Sunga chan v CA

In 1977, Chua and Jacinto Sunga verbally agreed to form a partnership for the sale and
distribution of Shellane LPGs. Their business was very profitable but in 1989 Jacinto died.
Upon Jacintos death, his daughter Lilibeth took over the business as well as the business
assets. Chua then demanded for an accounting but Lilibeth kept on evading him. In 1992
however, Lilibeth gave Chua P200k. She said that the same represents a partial payment;
that the rest will come after she finally made an accounting. She never made an accounting
so in 1992, Chua filed a complaint for Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of Preliminary Attachment
against Lilibeth.
Lilibeth in her defense argued among others that Chuas action has prescribed.
ISSUE: Whether or not Chuas claim is barred by prescription.
HELD: No. The action for accounting filed by Chua three (3) years after Jacintos death was
well within the prescribed period. The Civil Code provides that an action to enforce an oral
contract prescribes in six (6) years while the right to demand an accounting for a partners
interest as against the person continuing the business accrues at the date of dissolution, in
the absence of any contrary agreement. Considering that the death of a partner results in
the dissolution of the partnership, in this case, it was after Jacintos death that Chua as the
surviving partner had the right to an account of his interest as against Lilibeth. It bears
stressing that while Jacintos death dissolved the partnership, the dissolution did not
immediately terminate the partnership. The Civil Code expressly provides that upon
dissolution, the partnership continues and its legal personality is retained until the complete
winding up of its business, culminating in its termination.
RAVINA V VILLA-ABRILLE G.R. NO 160708 OCTOBER 16, 2009
FACTS: Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. In 1982, the
spouses acquired lot 7 in Davao City with TCT T-88674 in their names. Said lot was adjacent to
lot 8 which Pedro acquired when he was still single and was registered solely under his name
(TCT T-26471)
Spouses used their conjugal funds and loan from DBP to build a house on 7 and Pedros
lot. Consequently, they made improvements, including a poultry house and an annex
1991 The husband got a mistress and started to neglect his family. The wife was
forced to sell or mortgage their movables to support the family.
On his own, the husband wanted to dispose of the house and two lots to the petitioners
Patrocinia and Wilfredo Ravina. The wife opposed but the husband still sold the
property without the wifes consent and signature
July 5, 1991 While the wife and children were out, the husband and some CAFGU
members transferred all their belongings from the house to an apartment. When they
got home, the were prevented from entering the house. Thus, the wife filed a complaint
for the annulment of sale with damages against the husband and the petitioners.
During the trial, the husband alleged that the house was built from his exclusive funds
September 26, 1995 RTC ruled in favor of the wife, declaring that the sale of lot 8 was
void, being a conjugal property while the sale of lot 7 was valid since it was the
husbands exclusive property
CA declared that: sale of lot 7 to petitioners is valid but the sale of lot 8 is null and void;
that the husband is ordered to return the value of the consideration for lot 8 to
petitioners; that petitioners are ordered to reconvey the house and lot to the wife
ISSUE: Whether or not the husband can sell a property which is part exclusive and part
conjugal
HELD: Art. 160 NCC provides that all property of the marriage is presumed to belong to the
conjugal partnership, unless it is proven that it pertains exclusively to the husband or to the

