PERSONS & FAMILY RELATIONS (Case Digests)

1

ILUSORIO v. BILDNER
Facts: Potenciano and Erlinda were spouses. However, they obtained a legal
separation in 1972. Apparently, Potenciano is a very rich lawyer who
acquired millions of pesos. Since Erlinda and Potenciano were already
separated, they lived in separate homes. Potenciano has a condominium in
Makati and a house ig Baguio, and Erlinda has a home in Antipolo.
One day, after Potenciano came from the US, he went to stay at the home of
Erlinda. However, their children accused Erlinda of giving Potenciano an
overdose of 200 mg instead of 100 mg Zoloft, an antidepressant drug
prescribed by his doctor in New York, U.S.A. As a consequence, Potencianos
health deteriorated.
Erlinda filed with the RTC for guardianship over the person and property of
Potenciano Ilusorio due to the latters advanced age, frail health, poor
eyesight and impaired judgment.
Erlinda filed with the CA a petition for habeas corpus to have the custody of
lawyer Potenciano Ilusorio. She alleged that respondents refused petitioners
demands to see and visit her husband and prohibited Potenciano from
returning to Antipolo City.
CA granted visitation rights to Potenciano, stating that failure to observe the
order of the court will penalize the persons with contempt.
Issue: May a wife secure a writ of habeas corpus to compel her husband to
live with her in conjugal bliss?
Held: No. Marital rights including coverture and living in conjugal dwelling
may not be enforced by the extra-ordinary writ of habeas corpus1.
The evidence shows that there was no actual and effective detention or
deprivation of lawyer Potenciano Ilusorios liberty that would justify the
issuance of the writ. The fact that lawyer Potenciano Ilusorio is about 86
years of age, or under medication does not necessarily render him mentally
incapacitated. Soundness of mind does not hinge on age or medical condition
but on the capacity of the individual to discern his actions.
After due hearing, the Court of Appeals concluded that there was no
unlawful restraint on his liberty.
The Court of Appeals also observed that lawyer Potenciano Ilusorio did not
request the administrator of the Cleveland Condominium not to allow his
wife and other children from seeing or visiting him. He made it clear that he
did not object to seeing them.
As to lawyer Potenciano Ilusorios mental state, the Court of Appeals
observed that he was of sound and alert mind, having answered all the
relevant questions to the satisfaction of the court.
Being of sound mind, he is thus possessed with the capacity to make choices.
In this case, the crucial choices revolve on his residence and the people he
opts to see or live with. The choices he made may not appeal to some of his
family members but these are choices which exclusively belong to
Potenciano. He made it clear before the Court of Appeals that he was not
prevented from leaving his house or seeing people. With that declaration,
and absent any true restraint on his liberty, we have no reason to reverse the
findings of the Court of Appeals.
With his full mental capacity coupled with the right of choice, Potenciano
Ilusorio may not be the subject of visitation rights against his free choice.
Otherwise, we will deprive him of his right to privacy. Needless to say, this
will run against his fundamental constitutional right. Es m

1 A writ of habeas corpus extends to all cases of illegal confinement or detention, or by which the
rightful custody of a person is withheld from the one entitled thereto.
"Habeas corpus is a writ directed to the person detaining another, commanding him to produce the
body of the prisoner at a designated time and place, with the day and cause of his capture and
detention, to do, submit to, and receive whatsoever the court or judge awarding the writ shall consider
in that behalf."
It is a high prerogative, common-law writ, of ancient origin, the great object of which is the liberation
of those who may be imprisoned without sufficient cause. It is issued when one is deprived of liberty or
is wrongfully prevented from exercising legal custody over another person

