MARIANO v.

COURT OF APPEALS
June 7, 1989 (174 SCRA 335)
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, Esthers 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 Sanchezs 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 husbands 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 wifes obligations in the
premises cannot be disputed.
Ayala Investments vs CA
GR No. 118305, February 12, 1998
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 PBMs

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 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: Whether or not the debts and obligations contracted by the husband
alone is considered for the benefit of the conjugal partnership and is it
chargeable.
HELD:
The loan procured from AIDC was for the advancement and benefit of PBM
and not for the benefit of the conjugal partnership of Ching. Furthermore,
AIDC failed to prove that Ching contracted the debt for the benefit
of the conjugal partnership of gains. PBM has a personality distinct and
separate from the family of Ching despite the fact that they happened to be
stockholders of said corporate entity. Clearly, the debt was a corporate debt
and right of recourse to Ching as surety is only to the extent of his corporate
stockholdings.
Based from the foregoing jurisprudential rulings of the court, if the money
or services are given to another person or entity, and the husband acted only
as a surety orguarantor, 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.
Ching only signed as a surety for the loan contracted with AIDC in behalf of
PBM. Signing as a surety is certainly not an exercise of an industry or
profession, it is not embarking in a business. Hence, the conjugal
partnership should not be made liable for the surety agreement which was
clearly for the benefit of PBM.
The court did not support the contention of the petitioner that a benefit for
the family may have resulted when the guarantee was in favor of Chings
employment (prolonged tenure, appreciation of shares of stocks, prestige
enhanced) since the benefits contemplated in Art. 161 of the Civil Code must
be one directly resulting from the loan. It must not be a mere by product or
a spin off of the loan itself.
Ching v. CA, 423 SCRA 356, February 23, 2004

FACTS: Philippine Blooming Mills Company, Inc. (PBMCI) obtained two loans
from the Allied Banking Corporation (ABC). (PBMCI) Executive Vice-President
Alfredo Ching executed a continuing guaranty with the ABC for the payment
of the said loan. The PBMCI defaulted in the payment of all its loans so ABC
filed a complaint for sum of money against the PBMCI. Trial court issued a
writ of preliminary attachment against Alfredo Ching requiring the sheriff of
to attach all the properties of said Alfredo Ching to answer for the payment
of the loans. Encarnacion T. Ching, wife of Alfredo Ching, filed a Motion to Set
Aside the levy on attachment allegeing 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. 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. !21 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-husbands profession or business.44
ISSUE: WON 100,000 shares of stocks may be levied on by the sheriff to
answer for the loans guaranteed by petitioner Alfredo Ching
HELD: No.
RATIO: The CA 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 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 appellate court erred in concluding that the conjugal partnership is liable
for the said account of PBMCI.
Article 121 provides: The conjugal partnership shall be liable for: (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.
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.
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.
HOMEOWNERS SAVINGS & LOAN BANK vs. MIGUELA C. DAILO,
G.R. No. 153802
March 11, 2005
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 Dailos
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 latters 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
attorneys fees, moral and exemplary damages.

The appellate court affirmed the trial courts Decision, but deleted the award
for damages and attorneys 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. 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 coownership apply in a suppletory manner, the conjugal partnership shall be
governed by the rules on contract of partnership in all that is not in conflict
with what is expressly determined in the chapter (on conjugal partnership of
gains) or by the spouses in their marriage settlements. Thus, the property
relations of respondent and her late husband shall be governed, foremost, by
Chapter 4 on Conjugal Partnership of Gains of the Family Code and,