wife. Lot 7 is an exclusive property of the husband since it was acquired prior to his marriage
with the respondent. However lot 8 was acquired in 1983 during the marriage of the spouses.
There is no evidence proving that the subject property was acquired through exchange or
barter. The presumption of the conjugal nature of the property subsists in the absence of and
convincing evidence to over come the presumption.
A sale or encumbrance of conjugal property concluded after the effectivity of the Family Code
on August 3, 1988 is governed by Art. 124 FC which states that a disposition or encumbrance is
void if done a. without the consent of both the husband and wife , or; b. in case of one
spouses inability, the authority of the court.
ART. 124. The administration and enjoyment of the conjugal partnership property
shall belong to both spouses jointly. In case of disagreement, the husbands
deciwision shall prevail, subject to recourse to the court by the wife for proper
remedy which must be availed of within five years from the date of the contract
implementing such decision.
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. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third person, and
may be perfected as a binding contract upon the acceptance by the other spouse
or authorization by the court before the offer is withdrawn by either or both
offerors. (Emphasis supplied.)
Unlike in the NCC which gives the wife 10 years to annul the alienation or encumbrance, any
alienation or encumbrance under the FC without the consent of both spouses is NULL AND
VOID. Just like in ACP, if the husband, without the knowledge and consent of the wife, sells
conjugal property, the sale is void. If the sale was with knowledge the not consent of the wife,
the wife has 5 years from the date of the contract to annul the sale.
In the present case, the wife filed within the prescribed period. However, her action to annul the
sale pertains only to the conjugal house and lot which does not include lot 7 which is an
exclusive property of the husband.
The petitioners cannot argue that they were buyers of good faith since they knew that at the
time of the sale, Pedro was married to Mary Ann and her signature did not appear in the deed.
Even if they were to argue that the property is an exclusive property of the husband, that they
proceeded with the sale regardless of the wifes contention and that the she was in actual and
public possession of the house at the time of the sale, clearly indicates that they are not
purchasers in good faith. CA DECISION AFFIRMED.

ROBERTO and VENUS BUADO vs COURT OF APPEALS and ROMULO NICOL

FACTS:
- Mr. and Mrs. Buado filed a civil case against Erlinda Nicol.
- On April 1987, the trial court rendered a decision ordering Erlinda to pay damages to the petitioners.
- The personal properties of Erlinda were insufficient to pay the damages.
- The sheriff levied and auctioned the property of Erlinda.
- An auction sale was held with the petitioners as the highest bidder. A certificate of sale was issued in favor of
Mr.and Mrs. Buado.
- After almost one year, the husband of Erlinda, Romulo Nicol, filed a complaint for the annulment of certificate of
sale and damages with preliminary injunction against petitioners and deputy sheriff.
- He argued that there was no proper publication and posting for the auction sale. He also claimed that the judgment
obligation of Erlinda Nicol amounted to P40,000 only. The spouses Buado obtained the P500,000 worth of
propertyfor only P51,685.

- The Regional Trial Court dismissed the petition of Romulo Nicol.

- The Court of Appeals reversed the decision of the RTC and held that Branch 21 has jurisdiction to act on the
complaint filed by the respondent in this case.
- The petitioners filed a petition where they said that the Court of Appeals committed a grave abuse of discretion for
reversing the decision given by the RTC.
ISSUE:
Whether or not the obligation of Erlinda Nicol arising from her criminal liability is chargeable to the conjugal
partnership.
HELD:
NO. Erlinda Nicols liability is not chargeable to the conjugal partnership. Unlike in the system of absolute
community where liabilities incurred by either spouse by reason of a crime or
quasi-delict
is chargeable to the absolute community of property, in the absence or insufficiency of the exclusive property of the
debtor-spouse, the same advantage is not accorded in the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments for the liability of the debtor-spouse. Petitioners argue
that the obligation of the wife arising from her criminal liability is chargeable to the conjugal partnership. The
Supreme Court does not agree to the contention of Mr. and Mrs. Buado. In Guadalupe v. Tronco, this Court held that
the car which was claimed by the third party complainant to be conjugal property was being levied upon to enforce
"a judgment for support" filed by a third person, the third-party claim of the wife is proper since the obligation
which is personal to the husband is chargeable not on the conjugal property but on his separate property. Hence, the
filing of a separate action by Romulo Nicol was proper. The decision of the Court of Appeals is affirmed.
Wong vs. IAC
GR No. 70082, August 19, 1991
FACTS:
Romario Henson married Katrina on January 1964. They had 3 children however, even
during the early years of their marriage, the spouses had been most of the time living
separately. During the marriage or on about January 1971, the husband bought a parcel of
land in Angeles from his father using the money borrowed from an officemate. Sometime in
June 1972, Katrina entered an agreement with Anita Chan where the latter consigned the
former pieces of jewelry valued at P321,830.95. Katrina failed to return the same within the
20 day period thus Anita demanded payment of their value. Katrina issued in September
1972, check of P55,000 which was dishonored due to lack of funds. The spouses Anita Chan
and Ricky Wong filed action for collection of the sum of money against Katrina and her
husband Romarico. The reply with counterclaim filed was only in behalf of Katrina. Trial
court ruled in favor of the Wongs then a writ of execution was thereafter issued upon the 4
lots in Angeles City all in the name of Romarico Henson married to Katrina Henson. 2 of the
lots were sold at public auction to Juanito Santos and the other two with Leonardo Joson. A
month before such redemption, Romarico filed an action for annulment of the decision
including the writ and levy of execution.
ISSUE: WON debt of the wife without the knowledge of the husband can be satisfied through
the conjugal property.
HELD:
The spouses had in fact been separated when the wife entered into the business deal with
Anita. The husband had nothing to do with the business transactions of Katrina nor
authorized her to enter into such. The properties in Angeles were acquired during the
marriage with unclear proof where the husband obtained the money to repay the loan.
Hence, it is presumed to belong in the conjugal partnership in the absence of proof that they
are exclusive property of the husband and even though they had been living separately. A
wife may bind the conjugal partnership only when she purchases things necessary for
support of the family. The writ of execution cannot be issued against Romarico and the