The Court of Appeals exceeded its authority when it awarded visitation rights
in a petition for habeas corpus where Erlinda never even prayed for such
right. The ruling is not consistent with the finding of subjects sanity.
When the court ordered the grant of visitation rights, it also emphasized that
the same shall be enforced under penalty of contempt in case of violation or
refusal to comply. Such assertion of raw, naked power is unnecessary.
The Court of Appeals missed the fact that the case did not involve the right of
a parent to visit a minor child but the right of a wife to visit a husband. In
case the husband refuses to see his wife for private reasons, he is at liberty
to do so without threat of any penalty attached to the exercise of his right.
No court is empowered as a judicial authority to compel a husband to live
with his wife. Coverture cannot be enforced by compulsion of a writ
ofhabeas corpus carried out by sheriffs or by any other mesne process. That
is a matter beyond judicial authority and is best left to the man and womans
free choice.
Facts: Respondents herein are the nephews and neices of Francisco (the old
man) who filed against petitioner (Cirila) a case for declaration of nullity of a
deed of donation inter vivos, recovery of possession, and damages. According
to them, the subject property belongs to Francisco and his wife. Francisco
and his wife died without issue, hence their neices and nephews
automatically became their heirs. Before Franciscos death, he donated such
property to Cirila since the latter rendered services to him for 10 years.
According to the neices of Francisco, he and Cirila had a relationship. Cirila
denied this. Francisco executed a deed of donation which was also received
by Cirila. Cirila now became the owner of the subject property. Respondents,
who are the decedents nephews and nieces and his heirs by intestate
succession, alleged that Cirila was the common-law wife of Francisco and the
donation inter vivos made by Francisco in her favor is void under Article 87 of
the Family Code, which provides:
Every donation or grant of gratuitous advantage, direct or indirect,
between the spouses during the marriage shall be void, except
moderate gifts which the spouses may give each other on the occasion
of any family rejoicing. The prohibition shall also apply to persons
living together as husband and wife without a valid marriage.
TC decalared the donation void.
CA upheld the ruling of the TC.
Issue: W/N the Court of Appeals correctly applied Art. 87 of the Family Code
to the circumstances of this case.
Held: Yes. In Bitangcor v. Tan, we held that the term cohabitation or living
together as husband and wife means not only residing under one roof, but
also having repeated sexual intercourse. Cohabitation, of course, means
more than sexual intercourse, especially when one of the parties is already
old and may no longer be interested in sex. At the very least, cohabitation is
the public assumption by a man and a woman of the marital relation, and
dwelling together as man and wife, thereby holding themselves out to the
public as such. Secret meetings or nights clandestinely spent together, even
if often repeated, do not constitute such kind of cohabitation; they are
merely meretricious. In this jurisdiction, this Court has considered as
sufficient proof of common-law relationship the stipulations between the
parties, a conviction of concubinage, or the existence of illegitimate children.
Was Cirila Franciscos employee or his common-law wife? Cirila
admitted that she and Francisco resided under one roof for a long time. It is
very possible that the two consummated their relationship, since Cirila gave
Francisco therapeutic massage and Leticia said they slept in the same
bedroom. At the very least, their public conduct indicated that theirs was
not just a relationship of caregiver and patient, but that of exclusive partners
akin to husband and wife.
Aside from Erlinda Tabancuras testimony that her uncle told her that Cirila
was his mistress, there are other indications that Cirila and Francisco were
common-law spouses. Seigfredo Tabancura presented documents
apparently signed by Cirila using the surname Comille. As previously stated,
these are an application for a business permit to operate as a real estate
lessor, a sanitary permit to operate as real estate lessor with a health
certificate, and the death certificate of Francisco. These documents show
that Cirila saw herself as Franciscos common-law wife, otherwise, she would
not have used his last name. Similarly, in the answer filed by Franciscos
lessees in Erlinda Tabancura, et al. vs. Gracia Adriatico Sy and Antonio Sy,
ARCABA v. TABANCURA
PERSONS & FAMILY RELATIONS (Case Digests)
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RTC Civil Case No. 4719 (for collection of rentals), these lessees referred to
Cirila as the common-law spouse of Francisco. Finally, the fact that Cirila
did not demand from Francisco a regular cash wage is an indication that she
was not simply a caregiver-employee, but Franciscos common law
spouse. She was, after all, entitled to a regular cash wage under the law. It is
difficult to believe that she stayed with Francisco and served him out of pure
beneficence. Human reason would thus lead to the conclusion that she was
Franciscos common-law spouse.
Respondents having proven by a preponderance of evidence that Cirila and
Francisco lived together as husband and wife without a valid marriage, the
inescapable conclusion is that the donation made by Francisco in favor of
Cirila is void under Art. 87 of the Family Code.
MUNOZ, JR. v. CARLOS
EXCLUSIVE PROPERTY OF ERLINDA
Facts: Eliseo Carlos mortgage the subject property to GSIS to secure a
housing loan with Erlindas consent. Spouses Carlos made the subject parcel
of land as a collateral since they incurred a loan from the GSIS. For the
payment of the said mortgage, the GSIS would deduct a sum of money
monthyly from Eliseos salary. Thereafter, the subject proerty was
transferred to Mr. Munoz by a DOS, executed by Erlinda, for herself and as
attorney-in-fact of Eliseo, with a consideration of P602K.
According to the Carlos spouses, it was not a sale but only a mortgage. That
Mr. Munoz made them to borrow money from him so that they will cancel
the loan from GSIS. Since in their agreement, the affidavit should be signed
by Eliseo, when the purported signature of Eliseo was not there and the
failure of Erlinda to give back the P20K to Mr. Munoz, he purportedly kept
the title and the spouses were shocked to know that later, the subject
property was now owned by Mr. Munoz.
The NBI found that the purported signatures of Mr. Carlos were forged.
Munoz countered that the subject property was the paraphernal property of
Erlinda Carlos which she inherited from her father. He also averred that
failure of the spouses to redeem the property within 1 yr, he caused the
registration of the titles to himself. Moreover, the spouses failed to pay
rentals on the subject proerty.
MTC ruled that the subject properties were Erlindas paraphernal properties,
thus her husbands consent is immaterial.
CA reversed the ruling of the MTC. The subject property became conjugal
property after it was used as a collateral, with her husbands salary used to
pay for it. It held that the residential lot became conjugal when the house
was built thereon through conjugal funds, applying the second paragraph
of Article 158 of the Civil Code and Calimlim-Canullas. Under the second
paragraph of Article 158 of the Civil Code, a land that originally belonged to
one spouse becomes conjugal upon the construction of improvements
thereon at the expense of the partnership. The SC applied this provision
in Calimlim-Canullas, where the SC held that when the conjugal house is
constructed on land belonging exclusively to the husband, the land ipso
facto becomes conjugal, but the husband is entitled to reimbursement of the
value of the land at the liquidation of the conjugal partnership.
Issue: W/N the subject property is paraphernal or conjugal.
Held: As a general rule, 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.

In the present case, clear evidence that Erlinda inherited the residential lot
from her father has sufficiently rebutted this presumption of conjugal
ownership. Pursuant to Articles 92 and 109 of the Family Code, properties
acquired by gratuitous title by either spouse, during the marriage, shall be
excluded from the community property and be the exclusive property of
each spouse. The residential lot, therefore, is Erlindas exclusive
paraphernal property.


The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas

We cannot subscribe to the CAs misplaced reliance on Article 158 of the
Civil Code and Calimlim-Canullas.

As the respondents were married during the effectivity of the Civil Code, its
provisions on conjugal partnership of gains (Articles 142 to 189) should
have governed their property relations. However, with the enactment of
the Family Code on August 3, 1989, the Civil Code provisions on conjugal
partnership of gains, including Article 158, have been superseded by those
found in the Family Code (Articles 105 to 133). Article 105 of the Family
Code states:

x x x x

The provisions of this Chapter [on the Conjugal
Partnership of Gains] shall also apply to conjugal
partnerships of gains already established between
spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as
provided in Article 256.

Thus, in determining the nature of the subject property, we refer to the
provisions of the Family Code, and not the Civil Code, except with respect
to rights then already vested.

Article 120 of the Family Code, which supersedes Article 158 of the Civil
Code, provides the solution in determining the ownership of the
improvements that are made on the separate property of the spouses, at the
expense of the partnership or through the acts or efforts of either or both
spouses. Under this provision, when the cost of the improvement and any
resulting increase in value are more than the value of the property at the
time of the improvement, the entire property of one of the spouses shall
belong to the conjugal partnership, subject to reimbursement of the value
of the property of the owner-spouse at the time of the improvement;
otherwise, said property shall be retained in ownership by the owner-
spouse, likewise subject to reimbursement of the cost of the improvement.

In the present case, we find that Eliseo paid a portion only of the GSIS loan
through monthly salary deductions. From April 6, 1989 to April 30, 1992,
Eliseo paid about P60,755.76, not the entire amount of the GSIS housing loan
plus interest, since the petitioner advanced the P176,445.27 paid by Erlinda
to cancel the mortgage in 1992. Considering the P136,500.00 amount of the
GSIS housing loan, it is fairly reasonable to assume that the value of the
residential lot is considerably more than theP60,755.76 amount paid by
Eliseo through monthly salary deductions.

Thus, the subject property remained the exclusive paraphernal property of
Erlinda at the time she contracted with the petitioner; the written consent
of Eliseo to the transaction was not necessary. The NBI finding that Eliseos
signatures in the special power of attorney and affidavit were forgeries was
immaterial.

Nonetheless, the RTC and the CA apparently failed to consider the real
nature of the contract between the parties.

