BA Finance vs CA GR No.

61464 May 28, 1998

FACTS: On July 1, 1975, private respondent 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
representative of the A & L Industries. Respondent Yulo presented an alleged special power of
attorney executed by his wife, respondent Lily Yulo, who manages A & L Industries and under
whose name the said business is registered, purportedly authorizing Augusto Yulo to procure the
loan and sign the promissory note. About two months prior to the loan, however, Augusto Yulo
had already left Lily Yulo and their children and had abandoned their conjugal home. When the
obligation became due and demandable, Augusto Yulo failed to pay the same. By virtue of a trial
court order, petitioner caused the attachment of the properties of A& L Industries. RTC dismissed
the petition. CA affirmed RTCs decision.
ISSUE: WON A&L Industries could be held liable for the obligations contracted by Augusto
Yulo, as administrator of the partnership.
RULING: No. There is no dispute that A & L Industries was established during the marriage of
Augusta and Lily Yulo and therefore the same is presumed conjugal and the fact that it was
registered in the name of only one of the spouses does not destroy its conjugal nature. However,
for the said property to be held liable, the obligation contracted by the husband must have
redounded to the benefit of the conjugal partnership under Article 161 of the Civil Code. 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.
BPI vs Posadas 56 Phil 215
FACTS: The estate of Adolphe Oscar Schuetze is the sole beneficiary named in the life-insurance
policy for $10,000, issued by the Sun Life Assurance Company of Canada on January 14, 1913.
During the following five years the insured paid the premiums at the Manila branch of the
company, and in 1918 the policy was transferred to the London branch. The record shows that
the deceased Adolphe Oscar Schuetze married the plaintiff-appellant Rosario Gelano on January
16, 1914. Bank of the Philippine Islands, was appointed administrator of the late Adolphe Oscar
Schuetze's testamentary estate by an order dated March 24, 1928, entered by the Court of First
Instance of Manila. On July 13, 1928, the Sun Life Assurance Company of Canada, whose main
office is in Montreal, Canada, paid Rosario Gelano Vda. de Schuetze upon her arrival at Manila,
the sum of P20,150, which was the amount of the insurance policy on the life of said deceased,
payable to the latter's estate. On the same date Rosario Gelano Vda. de Schuetze delivered the
money to said Bank of the Philippine Islands, as administrator of the deceased's estate, which
entered it in the inventory of the testamentary estate, and then returned the money to said
widow. The present complaint seeks to recover from the defendant Juan Posadas, Jr., Collector
of Internal Revenue, the amount of P1,209 paid by the plaintiff under protest, in its capacity of
administrator of the estate of the late Adolphe Oscar Schuetze, as inheritance tax upon the sum of
P20,150, which is the amount of an insurance policy on the deceased's life, wherein his own
estate was named the beneficiary.
ISSUE: WON the proceeds of a life-insurance policy is subject to inheritance tax.
RULING: By virtue of the foregoing, we are of opinion and so hold: (1) That the proceeds of a
life-insurance policy payable to the insured's estate, on which the premiums were paid by the
conjugal partnership, constitute community property, and belong one-half to the husband and the

other half to the wife, exclusively; (2) that if the premiums were paid partly with paraphernal and
partly conjugal funds, the proceeds are likewise in like proportion paraphernal in part and
conjugal in part; and (3) that the proceeds of a life-insurance policy payable to the insured's
estate as the beneficiary, if delivered to the testamentary administrator of the former as part of
the assets of said estate under probate administration, are subject to the inheritance tax according
to the law on the matter, if they belong to the assured exclusively, and it is immaterial that the
insured was domiciled in these Islands or outside.
CA decision is reversed. Defendant is ordered to return of the tax collected upon the
amount of P20,150, being the proceeds of the insurance policy on the life of the late Adolphe
Oscar Schuetze, after deducting the proportional part corresponding to the first premium.
Ayala Investments cs CA GR No. 118305 February 12, 1998
FACTS: Philippine Blooming Mills (hereinafter referred to as PBM) obtained a P50,300,000.00
loan from petitioner Ayala Investment and Development Corporation (hereinafter referred to as
AIDC). As added security for the credit line extended to PBM, respondent Alfredo Ching,
Executive Vice President of PBM, executed security agreements on December 10, 1980 and on
March 20, 1981 making himself jointly and severally answerable with PBMs indebtedness to
AIDC. PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a case for sum of money
against PBM and respondent-husband Alfredo Ching with the then CFI of Rizal entitled Ayala
Investment and Development Corporation vs. Philippine Blooming Mills and Alfredo Ching,
ISSUE: Is a surety agreement or an accommodation contract entered into by the husband in
favor of his employer considered for the benefit of the family, thus chargeable to the conjugal
property?
RULING: (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.
Petition denied.