Homeowners Savings & Loan Bank v.

Miguela Dailo
GR No. 153802, March 11, 2005
Tinga, J. / KMD

SUBJECT MATTER: Property Relations; Conjugal Partnership of Gains; Charges upon and Obligations of CPG
CASE SUMMARY:
In Homeowners v. Dailo, Marcelino Dailo contracted a loan of P300,000 and mortgaged their house and lot in San
Pablo City. When he died and upon the maturity of the loan, the loan remained unpaid. As a result, petitioner
instituted an extrajudicial foreclosure proceedings followed by an affidavit of consolidation of ownership and
absolute deed of sale. Upon discovery of the respondent, she filed a complaint with the RTC praying for the
declaration of nullity of the real estate mortgage contracted by his husband without the respondent’s knowledge and
consent. Petitioner argued that the subject property was an exclusive property of Mercelino Dailo as it was
registered under his name. Both RTC and CA ruled in favor of the respondent. SC also affirmed the CA decision
holding that the real estate mortgage was instituted without the respondents consent and that the subject property
cannot be held liable for an obligation to pay a loan that was not established to have benefited the family.
DOCTRINES:
The sale of a conjugal property requires the consent of both the husband and wife. Applying Article 124 of
the Family Code, the Supreme 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.
The conjugal property should NOT be held liable for the debt and obligation contracted by either spouse
without the consent of the other that did not contribute to the benefit of the family
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
FACTS:
o This is a petition for review on certiorari of the CA Decisionsffirming with modification the RTC decision.
o Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, 1967.
o The spouses purchased a house and lot in San Pablo which was registered under Marcelino Dailo’s name
only.
o On December 1, 1993, Marcelino Dailo, executed a Special Power of Attorney (SPA) in favor of one
Lilibeth 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.
o Lilibeth loaned an amount of P300,000.00 from petitioner and mortgaged the subject property.
o Respondent did not know any of these.
o Upon maturity, the loan remained outstanding so the petitioner instituted extrajudicial foreclosure
proceedings on the mortgaged property.
o Without the property being redeemed, petitioner, consolidated the ownership thereof by executing on June
6, 1996 an Affidavit of Consolidation of Ownership and a Deed of Absolute Sale.
o Meanwhile, Marcelino Dailo, died on December 20, 1995.
o In one of the respondent’s visits to the subject property, she learned that petitioner had already employed a
certain Roldan 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.
o Respondent filed a complaint with RTC San Pablo City for the 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 on the premise that she has no knowledge of the mortgage constituted
on the subject property,
o 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.
o RTC ruled in favor of respondent, Miguela Dailo. RTC declared deed of real estate mortgage, affidavit of
consolidation of ownership null and void. It ordered the petitioner to pay P40,000 for the burned car and
additional costs.
o CA affirmed RTC. RTC ruled that subject property was conjugal in nature, in the absence of clear and
convincing evidence to rebut the presumption. However, RTC deleted the award for damages and
attorney’s fees for lack of basis.
ISSUES:
1. WON the mortgage constituted by the late Marcelino Dailo on the subject property is valid. (NO)
2. WON the conjugal partnership is liable for the payment of the loan obtained by the late Marcelino Dailo. (NO)

HOLDING:
1. No, the real estate mortgage on the subject property is null and void because of the lack of respondent’s consent.
In Guiang v. Court of Appeals, it was held that the sale of a conjugal property requires the consent of both
the husband and the wife. In applying Article 124 of the Family Code, the SC 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.
The same principle applies to this case. It was established that Marcelino Dailo constituted the real estate
mortgage on the subject property, which formed part of the conjugal property, without the knowledge and consent of
his wife. Thus, the RTC and CA were both correct in declaring the nullity of the real estate mortgage.

2. NO, the conjugal partnership is not liable for the payment of the loan obtained which was not proven to have
benefited the family.
Under Article 121 paragraph 3 of the Family Code, “The conjugal partnership shall be liable for…debts
and obligations contracted by either spouses without consent of the other to the extent that the family may have
benefited.” Therefore, for the subject property to be held liable, the obligation contracted by the Late Marcelino
Dailo must have redounded to the benefit of the conjugal partnership.
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. However, there is nothing in the records of the case that would show that
the loan obtained by the late Marcelino Dailo benefited the family. Consequently, the conjugal partnership cannot be
held liable for the payment of the principal obligation.

Petition DENIED.

See articles 149 and 121 of FC.