AYALA INVESTMENTS v. CA
THE LOAN PROCURED FROM AIDC WAS FOR THE ADVANCEMENT AND
BENEFIT OF PBM AND NOT FOR THE CPG
Facts: Philippine Blooming Mills incurred a loan from Ayala Investment and
Development Corp. As the vice president of PBM, Mr. Ching made himself
jointly and severally liable to AIDC for the loan that PBM incurred.
When PBM failed to pay AIDC, AIDC filed a case in the CFI for a case of sum of
money against PBC and Mr. Ching. CFI ordered PBM and Mr. Ching to pay
AIDC plus interests. Pending appeal, the CFI ordered a writ of execution.
Among those that are included in the writ of execution are the 3 conjugal
properties of Mr. Ching and his wife.
On the other hand, PBM and Mr. Ching filed a case of injunction against
AIDC with CFI to enjoin the auction sale alleging that petitioners cannot
enforce the judgment against the conjugal partnership levied on the ground
that, among others, the subject loan did not redound to the benefit of the
said conjugal partnership.
After the CA decided of the lifting of the TRO of of the TC, the auction sale
was held with AIDC as the highest bidder.
Acting on the petition for injunction filed by PBC and Mr. Chinf, the TC held
that the sale was null and void.
CA upheld the ruling of the TC.
AIDC in their appeal point out that there is no need to prove that actual
benefit redounded to the benefit of the partnership; all that is necessary,
they say, is that the transaction was entered into for the benefit of the
conjugal partnership. Thus, petitioners aver that:
PERSONS & FAMILY RELATIONS (Case Digests)
3

The wordings of Article 161 of the Civil Code is very
clear: for the partnership to be held liable, the husband
must have contracted the debt for the benefit of the
partnership, thus:
Art. 161. The conjugal partnership shall be liable for:
1) all debts and obligations contracted by the husband
for the benefit of the conjugal partnership x x x.
There is a difference between the phrases: redounded to the
benefit of or benefited from (on the one hand) and for the
benefit of (on the other). The former require that actual benefit
must have been realized; the latter requires only that the
transaction should be one which normally would produce benefit
to the partnership, regardless of whether or not actual benefit
accrued.
Issues: What debts and obligations contracted by the husband alone are
considered for the benefit of the conjugal partnership which are
chargeable against the conjugal partnership?
Is a surety agreement or an accommodation contract entered into by the
husband in favor of his employer within the contemplation of the said
provision?
Held: We do not agree with petitioners that there is a difference between
the terms redounded to the benefit of or benefited from on the one
hand; and for the benefit of on the other. They mean one and the same
thing. Article 161 (1) of the Civil Code and Article 121 (2) of the Family Code
are similarly worded, i.e., both use the term for the benefit of. On the
other hand, Article 122 of the Family Code provides that The payment of
personal debts by the husband or the wife before or during the marriage
shall not be charged to the conjugal partnership except insofar as they
redounded to the benefit of the family. As can be seen, the terms are used
interchangeably.
Petitioners further contend that the ruling of the respondent court runs
counter to the pronouncement of this Court in the case of Cobb-Perezvs.
Lantin, that the husband as head of the family and as administrator of the
conjugal partnership is presumed to have contracted obligations for the
benefit of the family or the conjugal partnership.
Contrary to the contention of the petitioners, the case of Cobb-Perez is not
applicable in the case at bar. This Court has, on several instances,
interpreted the term for the benefit of the conjugal partnership.
In the cases of Javier vs. Osmea, Abella de Diaz vs. Erlanger & Galinger, Inc.,
Cobb-Perez vs. Lantin and G-Tractors, Inc. vs. Court of Appeals, cited by the
petitioners, we held that:
The debts contracted by the husband during the marriage
relation, for and in the exercise of the industry or profession
by which he contributes toward the support of his family,
are not his personal and private debts, and the products or
income from the wifes own property, which, like those of
her husbands, are liable for the payment of the marriage
expenses, cannot be excepted from the payment of such
debts. (Javier)
The husband, as the manager of the partnership (Article
1412, Civil Code), has a right to embark the partnership in
an ordinary commercial enterprise for gain, and the fact
that the wife may not approve of a venture does not make
it a private and personal one of the husband. (Abella de
Diaz)
Debts contracted by the husband for and in the exercise of
the industry or profession by which he contributes to the
support of the family, cannot be deemed to be his exclusive
and private debts. (Cobb-Perez)
x x x if he incurs an indebtedness in the legitimate pursuit
of his career or profession or suffers losses in a legitimate
business, the conjugal partnership must equally bear the
indebtedness and the losses, unless he deliberately acted to
the prejudice of his family. (G-Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila, Fidelity Insurance &
Luzon Insurance Co., Liberty Insurance Corporation vs. Banuelos, and Luzon
Surety Inc. vs. De Garcia, cited by the respondents, we ruled that:
The fruits of the paraphernal property which form part of
the assets of the conjugal partnership, are subject to the
payment of the debts and expenses of the spouses, but not
to the payment of the personal obligations (guaranty
agreements) of the husband, unless it be proved that such
obligations were productive of some benefit to the family.
(Ansaldo; parenthetical phrase ours.)
When there is no showing that the execution of an
indemnity agreement by the husband redounded to the
benefit of his family, the undertaking is not a conjugal debt
but an obligation personal to him. (Liberty Insurance)
In the most categorical language, a conjugal partnership
under Article 161 of the new Civil Code is liable only for such
debts and obligations contracted by the husband for the
benefit of the conjugal partnership. There must be the
requisite showing then of some advantage which clearly
accrued to the welfare of the spouses. 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 husband, therefore, is denied the
power to assume unnecessary and unwarranted risks to the
financial stability of the conjugal partnership. (Luzon
Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we can derive the
following conclusions:
(A) If the husband himself is the principal obligor in the contract, i.e., he
directly received the money and services to be used in or for his own
business or his own profession, that contract falls within the term x x x x
obligations for the benefit of the conjugal partnership. Here, no actual
benefit may be proved. It is enough that the benefit to the family is apparent
at the time of the signing of the contract. From the very nature of the
contract of loan or services, the family stands to benefit from the loan facility
or services to be rendered to the business or profession of the husband. It is
immaterial, if in the end, his business or profession fails or does not
succeed. Simply stated, where the husband contracts obligations on behalf
of the family business, the law presumes, and rightly so, that such
obligation will redound to the benefit of the conjugal partnership.
(B) 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, that
contract cannot, by itself, alone be categorized as falling within the context
of obligations for the benefit of the conjugal partnership. The contract of
loan or services is clearly for the benefit of the principal debtor and not for
the surety or his family. No presumption can be inferred that, when a
husband enters into a contract of surety or accommodation agreement, it is
for the benefit of the conjugal partnership. Proof must be presented to
establish benefit redounding to the conjugal partnership.
Thus, the distinction between the Cobb-Perez case, and we add, that of the
three other companion cases, on the one hand, and that of Ansaldo, Liberty
Insurance and Luzon Surety, is that in the former, the husband contracted
the obligation for his own business; while in the latter, the husband merely
acted as a surety for the loan contracted by another for the latters
business.
The evidence of petitioner indubitably show that co-respondent Alfredo
Ching signed as surety for the P50M loan contracted on behalf of
PBM. Petitioner should have adduced evidence to prove that Alfredo
Chings acting as surety redounded to the benefit of the conjugal
partnership. The reason for this is as lucidly explained by the respondent
court:
The loan procured from respondent-appellant AIDC was
for the advancement and benefit of Philippine Blooming
Mills and not for the benefit of the conjugal partnership of
petitioners-appellees. Philippine Blooming Mills has a
personality distinct and separate from the family of
petitioners-appellees - this despite the fact that the
members of the said family happened to be stockholders
of said corporate entity.
x x x x x x x x x
x x x. 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. In the case at
bar, respondent-appellant AIDC failed to prove that the
debt was contracted by appellee-husband, for the benefit of
the conjugal partnership of gains. What is apparent from
the facts of the case is that the judgment debt was
PERSONS & FAMILY RELATIONS (Case Digests)
4

