnership of gains is a
special type of partnership, where the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate properties and those acquired by
either or both spouses through their efforts or by chance. Unlike the absolute community of
property wherein the rules on co-ownership apply in a suppletory manner, the conjugal
partnership shall be governed by the rules on contract of partnership in all that is not in
conflict with what is expressly determined in the chapter (on conjugal partnership of gains)
or by the spouses in their marriage settlements. Thus, the property relations of respondent
and her late husband shall be governed, foremost, by Chapter 4 on Conjugal Partnership of
Gains of the Family Code and, suppletorily, by the rules on partnership under the Civil Code.
In case of conflict, the former prevails because the Civil Code provisions on partnership apply
only when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the knowledge and consent
of his wife, Marcelino constituted a real estate mortgage on the subject property, which
formed part of their conjugal partnership. By express provision of Article 124 of the Family
Code, in the absence of (court) authority or written consent of the other spouse, any
disposition or encumbrance of the conjugal property shall be void.
The aforequoted provision does not qualify with respect to the share of the spouse who
makes the disposition or encumbrance in the same manner that the rule on co-ownership
under Article 493 of the Civil Code does. Where the law does not distinguish, courts should
not distinguish. Thus, both the trial court and the appellate court are correct in declaring the
nullity of the real estate mortgage on the subject property for lack of respondent’s consent.
2) WON THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE PAYMENT OF THE LOAN
OBTAINED BY THE LATE MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED
TO THE BENEFIT OF THE FAMILY.
NO. Under Article 121 of the Family Code, “[T]he conjugal partnership shall be liable for: . . .
(1) Debts and obligations contracted by either spouse without the consent of the other to
the extent that the family may have been benefited; . . . .”
Certainly, to make a conjugal partnership respond for a liability that should appertain to the
husband alone is to defeat and frustrate the avowed objective of the new Civil Code to show
the utmost concern for the solidarity and well-being of the family as a unit.[
The burden of proof that the debt was contracted for the benefit of the conjugal partnership
of gains lies with the creditor-party litigant claiming as such. Ei incumbit probatio qui dicit,
non qui negat (he who asserts, not he who denies, must prove). Petitioner’s sweeping
conclusion that the loan obtained by the late Marcelino to finance the construction of
housing units without a doubt redounded to the benefit of his family, without adducing
adequate proof, does not persuade this Court. Consequently, the conjugal partnership
cannot be held liable for the payment of the principal obligation.
JOSE AND GLENDA UY AND GILDA JARDELEZA vs. CA AND TEODORO JARDELEZA
(G.R. No. 109557, November 29, 2000)
PARDO, J
FACTS:
Dr. Ernesto Jardelaza suffered stroke that rendered him comatose. Gilda, wife of the latter,
filed a petition in RTC Iloilo to be allowed as sole administrator of their conjugal property and
be authorized to sell the same as her husband is physically incapacitated to discharge his
functions. She further contest that such illness of the husband necessitated expenses that
would require her to sell their property in Lot 4291 and its improvement to meet such
necessities. RTC ruled in favor of Gilda contending that such decision is pursuant to Article
124 of FC and that the proceedings thereon are governed by the rules on summary
proceedings.
The son of the spouses, Teodoro, filed a motion for reconsideration contending that the
petition made by her mother was essentially a petition for guardianship of the person and
properties of his father. As such it cannot be prosecuted in accordance with the provisions
on summary proceedings instead it should follows the ruled governing special proceedings in
the Revised Rules of Court requiring procedural due process particularly the need for notice
and a hearing on the merits. He further reiterated that Chapter 2 of the FC comes under the
heading on “Separation in Fact Between Husband and Wife” contemplating a situation where
both spouses are of disposing mind. Hence, he argued that this should not be applied in their
case.
During the pendency of the motion, Gilda sold the property to her daughter and son in law.
Upon the appeal by Teodoro, CA reversed the decision of the lower court.
ISSUE:
WON Gilda as the wife of a husband who suffered stroke, a cerebrovascular accident
rendering him comatose, without motor and mental faculties, may assume sole powers of
administration of the conjugal property and dispose a parcel of land with improvements.
HELD:
SC ruled in favor of Teodoro. The rule on summary proceedings does not apply to cases
where the non-consenting spouse is incapacitated or incompetent to give consent. In this
case, trial court found that subject spouse was incompetent who was in a comatose
condition and with a diagnosis of brain stem infract. Hence, the proper remedy is a judicial
guardianship proceeding under the Revised Rules of Court. The law provides that wife who
assumes sole powers of administration has the same powers and duties as a guardian.
Consequently, a spouse who desires to sell real property as administrator of the conjugal
property, must observe the procedure for the sale of the ward’s estate required of judicial
guardians, and not the summary judicial proceedings under FC. SC further held that such
incapacity of the trial court to provide for an opportunity to be heard is null and void on the
ground of lack of due process.