CASE ANTECEDENT FACTS
Matthews v Taylor  Benjamin Taylor (British) and Joselyn (Filipino) got married.
 Joselyn bought a 1,294 square-meter lot in Boracay, for and in consideration of
P129,000.00. The sale was allegedly financed by Benjamin.
 Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen.
 Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin,
authorizing the latter to maintain, sell, lease, and sub-lease and otherwise enter
into contract with third parties with respect to their Boracay property.
 Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an
Agreement of Lease involving the Boracay property for a period of 25 years
 Benjanmin claimed that he had not given his consent. Benjamin instituted an
action for Declaration of Nullity of Agreement of Lease with Damages against
Joselyn and the petitioner.
 The SC denied the action for the Declaration of Nullity of Agreement of Lease with
Damages against Joselyn and the petitioner.
Elena Muller v Helmut  Elena Muller and Helmut Muller got married. The couple resided in Germany at a
Muller house owned by respondent’s parents but decided to move and reside
permanently in the Philippines.
 Respondent sold his property in Germany to purchase a portion of land in the
Philippines. The property was registered to Elena.
 The spouses eventually separated.
 The respondent filed a petition for the separation of properties which the RTC
granted but the RTC stated that he cannot recover the funds because the
property was purchased in violation of the Constitution.
 The respondent appealed to the CA. The CA reversed the decision of the RTC and
stated that the respondent merely prayed for reimbursement for the purchase of
the Antipolo property, and not acquisition or transfer of ownership to him. The
CA ordered Elena to reimburse Helmut.
 Elena filed a petition for review.
 The Court ruled in favor of Elena.
Navaro c Escobido  Roger Navarro entered into a lease agreement with option to purchase with
Glenn O. Go , of Kargo Enterprises, for a Fuso truck with a mounted crane.
 Navarro delivered six post-dated checks, each in the amount of ₱66,333.33 for
the rentals. The 5th and 6th checks were dishonored when presented for payment,
due to insufficient funds
 Demands were made for Navarro to pay the balance of ₱132,666.66, or to return
the vehicle. This was to no avail
 RTC issued writs of replevin, leading to the seizure of the vehicles and their
delivery to Karen Go.
 Navarro claimed the defense of no cause of action since Karen is not a party to
the agreement. RTC ordered Karen to file a motion to include Glenn Go as
plaintiff.
 RTC denied Navarro defense. CA affirmed RTC
 SC DENIED NAVARO REVIEW
APPLICATION OF LAW
 Benjamin has no right to nullify the Agreement of Lease between Joselyn and
petitioner. Benjamin, being an alien, is absolutely prohibited from acquiring
private and public lands in the Philippines. Considering that Joselyn appeared
to be the designated “vendee” in the Deed of Sale of said property, she
acquired sole ownership thereto. This is true even if the Court sustained
Benjamin’s claim that he provided the funds for such acquisition. By entering
into such contract knowing that it was illegal, no implied trust was created in
his favor; no reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of the
conjugal/community property of the spouses.
 In any event, he had and has no capacity or personality to question the
subsequent lease of the Boracay property by his wife on the theory that in so
doing, he was merely exercising the prerogative of a husband in respect of
conjugal property
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134
to 138.
 There is an express prohibition against foreigners owning land in the
Philippines. 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.
1997 Rules of Civil Procedure
every action must be prosecuted or defended in the name of the real
party-in-interest, i.e., the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit
-Karen is a party as owner of Kargo Enterprises. Glenn Go is merely a
manager, so Karen is the real party in interest.
Section 1, Rule 3 of the Rules of Civil Procedure & Article 44, CC
Kargo enterprises, as a sole proprietorship, is neither a natural person nor
a juridical person
-it cannot, therefore, be a party to a civil suit
-Juasong Hardware v Mendoza
-suit should have been brought in the name of the owner, adding such
phrase as “doing business as Huasing Hardware”
Article 160 of the New Civil Code

Imani v Metrobank  Evangeline D. Imani signed a Continuing Suretyship Agreement in favor of
Metropolitan Bank & Trust Company , with Cesar P. Dazo, Nieves Dazo, Benedicto
C. Dazo, Cynthia C. Dazo, Doroteo Fundales, Jr., and Nicolas Ponce as her co-
sureties. As sureties, they bound themselves to pay Metrobank whatever
indebtedness C.P. Dazo Tannery, Inc. (CPDTI) incurs, but not exceeding Six Million
Pesos (₱6,000,000.00).