contracted by or in the name of the Corporation Philippine
Blooming Mills and appellee-husband only signed as surety
thereof. The debt is clearly a corporate debt and
respondent-appellants right of recourse against appellee-
husband as surety is only to the extent of his corporate
stockholdings. It does not extend to the conjugal
partnership of gains of the family of petitioners-
appellees. x x x x x x.
Petitioners contend that no actual benefit need accrue to the conjugal
partnership. To support this contention, they cite Justice J.B.L. Reyes
authoritative opinion in the Luzon Surety Company case:
I concur in the result, but would like to make of record that,
in my opinion, the words all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership used in Article 161 of the Civil Code of the
Philippines in describing the charges and obligations for
which the conjugal partnership is liable do not require that
actual profit or benefit must accrue to the conjugal
partnership from the husbands transaction; but it suffices
that the transaction should be one that normally would
produce such benefit for the partnership. This is the ratio
behind our ruling in Javier vs. Osmea, 34 Phil. 336, that
obligations incurred by the husband in the practice of his
profession are collectible from the conjugal partnership.
The aforequoted concurring opinion agreed with the majority decision that
the conjugal partnership should not be made liable for the surety agreement
which was clearly for the benefit of a third party. Such opinion merely
registered an exception to what may be construed as a sweeping statement
that in all cases actual profit or benefit must accrue to the conjugal
partnership. The opinion merely made it clear that no actual benefits to the
family need be proved in some cases such as in the Javier case. There, the
husband was the principal obligor himself. Thus, said transaction was found
to be one that would normally produce x x x benefit for the partnership. In
the later case of G-Tractors, Inc., the husband was also the principal obligor -
not merely the surety. This latter case, therefore, did not create any
precedent. It did not also supersede the Luzon Surety Company case, nor
any of the previous accommodation contract cases, where this Court ruled
that they were for the benefit of third parties.
But it could be argued, as the petitioner suggests, that even in such kind of
contract of accommodation, a benefit for the family may also result, when
the guarantee is in favor of the husbands employer.
In the case at bar, petitioner claims that the benefits the respondent family
would reasonably anticipate were the following:
(a) The employment of co-respondent Alfredo Ching
would be prolonged and he would be entitled to his monthly
salary ofP20,000.00 for an extended length of time because
of the loan he guaranteed;
(b) The shares of stock of the members of his family would
appreciate if the PBM could be rehabilitated through the
loan obtained;
(c) His prestige in the corporation would be enhanced and
his career would be boosted should PBM survive because of
the loan.
However, these are not the benefits contemplated by Article 161 of the Civil
Code. The benefits must be one directly resulting from the loan. It cannot
merely be a by-product or a spin-off of the loan itself.
In all our decisions involving accommodation contracts of the husband, we
underscored the requirement that: there must be the requisite showing x
x x of some advantage which clearly accrued to the welfare of the spouses
or benefits to his family or that such obligations are productive of some
benefit to the family. Unfortunately, the petition did not present any proof
to show: (a) Whether or not the corporate existence of PBM was prolonged
and for how many months or years; and/or (b) Whether or not the PBM was
saved by the loan and its shares of stock appreciated, if so, how much and
how substantial was the holdings of the Ching family.
Such benefits (prospects of longer employment and probable increase in the
value of stocks) might have been already apparent or could be anticipated at
the time the accommodation agreement was entered into. But would those
benefits qualify the transaction as one of the obligations x x x for the
benefit of the conjugal partnership? Are indirect and remote probable
benefits, the ones referred to in Article 161 of the Civil Code? The Court of
Appeals in denying the motion for reconsideration, disposed of these
questions in the following manner:
No matter how one looks at it, the debt/credit extended by
respondents-appellants is purely a corporate debt granted to
PBM, with petitioner-appellee-husband merely signing as
surety. While such petitioner-appellee-husband, as such
surety, is solidarily liable with the principal debtor AIDC, such
liability under the Civil Code provisions is specifically
restricted by Article 122 (par. 1) of the Family Code, so that
debts for which the husband is liable may not be charged
against conjugal partnership properties. Article 122 of the
Family Code is explicit The payment of personal debts
contracted by the husband or the wife before or during the
marriage shall not be charged to the conjugal partnership
except insofar as they redounded to the benefit of the
family.
Respondents-appellants insist that the corporate debt in
question falls under the exception laid down in said Article
122 (par. one). We do not agree. The loan procured from
respondent-appellant AIDC was for the sole advancement
and benefit of Philippine Blooming Mills and not for the
benefit of the conjugal partnership of petitioners-appellees.
x x x appellee-husband derives salaries, dividends benefits
from Philippine Blooming Mills (the debtor corporation),
only because said husband is an employee of said
PBM. These salaries and benefits, are not the benefits
contemplated by Articles 121 and 122 of the Family
Code. The benefits contemplated by the exception in
Article 122 (Family Code) is that benefit derived directly from
the use of the loan. In the case at bar, the loan is a corporate
loan extended to PBM and used by PBM itself, not by
petitioner-appellee-husband or his family. The alleged
benefit, if any, continuously harped by respondents-
appellants, are not only incidental but also speculative.
[19]

