Mariano v CA

FACTS:The proceedings at bar concern (1) an attempt by a married man to prevent execution against conjugal property of a judgment rendered against his wife, for obligations incurred by the latter while engaged in a business that had admittedly redounded to the benefit of the family, and (2) the interference by a court with the proceedings on execution of a co-equal or coordinate court. Both acts being proscribed by law, correction is called for and will hereby be effected.

The proceedings originated from a suit filed by Esther Sanchez against Lourdes Mariano in the Court of First Instance at Caloocan City, for recovery of the value of ladies’ ready made dresses allegedly purchased by and delivered to the latter.

Daniel Sanchez, Esther’s husband, now made his move. He filed a complaint for annulment of the execution in the Court of First Instance at Quezon City in his capacity as administrator of the conjugal partnership. He alleged that the conjugal assets could not validly be made to answer for obligations exclusively contracted by his wife, and that, moreover, some of the personal property levied on, such as household appliances and utensils necessarily used in the conjugal dwelling, were exempt from execution.

ISSUE: WON the claim that property levied on in execution of a judgment is not property of the judgment debtor, Daniel Sanchez’s wife, but of the conjugal partnership of the Sanchez Spouses

HELD:In the case at bar, the husband of the judgment debtor cannot be deemed a “stranger” to the case

prosecuted and adjudged against his wife. In any case, whether by intervention in the court issuing the writ, or by separate action, it is unavailing for either Esther Sanchez or her husband, Daniel, to seek preclusion of the enforcement of the writ of possession against their conjugal assets. For it being established, as aforestated, that Esther had engaged in business with her husband’s consent, and the income derived therefrom had been expended, in part at least, for the support of her family, the liability of the conjugal assets to respond for the wife’s obligations in the premises cannot be disputed.

Ayala v CA

AYALA INVESTMENT & DEVT CORP. And ABELARDO MAGSAJO v. CA and SPOUSES CHINGFebruary 12, 1998 (286 SCRA 272)

FACTS:Philippine Blooming Mills (PBM) obtained P50,300,000.00 loan from petitioner Ayala Investment and Development Corporation (AIDC). Respondent Alfredo Ching, EVP of PBM, executed security agreements on December 1980 and March 1981 making him jointly and severally answerable with PBM’s indebtedness to AIDC. PBM failed to pay the loan hence filing of complaint against PBM and Ching. The RTC rendered judgment ordering PBM and Ching to jointly and severally pay AIDC the principal amount with interests. Pending the appeal of the judgment, RTC issued writ of execution. Thereafter, Magsajo, appointed deputy sheriff, caused the issuance and service upon respondent spouses of the notice of sheriff sale on 3 of their conjugal properties on May 1982. Respondent spouses filed injunction against petitioners on the ground that subject loan did not redound to the benefit of the said

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conjugal partnership. CA issued a TRP enjoining lower court from enforcing its order paving way for the scheduled auction sale of respondent spouses conjugal properties. A certificate of sale was issued to AIDC, being the only bidder and was registered on July 1982.

ISSUE: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?

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 partnershipIs a surety agreement or an accommodation contract entered into by the husband in favor of his employer within the contemplation of the said provision?

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.Alfredo Ching signed as surety for the P50M loan contracted on behalf of PBM. petitioner should have adduced evidence to prove that Alfredo Ching’s acting as surety redounded to the benefit of the conjugal partnership.

The petitioners claim that the benefits were: employment of Ching would be prolonged, his shares would appreciate, and it would enhance his career. 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 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.

Signing as a surety is certainly not an exercise of an industry or profession . The court 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.

*We do not agree with petitioners that there is a difference between

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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.

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Ching v CA

FACTS:The Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of P9,000,000 from the Allied Banking Corporation (ABC). By virtue of this loan, the PBMCI, through its Executive Vice-President Alfredo Ching, executed a promissory note for the said amount promising to pay on December 22, 1978 at an interest rate of 14% per annum. 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, on August 21, 1981, the ABC filed a complaint for sum of money with prayer for a writ of preliminary attachment against the PBMCI to collect the P12,612,972.88 exclusive of interests, penalties and other bank charges. Impleaded as co-defendants in the complaint were Alfredo Ching, Emilio Tañedo and Chung Kiat Hua in their capacity as sureties of the PBMCI. 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 the 100,000 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.

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. The petitioner-spouses aver that the source of funds in the acquisition of the levied shares of stocks is not the controlling factor when invoking the presumption of the conjugal nature of stocks under Art. 160 and that such presumption subsists even if the property is registered only in the name of one of the spouses, in this case, petitioner Alfredo Ching. According to the petitioners, the suretyship obligation was not contracted in the pursuit of the petitioner-husband's profession or business. And where conjugal assets are attached in a collection suit on an obligation contracted by the husband, the wife should exhaust her motion to quash in the main case and not file a separate suit. Furthermore, the petitioners contend that under Art. 125 of the Family Code, the petitioner-husband's gratuitous suretyship is null and void ab initio, and that the share of one of the spouses in the conjugal partnership remains inchoate until the dissolution and liquidation of the partnership. The trial court initially granted the lifting of the preliminary attachment but on appeal, the decision was reversed, the appellate court holding that petitioner Encarnacion Ching was not a proper party to the action and that even if she possessed such right, her action was already barred by laches. The appellate court also ruled that the presumption under Art. 160 was inapplicable in the present case,

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when petitioner-spouses failed to prove the source of the money used to acquire the shares of stock. Hence this present petition.

ISSUES: 1.Do the 100,000 shares of stock in the name of Alfredo Ching belong to the conjugalpartnership?2.Is the conjugal partnership liable for the payment of the liability?

HELD:1. 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.

2. NO.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-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.

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Homeowners v. Dalio

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:

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.