"all property of the marriage is presumed to be conjugal partnership,
unless it be prove[n] that it pertains exclusively to the husband or to the
wife."
-Kargo Enterprises is conjugal property
Article 124 of the Family Code
-“The administration and enjoyment of the conjugal partnership property
shall belong to both spouses jointly.”
-Allows either Karen or Glenn to speak in behalf of the business
Article 1811 of the Civil Code
-(1) A partner, subject to the provisions of this Title and to any agreement
between the partners, has an equal right with his partners to possess
specific partnership property for partnership purposes; xxx
Art. 108.Family Code
The conjugal partnership shall be governed by the rules on the contract
of partnership in all that is not in conflict with what is expressly
determined in this Chapter or by the spouses in their marriage
settlements.
This provision is practically the same as the Civil Code provision it
superseded:
Art. 147. Civil Code
The conjugal partnership shall be governed by the rules on the contract
of partnership in all that is not in conflict with what is expressly
determined in this Chapter.
Article 1811 of the Civil Code
"[a] partner is a co-owner with the other partners of specific partnership
property."
Article 487 of the Civil Code and relevant jurisprudence
All co-owners may bring an action, any kind of action, for the recovery of
co-owned properties. Therefore, only one of the co-owners, namely the
co-owner who filed the suit for the recovery of the co-owned property, is
an indispensable party thereto. The other co-owners are not
indispensable parties. They are not even necessary parties, for a
complete relief can be accorded in the suit even without their
participation, since the suit is presumed to have been filed for the benefit
of all co-owners. Since Glenn Go is not strictly an indispensable party in
the action to recover possession of the leased vehicles, he only needs to
be impleaded as a pro-forma party to the suit, based on Section 4, Rule 4
of the Rules, which states:
Section 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except
as provided by law.
Section 16 of Rule 39, Rules of Court
a third-party claimant or a stranger to the foreclosure suit, can opt to file a remedy
known as terceria against the sheriff or officer effecting the writ by serving on him
an affidavit of his title and a copy thereof upon the judgment creditor. By the
terceria, the officer shall not be bound to keep the property and could be
answerable for damages.
  CPDTI obtained loans of ₱100,000.00 and ₱63,825.45, respectively. The loans
were evidenced by promissory notes signed by Cesar and Nieves Dazo. CPDTI
defaulted in the payment of its loans. Metrobank made several demands for
payment upon CPDTI, but to no avail. This prompted Metrobank to file a
collection suit against CPDTI and its sureties
 RTC decided in favor of Metrobank. Appeald to CA. DENIED
 Metrobank filed a motion for execution. GRANTED. Public auction conducted,
which Metrobank won as highest bidder. Metrobank then asked the RTC through
a Manifestation and Motion to compel the Imani couple to surrender the
property title. Evangeline opposed since such is conjugal property
 RTC initially sided with Evangeline, but reversed itself upon MR by Metrobank. CA
reversed RTC
DELA PEÑA V. AVILA  The suit concerns a 277 square meter parcel of residential land, together with the
improvements thereon, situated in Marikina City and previously registered in the
name of petitioner Antonia R. Dela Peña, "married to Antegono A. Dela Peña" under
Transfer Certificate of Title (TCT).
 Antonia obtained from A.C. Aguila & Sons, Co. a loan in the sum of ₱250,000.00
which, pursuant to the Promissory Note the former executed in favor of the latter.
 On the very same day, Antonia also executed in favor of Aguila a notarized Deed of
Real Estate Mortgage over the property, for the purpose of securing the payment of
said loan obligation.
 Antonia executed a notarized Deed of Absolute Sale over the property in favor of
respondent Gemma Remilyn C. Avila, for the stated consideration of ₱600,000.00.
 Utilizing the document, Gemma caused the cancellation and issuance of TCT
Marikina City Registry of Deeds, naming her as the owner of the subject realty.
