BUADO VS.

CA

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 property for 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

BA FINANCE CORP. VS. CA

FACTS:
Augusto Yulo secured a loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own behalf and as a representative of A&L
Industries. Augusto presented an alleged special power of attorney executed by his wife, Lily
Yulo, who managed the business and under whose name the said business was registered,
purportedly authorized the husband to procure the loan and sign the promissory note. 2months

prior the procurement of the loan, Augusto left Lily and their children which in turn abandoned
their conjugal home. When the obligation became due and demandable, Augusto failed to pay
the same.
The petitioner prayed for the issuance of a writ of attachment alleging that said spouses
were guilty of fraud consisting of the execution of Deed of Assignment assigning the rights, titles
and interests over a construction contract executed by and between the spouses and A. Soriano
Corporation. The writ hereby prayed for was issued by the trial court and not contented with the
order, petitioner filed a motion for the examination of attachment debtor alleging that the
properties attached by the sheriff were not sufficient to secure the satisfaction of any judgment
which was likewise granted by the court.

ISSUE:

Whether or not A&L Industries can be held liable for the obligations contracted by the
husband.

HELD:

A&L Industries is a single proprietorship; whose registered owner is Lily Yulo. The said
proprietorship was established during the marriage and assets were also acquired during the
same. Hence, it is presumed that the property forms part of the conjugal partnership of the
spouses and be held liable for the obligations contracted by the husband. However, for the
property to be liable, the obligation contracted by the husband must have redounded to the
benefit of the conjugal partnership. The obligation was contracted by Augusto for his own benefit
because at the time he incurred such obligation, he had already abandoned his family and left
their conjugal home. He likewise made it appear that he was duly authorized by his wife in

behalf of the company to procure such loan from the petitioner. Clearly, there must be the
requisite showing that some advantage accrued to the welfare of the spouses.
Thus, the Court ruled that petitioner cannot enforce the obligation contracted by Augusto
against his conjugal properties with Lily. Furthermore, the writ of attachment cannot be issued
against the said properties and that the petitioner is ordered to pay Lily actual damages amouting
to P660,000.00.