2. WON THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE MARCELINO DAILO, JR.

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THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE FAMILY.

HELD: the petition is denied.

1. 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

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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. 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.

NOTES:

In addition, a perusal of the records of the case reveals that during the trial, petitioner vigorously asserted that the subject property was the exclusive property of the late Marcelino Dailo, Jr. Nowhere in the

answer filed with the trial court was it alleged that the proceeds of the loan redounded to the benefit of the family. Even on appeal, petitioner never claimed that the family benefited from the proceeds of the loan. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. A party may change his legal theory on appeal only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory.

Ando v Campo

Facts:Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI). Respondents were hired by PACSI as pilers or haulers tasked to manually carry bags of sugar. In June 1998, respondents were dismissed from employment. They filed a case for illegal dismissal and some money claims with the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. VI, Bacolod City. NLRC decided in the favor of respondents directing petitioner to pay 442,702. Petitioner and PACSI appealed to the NLRC. In a decision but failed to perfect his appeal because he did not pay the supersedes bond. It also affirmed the Labor Arbiter's decision with modification of the award for separation pay to four other employees who were similarly situated. Upon finality of the decision, respondents moved for its execution.[9]

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To answer for the monetary award, NLRC Acting Sheriff Romeo Pasustento issued a Notice of Sale on Execution of Personal Property over the property covered by Transfer Certificate of Title (TCT) No. T-140167 in the name of "Paquito V. Ando x x x married to Erlinda S. Ando."

This prompted petitioner to file an action for prohibition and damages with prayer for theissuance of (TRO) before the RTC Bacolod City. Petitioner claimed that the property belonged to him and his wife, not to the corporation, and, hence, could not be subject of the execution sale. Since it is the corporation that was the judgment debtor, execution should be made on the latter's properties. RTC denied the prayer for TRO because lack of jurisdiction pursuant to the NLRC Manual on the Execution of Judgment, petitioner's remedy was to file a third-party claim with the NLRC Sheriff. Despite lack of jurisdiction, however, the RTC went on to decide the merits of the case.Petitioner filed a petition for certiorari under Rule 65 before the CA. CA affirmed RTC decision hence this petitionIssue: whether RTC has jurisdiction over disputes arising from labor decisions.Whether the notice of sale was valid.

Held:CA did not, in fact, err in upholding the RTC's lack of jurisdiction to restrain the implementation of the writ of execution issued by the Labor Arbiter.

The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and

Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice.

Thus, it is, first and foremost, the NLRC Manual on the Execution of Judgment that governs any question on the execution of a judgment of that body. The NLRC Manual on the Execution of Judgment deals specificallywith third-party claims in cases brought before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party claim There is no doubt in our mind that petitioner's complaint is a third- party claim within the cognizance of the NLRC. Petitioner may indeed be considered a "third party" in relation to the property subject of the execution vis-à-vis the Labor Arbiter's decision. There is no question that the property belongs to petitioner and his wife, and not to the corporation. It can be said that the property belongs to the conjugal partnership, not to petitioner alone. Thus, the property belongs to a third party, i.e., the conjugal partnership. At the very least, the Court can consider that petitioner's wife is a third party within contemplation of the law.The broad powers granted to the Labor Arbiter and to the National Labor Relations Commission by Articles 217, 218 and 224 of the Labor Code can only be interpreted as vesting in them jurisdiction over incidents arising from, in connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of the regular courts.

There is no denying that the present controversy arose from the complaint for illegal dismissal. The subject matter of petitioner's

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complaint is the execution of the NLRC decision. Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once acquired, continues until the case is finally terminated, and there can be no end to the controversy without the full and proper implementation of the commission's directives.Petitioner claims that the property sought to be levied does not belong to PACSI, the judgment debtor, but to him and his wife. Since he was sued in a representative capacity, and not in his personal capacity, the property could not be made to answer for the judgment obligation of the corporation.

2. notice of sale null and voidThe power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor. Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation.

In sum, while petitioner availed himself of the wrong remedy to vindicate his rights, nonetheless, justice demands that this Court look beyond his procedural missteps and grant the petition.

G-Tractors v CA

FACTS Luis Narciso is married to Josefina Narciso. He operates a logging concession, Luis Narciso entered into Contract o Hire of heavey Equipment with petitioner G-Tractors where G-tractors leased former tractors. Co tract stipulated payment for rental. However Luis wasn‘t able to pay.

Property of Luis was sold to pay for his debt, one of which was conjugal property of land. WIFE’S CONTENTIONS:-whatever transpired in the civil case against them could be binding only on the husband Luis R. Narciso and could not affect or bind the plaintiff-wife Josefina Salak Narciso who was not a party to that casethat the nature of the Sheriff's sale clearly stated that only the property of the husband may be sold to satisfy the money judgment against himthat the conjugal property of the plaintiffs-spouses could not be made liable for the satisfaction of the judgment in the civil caseconsidering that the subject matter of said case was never used for the benefit of the conjugal partnership or of the familyISSUE WON the judgment debt of private respondent Luis R. Narciso is a conjugal debt for which the conjugal partnership property can be held answerable?RATIO YES. Article 161 of the New Civil Code provides that the conjugal partnership shall be liable for “all the 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.” There is no doubt then that his account with the petitioner was brought about in order to enhance the productivity of said logging business, a commercial enterprise for gain which he had the right to embark the conjugal partnership. The obligations were contracted in connection with his legitimate business as a producer and exporter in mahogany logs and certainly benefited the conjugal partnership. The debts contracted by the husband for and in the exercise of the industry or profession by which

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he contributes to the support of the family cannot be deemed to be his exclusive and private debts.