 Gemma also constituted a real estate mortgage over said parcel in favor of
respondent Far East Bank and Trust Company [now Bank of the Philippine Islands],
to secure a loan facility with a credit limit of ₱1,200,000.00.
 Antonia filed with the Register of Deeds of Marikina an Affidavit of Adverse Claim to
the effect, among others, that she was the true and lawful owner of the property
which had been titled in the name of Gemma.
 Gemma’s failure to pay the principal as well as the accumulated interest and
penalties on the loans she obtained, on the other hand, FEBTC-BPI caused the
extrajudicial foreclosure of the real estate mortgage constituted over the property.
 FEBTC-BPI later consolidated its ownership over the realty and caused the same to
be titled in its name
 Alvin John B. Dela Peña, son of Antonia, filed against Gemma the complaint for
annulment of deed of sale.
 Claiming that the subject realty was conjugal property, the Dela Peñas alleged,
Antonia executed in favor of Aguila was not consented to by Antegono who had, by
then, already died.
TITAN CONSTRUCTION  Manuel A. David, Sr. and Martha S. David were married.
CORPORATION V.  The spouses acquired a 602 square meter lot located at Quezon City, which was
DAVID registered in the name of "MARTHA S. DAVID, of legal age, Filipino, married to
Manuel A. David" and covered by Transfer Certificate of Title (TCT).
 The spouses separated de facto, and no longer communicated with each other.
Article 160 of the New Civil Code
 provides that "all property of the marriage is presumed to belong to the
conjugal partnership; unless it be proved that it pertains exclusively to
the husband or to the wife."
 party invoking this has burden of proof.
 photocopies of checks and Intestate Estate have no
 probative value and cannot be accepted as evidence
 no proof the subject property was acquired during the
 Marriage
*Subject property not duly proven to be conjugal, thus cannot be levied to satisfy
the debt of Evangeline
 Pursuant to Article 160 of the Civil Code of the Philippines, all property of the
marriage is presumed to belong to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband or to the wife.
Proof of acquisition during the marriage is an essential condition for the operation
of the presumption in favor of the conjugal partnership.
 As the parties invoking the presumption of conjugality under Article 160 of the
Civil Code, the Dela Peñas did not even come close to proving that the subject
property was acquired during the marriage between Antonia and Antegono.
 Beyond Antonia’s bare and uncorroborated assertion that the property was
purchased when she was already married, the record is bereft of any evidence
from which the actual date of acquisition of the realty can be ascertained.
 Not having established the time of acquisition of the property, the Dela Peñas
insist that the registration thereof in the name of "Antonia R. Dela Peña, of legal
age, Filipino, married to Antegono A. Dela Peña" should have already sufficiently
established its conjugal nature.
Ruiz vs. Court of Appeals, this Court ruled, however, that the phrase "married to" is
merely descriptive of the civil status of the wife and cannot be interpreted to mean
that the husband is also a registered owner.
 The property is part of the spouses’ conjugal partnership.
 The Civil Code of the Philippines, the law in force at the time of the celebration
of the marriage between Martha and Manuel in 1957. Provisions governing such
property relation are carried over to the Family Code. In particular, Article 117
hereof provides:
  Manuel discovered that Martha had previously sold the property to Titan
Construction Corporation (Titan) for ₱1,500,000.00 through a Deed of Sale and the
TCT had been cancelled and replaced in the name of Titan.
 Manuel filed a Complaint for Annulment of Contract and Recovenyance against
Titan.
 Manuel alleged that the sale executed by Martha in favor of Titan was without his
knowledge and consent, and therefore void.
 He prayed that the Deed of Sale and TCT be invalidated, that the property be
reconveyed to the spouses, and that a new title be issued in their names.
 Titan claimed that it was a buyer in good faith and for value because it relied on a
Special Power of Attorney (SPA) signed by Manuel which authorized Martha to
dispose of the property on behalf of the spouses.
 RTC issued a decision in favor of Manuel.
 CA affirmed the decision of RTC.
TAN V. ANDRADE  Rosario Vda. De Andrade (Rosario) was the registered owner of four parcels
of land
 She mortgaged to and subsequently foreclosed the land by one Simon Diu
(Simon)
 When the redemption period was about to expire, Rosario sought the
assistance of Bobby Tan (Bobby) who agreed to redeem the subject
properties.