execution of judgments extends only over properties belonging to the judgment debtor. The
conjugal properties cannot answer for Katrinas obligations as she exclusively incurred the
latter without the consent of her husband nor they did redound to the benefit of the family.
There was also no evidence submitted that the administration of the partnership had been
transferred to Katrina by Romarico before said obligations were incurred. In as much as the
decision was void only in so far as Romarico and the conjugal properties concerned, Spouses
Wong may still execute the debt against Katrina, personally and exclusively.

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 or guarantor, 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.

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.
SECURITY BANK AND TRUST COMPANY v. MAR TIERRA CORP, WILFRIDO MARTINEZ, MIGUEL
LACSON, and RICARDO LOPA
November 29, 2006 (508 SCRA 419)
FACTS:
Respondent Mar Tierra Corporation, through its president, Wilfrido C. Martinez, applied for a P12,000,000 credit

accommodation with petitioner Security Bank and Trust Company. Petitioner approved the application and entered
into a credit line agreement with respondent corporation. It was secured by an indemnity agreement executed by
individual respondents Wilfrido C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound themselves jointly
and severally with respondent corporation for the payment of the loan.
Respondent corporation was not able to pay all its debt balance as it suffered business reversals, eventually ceasing
operations. Petitioner filed a complaint against respondent corp and individual respondents.
RTC issued a writ of attachment on all real and personal properties of respondent corporation and individual
respondent Martinez including the conjugal house and lot of the spouses but it found that it did not redound to the
benefit of his family, hence, it ordered the lifting of the attachment on the conjugal house and lot of the spouses
Martinez.
Petitioner

appealed

to

CA.

It

affirmed

RTC

decision.

Petitioned

to

SC.

ISSUE: WON the conjugal partnership may be held liable for an indemnity agreement entered into by the husband
to accommodate a third party
HELD:
No. SC upheld the CA. Under Article 161(1) of the Civil Code, the conjugal partnership is liable for all debts and
obligations contracted by the husband for the benefit of the conjugal partnership.
The court ruled in Luzon Surety Co., Inc. v. de Garcia that, in acting as a guarantor or surety for another, the
husband does not act for the benefit of the conjugal partnership as the benefit is clearly intended for a third party.
In Ayala Investment and Development Corporation v. Court of Appeals, we ruled that, if the husband himself is the
principal obligor in the contract, i.e., the direct recipient of the money and services to be used in or for his own
business or profession, the transaction falls within the term obligations for the benefit of the conjugal partnership.
In other words, where the husband contracts an obligation on behalf of the family business, there is a legal
presumption that such obligation redounds to the benefit of the conjugal partnership.
On the other hand, if the money or services are given to another person 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.
In the case at bar, the principal contract, the credit line agreement between petitioner and respondent corporation,
was solely for the benefit of the latter. The accessory contract (the indemnity agreement) under which individual
respondent Martinez assumed the obligation of a surety for respondent corporation was similarly for the latters
benefit. Petitioner had the burden of proving that the conjugal partnership of the spouses Martinez benefited from
the transaction. It failed to discharge that burden.
CASE DIGEST: Metrobank v. Pascual
FACTS:
Florencia Nevalga and Nicholson Pascual were married in 1985. During the union, they acquired a lot
with a three door apartment standing thereon. Their marriage were annulled in 1994 and they went on
their separate ways without liquidating their properties.
In 1997, Florencia mortgaged the aforesaid property as a security for the loan she obtained with spouses
Oliveros. Petitioner foreclosed the mortgage, had the property auctioned and acquired it as the successful
bidder. Nicholson filed an action to annul the mortgage alleging that the subject property is still a conjugal
property and it was executed without his consent