suppletorily, by the rules on partnership under the Civil Code. In case of

conflict, the former prevails because the Civil Code provisions on partnership
apply only when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the
knowledge and consent of his wife, Marcelino constituted a real estate
mortgage on the subject property, which formed part of their conjugal
partnership. By express provision of Article 124 of the Family Code, in
the absence of (court) authority or written consent of the other
spouse, any disposition or encumbrance of the conjugal property
shall be void.
The aforequoted provision does not qualify with respect to the
share of the spouse who makes the disposition or encumbrance in
the same manner that the rule on co-ownership under Article 493 of
the Civil Code does. Where the law does not distinguish, courts
should not distinguish. Thus, both the trial court and the appellate
court are correct in declaring the nullity of the real estate mortgage
on the subject property for lack of respondents 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). Petitioners 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, G.R. No. 184007, February 16, 2011
FACTS: Paquito Ando (petitioner) was the president of Premier Allied and
Contracting Services, Inc. (PACSI), an independent labor contractor. Andresito
Campo and the other respondents were hired by PACSI as pilers or haulers.
Respondents were dismissed from employment. Consequently filing a case
for illegal dismissal and some money claims with the NLRC. The Labor Arbiter
ruled in respondents favor. PACSI and Ando were directed to pay a total of
P422,702.28 (for separation pay and award of attorneys fees). PACSI and
Ando appealed to NLRC, which affirmed the Labor Arbiters decision.
Respondents moved for its execution. To answer for the reward, the NLRC
acting sheriff issued a Notice of Sale on Execution of Personal Property over a
property in the name of Paquito V. Ando xxx married to Erlinda S. Ando.
Prompting Ando to file an action for prohibition before the RTC. Ando claims
that the property belonged to him and his wife and not the corporation, and
hence, could not be the subject of the execution sale. RTC denied the prayer
for TRO and directed him to file a claim with the NLRC Sheriff. Instead, Ando
filed a petition for certiorari before the CA. Ando argued that the property to
be levied belonged to him and his wife in their personal capacity and thus
the execution should not prosper. It was likewise denied.
ISSUE: WON the property owned by Ando and his wife could be levied for
reason of a debt incurred by him, in his representative capacity and his
company, PACSI.
HELD: No. The power of the NLRC to execute its judgment extends only to
properties unquestionably belonging to the judgment debtor alone. Thus, a
sheriff has no authority to attach the property of any person except that of
the judgment debtor. The property in question belongs not only to Ando, but
his wife as well. She stands to lose the property subject to execution without
ever being a party to the case which is tantamount to deprivation of
property without due process.
G-Tractors, Inc. v. Court of Appeals, G.R. No. L-57402, February 28,
1985
FACTS: Luis R. Narciso, legally married to Josefina Narciso, is a businessman
engaged in business as a producer and exporter of Philippine mahogany logs
and operates a logging concession at del Gallego, Camarines Sur. G-Tractors,
Inc. is a domestic corporation engaged primarily in the business of leasing
heavy equipments such as tractors, bulldozers, and the like.
Luis entered into a Contract of Hire of Heavy Equipment with G-Tractors
under the terms of which the latter leased to the former tractors for the
purpose of constructing switchroads and hauling felled trees at the jobsite of

Narciso's logging concession at del Gallego, Camarines Sur. The contract

provided for payment of rental for the use of said tractors. Luis Narciso failed
to pay; G-Tractors instituted an action urging Luis to pay a certain amount
(P155,410.25), representing the unpaid rentals. G-Tractors accepted his offer
for a compromise agreement, stating the mode of payment (installment
plan); Luis failed to comply; G-Tractors filed a motion for execution; Luis
asked for suspension of the motion stating that he still has a pending loan
with a banking institution; request for suspension denied. Levy was
accordingly made by the City Sheriff of QC on certain personal properties of
the spouses at their residence in Quezon City. Auction sale was held, and GTractors was awarded with the sale of such. Luis then offered to redeem such
properties for the same amount; accepted; a Deed of Reconveyance was
executed by G-Tractors.
On February 12, 1975, the Sheriff of Quezon City made a levy on "all rights,
interest, title, participation which the defendant Luis R. Narciso" may have
over a parcel of residential land of the Registry of Deeds of QC which parcel
of land is allegedly the conjugal property of the spouses Luis and Josefina.
Sheriff sold at public auction to the highest bidder for cash. Certificate of
Sale was then issued to G-Tractors as the highest bidder for P180,000.
On March 31, 1976, Josefina and Luis filed a complaint in CFI of Quezon City
for "declaration of nullity of levy on execution and auction sale of plaintiff's
conjugal property with damages and injunction", claiming that the conjugal
property of the plaintiffs-spouses could not be made liable considering that
the subject matter was never used for the benefit of the conjugal partnership
or of the family
ISSUE: Whether or not the conjugal property of the spouses can be held
answerable for the debt of the husband
HELD: YES, the conjugal property of the spouses can be held answerable for
the debt of the husband. CAs decision reversed and set aside
RATIO:
Article 161 of the New Civil Code provides that the conjugal partnership shall
be liable for:
(1) 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
His account with petitioner G-Tractors, Inc. represents rentals for the use of
petitioner's tractors which he leased for the purpose of constructing
switchroads and hauling felled trees at the jobsite of the logging concession
at del Gallego, Camarines Sur which is not his exclusive property but that of
his family. 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.
It is very clear, therefore, that 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 husband is the administrator of the conjugal partnership and as long as
he believes he is doing right to his family, he should not be made to suffer
and answer alone. So that, 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.
The sale at public auction belonging to the conjugal partnership of gains of
the Narcisos in order to satisfy the judgment debt of the private respondent
Luis R. Narciso was validly and legally made in accordance with law.
Ong v. CA
Facts:
Petitioner Jaime Ong, on the one hand, and respondent spouses Miguel K.
Robles and Alejandra Robles, on the other hand, executed an "Agreement of
Purchase and Sale" respecting two parcels of land situated at Barrio Puri, San
Antonio, Quezon. On May 15, 1983, petitioner Ong took possession of the
subject parcels of land together with the piggery, building, ricemill,
residential house and other improvements thereon.
For failure of the vendee to pay the price as agreed upon, a complaint for
rescission of contract and recovery of properties with damages. Later, while
the case was still pending with the trial court, petitioner introduced major
improvements on the subject properties. These prompted the respondent
spouses to ask for a writ of preliminary injunction. The trial court granted the
application and enjoined petitioner from introducing improvements on the
properties except for repairs. Eventually, the trial court ordered the
rescission of the contract.
Issues:
(1) whether the contract entered into by the parties may be validly rescinded
under Article 1191 of the New Civil Code
(2) whether the parties had novated their original contract as to the time and
manner of payment
Held:
Article 1191 of the New Civil Code refers to rescission applicable to reciprocal
obligations. Reciprocal obligations are those which arise from the same
cause, and in which each party is a debtor and a creditor of the other, such
that the obligation of one is dependent upon the obligation of the other. They
are to be performed simultaneously such that the performance of one is
conditioned upon the simultaneous fulfillment of the other.