 Rosario sold the same to Bobby and her son, Proceso Andrade
 Rosario’s children filed a complaint for reconveyance and annulment of
deeds of conveyance
 They claimed that since the subject properties were inherited by them from
their father, Proceso Andrade, Sr. (Proceso, Sr.), the subject properties were
conjugal in nature, and thus, Rosario had no right to dispose of their
respective shares therein
Art. 117. The following are conjugal partnership properties:
(1) Those 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;
 Manuel was not required to prove that the property was acquired with funds of
the partnership. Rather, the presumption applies even when the manner in
which the property was acquired does not appear.
 In the absence of Manuel’s consent, the Deed of Sale is void.
 Since the property was undoubtedly part of the conjugal partnership, the sale
to Titan required the consent of both spouses.
Article 165 of the Civil Code expressly provides that "the husband is the
administrator of the conjugal partnership". Likewise, Article 172 of the Civil Code
ordains that "(t)he wife cannot bind the conjugal partnership without the husband’s
consent, except in cases provided by law".
Similarly, Article 124 of the Family Code requires that any disposition or
encumbrance of conjugal property must have the written consent of the other
spouse, otherwise, such disposition is void.
 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 disposition or
encumbrance without authority of the court or the written consent of the other
spouse.
 The presumption in favor of conjugality does not operate if there is no
showing of when the property alleged to be conjugal was acquired.
Moreover, the presumption may be rebutted only with strong, clear,
categorical and convincing evidence. There must be strict proof of the
exclusive ownership of one of the spouses, and the burden of proof rests
upon the party asserting it.
Valdez v. CA
 The presumption under Article 160 of the New Civil Code, that property
acquired during marriage is conjugal, does not apply where there is no
showing as to when the property alleged to be conjugal was acquired.
The presumption cannot prevail when the title is in the name of only one
spouse and the rights of innocent third parties are involved.
In this case, records reveal that the conjugal partnership of Rosario and her
husband was terminated upon the latter’s death
 no evidence was adduced by the Andrades to establish that the subject
properties were procured during the coverture of their parents or that
the same were bought with conjugal funds.
 Petition denied
ORSOLINO V. FRANY  Spouses Frany claimed that Carolina Orsolino (Carolina), the mother of
petitioner Dennis, authorized her other son Sander Orsolino (Sander), to sell
the subject property
 Sander sold the subject property to Spouses Frany
 it was agreed upon that Spouses Orsolino, who are the current occupants of
the subject property, shall vacate and peacefully surrender the possession
of the same to Spouses Frany
 petitioners failed to do so
 Spouses Orsolino claimed that they derived their right to stay therein from
their mother Carolina, who has bought her right to the subject property from
Julieta Guaniso
 They also claimed that the signature in the Deed was forged
 MeTC ruled in favour of Spouses Frany. RTC ruled in favour of Spouses
Orsolino.
 RTC ruled that the sale of the land was void because it was conjugal when
Carolina sold it
 CA reversed RTC.
AYALA INVESTMENT  Philippine Blooming Mills (PBM) obtained P50,300,000.00 loan from petitioner
V. CA Ayala Investment and Development Corporation (AIDC).
 Respondent Alfredo Ching, EVP of PBM, executed security agreements making
him jointly and severally answerable with PBM’s 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.
 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 spouse’s conjugal properties. A
certificate of sale was issued to AIDC, being the only bidder and was registered.
 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.
ROS V. PNB  Joe Ros obtained a loan of P115,000.00 from PNB on October 14, 1974 and as
security for the loan, petitioner, Ros, executed a real estate mortgage involving a
parcel of land with all the.
 Upon maturity, the loan remained outstanding. As a result, PNB instituted
extrajudicial foreclosure proceedings on the mortgaged property. After the
extrajudicial sale, a Certificate of Sale was issued in favor of PNB, as the highest
bidder.
No forgery was proven
 forgery cannot be presumed and must be proved by clear, positive and
convincing evidence, thus, the burden of proof lies on the party alleging
forgery
 validity of the said documents must be upheld on the ground that it
enjoys the presumption of regularity of a public document since the same
carry evidentiary weight with respect to their due execution.
