Arcaba vs.
Tabancura Ayala vs CA
Francisco Comille and his wife Zosima Montallana became the
registered owners of Lot No. 437-A located at Balintawak St. and Rizal
Avenue in Dipolog City, Zamboanga del Norte in January 1956. Zosima
died in 1980 hence Francisco and his mother in law executed a deed of
extrajudicial partition with waiver of rights, where the latter waived her
share consisting of of the property in favor of Francisco. Since
Francisco do not have any children to take care of him after his
retirement, he asked Leticia, his niece, Leticias cousin, Luzviminda and
Cirila Arcaba, the petitioner, who was then a widow and took care of
Franciscos house as well as the store inside.
According to Leticia, Francisco and Cirila were lovers since they slept in
the same room. On the other hand, Erlinda Tabancura, another niece
of Francisco claimed that the latter told her that Cirila was his
mistress. However, Cirila defensed herself that she was a mere helper
who could enter the masters bedroom when Francisco asked her to and
that Francisco was too old for her. She denied having sexual intercourse
with Francisco. When the nieces got married, Cirila who was then 34
year-old widow started working for Francisco who was 75 year old
widower. The latter did not pay him any wages as househelper though
her family was provided with food and lodging. Franciscos health
deteriorated and became bedridden. Tabancura testified that
Franciscos only source of income was the rentals from his lot near the
public streets.
In January 1991, few months before Francisco died, he executed a
Deed of Donation Inter Vivos where he ceded a portion of Lot 437-A
composed of 150 sq m., together with his house to Cirila who accepted
the same. The larger portion of 268 sq m. was left under his name. This
was made in consideration of the 10 year of faithful services of the
petitioner. Atty Lacaya notarized the deed and was later registered by
Cirila as its absolute owner.
In Octoer 1991, Francisco died and in 1993, the lot received by Cirila had
a market value of P57,105 and assessed value of P28,550. The
decedents nephews and nieces and his heirs by intestate succession
alleged that Cirila was the common-law wife of Francisco.
ISSUE: Whether or not the deed of donation inter vivos executed by
Francisco in Arcabas favor was valid.
HELD: The court in this case considered a sufficient proof of common
law relationship wherein donation is not valid. The conclusion was
based on the testimony of Tabancura and certain documents bearing
the signature of Cirila Comille such as application for business permit,
sanitary permit and the death certificate of Francisco. Also, the fact that
Cirila did not demand her wages is an indication that she was not simply
a caregiver employee.
Cohabitation means more than sexual intercourse, especially when one
of the parties is already old and may no longer be interested in sex at
the very least, cohabitation is a public assumption of men and women
holding themselves out to the public as such.
Hence, the deed of donation by Francisco in favor of Cirila is void under
Art. 87 of the Family Code.
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 is 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: No. 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
 Wong vs IAC
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, the husband bought a parcel of land in
Angeles from his father using the money borrowed from an
officemate. Sometime a year later, 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 is WON debt of the wife without the knowledge of the
husband can be satisfied through the conjugal property.
HELD: No. 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.
CARLOS VS ABELARDO
Respondent and his wife approached the petitioner and
requested him to advance the amount of US$25,000.00 for the
purchase of a house and lot.
To enable and assist the spouses conduct their married life
independently and on their own, petitioner issued a check in the
name of a certain Pura Vallejo, seller of the property, who
acknowledged receipt thereof.
When petitioner inquired from the spouses as to the status of
the amount he loaned to them, the latter acknowledged their
obligation but pleaded that they were not yet in a position to
make a definite settlement of the same.
Thereafter, respondent expressed violent resistance to
petitioners inquiries on the amount to the extent of making
various death threats against petitioner.
The petitioner filed a complaint for collection of a sum of money
and damages against respondent and his wife.
As they were separated in fact for more than a year prior to the
filing of the complaint, respondent and his wife filed separate
answers.
The wife admitted securing a loan together with her husband,
from petitioner. She claimed, however, that said loan was
payable on a staggered basis so she was surprised when
petitioner demanded immediate payment of the full amount.
The respondent claimed that the US$25,000.00 was not a loan
but his share in the profits of H.L. Carlos Construction. He alleged
that he received money from petitioner amounting to almost P3
million as his share in the profits of the corporation. To prove
this, he presented 10 BPI checks allegedly given to him by
petitioner. He argued that if indeed, he and his wife were
indebted to petitioner, the latter could have easily deducted the
amount of the said loan from his share of the profits.
