Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-23235 August 27, 1925

latter, and prayed the court for judgment, decreeing the liquidation of said partnership, adjudicating to the plaintiff administrator one-half of the conjugal property described in the complaint with its products, that is to say, one-half of P26,125, Philippine currency, with the costs of the action. In answer to the complaint, Casimiro Natividad admitted the allegations contained in the first, second, and third paragraphs thereof and denied generally and specifically all the rest, and as special defense alleged: (1) That the plaintiff had no legal capacity to sue and maintain this actin; (2) that the estate of the conjugal partnership constituted between him and his deceased wife Maria Prado had already been liquidated, no conjugal property having been found to exist, but a loss of P10,000: (3) that the heirs of Maria Prado owe him the sum of P1,460; and (4) that the action brought by the plaintiff has already prescribed. The plaintiff, in reply to the answer, denied each and every allegation contained in the first, second, third, and fourth paragraphs thereof. After trial, the lower court rendered judgment, holding that no residue existed which should be divided between the husband and the heirs, and dismissing the complaint. From this judgment the plaintiff Jose Maria Prado took an appeal by bill of exceptions, assigning to the judgment of the trial court, as the basis of his appeal, four supposed errors which may be reduced to the following: First, its failure to decree the liquidation of the conjugal partnership formed by the spouses Casimiro Natividad and Maria Prado; second, the fact of the lower court having taken into account the value of the property of the conjugal partnership at the time of the acquisition thereof, and not of its liquidation: and third,

JOSE M. PRADO, administrator of the estate of Maria Prado, deceased, plaintiff-appellant, vs. CASIMIRO NATIVIDAD, defendant-appellee. Gregorio Perfecto for appellant. Manly, Goddard and Lockwood for appellee. VILLA-REAL, J.: Casimiro Natividad and Maria Prado contracted marriage in the month of May, 1889. Casimiro Natividad brought to the marriage some real properties which he had received from his mother as his future share in her inheritance. Maria Prado did not bring anything. During the marriage the spouses acquired on different dates real and personal properties. On April 27, 1904, Maria Prado died from pulmonary tuberculosis in Manila, where she had been taken for treatment. On the 14th day of February, 1917, Jose Maria Prado, in his capacity as administrator of the estate of the deceased Maria Prado, filed a complaint in the Court of First Instance of Camarines Sur against Casimiro Natividad, wherein he alleged that the latter had refused to make an liquidation of the estate of the conjugal partnership brought into existence by the marriage of Casimiro Natividad and the deceased Maria Prado and which was dissolved by the death of the

the fact of its having taken into consideration the supposed debt of P17,428.98. The complaint filed herein contains a detailed statement of the movable and immovable properties that were acquired during marriage. At the trial of the case, evidence was introduced tending to show the existence of said properties with their prices and fruits. Also evidence was introduced in an attempt to show the true expenses incurred during the administration of the conjugal partnership. With that evidence in the record, it is not necessary to order the defendant, in his capacity as administrator of the estate of said partnership, to make a formal liquidation thereof; because what was done during the trial of the case amounts to a liquidation, and to make another one would be to do double work, and would give rise to new controversies when the liquidation is submitted for the contesting thereof by the adverse party. The trial court has not, therefore, committed any error in not ordering a formal liquidation. As to the appraisal of the real property of the conjugal partnership, it is not the purchase, but the market, or in default thereof, the assessed, value at the time of the liquidation that must be taken into account. (Art. 1428 in connection with art. 1367 of the Civil Code.) Urban, as well as rural, property has its value in the market which rises and falls according to the movement of the population, market, and trade, and it is not just nor equitable that the conjugal partnership should not share the advantages or disadvantages that those fluctuations give to its property. The evidence shows that during the marriage the spouses began to build a house of strong materials which remained unfinished until the dissolution of the conjugal partnership by the death of the wife Maria Prado, and cost P3,000. Upon the death of Maria Prado the defendant had the building

