Conjugal Partnership of Gains

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.
Carlos vs. Abelardo
GR No. 146504, April 4, 2002

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 courts 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. Abelardos 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 attorneys fees.
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.
Guiang v. CA
Facts:

Over the objection of private respondent Gilda Corpuz and while she was in Manila
seeking employment, 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 shorer 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:

Whether the sale was void or merely voidable and was ratified by the amicable settlement

Held:

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.

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.
THELMA A. JADER-MANALO vs. NORMA FERNANDEZ C.
CAMAISA
G.R. No. 147978. January 23, 2002.

FACTS:
Petitioner, Thelma A. Jader-Manalo made an offer to buy the properties of the respondents from the husband of
Norma Fernandez C. Camaisa, respondent Edilberto Camaisa. After some bargaining, petitioner and Edilberto
agreed upon the purchase price and terms of payment. The agreement handwritten by the petitioner was signed by
Edilberto, with assurance from him that he would secure his wifes consent. Petitioner was later on surprised when
she was informed that respondent spouses were backing out of the agreement. Hence, she filed a complaint for
specific performance and damages.

ISSUE:
Whether or not the husband may validly dispose of a conjugal property without the wife's written consent.

HELD:
Under Art. 124 of the Family Code: 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.

The properties subject to the contract in this case were conjugal; hence, for the contracts to sell to be effective, the
consent of both husband and wife must be obtained. Respondent Norma Camaisa did not give her written consent
to the sale. Even granting that respondent Norma actively participated in negotiating for the sale of the subject
properties, which she denied, her written consent to the sale is required by law for its validity. She may have been
aware of the negotiations for the sale of their conjugal properties, however that is not sufficient to demonstrate
consent.
Pana v. Heirs of Juanite, G.R. No. 164201, Dec. 10, 2012
FACTS: Petitioner EfrenPana (Efren), his wife Melecia, and others were accused of murder. Efren was acquitted but
Melecia and another person was found guilty and was sentenced to the penalty of death and to pay each of the heirs of
the victims, jointly and severally for civil indemnity and damages.

Upon motion for execution by the heirs of the deceased, the RTC ordered the issuance of the writ, resulting in the levy of
real properties registered in the names of Efren and Melecia. Subsequently, a notice of levy and a notice of sale on
execution were issued.

Efren and his wife Melecia filed a motion to quash the writ of execution, claiming that the levied properties were conjugal
assets, not paraphernal assets of Melecia.

ISSUE: WON the conjugal properties of spouses Efren and Melecia can be levied and executed upon for the satisfaction
of Melecias civil liability in the murder case.

HELD: Art. 122. The payment of personal debts contracted by the husband or the wife before or during the marriage shall
not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.

Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.

The payment of fines and indemnities imposed upon the spouses may be enforced against the partnership assets if the
spouse who is bound should have no exclusive property or if it should be insufficient.

Since Efren does not dispute the RTCs finding that Melecia has no exclusive property of her own, the above applies. The
civil indemnity that the decision in the murder case imposed on her may be enforced against their conjugal assets after
the responsibilities enumerated in Article 121 of the Family Code have been covered.
SEPARATION of Property

Case Digest: MULLER vs MULLER

IN RE: PETITION FOR SEPARATION OF PROPERTY; MULLER VS. MULLER

G.R. No. 149615, August 29,2006

Doctrine:

He who seeks equity must do equity, and he who comes into equity must come with clean hands.

Facts:

Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany on September 22,
1989. The couple resided in Germany at a house owned by respondents parents but decided to move and reside permanently in
the Philippines in 1992. By this time, respondent had inherited the house in Germany from his parents which he sold and used
the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the construction of a house
amounting to P2,300,000.00. The Antipolo property was registered in the name of petitioner, Elena Buenaventura Muller.

Due to incompatibilities and respondents alleged womanizing, drinking, and maltreatment, the spouses eventually separated.