ISSUE: W/N the respondent and his wife are jointly liable in the
payment of the loan
RULING: YES. The defendants never denied that the check of
US$25,000.00 was used to purchase the subject house and lot.
They do not deny that the same served as their conjugal home,
thus benefiting the family. On the same principle,
acknowledgment of the loan made by the defendant-wife binds
the conjugal partnership since its proceeds redounded to the
benefit of the family.
It was used to purchase the house and lot which became the
conjugal home of respondent and his family.
The loan is the liability of the conjugal partnership pursuant to
Article 121 of the Family Code.
Defendant-husband cannot allege as a defense that the amount
of US $25,000.00 was received as his share in the income or
profits of the corporation and not as a loan. Firstly, defendant-
husband does not appear to be a stockholder nor an employee
nor an agent of the corporation, H. L. Carlos Construction, Inc.
Since he is not a stockholder, he has no right to participate in the
income or profits thereof. In the same manner that as he is not
an employee nor an agent of H. L. Carlos Construction, Inc., he
has no right to receive any salary or commission therefrom.
 Secondly, the amount advanced for the purchase of the house
and lot came from the personal account of the plaintiff. If,
indeed, it was to be construed as defendant-husbands share in
the profits of the corporation, the checks should come from the
corporations account and not from the plaintiffs personal
account, considering that the corporation has a personality
separate and distinct from that of its stockholders and officers.
QUIAO VS QUIAO
Respondent, Rita Quiao, filed a petition for legal separation
against petitioner Brigido Quiao. It rendered a decision which
stated that Rita would have the custody of the minor children,
all the remaining conjugal properties will be divided equally
between herein [respondents] and [petitioner] subject to the
respective legitimes of the children and the payment of the
unpaid conjugal liabilities.
However, since the petitioner is the guilty spouse, his share on
the net profits of the conjugal properties would be forfeited in
favor of the parties common children.
A few months thereafter, Rita filed a motion for execution, which
was granted by the trial court. By 2006, Brigido paid Rita with
regards to the earlier decision; the writ was partially executed.
After more than 9 months later, Brigido filed a motion for
clarification asking the RTC to define Nets Profits Earned.
In answer, the court held that the phrase denotes the
remainder of the properties of the parties after deducting the
separate properties of each of the spouses and debts. Upon a
motion for reconsideration, it initially set aside its previous
decision stating that NET PROFIT EARNED shall be computed in
accordance with par. 4 of Article 102 of the FC. However, it later
reverted to its original.
Order, setting aside the last ruling.
ISSUE: What is the meaning of net profits and what shall be
included in the forfeiture of the guilty spouse in the net conjugal
partnership?
RULING:
As to the definition of "net profits," the court referred to Article
102 (4) of the Family Code which states that net profits "shall be
the increase in value between the market value of the
community property at the time of the celebration of the
marriage and the market value at the time of its dissolution."
Thus, Article 102 (4) applies to both the dissolution of the
absolute community regime under Article 102 of the Family
Code, and to the dissolution of the conjugal partnership regime
under Article 129 of the Family Code. We make it clear that
Article 102 (4) of the Family Code applies in the instant case for
purposes only of defining "net profit.
Since the trial court found the petitioner the guilty party, his
share from the net profits of the conjugal partnership is forfeited
in favor of the common children, pursuant to Article 63 (2) of the
Family Code. Since he does not own any separate property
during the liquidation, nothing will be returned to the guilty
party in the conjugal partnership regime, because there is no
separate property which may be accounted for in the guilty
party's favor.
QUIAO vs QUIAO
FACTS:
Rita C. Quiao (Rita) filed a complaint for legal separation against
petitioner Brigido B. Quiao (Brigido). RTC rendered a decision
declaring the legal separation thereby awarding the custody of
their 3 minor children in favor of Rita and all remaining
properties shall be divided equally between the spouses subject
to the respective legitimes of the children and the payment of
the unpaid conjugal liabilities.
Brigidos share, however, of the net profits earned by
the conjugal partnership is forfeited in favor of
the common children because Brigido is the offending spouse.
Neither party filed a motion for reconsideration and appeal
within the period 270 days later or after more than nine
months from the promulgation of the Decision, the petitioner
filed before the RTC a Motion for Clarification, asking the RTC to
define the term Net Profits Earned.