We agree with the respondent court. Indeed, considering the odds
involved in guaranteeing a large amount (P50,000,000.00) of loan, the
probable prolongation of employment in PBM and increase in value of its
stocks, would be too small to qualify the transaction as one for the benefit
of the suretys family. Verily, no one could say, with a degree of certainty,
that the said contract is even productive of some benefits to the conjugal
partnership.
We likewise agree with the respondent court (and this view is not
contested by the petitioners) that the provisions of the Family Code is
applicable in this case. These provisions highlight the underlying concern of
the law for the conservation of the conjugal partnership; for the husbands
duty to protect and safeguard, if not augment, not to dissipate it.
This is the underlying reason why the Family Code clarifies that the
obligations entered into by one of the spouses must be those that
redounded to the benefit of the family and that the measure of the
partnerships liability is to the extent that the family is benefited.
[20]

These are all in keeping with the spirit and intent of the other
provisions of the Civil Code which prohibits any of the spouses to donate or
convey gratuitously any part of the conjugal property.
[21]
Thus, when co-
respondent Alfredo Ching entered into a surety agreement he, from then on,
definitely put in peril the conjugal property (in this case, including the family
home) and placed it in danger of being taken gratuitously as in cases of
donation.
In the second assignment of error, the petitioner advances the view
that acting as surety is part of the business or profession of the respondent-
husband.
This theory is new as it is novel.
The respondent court correctly observed that:
Signing as a surety is certainly not an exercise of an
industry or profession, hence the cited cases of Cobb-Perez
vs. Lantin; Abella de Diaz vs. Erlanger & Galinger; G-
Tractors, Inc. vs. CA do not apply in the instant
case. Signing as a surety is not embarking in a business.
We are likewise of the view that no matter how often an executive acted or
was persuaded to act, as a surety for his own employer, this should not be
taken to mean that he had thereby embarked in the business of suretyship
or guaranty.
This is not to say, however, that we are unaware that executives are
often asked to stand as surety for their companys loan obligations. This is
especially true if the corporate officials have sufficient property of their own;
otherwise, their spouses signatures are required in order to bind the
conjugal partnerships.
PERSONS & FAMILY RELATIONS (Case Digests)
5

The fact that on several occasions the lending institutions did not
require the signature of the wife and the husband signed alone does not
mean that being a surety became part of his profession. Neither could he
be presumed to have acted for the conjugal partnrship.
Article 121, paragraph 3, of the Family Code is emphatic that the
payment of personal debts contracted by the husband or the wife before or
during the marriage shall not be charged to the conjugal partnership except
to the extent that they redounded to the benefit of the family.
Here, the property in dispute also involves the family home. The loan
is a corporate loan not a personal one. Signing as a surety is certainly not
an exercise of an industry or profession nor an act of administration for the
benefit of the family.
On the basis of the facts, the rules, the law and equity, the assailed
decision should be upheld as we now uphold it. This is, of course, without
prejudice to petitioners right to enforce the obligation in its favor against
the PBM receiver in accordance with the rehabilitation program and
payment schedule approved or to be approved by the Securities & Exchange
Commission.
CHING v. CA
Facts: Philippine Blooming Mills Company Inc. obtained a loan from Allied
Banking Corp. As added security for the said loan, Alfredo Ching, together
with Emilio Taedo 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 the. Thereafter, PBMCI then
obtained another loan from ABC However, PBMCI defaulted in the payment
of the loans, prompting ABC to institute a foreclosure.
ABC then filed a case against PBMCI along with the 3 who bound themselves
as sureties.
The RTC at first denied the petition of ABC. However, due to a motion for
reconsideration, the RTC granted the petition of ABC. A writ of preliminary
attachment was then issued.
Thereafter, the 100K shares of stock of Ching were levied by the sheriff.
Thereafter, 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. Furthermore, the
indebtedness covered by the continuing guaranty/comprehensive
suretyship contract executed by petitioner Alfredo Ching for the account of
PBMCI did not redound to the benefit of the conjugal partnership. She,
likewise, alleged that being the wife of Alfredo Ching, she was a third-party
claimant entitled to file a motion for the release of the properties. She
attached therewith a copy of her marriage contract with Alfredo Ching.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence
her marriage contract to Alfredo Ching to prove that they were married on
January 8, 1960; the articles of incorporation of Citycorp Investment
Philippines dated May 14, 1979; and, the General Information Sheet of the
corporation showing that petitioner Alfredo Ching was a member of the
Board of Directors of the said corporation and was one of its top twenty
stockholders.
TC lifted its order for the writ of preliminary attachment.
CA reversed the ruling of the TC.
Issue: 1-) W/N the petitioner-wife has the right to file the motion to quash
the levy on attachment on the 100,000 shares of stocks in the Citycorp
Investment Philippines.
2-) W/N the CA erred when it reversed the ruling of the RTC.
Held: 1-) Yes. the sheriff may attach only those properties of the defendant
against whom a writ of attachment has been issued by the court. When the
sheriff erroneously levies on attachment and seizes the property of a third
person in which the said defendant holds no right or interest, the superior
authority of the court which has authorized the execution may be invoked
by the aggrieved third person in the same case. Upon application of the
third person, the court shall order a summary hearing for the purpose of
determining whether the sheriff has acted rightly or wrongly in the
performance of his duties in the execution of the writ of attachment, more
specifically if he has indeed levied on attachment and taken hold of property
not belonging to the plaintiff. If so, the court may then order the sheriff to
release the property from the erroneous levy and to return the same to the
third person. In resolving the motion of the third party, the court does not
and cannot pass upon the question of the title to the property with any
character of finality. It can treat the matter only insofar as may be necessary
to decide if the sheriff has acted correctly or not. If the claimants proof does
not persuade the court of the validity of the title, or right of possession
thereto, the claim will be denied by the court. The aggrieved third party may
also avail himself of the remedy of "terceria" by executing an affidavit of his
title or right of possession over the property levied on attachment and
serving the same to the office making the levy and the adverse party. Such
party may also file an action to nullify the levy with damages resulting from
the unlawful levy and seizure, which should be a totally separate and distinct
action from the former case. The above-mentioned remedies are cumulative
and any one of them may be resorted to by one third-party claimant without
availing of the other remedies.
In this case, the petitioner-wife filed her motion to set aside the levy on
attachment of the 100,000 shares of stocks in the name of petitioner-
husband claiming that the said shares of stocks were conjugal in nature;
hence, not liable for the account of her husband under his continuing
guaranty and suretyship agreement with the PBMCI. The petitioner-wife
had the right to file the motion for said relief.
2-) 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. In Tan v. Court of Appeals, we held that it is not even
necessary to prove that the properties were acquired with funds of the
partnership. 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. The presumption of the conjugal nature of the
properties acquired during the marriage subsists in the absence of clear,
satisfactory and convincing evidence to overcome the same.
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. The private
respondents reliance on the rulings of this Court in Maramba v. Lozano and
Associated Insurance & Surety Co., Inc. v. Banzon is misplaced. In the
Maramba case, we held that where there is no showing as to when the
property was acquired, the fact that the title is in the wifes name alone is
determinative of the ownership of the property. The principle was
reiterated in the Associated Insurance case where the uncontroverted
evidence showed that the shares of stocks were acquired during the
marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this
Court in Wong v. Intermediate Appellate Court buttresses the case for the
petitioners. In that case, we ruled that he who claims that property acquired
by the spouses during their marriage is not conjugal partnership property
but belongs to one of them as his personal property is burdened to prove
the source of the money utilized to purchase the same. In this case, the
private respondent claimed that the petitioner-husband acquired the shares
of stocks from the Citycorp Investment Philippines in his own name as the
owner thereof. It was, thus, the burden of the private respondent to prove
that the source of the money utilized in the acquisition of the shares of
stocks was that of the petitioner-husband alone. As held by the trial court,
the private respondent failed to adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty
and suretyship agreement with the private respondent for the payment of
the PBMCI loans, the petitioner-husband was in the exercise of his
profession, pursuing a legitimate business. The appellate court erred in
concluding that the conjugal partnership is liable for the said account of
PBMCI under Article 161(1) of the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3] of the Family
Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
PERSONS & FAMILY RELATIONS (Case Digests)
6