finished, spending P2,000 more out of his own money. At the termination of the house, it was assessed at P10,654, its value having, therefore, increased by P5,654, of which increase P3,392.40 must correspond to the P3,000 which was the cost of the house not finished at the death of Maria Prado, making a total of P6,391.40. The lands in Burobandan which were acquired during marriage, had an area of 15 hectares approximately. After the dissolution of the conjugal partnership the defendant acquired 80 hectares more which added to the 15 hectares formed a single tract of 95 hectares which was assessed at P9,500, of which P1,500 correspond to the 15 hectares pertaining to the conjugal partnership. Of the land of 40 hectares in Cabatagan which was assessed at P3,750, only 5 hectares pertain to the conjugal partnership and the 35 are private property of the husband, P469 corresponding to the 5 hectares. The lands in Sagpon are assessed at P1,072; the one in San Antonio at P180, and the one in Joyon-Joyon at P150. All of the other lands, those situated in Catalutoan and San Jose, are estimated at P1,090. Taking, therefore, into account the assessed value of the property of the conjugal partnership at the time of the liquidation, the total value thereof amounts to P10,853.40. The appellant contends that the claim in connection with the debts contracted by Casimiro Natividad for the expenses of the administration of the property of the conjugal partnership of the family and the last sickness and funerals of Maria Prado, should have been filed with the committee on claims in the intestate proceeding for the settlement of the estate of Maria Prado. This contention is clearly untenable, because said debts having been contracted by Casimiro Natividad as legal administrator of the conjugal partnership formed by virtue of his marriage with Maria Prado, must, according to law (art. 1408 of the Civil Code), be charged to said partnership at the making of the liquidation thereof and not to

the estate of Maria Prado, inasmuch as she did not personally intervene in obtaining said loans. So that even if the assessed value of the estate of the conjugal partnership at the time of the liquidation be taken into account, its total value of P10,853.40 would not be sufficient to cover all the expenses incurred by the administration of said partnership which amount to the sum of P17,423.98, and consequently after the sale of said estate and the payment of the debts with the proceeds thereof there would be no residue that might be considered as conjugal property to be distributed among the heirs of Maria Prado.

In conclusion, while the lower court erred in not taking into account the assessed value of the estate of the conjugal partnership at the time of its liquidation, yet that does not affect the final decision, and the judgment appearing to be in accordance with the evidence and the law, the same is hereby affirmed in its entirety, with the costs against the appellant. So ordered. Avancea, C.J., Johnson, Street, Malcolm, Villamor, and Johns, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-43257 February 19, 1937

The joint savings account in the name of Angel A. Ansaldo and Margarita Quintos de Ansaldo in the said Bank of the Philippine Islands amounting to P165.84.

MARGARITA QUINTOS DE ANSALDO and ANGEL A. ANSALDO, plaintiffs-appellees, vs. THE SHERIFF OF THE CITY OF MANILA, FIDELITY & SURETY COMPANY OF THE PHILIPPINE ISLANDS and LUZON SURETY COMPANY, defendants-appellants. Ross, Lawrence and Selph for appellants. Angel A. Ansaldo for appellees. ABAD SANTOS, J.: Upon the express guaranty of the appellant Fidelity & Surety Company of the Philippine Islands, the Philippine Trust Company granted Romarico Agcaoili a credit in current account not to exceed at any one time P20,000. Appellee Angel A. Ansaldo, in turn, agreed to indemnify the Fidelity & Surety Company of the Philippine Islands for any and all losses and damages that it might sustain by reason of having guaranteed Agcaoili's obligations to the said Philippine Trust Company. Agcaoili defaulted, and the surety company, as his guarantor, paid the Philippine Trust Company the sum of P19,065.17. Thereafter, the surety company brought an action against the appellee Angel A. Ansaldo for the recovery of the said sum of P19,065.17, and after obtaining a judgment on its favor, caused the sheriff of the City of Manila to levy on the following properties:

Upon learning of the action taken by the sheriff, appellees filed with him a third party claim alleging that the money on which he levied execution was the property of the conjugal partnership existing between the said appellees and not liable for the payment of personal obligations of the appellee Angel A. Ansaldo; but upon execution of an indemnity bond by the appellant Luzon Surety Company, the sheriff retained the money in his possession. Subsequently, appellees instituted an action against the appellants in the Court of First Instance of Manila to have the execution levied by the sheriff declared null and void. The court below granted the relief prayed for and sentenced the appellants, jointly and severally, to pay the appellees the sum of P636.80 with interest thereon at the rate of ten per centum per annum from June 6, 1934 until paid, and the costs of suit. As stated by counsel for the appellants, the question involved in this appeal is whether a joint savings account and a joint current account, in a bank, of a husband and his wife are liable for the payment of the obligation of the husband. It is undisputed that the sum of P636.80 which is now in controversy was derived from the paraphernal property of the appellee, Margarita Quintos de Ansaldo, the wife of the other appellee Angel A. Ansaldo. It therefore belongs to the conjugal partnership of the said spouses. (Civil Code, art. 1401.)