Article 160 of the Civil Code
 all property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the
husband or to the wife. However, the presumption under said article
applies only when there is proof that the property was acquired during
the marriage. Proof of acquisition during the marriage is an essential.
condition for the operation of the presumption in favor of the conjugal
partnership
 RTC's conclusion that the subject property was conjugal was not based
on evidence since Spouses Orsolino failed to present any evidence to
establish that Carolina acquired the subject property during her marriage
 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.
 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 Ching’s
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
spinoff of the loan itself.
 Yes. At the time of the mortgage the Civil Code was the applicable law. Article
161 of the Civil Code enumerated the instances of which the spouses-conjugal
partnership shall be liable and paragraph (1) one of the said provision states
“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”.
 The loan was used for additional working capital for their family business
hence, it is considered that such loan was acquired for the benefit of the
conjugal partnership and not merely for the benefit of Ros.
  The property was consolidated and registered in the name of PNB, after the lapse
of one year without the property being redeemed. Laoag Branch on August 10,
1978.
 Estrella Agueta, wife of Joe Ros claims that she has no knowledge of the loan
obtained by her husband nor she consented to the mortgage instituted on the
conjugal property.
 Ros and Agueta filed to annul the proceedings pertaining to the mortgage, sale
and consolidation of the property – interposing the defense that her signatures
affixed on the documents were forged and that the loan did not redound to the
benefit of the family.
 PNB seeks for the dismissal of the complaint for lack of
 cause of action, and insists that it was petitioners’ own acts of omission that bar
them from recovering the subject property on the ground of estoppel, laches,
abandonment and prescription.
 Issue:
 Whether or not the debt/loan was chargeable to the conjugal property.
Elenita Dewara v  Eduardo Dewara (Eduardo) and petitioner Elenita Magallanes Dewara * Art. 163. The payment of debts contracted by the husband or the wife before the
Spouses Lamela (Elenita) got married (Under the Civil Code) and eventually separated. marriage shall not be charged to the conjugal partnership.
Elenita went to work in the US while Eduardo stayed in the Philippines.
 Eduardo, while driving a private jeep registered to the name of Elena, hit Art. 161. The conjugal partnership shall be liable for:
respondent Ronnie Lamela. Ronnie filed a criminal case and the MTCC found (1) All debts and obligations contracted by the husband for the benefit of the
Eduardo guilty and sentenced him to suffer imprisonment and pay a fine. conjugal partnership, and those contracted by the wife, also for the same purpose,
 Since Eduardo had no property to satisfy the writ of execution. He requested in the cases where she may legally bind the partnership;
to levy the property of Elenita in his name. The property was sold at a public (2) Arrears or income due, during the marriage, from obligations which constitute
auction. a charge upon property of either spouse or of the partnership;
 Elenita claimed that the levy of execution was illegal her property and it (3) Minor repairs or for mere preservation made during the marriage upon the
cannot be used to answer for the mistakes of her husband. separate property of either the husband or the wife; major repairs shall not be
 The Court ruled in favor of the respondents. charged to the partnership;
(4) Major or minor repairs upon the conjugal partnership property;
(5) The maintenance of the family and the education of the children of both the
husband and wife, and of legitimate children of one of the spouses;
(6) Expenses to permit the spouses to complete a professional, vocational or other
course.

Delos Santos v Abejon  Erlinda and her late husband Pedro Delos Santos (Pedro) borrowed the
amount of ₱l00,000.00 from the former's sister, Teresita, as evidenced by a
Promissory Note dated April 8, 1998
 As security for the loan, Erlinda and Pedro mortgaged their property which
mortgage was annotated on the title. After Pedro died, Erlinda ended up
being unable to pay the loan, and as such, agreed to sell the subject land to
Teresita for ₱l50,000.00, or for the amount of the loan plus an additional
₱50,000.00.
 On July 8, 1992, they executed a Deed of Sale and a Release of Mortgage,
and eventually, TCT No. 131753 was cancelled and TCT No. 180286 was
issued in the name of "Teresita, Abejon, married to Alberto S. Abejon."
 The Abejons then constructed a three-storey building worth P2,000,000.