RTC held that the phrase NET PROFIT EARNED denotes the
remainder of the properties of the parties after deducting the
separate properties of each [of the] spouse and the debts. It
further held that after determining the remainder of the
properties, it shall be forfeited in favor of the common children
because the offending spouse does not have any right to any
share of the net profits earned, pursuant to Articles 63, No. (2)
and 43, No. (2) of the Family Code.
The petitioner claims that the court a quo is wrong when it
applied Article 129 of the Family Code, instead of Article 102. He
confusingly argues that Article 102 applies because there is no
other provision under the Family Code which defines net profits
earned subject of forfeiture as a result of legal separation.
ISSUES:
1. Whether Art 102 on dissolution of absolute community or Art
129 on dissolutionof conjugal partnership of gains is applicable
in this case. Art 129 will govern.
2. Whether the offending spouse acquired vested rights overof
the properties in the conjugal partnership NO.
3. Is the computation of net profits earned in
the conjugal partnership of gains the same with
the computation of net profits earned in the absolute
community? NO.
RATIO:
1. First, since the spouses were married prior to the
promulgation of the current family code, the default rule is that
In the absence of marriage settlements, or when the same are
void, the system of relative community or conjugal partnership
of gainsas established in this Code, shall govern the property
relations between husband and wife.
Second, since at the time of the dissolution of the spouses
marriage the operative law is already the Family Code, the same
applies in the instant case and the applicable law in so far as the
liquidation of the conjugal partnership assets and liabilities is
concerned is Article 129 of the Family Code in relation to Article nothing to return to any of them. The listed properties above are
63(2) of the Family Code. considered part of the conjugal partnership. Thus, ordinarily,
2. The petitioner is saying that since the property relations what remains in the above-listed properties should be divided
between the spouses is governed by the regime equally between the spouses and/or their respective heirs.
of Conjugal Partnership of Gains under the Civil Code, the However, since the trial court found the petitioner the guilty
petitioner acquired vested rights over half of the properties of party, his share from the net profits of the conjugalpartnership
the ConjugalPartnership of Gains, pursuant to Article 143 of the is forfeited in favor of the common children, pursuant to Article
Civil Code, which provides: All property of 63(2) of the Family Code. Again, lest we be confused, like in the
the conjugal partnership of gains is owned in common by the absolute community regime, nothing will be returned to the
husband and wife. guilty party in the conjugal partnership regime, because there is
While one may not be deprived of his vested right, he may lose no separate property which may be accounted for in the guilty
the same if there is due process and such deprivation is founded partys favor.
in law and jurisprudence.
In the present case, the petitioner was accorded his right to due
process. First, he was well-aware that the respondent prayed in
her complaint that all of the conjugalproperties be awarded to
her. In fact, in his Answer, the petitioner prayed that the trial
court divide the community assets between the petitioner and
the respondent as circumstances and evidence warrant after the
accounting and inventory of all the community properties of the
parties. Second, when the decision for legal separation was
promulgated, the petitioner never questioned the trial courts
ruling forfeiting what the trial court termed as net profits,
pursuant to Article 129(7) of the Family Code. Thus, the
petitioner cannot claim being deprived of his right to due
process.
3. When a couple enters into a regime of absolute community,
the husband and the wife become joint owners of all the
properties of the marriage. Whatever property each spouse
brings into the marriage, and those acquired during the marriage
(except those excluded under Article 92 of the Family Code) form
the common mass of the couples properties. And when the
couples marriage or community is dissolved, that common mass
is divided between the spouses, or their respective heirs, equally
or in the proportion the parties have established, irrespective of
the value each one may have originally owned.
In this case, assuming arguendo that Art 102 is applicable, since
it has been established that the spouses have no separate
properties, what will be divided equally between them is simply
the net profits. And since the legal separationshare decision
of Brigido states that the in the net profits shall be awarded to
the children, Brigido will still be left with nothing.
On the other hand, when a couple enters into a regime
of conjugal partnership of gains under Article142 of the Civil
Code, the husband and the wife place in common fund the
fruits of their separate property and income from their work or
industry, and divide equally, upon the dissolution of the
marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the marriage.
From the foregoing provision, each of the couple has his and her
own property and debts. The law does not intend to effect a
mixture or merger of those debts or properties between the
spouses. Rather, it establishes a completeseparation of capitals.
In the instant case, since it was already established by the trial
court that the spouses have no separate properties, there is