(1) All debts and obligations contracted by the husband for the benefit of
the conjugal partnership, and those contracted by the wife, also for the
same purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship
agreement as security for the payment of the loan obtained by the PBMCI
from the private respondent in the amount of P38,000,000. In Ayala
Investment and Development Corp. v. Court of Appeals, this Court ruled
"that the signing as surety is certainly not an exercise of an industry or
profession. It is not embarking in a business. No matter how often an
executive acted on or was persuaded to act as surety for his own employer,
this should not be taken to mean that he thereby embarked in the business
of suretyship or guaranty."
For the conjugal partnership to be liable for a liability that should appertain
to the 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 alone to one of the spouses
is to frustrate the objective of the New Civil Code to show the 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-husbands
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.
It could be argued that the petitioner-husband was a member of the Board of
Directors of PBMCI and was one of its top twenty stockholders, and that the
shares of stocks of the petitioner-husband and his family would appreciate if
the PBMCI could be rehabilitated through the loans obtained; that the
petitioner-husbands career would be enhanced should PBMCI survive
because of the infusion of fresh capital. However, these are not the benefits
contemplated by Article 161 of the New Civil Code. The benefits must be
those DIRECTLY resulting from the loan. They cannot merely be a by-
product or a spin-off of the loan itself.
This is different from the situation where the husband borrows money or
receives services to be used for his own business or profession. In the Ayala
case, we ruled that it is such a contract that is one within the term
"obligation for the benefit of the conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he
directly received the money and services to be used in or for his own
business or his own profession, that contract falls within the term "
obligations for the benefit of the conjugal partnership." Here, no actual
benefit may be proved. It is enough that the benefit to the family is
apparent at the time of the signing of the contract. From the very nature of
the contract of loan or services, the family stands to benefit from the loan
facility or services to be rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or profession fails or
does not succeed. Simply stated, where the husband contracts obligations
on behalf of the family business, the law presumes, and rightly so, that
such obligation will redound to the benefit of the conjugal partnership.
The Court held in the same case that the rulings of the Court in Cobb-Perez
and G-Tractors, Inc. are not controlling because the husband, in those cases,
contracted the obligation for his own business. In this case, the petitioner-
husband acted merely as a surety for the loan contracted by the PBMCI from
the private respondent.
FRANCISCO v. GONZALES
Facts: The Francisco spouses obtained a decree of nullity of their marriage.
After such their properties were automatically dissolved and they made a
compromise agreement in favor of their 2 children. In the stipulation of the
compromise agreement, it stated that , Title and ownership of the conjugal
property consisting of a house and lot located in Ayala Alabang, Muntinlupa,
Metro Manila shall be transferred by way of a deed of donation
to Cleodia and Ceamantha, as co-owners, when they reach nineteen (19) and
eighteen (18) years old, respectively, subject to the following conditions:

The property subject of the compromise agreement is the property that is
the subject of this case. Accordingly, such property was named after the
Francisco spouses, naming them both as husband and wife.

However, one day, the Gonzales spouses filed an unlawful detainer case with
preliminary attachment against Michelle and her live-in partner Matrai. They
were ordered to vacate the leased premises and to pay their unpaid rents
and bills.

Pending appeal tp the RTC of the decision of the MTC, notice of sale by
execution was then issued by the sheriff covering the real property (the
donated property) in the name of Cleodualdo M. Francisco, married to
Michele U. Francisco.

After knowing such, the grandmother of the 2 children, acting as their
guardian, filed with the RTC a third party claim to stop the execution. This
was however deined by the RTC.

The CA sustained the ruling of the RTC.

The petitioners argue that: (1) they are the rightful owners of the property as
the Partial Decision issued by the RTC of Makati in Civil Case No. 93-2289 had
already become final; (2) their parents already waived in their favor their
rights over the property; (3) the adjudged obligation of Michele in
the ejectment case did not redound to the benefit of the family; (4) Michele's
obligation is a joint obligation between her and Matrai, not joint
and solidary.

Issue: W/N the subject property should be attached in the execution sale.


Held: The Court finds that it was grave error for the RTC to proceed with the
execution, levy and sale of the subject property. The power of the court in
executing judgments extends only to properties unquestionably belonging
to the judgment debtor alone, in the present case to those belonging to
Michele and Matrai. One man's goods shall not be sold for another man's
debts.
To begin with, the RTC should not have ignored that TCT No.
167907 is in the name of Cleodualdo M. Francisco, married to Michele U.
Francisco. On its face, the title shows that the registered owner of the
property is not Matrai and Michele but Cleodualdo, married to
Michele. This describes the civil status of Cleodualdo at the time the
property was acquired.

