Case # 105 (assigned to Astrid) ARTICLE 105 Conjugal Partnership of Gains (What is excluded) Security Bank and Trust

t Company, petitioner v. Mar Tierra Corporation, Wilfredo Martinez, Miguel Lacson and Ricardo Lopa, respondents PONENTE: Corona, J. FACTS: On May 7, 1980, Mar Tierra Corporation through its president, Wilfredo Martinez, applied for a P12M credit accommodation with Security Bank and Trust Company, which the bank approved. On July 2, 1980, the credit line was increased to P14M and Martinez, Lacson and Lopa executed a new Indemnity Agreement in favour of the bank. On September 25, 1981, Mar Tierra Corp availed of the credit line and received the sum of P9,952,000, which it undertook to pay on November 30, 1981. It was able to pay P4,648,000 of the principal and over P2.7M on interest and other charges. The corporation was not able to pay the balance because it suffered a loss and eventually closed operations in 1984. Security Bank filed a complaint for the sum of money with prayer for attachment against respondent corporation and individual respondents. Security Bank subsequently dismissed the case with respect to Lacson and Lopa leaving Martinez as the remaining individual respondent. On August 10, 1982, the RTC issued a writ of attachment on the real and personal property of Mar Tierra Corp and Martinez. As a consequence, the conjugal dwelling of Wilfredo and Josefina Martinez in Caloocan City was levied on. On June 20, 194, RTC held that Mar Tierra Corp and Martinez are jointly and severally liable to Security Bank the amount of P5,304,000 plus 12% interest and 5% penalty starting June 21, 1982, plus attorneys fees. It however found that the obligation contracted by Martinez did not redound to the benefit of his family, hence, it ordered the lifting of the attachment on the conjugal home of Martinez. Security Bank filed an appeal but CA affirmed RTCs decision, hence, this petition for certiorari.

ISSUE:

1) Whether or not the conjugal property/dwelling of Wilfredo Martinez can be attached by Security Bank against the unpaid credit line obtained by Mar Tierra Corporation, secured by an Indemnity Agreement (surety or guaranty) signed by Wilfredo Martinez. HELD: 1) No, the conjugal property/dwelling of Wilfredo Martinez cannot be attached by Security Bank against the unpaid credit line. RATIONALE: If the money or services are given to another party 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. No presumption is raised 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 the benefit redounding to the conjugal partnership. In the absence of any showing of benefit received by it, the conjugal partnership cannot be held liable on an indemnity agreement executed by the husband to accommodate a third party/entity (Mar Tierra Corporation). To hold the conjugal partnership liable for an obligation pertaining to the husband alone defeats the objective of the Civil Code to protect the solidarity and well being of the family as a unit. The underlying concern of the law is the conservation of the conjugal partnership. Hence, it limits the liability of the conjugal partnership only to debt and obligations contracted by the husband for the benefit of the conjugal partnership.