On September 26, 1994, respondent filed a petition for separation of properties before the Regional Trial Court of Quezon City.
The court granted said petition. It also decreed the separation of properties between them and ordered the equal partition of
personal properties located within the country, excluding those acquired by gratuitous title during the marriage. With regard to
the Antipolo property, the court held that it was acquired using paraphernal funds of the respondent. However, it ruled that
respondent cannot recover his funds because the property was purchased in violation of Section 7, Article XII of the
Constitution.

The respondent elevated the case to the Court of Appeals, which reversed the decision of the RTC. It held that respondent
merely prayed for reimbursement for the purchase of the Antipolo property, and not acquisition or transfer of ownership to him.
It ordered the respondent to REIMBURSE the petitioner the amount of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house situated in Antipolo, Rizal.

Elena Muller then filed a petition for review on certiorari.

Issue:

Whether or not respondent Helmut Muller is entitled to reimbursement.

Ruling:

No, respondent Helmut Muller is not entitled to reimbursement.

Ratio Decidendi:
There is an express prohibition against foreigners owning land in the Philippines.

Art. XII, Sec. 7 of the 1987 Constitution provides: Save in cases of hereditary succession, no private lands shall be transferred
or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

In the case at bar, the respondent willingly and knowingly bought the property despite a constitutional prohibition. And to get
away with that constitutional prohibition, he put the property under the name of his Filipina wife. He tried to do indirectly what
the fundamental law bars him to do directly.

With this, the Supreme Court ruled that respondent cannot seek reimbursement on the ground of equity. It has been held that
equity as a rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done
directly.

MAQUILAN vs. MAQUILAN Case Digest

VIRGILIO MAQUILAN vs. DITA MAQUILAN

G.R. No. 155409 June 8, 2007

FACTS: Herein petitioner and herein private respondent are spouses who once had a blissful married life and out of
which were blessed to have a son. However, their once sugar coated romance turned bitter when petitioner
discovered that private respondent was having illicit sexual affair with her paramour, which thus, prompted the
petitioner to file a case of adultery against private respondent and the latter's paramour. Consequently, both
accused were convicted of the crime charged.

Thereafter, private respondent, through counsel, filed a Petition for Declaration of Nullity of Marriage, Dissolution
and Liquidation of Conjugal Partnership of Gains and Damages imputing psychological incapacity on the part of the
petitioner. During the pre-trial of the said case, petitioner and private respondent entered into a COMPROMISE
AGREEMENT.

Subsequently, petitioner filed a motion for the repudiation of the AGREEMENT. This motion was denied. Petitioner
then filed a Petition for Certiorari and Prohibition with the Court of Appeals on the ground that the conviction of the
respondent of the crime of adultery disqualify her from sharing in the conjugal property. The Petition was dismissed.

ISSUE: Is the conviction of the respondent of the crime of adultery a disqualification for her to share in the conjugal
property?

HELD: No. The conviction of adultery does not carry the accessory of civil interdiction. Article 34 of the Revised
Penal Code provides for the consequences of civil interdiction:

Art. 34. Civil Interdiction. Civil interdiction shall deprive the offender during the time of his sentence of the rights of
parental authority, or guardianship, either as to the person or property of any ward, of marital authority, of the right to
manage his property and of the right to dispose of such property by any act or any conveyance inter vivos.

Under Article 333 of the same Code, the penalty for adultery is prision correccional in its medium and maximum
periods. Article 333 should be read with Article 43 of the same Code. The latter provides:

Art. 43. Prision correccional Its accessory penalties. The penalty of prision correccional shall carry with it that
of suspension from public office, from the right to follow a profession or calling, and that of perpetual special
disqualification from the right of suffrage, if the duration of said imprisonment shall exceed eighteen months. The
offender shall suffer the disqualification provided in this article although pardoned as to the principal penalty, unless
the same shall have been expressly remitted in the pardon.

It is clear, therefore, and as correctly held by the CA, that the crime of adultery does not carry the accessory penalty
of civil interdiction which deprives the person of the rights to manage her property and to dispose of such property
inter vivos.
Property Regime without Marriage