Ong v CAFacts:1. Teodora conducted her own logging business. In furtherance of her business operation, she secured from Boix a loan.2. Teodora defaulted. Hence Boix filed a case against her.3. Judgment was rendered in favor of Boix and thus the Sheriff levied and attached a parcel of land.4. Said parcel of land was awarded in favor of Boix pursuant to a writ of execution.5. Ramon filed a complaint to annul the auction sale of a parcel of land, allegedly owned conjugally by him and his former wife Teodora and thus could not be held liable for personal debts contracted by the wife.

Issue: WoN the subject property is conjugal

Held: NOPetitioner relied heavily on the fact that since the surname “Ong” was carried by Teodora in the Tax Declaration of the subject property, it indicates that the subject property was acquired during the marriage and therefore conjugal.The mere use of the surname of the husband in the tax declaration of the subject property is not sufficient proof that said property was acquired during the marriage and is therefore conjugal. It is undisputed that the subject parcel was declared solely in the wife's name, but the house built thereon was declared in the name of the spouses.

Security Bank v. Mar Tierra

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

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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.

Aguete v PNB

DOCTRINE: 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.

FACTS: Spouses Jose Ros and Estrella Aguete filed acomplaint for annulment against PNB before the Court of First Instance of Rizal.

Jose Ros previously obtained a loan in the amount of P115,000.00 from PNB and as security, a real estate mortgage over a parcel of land with TCT. No. T-9646 was executed. Upon maturity, the loan remained unpaid and an extrajudicial foreclosure proceeding on the mortgaged property was instituted by PNB. After the lapse of a year, the property was consolidated and registered in the name of PNB.

Estrella Aguete, claiming she had no knowledge of the said loan nor the mortgage constituted on the land which is part of their conjugal property, contested the transactions and filed for an annulment of the proceedings. She interposed in her defense that the signatures affixed on the documents were forged and that the proceeds of the loan did not redound to the benefit of the family.

RTC ruled for the spouses, stating that Aguete may during their marriage and within ten years from the transaction mentioned, may ask the court for an annulment of the case. On notice of appeal by PNB, Court of Appeals reversed this ruling and found for PNB, stating that forgery was concluded without adequate proof. It also found that the loan was used in the expansion of the family business.

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ISSUE: How is the benefit to the family proven so as to render the loan contracted by the husband binding upon the conjugal property?

HELD: If the husband himself is the principal obligor in the contract, 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 signing of the contract. 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. Court denies the petition.

RATIO: Annulment of the contract will only be granted upon a finding that the wife did not give her consent to the transaction. Even as Aguete disavows the documents supposedly acknowledged before the notary public, the document carries the evidentiary weight conferred upon it with respect to its due exececution. It has in its favor the presumption of regularity which may only be rebutted by evidence so clear, strong and convincing as to exclude all controversy as to the falsity of the certificate. Petitioners did not present any corroborating witness, such as a handwriting expert, who could authoritatively declare that Aguete’s signatures were really forged.

In her testimony, Aguete confirmed that Ros engaged in such business, but claimed to be unaware whether it prospered. 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. It is immaterial, if in the end, his business or profession fails or does not

succeed, such may still be charged against the conjugal property of the spouses.

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Costuna v Domondon

Sps. Amadeo and Estela Costuna bought 3 parcels of land during their marriage and registered the same in the name of Amadeo. Amadeo was later hospitalized (on different dates) for 3rd degree burns on his legs. While already ill due to old age, he went to his relatives in Samar to settle his property documents. Because of his failure to return, Estela refused to give her consent to the action of partition of their conjugal partnership and the deed of sale allegedly filed by Amadeo in Samar for the purpose of financing his medical needs. Hence, Amadeo executed the mentioned deed of sale, which sold his ½ indeterminate share on the 3-parcel property, in favour of Laureana Domondon. When Amadeo died, Estela sought the execution of Amadeo‘s will, executed prior to his trip to Samar, which named her as sole. Laureana opposed the motion, claimed her ½ share in the property and sought to have Estela give consent to the deed of sale.CA:- husband may not sell real estate without consent unless (1) sale of personal properties (2) real properties acquired before NCC (3) real properties acquired after NCC but wife is in a leprosarium, declared spendthrift or under civil interdiction, (4) purpose is to pay conjugal liabilities (5) purpose is to secure future of children or finishing a career.- Support of spouse by conjugal property is not relieved when they do not live on the same roof.ISSUE:- (1) WON deed of sale should be nullified since it waas without the consent of the wife- (2) WON conjugal partnership should be made liable for payment of hospital and

medical expenses of Amadeo who allegedly abandoned conjugal home and wifeHELD:(1) NO- Amadeo sought the petitoner‘s consent but petitioner withheld it. However when deed of sale was made, she did nothing to impugn it and assailed it for the first time when Respondent filed a case in RTC-QC.- Amadeo only sold his ½ share of community property. Her share in the property is intact.- When consent is unreasonably withheld, one should consider law as falling within the recognized exceptions- (2) YESit falls under the obligations protected by Art 161 of CC since it gives a discernible advantage or good to the conjugal partnership, directly or indirectly. Health would obviously benefit their conjugal partnership.

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Carlos v Abelardo

FACTS:

Honorio Carlos filed a petition against Manuel Abelardo, his son-in-law for recovery of the $25,000 loan used to purchase a house and lot located at Paranaque. It was in October 1989 when the petitioner issued a check worth as such to assist the spouses in conducting their married life independently. The seller of the property acknowledged receipt of the full payment. In July 1991, the petitioner inquired from spouses status of the amount loaned from him, the spouses pleaded that they were not yet in position to make a definite settlement. Thereafter, respondent expressed violent resistance to the extent of making various death threats against petitioner. In 1994, petitioner made a formal demand but the spouses failed to comply with the obligation. The spouses were separated in fact for more than a year prior the filing of the complaint hence spouses filed separate answers. Abelardo contended that the amount was never intended as a loan but his share of income on contracts obtained by him in the construction firm and that the petitoner could have easily deducted the debt from his share in the profits. RTC decision was in favor of the petitioner, however CA reversed and set aside trial court’s decision for insufficiency of evidence. Evidently, there was a check issued worth $25,000 paid to the owner of the Paranaque property which became the conjugal dwelling of the spouses. The wife executed an instrument acknowledging the loan but Abelardo did not sign.