Records show that Cleodualdo and Michele were married on June 12,
1986, prior to the effectivity of the Family Code onAugust 3, 1988. As such,
their property relations are governed by the Civil Code on conjugal
partnership of gains.
The CA acknowledged that ownership of the subject property
is conjugal in nature; however, it ruled that since Michele's obligation was
not proven to be a personal debt, it must be inferred that it is conjugal and
redounded to the benefit of the family, and hence, the property may be held
answerable for it.
The Court does not agree.
A wife may bind the conjugal partnership only when she purchases
things necessary for the support of the family, or when she borrows money
for that purpose upon her husband's failure to deliver the needed sum;
when administration of the conjugal partnership is transferred to the wife
by the courts or by the husband; or when the wife gives moderate
donations for charity. Failure to establish any of these circumstances means
that the conjugal asset may not be bound to answer for the wife's personal
obligation. Considering that the foregoing circumstances are evidently not
present in this case as the liability incurred by Michele arose from a
judgment rendered in an unlawful detainer case against her and her
partner Matrai.
Furthermore, even prior to the issuance of the Notice of Levy on
Execution on November 28, 2001, there was already annotated on the title
the following inscription:

Entry No. 23341-42/T-167907 Nullification of
Marriage
By order of the Court RTC, NCR, Branch
144, Makati City dated July 4, 2001, which become
final and executory on October 18, 2001declaring the
Marriage Contract between
Michelle Uriarte and Cleodualdo M. Francisco, Jr. is
null & void ab initio and title of ownership of the
conjugal property consisting of the above-described
property shall be transferred by way of a Deed of
Donation to Cleodia Michaela U. Francisco
and Ceamantha Maica U. Francisco, as co-owners
when they reach nineteen (19) and eighteen (18) yrs.
PERSONS & FAMILY RELATIONS (Case Digests)
7

old to the condition that Cleodualdo, shall
retain usufructuary rights over the property until he
reaches the age of 65 yrs. Old.
Date of instrument Oct 18, 2001
Date of inscription Oct 22, 2001.
[22]


This annotation should have put the RTC and the sheriff on guard, and they
should not have proceeded with the execution of the judgment debt of
Michele and Matrai.
While the trial court has the competence to identify and to secure
properties and interest therein held by the judgment debtor for the
satisfaction of a money judgment rendered against him, such exercise of its
authority is premised on one important fact: that the properties levied upon,
or sought to be levied upon, are properties unquestionably owned by the
judgment debtor and are not exempt by law from execution. Also, a sheriff
is not authorized to attach or levy on property not belonging to the
judgment debtor, and even incurs liability if he wrongfully levies upon the
property of a third person. A sheriff has no authority to attach the
property of any person under execution except that of the judgment
debtor.

It should be noted that the judgment debt for which the subject
property was being made to answer was incurred by Michele and her
partner, Matrai. Respondents allege that the lease of the property in Lanka
Drive redounded to the benefit of the family. By no stretch of one's
imagination can it be concluded that said debt/obligation was incurred for
the benefit of the conjugal partnership or that some advantage accrued to
the welfare of the family. In BA Finance Corporation v. Court of Appeals, the
Court ruled that the petitioner cannot enforce the obligation contracted
by Augusto Yulo against his conjugal properties with respondent
Lily Yulo because it was not established that the obligation contracted by the
husband redounded to the benefit of the conjugal partnership under Article
161 of the Civil Code. The Court stated:
In the present case, the obligation which the
petitioner is seeking to enforce against the conjugal
property managed by the private respondent
Lily Yulo was undoubtedly contracted
by Augusto Yulo for his own benefit because at the
time he incurred the obligation he had already
abandoned his family and had left their conjugal home.
Worse, he made it appear that he was duly authorized
by his wife in behalf of A & L Industries, to procure
such loan from the petitioner. Clearly, to make A & L
Industries liable now for the said loan would be unjust
and contrary to the express provision of the Civil Code.
(Emphasis supplied)
Similarly in this case, Michele, who was then already living separately
from Cleodualdo, rented the house in Lanka Drive for her and Matrais own
benefit. In fact, when they entered into the lease agreement, Michele
and Matrai purported themselves to be husband and wife. Respondents
bare allegation that petitioners lived with Michele on the leased property is
not sufficient to support the conclusion that the judgment debt against
Michele and Matrai in the ejectment suit redounded to the benefit of the
family of Michele and Cleodualdo and petitioners. Thus, in Homeowners
Savings and Loan Bank v. Dailo, the Court stated thus:

x x x Ei incumbit probatio qui dicit, non
qui negat (he who asserts, not he who denies, must
prove). Petitioners sweeping conclusion that the loan
obtained by the late Marcelino Dailo, Jr. 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. Other than petitioners bare allegation, there is
nothing from the records of the case to compel a
finding that, indeed, the loan obtained by the
late Marcelino Dailo, Jr. redounded to the benefit of
the family. Consequently, the conjugal partnership
cannot be held liable for the payment of the principal
obligation.
To hold the property in Taal St. liable for the obligations of Michele
and Matrai would be going against the spirit and avowed objective of the
Civil Code to give the utmost concern for the solidarity and well-being of
the family as a unit.
In justifying the levy against the property, the RTC went over the
Compromise Agreement as embodied in the Partial Decision
dated November 29, 2000. Oddly, the RTC ruled that there was no effective
transfer of ownership to the siblings Cleodia andCeamantha Francisco. In the
same breath, the RTC astonishingly ruled that Michele is now the owner of
the property inasmuch asCleodualdo already waived his rights over the
property. The Compromise Agreement must not be read piece-meal but in
its entirety. It is provided therein, thus:

7. In their desire to manifest their genuine
concern for their
children, Cleodia and Ceamantha, Cleodualdo and
Michelle have voluntarily agreed to herein set forth
their obligations, rights and responsibilities on matters
relating to their children's support, custody, visitation,
as well as to the dissolution of their conjugal
partnership of gains as follows:

(a) Title and ownership of the conjugal property
consisting of a house and lot located in
Ayala Alabang,Muntinlupa, Metro Manila shall be
transferred by way of a deed of donation
to Cleodia and Ceamantha, as co-owners, when they
reach nineteen (19) and eighteen (18) years old,
respectively, subject to the following conditions:

a.1. Cleodualdo shall retain usufructuary rights over
the property until he reaches the age of 65 years old,
with the following rights and responsibilities:

x x x x
[32]
(Emphasis supplied)

From the foregoing, it is clear that both Michele and Cleodualdo have
waived their title to and ownership of the house and lot in Taal St. in favor
of petitioners. The property should not have been levied and sold at
execution sale, for lack of legal basis.

BUADO v. NICOL
CONJUGAL PARTNERSHIP OF GAINS IS NOT LIABLE FOR THE CIVIL LIABILITY
OF THE OTHER SPOUSE, UNLESS IT REDOUNDED TO THE BENEFIT OF THE
FAMILY
Facts: Spouses Buado filed a case of slander by deed to Nicol. They want to
exact from Nicol civil liability arising from the criminal offense of slander.