A careful reading of the parties' "Agreement of Purchase and Sale" shows

that it is in the nature of a contract to sell, as distinguished from a contract
of sale. In a contract of sale, the title to the property passes to the vendee
upon the delivery of the thing sold; while in a contract to sell, ownership is,
by agreement, reserved in the vendor and is not to pass to the vendee until
full payment of the purchase price. In a contract to sell, the payment of the
purchase price is a positive suspensive condition, the failure of which is not a
breach, casual or serious, but a situation that prevents the obligation of the
vendor to convey title from acquiring an obligatory force. The non-fulfillment
of the condition of full payment rendered the contract to sell ineffective and
without force and effect. It must be stressed that the breach contemplated in
Article 1191 of the New Civil Code is the obligor's failure to comply with an
obligation. Failure to pay, in this instance, is not even a breach but merely an
event which prevents the vendor's obligation to convey title from acquiring
binding force. Hence, the agreement of the parties in the case at bench may
be set aside, but not because of a breach on the part of petitioner for failure
to complete payment of the purchase price. Rather, his failure to do so
brought about a situation which prevented the obligation of respondent
spouses to convey title from acquiring an obligatory force.
Novation is never presumed, it must be proven as a fact either by express
stipulation of the parties or by implication derived from an irreconcilable
incompatibility between the old and the new obligation. In order for novation
to take place, the concurrence of the following requisites is indispensable: (1)
there must be a previous valid obligation; (2) there must be an agreement of
the parties concerned to a new contract; (3) there must be the
extinguishment of the old contract; and (4) there must be the validity of the
new contract. The aforesaid requisites are not found in the case at bench.
The subsequent acts of the parties hardly demonstrate their intent to
dissolve the old obligation as a consideration for the emergence of the new
one.
SECURITY BANK AND TRUST COMPANY v. MAR TIERRA CORP,
WILFRIDO MARTINEZ, MIGUEL LACSON, and RICARDO LOPA
November 29, 2006 (508 SCRA 419)
FACTS:
Respondent Mar Tierra Corporation, through its president, Wilfrido C.
Martinez, applied for a P12,000,000 credit accommodation with petitioner
Security Bank and Trust Company. Petitioner approved the application and
entered into a credit line agreement with respondent corporation. It was
secured by an indemnity agreement executed by individual respondents
Wilfrido C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound
themselves jointly and severally with respondent corporation for the
payment of the loan.

Respondent corporation was not able to pay all its debt balance as it suffered
business reversals, eventually ceasing operations. Petitioner filed a
complaint against respondent corp and individual respondents.
RTC issued a writ of attachment on all real and personal properties of
respondent corporation and individual respondent Martinez including the
conjugal house and lot of the spouses but it found that it did not redound to
the benefit of his family, hence, it ordered the lifting of the attachment on
the conjugal house and lot of the spouses Martinez.
Petitioner appealed to CA. It affirmed RTC decision. Petitioned to SC.
ISSUE: WON the conjugal partnership may be held liable for an indemnity
agreement entered into by the husband to accommodate a third party
HELD:
No. SC upheld the CA. Under Article 161(1) of the Civil Code, the conjugal
partnership is liable for all debts and obligations contracted by the husband
for the benefit of the conjugal partnership.
The court ruled in Luzon Surety Co., Inc. v. de Garcia that, in acting as a
guarantor or surety for another, the husband does not act for the benefit of
the conjugal partnership as the benefit is clearly intended for a third party.
In Ayala Investment and Development Corporation v. Court of Appeals, we
ruled that, if the husband himself is the principal obligor in the contract, i.e.,
the direct recipient of the money and services to be used in or for his own
business or profession, the transaction falls within the term obligations for
the benefit of the conjugal partnership. In other words, where the husband
contracts an obligation on behalf of the family business, there is a legal
presumption that such obligation redounds to the benefit of the conjugal
partnership.
On the other hand, if the money or services are given to another person or
entity and the husband acted only as a surety or guarantor, the transaction
cannot by itself be deemed an obligation for the benefit of the conjugal
partnership. It is for the benefit of the principal debtor and not for the surety
or his family.
In the case at bar, the principal contract, the credit line agreement between
petitioner and respondent corporation, was solely for the benefit of the latter.
The accessory contract (the indemnity agreement) under which individual
respondent Martinez assumed the obligation of a surety for respondent
corporation was similarly for the latters 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. PHILIPPINE NATIONAL BANK
G.R. No. 170166, [April 6, 2011]
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. T9646 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 conjugalproperty,
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.
Hence, this petition.
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
theconjugal 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
theconjugal 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 Aguetes 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.