ISSUE: WON a loan obtained to purchase the conjugal dwelling can be charged against the conjugal partnership.

HELD:

Yes, as it has redounded to the benefit of the family. They did not deny that the same served as their conjugal home thus benefiting the family. Hence, the spouses are jointly and severally liable in the payment of the loan. Abelardo’s contention that it is not a loan rather a profit share in the construction firm is untenable since there was no proof that he was part of the stockholders that will entitle him to the profits and income of the company.

Hence, the petition was granted and Abelardo is ordered to pay the petitioner in the amount of $25,000 plus legal interest including moral and exemplary damages and attorney’s fees.

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Villanueva v Chiong

FACTS OF THE CASE:Florentino and Elisera Chiong were married sometime in January 1960 but have been separated in fact since 1975. During their marriage, they acquired Lot No. 997-D-1 situated at Poblacion, Dipolog City and covered by Transfer Certificate of Title (TCT) No. (T-19393)-2325,3 issued by the Registry of Deeds of Zamboanga del Norte. Sometime in 1985, Florentino sold the one-half western portion of the lot to petitioners forP8,000, payable in installments. Thereafter, Florentino allowed petitioners to occupy4 the lot and build a store, a shop, and a house thereon. Shortly after their last installment payment on December 13, 1986,5 petitioners demanded from respondents the execution of a deed of sale in their favor. Elisera, however, refused to sign a deed of sale.

ISSUES:(1) Is the subject lot an exclusive property of Florentino or a conjugal property of respondents?(2) Was its sale by Florentino without Elisera's consent valid?RULING:1. That the lot belongs exclusively to Florentino because of his separation in fact from his wife, Elisera, at the time of sale dissolved their property relations, is bereft of merit. Respondents' separation in fact neither affected the conjugal nature of the lot nor prejudiced Elisera's interest over it. Under Article 178 of the Civil Code, the separation in fact between husband and wife without judicial approval shall not affect the conjugal partnership. The lot retains its conjugal nature. All property acquired by the spouses during the marriage is presumed to belong to the conjugal partnership of gains, unless it is proved that it pertains exclusively to the husband or to the wife. Petitioners' mere insistence as

to the lot's supposed exclusive nature is insufficient to overcome such presumption when taken against all the evidence for respondents.2. The sale by Florentino without Elisera's consent is not, however, void. We held that without the wife’s consent, the husband’s alienation or encumbrance of conjugal property prior to the effectivity of the Family Code on August 3, 1988 is not void, but merely voidable Articles 166 and 173 of the Civil Code. Therefore, the effect of annulment of the contract is to wipe it out of existence, and to restore the parties, insofar as legally and equitably possible, to their original situation before the contract was entered into. Strictly applying Article 1398 to the instant case, petitioners should return to respondents the land with its fruits and respondent Florentino should return to petitioners the sum ofP8,000, which he received as the price of the land, together with interest thereon.On the matter of fruits and interests, we take into consideration that petitioners have been using the land and have derived benefit from it just as respondent Florentino has used the price of the land in the sum of P8,000. Hence, if, as ordered by the lower court, Florentino is to pay a reasonable amount or legal interest for the use of the money then petitioners should also be required to pay a reasonable amount for the use of the land. Under the particular circumstances of this case, however, it would be equitable to consider the two amounts as offsetting each other.

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Ravina v Villa-Abrille

FACTS: Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. In 1982, the spouses acquired lot 7 in Davao City with TCT T-88674 in their names. Said lot was adjacent to lot 8 which Pedro acquired when he was still single and was registered solely under his name (TCT T-26471)• Spouses used their conjugal funds and loan from DBP to build a house on 7and Pedro’s lot. Consequently, they made improvements, including a poultry house and an annex• 1991 – The husband got a mistress and started to neglect his family. The wife was forced to sell or mortgage their movables to support the family.• On his own, the husband wanted to dispose of the house and two lots to the petitioners Patrocinia and Wilfredo Ravina. The wife opposed but the husband still sold the property without the wife’s consent and signature• July 5, 1991 – While the wife and children were out, the husband and some CAFGU members transferred all their belongings from the house to an apartment. When they got home, they were prevented from entering the house. Thus, the wife filed a complaint for the annulment of sale with damages against the husband and the petitioners.• During the trial, the husband alleged that the house was built from his exclusive funds• September 26, 1995 – RTC ruled in favor of the wife, declaring that the sale of lot 8 was void, being a conjugal property while the sale of lot 7 was valid since it was the husband’s exclusive property• CA declared that: sale of lot 7 to petitioners is valid but the sale of lot 8 is null and void; that the husband is ordered to return the value of the consideration for lot 8 to petitioners; that petitioners are ordered to reconvey the house and lot to the wife

ISSUE: Whether or not the husband can sell a property which is part exclusive and part conjugal

HELD: Art. 160 NCC provides that “all property of the marriage is presumed to belong to the conjugal partnership, unless it is proven that it pertains exclusively to the husband or to the wife.” Lot 7 is an exclusive property of the husband since it was acquired prior to his marriage with the respondent. However lot 8 was acquired in 1983 during the marriage of the spouses. There is no evidence proving that the subject property was acquired through exchange or barter. The presumption of the conjugal nature of the property subsists in the absence of and convincing evidence to overcome the presumption. A sale or encumbrance of conjugal property concluded after the effectivity of the Family Code on August 3, 1988 is governed by Art. 124 FC which states that a disposition or encumbrance is void if done a. without the consent of both the husband and wife , or; b. in case of one spouse’s inability, the authority of the court. ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy which must be availed of within five years from the date of the contract implementing such decision. 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

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consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors.