RTC ruled that mortgage is invalid. The said lot is a conjugal property, the same having been acquired
during the existence of the marriage of Nicholson and Florencia. (Art 116 NCC) Metrobank had not
overcome the presumptive conjugal nature of the lot. And being conjugal, the RTC concluded that the
disputed property may not be validly encumbered by Florencia without Nicholsons consent.CA affirmed
the decision
ISSUES:
A. WON the subject property is a conjugal by applying Article 116 of the Family Code.
B. WON the declaration of nullity of marriage between the respondent Nicholson Pascual and Florencia
Nevalga ipso facto dissolved the regime of community of property of the spouses.

RULING:
A.) The property relations of the former spouses are governed by the Civil Code Art 106 (Being contrated
prior to effectivity of the Family Code) which provides that all property of the marriage is presumed to be
conjugal partnership, unless it be proven that it pertains exclusively to the husband or to the wife. This
article does not require proof that the property was acquired with funds of the partnership. The
presumption applies even when the manner in which the property was acquired does not appear. (Note:
The petitioner failed to overcome the presumption in this case)
B.) While the declared nullity of marriage severe marital bond and dissolved the conjugal partnership, the
character of the properties acquired before such declaration continues to subsist as conjugal properties
until and after the liquidation and partition of the partnership. In this pre-liquidation scenario, Art. 493 of
the Civil Code shall govern the property relationship between the former spouses. Thus, applying the
provision to the present case, the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership. Accordingly, the mortgage contract insofar as it covered the remaining 1/2 undivided portion of
the lot is null and void, Nicholson not having consented to the mortgage of his undivided half.
(In the trial, it was found that the alleged waiver presented by Florencia bore Nicholson's forged
signature.)

Aguete v. PNB, G.R. No. 170166 April 6, 2011

FACTS: Spouses Jose Ros and Estrella Aguete filed a complaint for the annulment of the Real Estate Mortgage and
all legal proceedings taken thereunder against PNB, Laoag Branch before the CFI of Ilocos Norte.
The information disclosed that Jose Ros (petitioner) obtained a loan of P115,000 from ONB and executed a real
estate mortgage involving a parcel of land as security thereof. Upon maturity, the loan remained unpaid and as a
result, PNB initiated extrajudicial foreclosure proceedings on the said property. After which, the lot was sold to PNB
as the highest bidder. Petitioner claims that she had no knowledge of the loan incurred by her husband nor did she
consent to the mortgage instituted on their conjugal property. She then filed a complaint to annul the proceedings
pertaining to the mortgage, sale and consolidation of the property (after the lapse of 1 year). The trial court rendered
its decision in favor of petitioners but was later reversed by the appellate court upon appeal.
ISSUE: WON the property is considered as redounded to the benefit of the conjugal partnership.
HELD: Yes. Petition denied.
The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the
wife. Should the husband do so, then the contract is voidable.17 Article 173 of the Civil Code allows Aguete to
question Ros encumbrance of the subject property. However, the same article does not guarantee that the courts will

declare the annulment of the contract. Annulment will be declared only upon a finding that the wife did not give her
consent.
It is enough that the benefit to the family is apparent at the signing of the contract. From the very nature of the
contract of loan or services, the family stands to benefit from the loan facility or services to be rendered to the
business or profession of the husband. It is immaterial, if in the end, his business or profession fails or does not
succeed. Simply stated, where the husband contracts obligations on behalf of the family business, the law
presumes, and rightly so, that such obligation will redound to the benefit of the conjugal
partnership.
Ros loan from PNB redounded to the benefit of the conjugal partnership. Hence, the debt is
chargeable to the conjugal partnership.