BA Finance Corporation vs.

CA
161 SCRA 608

Facts: Augusto Yulo, respondent, secured a loan from the petitioner, BA

Finance Corp., as evidenced by his signature on a promissory note in behalf
of the A & L Industries. About two months prior to the loan, however, Augusto
Yulo had already left Lily Yulo and their children and had abandoned their
conjugal home. When the obligation became due and demandable, Augusto
Yulo failed to pay the same.

Petitioner filed its amended complaint against the spouses on the basis of the
promissory note. They also prayed for the issuance of a writ of attachment
that the said spouses were guilty of fraud in contracting the debt. The trial
court issued the writ of attachment thereby enabling the petitioner to attach
the properties of A & L Industries. Private respondent Lily Yulo filed her answer
with counterclaim, alleging that Augusto had already abandoned her and their
children five months before the filing of the complaint and that they were
already separated when the promissory note was executed. She also alleged
that her signature was forged in the special power of attorney procured by
Augusto.

Petitioner contends that even if the signature was forged or even if the
attached properties were her exclusive property, the same can be made
answerable to the obligation because the said properties form part of the
conjugal partnership of the spouses Yulo.

Issue: Whether or not the exclusive property of private respondent forms part
of the conjugal partnership of the spouses and be made answerable to the
obligation.

Ruling: SC ordered the release of the attachment of the said property. Though
it is presumed that the single proprietorship established during the marriage
is conjugal and even if it is registered in the name of only one of the spouses.
However, for the said property to be held liable, the obligation contracted by
the husband must have redounded to the benefit of the conjugal partnership.

In the case at bar, the obligation which the petitioner is seeking to enforce
against the conjugal property managed by the private respondent was
undoubtedly contracted by Augusto Yulo for his own benefit because at the
time he incurred the obligation he had already abandoned his family and had
left their conjugal home. 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.