Unlike in the NCC which gives the wife 10 years to annul the alienation or encumbrance, any alienation or encumbrance under the FC without the consent of both spouses is NULL AND VOID. Just like in ACP, if the husband, without the knowledge and consent of the wife, sells conjugal property, the sale is void. If the sale was with knowledge the not consent of the wife, the wife has 5 years from the date of the contract to annul the sale. In the present case, the wife filed within the prescribed period. However, her action to annul the sale pertains only to the conjugal house and lot which does not include lot 7 which is an exclusive property of the husband. The petitioners cannot argue that they were buyers of good faith since they knew that at the time of the sale, Pedro was married to Mary Ann and her signature did not appear in the deed. Even if they were to argue that the property is an exclusive property of the husband, that they proceeded with the sale regardless of the wife’s contention and that the she was in actual and public possession of the house at the time of the sale, clearly indicates that they are not purchasers in good faith. CA DECISION AFFIRMED.

Fuentes v Roca

FACTS: On, Oct 11, 1982, Tarciano Roca bought a 358-square meter lot in Zambales from his mother. Six years later in 1988, Tarciano offered to sell the lot to the petitioners Fuentes spouses through the help of Atty. Plagata who would prepare the documents and requirements to complete the sale. In the agreement between Tarciano and Fuentes spouses there will be a Php 60,000 down payment and Php 140,000 will be paid upon the removal of Tarciano of certain structures on the land and after the consent of the estranged wife of Tarciano, Rosario, would be attained. Atty. Plagata thus went about to complete such tasks and claimed that he went to Manila to get the signature of Rosario but notarized the document at Zamboanga . The deed of sale was executed January 11, 1989. As time passed, Tarciano and Rosario died while the Fuentes spouses and possession and control over the lot. Eight years later in 1997, the children of Tarciano and Rosario filed a case to annul the sale and reconvey the property on the ground that the sale was void since the consent of Rosario was not attained and that Rosarios’ signature was a mere forgery. The Fuentes spouses claim that the action has prescribed since an action to annul a sale on the ground of fraud is 4 years from discovery.

The RTC ruled in favor of the Fuentes spouses ruling that there was no forgery, that the testimony of Atty. Plagata who witnessed the signing of Rosario must be given weight, and

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that the action has already prescribed.

On the other hand, the CA reversed the ruling of the CA stating that the action has not prescribed since the applicable law is the 1950 Civil Code which provided that the sale of Conjugal Property without the consent of the other spouse is voidable and the action must be brought within 10 years. Given that the transaction was in 1989 and the action was brought in 1997 hence it was well within the prescriptive period.

ISSUES: 1. Whether or not Rosario’s signature on the document of consent to her husband Tarciano’s sale of their conjugal land to the Fuentes spouses was forged;

2. Whether or not the Rocas’ action for the declaration of nullity of that sale to the spouses already prescribed; and

3. Whether or not only Rosario, the wife whose consent was not had, could bring the action to annul that sale.

RULING: 1. The SC ruled that there was forgery due to the difference in the signatures of Rosario in the document giving consent and another document executed at the same time period. The SC noted that the CA was correct in ruling that the heavy handwriting in the document which stated consent was completely different from the sample signature. There was no evidence provided to explain why there was such difference in the handwriting.

2. Although Tarciano and Rosario was married during the 1950 civil code, the sale was done in 1989, after the effectivity of the Family Code. The Family Code applies to Conjugal Partnerships already established at the enactment of the

Family Code. The sale of conjugal property done by Tarciano without the consent of Rosario is completely void under Art 124 of the family code. With that, it is a given fact that assailing a void contract never prescribes. On the argument that the action has already prescribed based on the discovery of the fraud, that prescriptive period applied to the Fuentes spouses since it was them who should have assailed such contract due to the fraud but they failed to do so. On the other hand, the action to assail a sale based on no consent given by the other spouse does not prescribe since it is a void contract.3. It is argued by the Spouses Fuentes that it is only the spouse, Rosario, who can file such a case to assail the validity of the sale but given that Rosario was already dead no one could bring the action anymore. The SC ruled that such position is wrong since as stated above, that sale was void from the beginning. Consequently, the land remained the property of Tarciano and Rosario despite that sale. When the two died, they passed on the ownership of the property to their heirs, namely, the Rocas. As lawful owners, the Rocas had the right, under Article 429 of the Civil Code, to exclude any person from its enjoyment and disposal.

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People v Lagrimas

Facts: 1) October11, 1962 Judgment finding Froilan Lagrimas guilty of murder becomes final.2) Writ of execution to cover the civil indemnity in the case was issued and 11 parcels of land in the name of the accused were scheduled for auction on Jan. 5, 19653) December 29, 1964 the wife of Lagrimas files a motion to quash the writs of attachment and execution on the properties citing that they belong to the spouses‘ conjugal property and thus could not be held liable for the husband‘s individual indemnity.4) LC grants the petition which is later reversed by a second judge of the same court only to be reaffirmed by a third judge ruling for the wife of the accused on March 5, 1960.5) LC rules that indemnities may be imposed on the conjugal properties of the accused only after the dissolution of the conjugal partnership and the liquidation of the assets thereof pursuant to ART 161 of the NCC.Issues: WON civil indemnities may be taken from the offender’s conjugal properties even before the dissolution of the conjugal partnership and the liquidation of its assets.Held: YES, the Civil Code provides that indemnities may be imposed on the conjugal property of an offender when the offender‘s exclusive properties are insufficient to cover the cost his indemnity. In this the law does not contemplate that the conjugal partnership must be dissolved and its assets liquidated before the indemnity is to be drawn. It merely requires that the offending spouse repay the liabilities taken from the conjugal partnership when such partnership is to be dissolved. However it is a condition in the article that the indemnities collectible from the CPG must not eat in to the funds for the maintenance of the family and the education of

the children as it would lead to injustice.