The enumeration above-listed should first be complied with before the conjugal
partnership may be held to answer for the liability adjudged against Eduardo.
Article 121of the Family Code
-loan obligation, including interest, if any, is chargeable to Erlinda and Pedro's
conjugal partnership as it was a debt contracted by the both of them during their
marriage; and should the conjugal partnership be insufficient to cover the same,
then Erlinda and Pedro (more particularly, his estate as he is already deceased) shall
be solidarily liable for the unpaid balance with their separate properties.
-Erlinda, as the only party to the sale, is the only one obligated to refund the
P50,000 consideration
Article 448 of the Civil Code
  Later, The Delos Santos family denied the 1992 sale ever occurred, since
Pedro died in 1989.The Abejons sought P2,000,000 from the Delos Santos
family for the cost of the building, and P150,000 for the land, before they
would turn them over.
 Delos Santos used the defense of not having participated in the spurious
sale. They claimed that Teresita constructed the building voluntarily
 RTC declared the sale void.Delos Santos family ordered to pay for the loan,
the building and the litigation costs
BORLONGON V.  Eliseo Borlongan, Jr. and his wife Carmelita, acquired a real property located at
BANCO DE ORO Pasig City covered by Transfer Certificate of Title.
 They went to the Registry of Deeds of Pasig City to obtain a copy of the TCT in
preparation for a prospective sale of the subject property. To their surprise, the
title contained an annotation that the property covered thereby was the subject
of an execution sale.
 Petitioner immediately procured a copy of the and found out that respondent
Banco de Oro (BDO), formerly Equitable PCI Bank, filed a complaint for sum of
money against Tancho Corporation, the principal debtor of loan obligations
obtained from the bank.
 Likewise, impleaded were several persons, including Carmelita, who supposedly
signed four (4) security agreements totaling ₱l3,500,000 to guarantee the
obligations of Tancho Corporation.
 RTC rendered a decision holding the defendants liable to pay BDO ₱32,543,856.33
plus 12% interest per annum from the time of the filing of the complaint until fully
paid and attorney's fees.
 BDO filed a Motion to Conduct Auction of the subject property. The motion was
granted so that the subject property was sold to BDO, as the highest bidder.
 Following the discovery of the sale of their property, Eliseo executed an affidavit
of adverse claim.
 He alleged in his Complaint that the subject property is a family home that belongs
to the conjugal partnership of gains he established with his wife.
 He further averred that the alleged surety agreements upon which the attachment
of the property was anchored were signed by his wife without his consent and did
not redound to benefit their family.
-"The essence of good faith lies in an honest belief in the validity of one's right,
ignorance of a superior claim, and absence of intention to overreach another."
Article 453 of the Civil Code
If there was bad faith, not only on the part of the person who built, planted or
sowed on the land of another, but also on the part of the owner of such land, the
rights of one and the other shall be the same as though both had acted in good
faith.
It is understood that there is bad faith on the part of the landowner whenever the
act was done with his knowledge and without opposition on his part.
-Teresita, having been apprised of Pedro’s death as early as 1990, acted in bad faith
Articles 546 and 548 of the Civil Code
- respondents would have a right of retention over the three (3)-storey building as
well as the subject land until petitioners complete the reimbursement
- Petitioners may also sell the subject land to respondents at a price equivalent to
the current market value thereof
Remanded to RTC to determine the proper application of Articles 448 and 453, in
relation to Articles 546 and 548 of the Civil Code,as applied in existing jurisprudence
 Petitioners argue that the obligation of the wife arising from her criminal liability
is chargeable to the conjugal partnership.1âwphi1 We do not agree.
There is no dispute that contested property is conjugal in nature. Article 122 of the
Family Code explicitly provides that payment of personal debts contracted by the
husband or the wife before or during the marriage shall not be charged to the
conjugal partnership except insofar as they redounded to the benefit of the family.
 Parenthetically, by no stretch of imagination can it be concluded that the civil
obligation arising from the crime of slander committed by Erlinda redounded to
the benefit of the conjugal partnership.
To reiterate, conjugal property cannot be held liable for the personal obligation
contracted by one spouse, unless some advantage or benefit is shown to have
accrued to the conjugal partnership.