The RTC, CA ans SC ruled in finality that Nicol should pay Buados the
corresponding civil liability.

Finding Erlinda Nicols personal properties insufficient to satisfy the
judgment, the Deputy Sheriff issued a notice of levy on real property on
execution addressed to the Register of Deeds of Cavite. The notice of levy
was annotated on the TCT.

The sheriffs sale was issued, with the Buado spouses as the highest bidders.

Almost a year later, Romulo Nicol (respondent), the husband of Erlinda Nicol,
filed a complaint for annulment of certificate of sale and damages with
preliminary injunction against petitioners and the deputy sheriff.
Respondent, as plaintiff therein, alleged that the defendants, now
petitioners, connived and directly levied upon and execute his real property
without exhausting the personal properties of Erlinda Nicol. Respondent
averred that there was no proper publication and posting of the notice of
sale. Furthermore, respondent claimed that his property which was valued
at P500,000.00 was only sold at a "very low price" of P51,685.00, whereas
the judgment obligation of Erlinda Nicol was only P40,000.00.

The RTC ruled that it lack jurisdiction to try the case.

The CA reversed the ruling of the RTC and remanded the case back to the
RTC.

Petitioners argue that the obligation of the wife arising from her criminal
liability is chargeable to the conjugal partnership.

Issue: W/N the the obligation of the wife arising from her criminal liability is
chargeable to the conjugal partnership.

Held: No. There is no dispute that contested property is conjugal in nature.
Article 122 of the Family Code explicitly provides that payment of personal
debts contracted by the husband or the wife before or during the marriage
shall not be charged to the conjugal partnership except insofar as they
redounded to the benefit of the family.
PERSONS & FAMILY RELATIONS (Case Digests)
8

Unlike in the system of absolute community where liabilities incurred by
either spouse by reason of a crime orquasi-delict is chargeable to the
absolute community of property, in the absence or insufficiency of the
exclusive property of the debtor-spouse, the same advantage is not
accorded in the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments for the liability
of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be concluded that the
civil obligation arising from the crime of slander committed by Erlinda
redounded to the benefit of the conjugal partnership.
To reiterate, conjugal property cannot be held liable for the personal
obligation contracted by one spouse, unless some advantage or benefit is
shown to have accrued to the conjugal partnership.
In Guadalupe v. Tronco, this Court held that the car which was claimed by the
third party complainant to be conjugal property was being levied upon to
enforce "a judgment for support" filed by a third person, the third-party
claim of the wife is proper since the obligation which is personal to the
husband is chargeable not on the conjugal property but on his separate
property.
PANA v. HEIRS OF JUANITE
MARRIAGE HERE IS SOLEMNIZE UNDER THE CC, CPG GOEVRNS. CPG WILL
NOT CONVERT TO ACP AFTER THE EFFECTIVITY OF THE FC, OR ELSE, THIS
WILL RESULT TO THE IMPAIRMENT OF VESTED RIGHTS
Facts: Pana spouses and others were accused of the crime of murder. Efren
(husband) was acquitted due to insufficiency of evidence, however Melecia
(wife) and others were convicted. The TC held that they should pay the heirs
the corresponding civil liability.
The SC upheld the conviction of both accused but modified the penalty to
reclusion perpetua. With respect to the monetary awards, the Court also
affirmed the award of civil indemnity and moral damages but deleted the
award for actual damages for lack of evidentiary basis. In its place, however,
the Court made an award of P15,000.00 each by way of temperate damages.
In addition, the Court awarded P50,000.00 exemplary damages per victim to
be paid solidarily by them. The decision became final and executory.
The RTC then issued a notice of execution on the properties of the spouses.
However, petitioner Efren and his wife Melecia filed a motion to quash the
writ of execution, claiming that the levied properties were conjugal assets,
not paraphernal assets of Melecia. On September 16, 2002 the RTC denied
the motion. The spouses moved for reconsideration but the RTC denied the
same.
The CA denied Efrens petition for certiorari.
Issue: W/N the conjugal properties of Efren and Melecia may be held to
answer for the civil liabilities imposed on Melecia in the murder case.
Held: Its Article 122 provides:
Art. 122. The payment of personal debts contracted by the husband or the
wife before or during the marriage shall not be charged to the conjugal
properties partnership except insofar as they redounded to the benefit of the
family.
Neither shall the fines and pecuniary indemnities imposed upon them be
charged to the partnership.
However, the payment of personal debts contracted by either spouse
before the marriage, that of fines and indemnities imposed upon them, as
well as the support of illegitimate children of either spouse, may be
enforced against the partnership assets after the responsibilities
enumerated in the preceding Article have been covered, if the spouse who
is bound should have no exclusive property or if it should be insufficient; but
at the time of the liquidation of the partnership, such spouse shall be
charged for what has been paid for the purpose above-mentioned.
Since Efren does not dispute the RTCs finding that Melecia has no exclusive
property of her own, the above applies. The civil indemnity that the decision
in the murder case imposed on her may be enforced against their conjugal
assets after the responsibilities enumerated in Article 121 of the Family Code
have been covered.
25
Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and the
legitimate children of either spouse; however, the support of
illegitimate children shall be governed by the provisions of this
Code on Support;
(2) All debts and obligations contracted during the marriage by
the designated administrator-spouse for the benefit of the
conjugal partnership of gains, or by both spouses or by one of
them with the consent of the other;
(3) Debts and obligations contracted by either spouse without the
consent of the other to the extent that the family may have
benefited;
(4) All taxes, liens, charges, and expenses, including major or
minor repairs upon the conjugal partnership property;
(5) All taxes and expenses for mere preservation made during the
marriage upon the separate property of either spouse;
(6) Expenses to enable either spouse to commence or complete a
professional, vocational, or other activity for self-improvement;
(7) Antenuptial debts of either spouse insofar as they have
redounded to the benefit of the family;
(8) The value of what is donated or promised by both spouses in
favor of their common legitimate children for the exclusive
purpose of commencing or completing a professional or
vocational course or other activity for self-improvement; and
(9) Expenses of litigation between the spouses unless the suit is
found to be groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the
spouses shall be solidarily liable for the unpaid balance with their separate
properties.1wphi1
Contrary to Efrens contention, Article 121 above allows payment of the
criminal indemnities imposed on his wife, Melecia, out of the partnership
assets even before these are liquidated. Indeed, it states that such
indemnities "may be enforced against the partnership assets after the
responsibilities enumerated in the preceding article have been
covered."[26] No prior liquidation of those assets is required. This is not
altogether unfair since Article 122 states that "at the time of liquidation of
the partnership, such [offending] spouse shall be charged for what has been
paid for the purposes above-mentioned."