Buado v CA

Facts:

Mr. and Mrs. Buado filed a civil case against Erlinda Nicol.On April 1987, the trial court rendered a decision ordering Erlinda to pay damages to the petitioners.The personal properties of Erlinda were insufficient to pay the damages.The sheriff levied and auctioned the property of Erlinda.An auction sale was held with the petitioners as the highest bidder. A certificate of sale was issued in favor of Mr. and Mrs. Buado.After almost one year, the husband of Erlinda, Romulo Nicol, filed a complaint for the annulment of certificate of sale and damages with preliminary injunction against petitioners and deputy sheriff.He argued that there was no proper publication and posting for the auction sale. He also claimed that the judgment obligation of Erlinda Nicol amounted to P40,000 only. The spouses Buado obtained the P500,000 worth of property for only P51,685.The Regional Trial Court dismissed the petition of Romulo Nicol.The Court of Appeals reversed the decision of the RTC and held that Branch 21 has jurisdiction to act on the complaint filed by the respondent in this case.The petitioners filed a petition where they said that the Court of Appeals committed a grave abuse of discretion for reversing the decision given by the RTC.Issue:

Whether or not the obligation of Erlinda Nicol arising from her criminal liability is chargeable to the conjugal partnership.

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HELD:

NO. Erlinda Nicol’s liability is not chargeable to the conjugal partnership.

Unlike in the system of absolute community where liabilities incurred by either spouse by reason of a crime or quasi-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.

Petitioners argue that the obligation of the wife arising from her criminal liability is chargeable to the conjugal partnership. The Supreme Court does not agree to the contention of Mr. and Mrs. Buado.

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. Hence, the filing of a separate action by Romulo Nicol was proper.

The decision of the Court of Appeals is affirmed.

Pana v Heirs of Juanite

Guiang v CA

FACTS:The sale of a conjugal property requires the consent of both the husband and the wife. The absence of the consent of one renders the sale null and void, while the vitiation thereof makes it merely voidable. Only in the latter case can ratification cure the defect.

Over the objection of private respondent Gilda Corpuz and while she was in Manila seeking employment (with the consent of her husband), her husband sold to the petitioners-spouses Antonio and Luzviminda Guiang one half of their conjugal peoperty, consisting of their residence and the lot on which it stood. Upon her return to Cotabato, respondent gathered her children and went back to the subject property. Petitioners filed a complaint for trespassing. Later, there was an amicable settlement between the parties. Feeling that she had the shorter end of the bargain, respondent filed an Amended Complaint against her husband and petitioners. The said Complaint sought the declaration of a certain deed of sale, which involved the conjugal property of private respondent and her husband, null and void.

ISSUE: WON contract without the consent of wife is void

HELD:Yes. Art 124 of the FC rules that In the event that one spouse is

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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.

Respondent’s consent to the contract of sale of their conjugal property was totally inexistent or absent. The nullity of the contract of sale is premised on the absence of private respondent’s consent. To constitute a valid contract, the Civil Code requires the concurrence of the following elements: (1) cause, (2) object, and (3) consent, the last element being indubitably absent in the case at bar.A void contract cannot be ratified.

Neither can the “amicable settlement” be considered a continuing offer that was accepted and perfected by the parties, following the last sentence of Article 124. The order of the pertinent events is clear: after the sale, petitioners filed a complaint for trespassing against private respondent, after which the barangay authorities secured an “amicable settlement” and petitioners filed before the MTC a motion for its execution. The settlement, however, does not mention a continuing offer to sell the property or an acceptance of such a continuing offer. Its tenor was to the effect that private respondent would vacate the property. By no stretch of the imagination, can the Court interpret this document as the acceptance mentioned in Article 124.

Roxas v CA

Melania (pet) is married to Antonio Roxas but is now living separately . Melania then found out that estranged husband Antonio Roxas entered into a contract of lease w/ Cayetano on 3/30/87 involving CPG in Nova QC TCT 378197.Melania planned to a flea market w/ 20 stalls for grocery and dry goods in said area and invested 135k for the prep and construction. Mayor‘s permit and Municipal license was already issued for 1986 but when she attempted to renew for said year, it was blocked by Antonio Cayetano. She therefore seek redress saying that there was unlawful deprivation from her operating her business as conjugal owner.On 7/31/89 Cayetano moved to dismiss saying that there was no cause of action. TC dismissed said complaint and CA affirmed TC.ISSUE: WON a lease is an encumberance and/or alienation within scope of Art 166 of NCCHELD: YES- Defintions:o Lease – Art 1643 of NCC – one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or

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indefinite. However no lease for more than 99 years shall be valid. Grant of use and possession.o Encumberance – includes not only liens but also attachment, LEASES, and other restrictions Lessor transfers right of use in favor of lessee. Thus his right is impaired and may even be ejected by lessee if lessor uses the leased realty. Thus it is a burden and encumberance on the lando Alienation – when lessee becomes the owner of the thing affected by the lease- Thus consent of wife is necessary if lease is for more than one year since it is now considered as a conveyance and encumberance within the provisions of the CC by which real property is conveyed or encumbered.Art 173 of CC – remedy of wife to annul the contract.

