Zulueta vs. Pan American World Airways, Inc.

Facts Sposes Rafael & Carolina Zuluet + daughter passengers of Pan Am Rafael left the plane and went to the beach in search of a place to relieve himself o Went far so the passengers & crew wont see him relieve himself o Gone for almost an hour before the plane left Captain Zenter accused Rafael of being drunk and had belligerent attitude o Due to this, Zetner ordered the Zulueta family to be off-loaded the plane o Also sent a note to Rafael implying Zetners intention of keeping him stranded for a minimum period of one week (cost of $13.30 per day) Zuluetas filed an action for damages o Zuluetas awarded with moral & exemplary damages & attorneys fees Reason for damages breach of contract on the part of Pan Am, aggravated by being a quasidelict While case is pending Zuluetas separated o Carolina entered into a compromise agreement with Pan Am She settled for Php 50,000.00 o Carolina dismissed the case On the ground that a wife cannot bind conjugal partnership without husbands consent, except in cases provided by law Among the grounds for appeal of Pan Am o Why should they award Zuluetas with damages (irrelevant) o Questioned why large amount (irrelevant) o Why court believed the testimony of plaintiffs (irrelevant) o Questions the compromise agreement made by Carolina

Compromise agreement ineffective as far as the conjugal partnership is concerned o Article 113 Civil Code not applicable husband must be joined in all suits by or against the wife except if they have in fact been separated for at least one year. Case at bar husband is the main party in interest & both as the person principally aggrieved and as administrator of conjugal partnership

Issue # 2: WON the award for damages is part of the conjugal partnership (YES) o Damages arose from a breach of contract with Pan Am o Plane ticket (symbolizes the contract) paid using the funds taken from conjugal property only a presumption, Pan Am did not present contrary proof o Article 153 Civil Code - applicable
The following are conjugal partnership property: (1) That which is acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; (2) That which is obtained by the industry, or work, or as salary of the spouses, or of either of them; (3) The fruits, rents or interests received or due during the marriage, coming from the common property or from the exclusive property of each spouse.

NOT under Article 148 Civil Code

Issue # 1: WON the compromise agreement is effective Ruling: Payment effective because it is due from the defendant with or without its compromise agreement with Carolina

The following shall be the exclusive property of each spouse: (1) That which is brought to the marriage as his or her own; (2) That which each acquires, during the marriage, by lucrative title; (3) That which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses; (4) That which is purchased with exclusive money of the wife or of the husband.

Deduced from # 3 & # 4 what is acquired with money of conjugal partnership belongs to conjugal partnership