Docena v Lapesura

FACTS:

Casiano Hombria, private respondent, filed a complaint for the recovery of a parcel of land against his lessees, petitioner-spouses, Antonio and Alfreda Docena. The spouses claimed ownership of the land based on the occupation since time immemorial. The petitioners filed a petition for certiorari and prohibition with CA alleging grave abuse of discretion on the part of the trial judge in issuing orders and that of the sheriff in issuing the writ of demolition. CA dismissed the petition on the ground that the petition was filed beyond the 60-day period provided in the Revised Rules of Civil Procedure and that the certification of non-forum shopping attached thereto was signed by only one of the petitioners.

ISSUE: WON it is sufficient that the certification of non-forum shopping was signed by only one of the petitioners.

HELD: In view of the property involved which is a conjugal property, the petition questioning the writ of demolition thereof originated from an action for recovery brought against the spouses and is clearly intended for the benefit of the conjugal partnership and the wife as point out was in the province of Samar whereas the petition was prepared in Metro Manila, a rigid application of the rules on forum shopping that would disauthorize a husband’s signing the certification in his behalf and that of his wife is too harsh.

In the previous court rulings, certificate of non-forum shopping should be sign by all the petitioners in a case. However, in the case at bar, such certificate signed by Antonio Docena alone should be deemed to constitute substantial compliance with the rules. The two petitioners in this case are husband and wife and their residence is the subject property alleged to be a conjugal property. Under the Family Code, the administration of the conjugal property belongs to the husband and wife jointly. However, unlike an act of alienation or encumbrance where the consent of both spouses is required, joint management or administration does not require that the husband and wife always act together. Each spouse may validly exercise full power of management alone, subject to the intervention of the court in proper cases.

Hence, petition is granted and the case is remanded to CA for further proceedings.

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Alinas v Alinas

Facts: Spouses Onesiforo and Rosario Alinas (petitioners) separated sometime in 1982. They left behind two lots identified, one with a bodega standing on it and the other with petitioners' house. Respondent Victor Alinas is the brother of petitioner. Petitioners alleged that they entrusted their properties to respondents. Sometime in 1993, petitioners discovered that their two lots were already titled in the name of the respondent spouses. Onesiforo’s signature appeared in an Absolute Deed of Sale selling one of the lots to respondent spouses. Records also show a notarized document whereby petitioner acknowledged that his brother used his own money to redeem one of the lots mortgaged and foreclosed and thus his brother became the owner. Petitioners filed with the RTC a complaint for the recovery of possession and ownership of their conjugal properties with damages against respondent spouses.

Issue: whether or not the by the husband petitioner to respondent spouses is valid despite the lack of consent of the wife

Ruling: pursuant to Article 124 of the Family Code and jurisprudence, the sale of petitioners' conjugal property made by petitioner Onesiforo alone is void in its entirety. It should be noted that respondent spouses were well aware that the property is a conjugal property of petitioners. They also knew that the disposition being made by Onesiforo is without the consent of his wife, as they knew that petitioners had separated, and, the sale documents do not bear the signature of petitioner Rosario. The fact that Onesiforo had to execute the Absolute Deed of Sale and a notarized Agreement reveals that they had full knowledge of the severe infirmities of the sale. Such

being the case, no injustice is being foisted on respondent spouses as they risked transacting with Onesiforo alone despite their knowledge that the subject property is a conjugal property.

Aggabao v Parulan

DOCTRINE(S):

The sale was made on March 18, 1991, or after Au-gust 3, 1988, the effectivity of the Family Code. The proper law to apply is, therefore, Article 124 of the Family Code, for it is settled that any alienation or encumbrance of conjugal property made during the effectivity of the Family Code is governed by Article 124 of the Family Code.According to Article 256 of the Family Code, the pro-visions of the Family Code may apply retroactively provided no vested rights are impaired. In Tumlos v. Fernandez, 330 SCRA 718 (2000), the Court rejected the petitioner’s argument that the Family Code did not apply because the acquisition of the contested property had occurred prior to the effectivity of the Family Code, and pointed out that Article 256 pro-vided that the Family Code could apply retroactively if the application would not prejudice vested or ac-quired rights existing before the effectivity of the Family Code. Herein, however, the petitioners did not show any vested right in the property acquired prior to August 3, 1988 that exempted their situation from the retroactive application of the Family Code.

FACTS:

In January 1991, real estate broker Marta K.Atanacio offered 2 lots located in Parañaque to the petitioners. On February 2, 1991, the petitioners met up with Elena Parulan at the site of the property and showed them the following

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documents: (a.) Owner’s original copy of the TCT of the 2 lots; (b.) tax declarations; (c.) a copy of the special power of attorney dated January 7, 1991 executed by Dionisio authorizing Elena to sell the property. The petitioners paid P200,000.00 as earnest money for which Elena executed a handwritten Receipt of Earnest Money which stipulated that the peitioners would pay an additional payment of P130, 000.00 on February 4, 1991; P650,000.00 on or before February 15, 1991 and P700, 000.00 on March 31, 1991 once Elena turned over the property.

On February 4, 1991, the petitioners, accompanied by the broker, went to the Office of the Register of Deeds to verify the TCTs shown by Elena. There they discovered that one of the lots had been encumbered to Banco Filipino, but that the encumbrance had been cancelled due to the full payment of the obligation. They noticed that the loan was effected through and SPA executed by Dionisio in favor of Elena. The other lot on the other hand had an annotation of an existing mortgage in favor of Los Baños Rural Bank, with the same SPA with a court order authorizing Elena to mortgage the lot to secure the loan.

The petitioners and the broker next inquired about the mortgage and the court order at the Los Baños Rural Bank. There, they met with Atty. Zarate, related that the bank had asked for the court order because the lot involved was conjugal property.

Following their verification, the petitioners delivered P130,000.00 as additional down payment on February 4, 1991; and P650,000.00 to the Los Baños Rural Bank on February 12, 1991, which then

released the owner’s duplicate copy of TCT to them.

On March 18, 1991, the petitioners delivered the final amount of P700,000.00 to Elena, who executed a deed of absolute sale in their favor. However, Elena did not turn over the owner’s duplicate copy of the TCT claiming that said copy was in the possession of a relative who was then in Hongkong. She assured them that the owner’s duplicate copy of TCT would be turned over after a week.

On March 19, 1991, TCT was cancelled and a new one was issued in the name of the petitioners. Elena did not turn over the duplicate owner’s copy of TCT as promised. In due time, the petitioners learned that the duplicate owner’s copy of TCT had been all along in the custody of Atty. Jeremy Z. Parulan, who appeared to hold an SPA executed by his brother Dionisio authorizing him to sell both lots. At Atanacio’s instance, the petitioners met on March 25, 1991 with Atty. Parulan at the Manila Peninsula. They were accompanied by one Atty. Olandesca. They recalled that Atty. Parulan “smugly demanded P800,000.00” in exchange for the duplicate owner’s copy of TCT, because Atty. Parulan represented the current value of the property to be P1.5 million. As a counter-offer, however, they tendered P250,000.00, which Atty. Parulan declined, giving them only until April 5, 1991 to decide. Hearing nothing more from the petitioners, Atty. Parulan decided to call them on April 5, 1991, but they informed him that they had already fully paid to Elena.

Thus, on April 15, 1991, Dionisio, through Atty. Parulan, commenced an action (Civil Case No. 91-1005 entitled Dionisio Z. Parulan, Jr., represented by Jeremy Z. Parulan, as attorney in fact, v. Ma. Elena

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Parulan, Sps. Rex and Coney Aggabao), praying for the declaration of the nullity of the deed of absolute sale executed by Ma. Elena, and the cancellation of the title issued to the petitioners by virtue thereof. In turn, the petitioners filed on July 12, 1991 their own action for specific performance with damages against the respondents. Both cases were consolidated for trial and judgment in the RTC.

On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in Makati City annulled the deed of absolute sale executed in favor of the petitioners covering two parcels of registered land the respondents owned for want of the written consent of respondent husband Dionisio Parulan, Jr. The CA affirmed the RTC decision.

ISSUE:

Which between Article 173 of the Civil Code and Article 124 of the Family Code should apply to the sale of the conjugal property executed without the consent of Dionisio?

HELD:

Article 124, Family Code, applies to sale of conjugal properties made after the effectivity of the Family Code

RATIO:

The petitioners submit that Article 173 of the CivilCode, not Article 124 of the Family Code, governed the property relations of the respondents because they had been married prior to the effectivity of the Family Code; and that the second paragraph of Article 124 of the Family Code should not apply because the other spouse held the administration over the conjugal property. They argue that notwithstanding his absence from the country Dionisio still held the

administration of the conjugal property by virtue of his execution of the SPA in favor of his brother; and that even assuming that Article 124 of the Family Code properly applied, Dionisio ratified the sale through Atty. Parulan’s counter-offer during the March 25, 1991 meeting.

To start with, Article 25427 the Family Code has expressly repealed several titles under the Civil Code, among them the entire Title VI in which the provisions on the property relations between husband and wife, Article 173 included, are found.

Secondly, the sale was made on March 18, 1991, or after August 3, 1988, the effectivity of the Family Code. The proper law to apply is, therefore, Article 124 of the Family Code, for it is settled that any alienation or encumbrance of conjugal property made during the effectivity of the Family Code is governed by Article 124 of the Family Code.

Article 124 of the Family Code provides:

“Article 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.

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 disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or

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consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors.”

Thirdly, according to Article 256 of the Family Code, the provisions of the Family Code may apply retroactively provided no vested rights are impaired. In Tumlos v. Fernandez, the Court rejected the petitioner’s argument that the Family Code did not apply because the acquisition of the contested property had occurred prior to the effectivity of the Family Code, and pointed out that Article 256 provided that the Family Code could apply retroactively if the application would not prejudice vested or acquired rights existing before the effectivity of the Family Code. Herein, however, the petitioners did not show any vested right in the property acquired prior to August 3, 1988 that exempted their situation from the retroactive application of the Family Code.

Fourthly, the petitioners failed to substantiate their contention that Dionisio, while holding the administration over the property, had delegated to his brother, Atty. Parulan, the administration of the property, considering that they did not present in court the SPA granting to Atty. Parulan the authority for the administration.

Nonetheless, we stress that the power of administration does not include acts of disposition or encumbrance, which are acts of strict ownership. As such, an authority to dispose cannot proceed from an authority to administer, and

vice versa, for the two powers may only be exercised by an agent by following the provisions on agency of the Civil Code (from Article 1876 to Article 1878). Specifically, the apparent authority of Atty. Parulan, being a special agency, was limited to the sale of the property in question, and did not include or extend to the power to administer the property.

Lastly, the petitioners’ insistence that Atty. Parulan’s making of a counter-offer during the March 25, 1991 meeting ratified the sale merits no consideration. Under Article 124 of the Family Code, the transaction executed sans the written consent of Dionisio or the proper court order was void; hence, ratification did not occur, for a void contract could not be ratified. On the other hand, we agree with Dionisio that the void sale was a continuing offer from the petitioners and Ma. Elena that Dionisio had the option of accepting or rejecting before the offer was withdrawn by either or both Ma. Elena and the petitioners. The last sentence of the second paragraph of Article 124 of the Family Code makes this clear, stating that in the absence of the other spouse’s consent, the transaction should be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or upon authorization by the court before the offer is withdrawn by either or both offerors

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