The provision of article 1408 of the Civil Code to the effect that the conjugal partnership shall be liable for all the debts and obligations contracted during the marriage by the husband must be understood as subject to the qualifications established by article 1386 of the same Code, which provides that:
The fruits of the paraphernal property cannot be subject to the payment of personal obligations of the husband, unless it be proved that such obligation were productive of some benefit to the family.

become the property of the conjugal partnership, at least one-half thereof was property levied on execution, as the share of the appellee Angel A. Ansaldo. This contention is without merit. The right of the husband to one-half of the property of the conjugal partnership does not vest until the dissolution of the marriage when the conjugal partnership is also dissolved. (Civil Code, arts. 1392 and 1426.) Counsel for the appellants call attention to the fact that in the third party claim filed with the sheriff of the City of Manila by the appellees, the latter did not allege that the money on which the sheriff levied execution was property belonging exclusively to the appellee Margarita Quintos de Ansaldo. Counsel contend that, as it was then claimed that the said amount of P638.80 was conjugal property, appellees are now in estoppel to claim that the same sum was not conjugal property but paraphernal property of the appellee Margarita Quintos de Ansaldo for the appellants are arguing from a wrong premise. Appellees do not contend that said sum of P636.80 is not conjugal property. They contend that while it forms part of the assets of the conjugal partnership under article 1385 of the Civil Code, it could not be levied upon, because it was not applicable to this case. The judgment appealed from is affirmed with costs against the appellants. So ordered. Avancea, C.J., Villa-real, Imperial, Diaz, Laurel and Concepcion, JJ., concur.

The meaning of this article is clarified by reference to the first paragraph of the preceding article 1385 which reads as follows:
The fruit of the paraphernal property form part of the assets of the conjugal partnership and are subject to the payment of the debts and expenses of the spouses.

Construing the two article together, it seems clear that the fruits of the paraphernal property which become part of the assets of the conjugal partnership are not liable for the payment of personal obligations of the husband, unless it be proved that such obligations were productive of some benefit to the family. In the case now before us no attempt has been made to prove that the obligations contracted by the appellee, Angel A. Ansaldo, were productive of some benefit to his family. It is, however, claimed that, as the sum of P636.80 has

THIRD DIVISION

[G.R. No. 137675. December 5, 2000]

NOVERNIA P. NAGUIT, petitioner, vs. THE COURT OF APPEALS, OSLER U. PADUA and NORBERTO B. MAGSAJO,respondents. DECISION
GONZAGA-REYES, J.: In a decision rendered on 15 October 1991, the Regional Trial Court (RTC) of Makati, Branch 133, found Rolando Naguit liable for violation of Batas Pambansa Blg. 22, and ordered him to idemnify private respondent Osler U. Padua in the amount of P260,000.00 and to pay the costs of the action (Criminal Case No. 90-2645). A writ of execution was issued by said court on 23 June 1992 and pursuant thereto, respondent Sheriff Norberto B. Magsajo levied upon a condominium unit covered by Condominium Certificate of Title No. 7362 of the Registry of Deeds for the City of Makati, which notice of levy was annotated at the back of the title. Consequently, the property was sold at a public auction for P318,050.00 in favor of private respondent, as the highest bidder. The certificate of sale was issued in the name of private respondent and registered with the Registry of Deeds on 25 August 1994. On 8 August 1995, petitioner filed a complaint with the RTC of Makati against private respondent Padua and respondent Sheriff Magsajo for the annulment of sale and for

damages, with a prayer for the issuance of a writ of preliminary injunction in order to enjoin the final conveyance of title over the condominium unit to private respondent (Civil Case No. 95-1182). Petitioner claimed that the debt contracted by her husband did not redound to the benefit of the family, nor was it made with her consent, and therefore, should not be charged to the conjugal partnership of gains or to her exclusive property; that the condominium unit levied upon and sold to private respondent is her exclusive property, not the judgment obligors; and that consequently, the levy and sale of the condominium unit are void.[1] On 20 September 1995, Branch 136 of the RTC of Makati denied petitioners prayer for the issuance of preliminary injunction, explaining that

The perceived anomaly in the auction sale of the property subject of this case, which [is] claimed to be owned by the petitioner is a matter within the competence of the Court which authorized the levy on execution of judgment, of property of plaintiff in this case. If plaintiff believes that there were irregularities in the auction sale of the property subject of this case which [is] claimed to be owned by the petitioner, the problems should have been threshed out before [the] RTC Makati, Branch 133, which court authorized the levy on execution of judgment of property of plaintiff in this case. Besides, the petitioner should have elevated the matter to the higher tribunal, and seek proper injunctive relief, and not to refer to this Court which does not exercise an appellate authority over the court that issued the aforesaid writ of execution.

The Court agrees with the argument of the defendant that the present action of the plaintiff in seeking relief with this Court is legally misplaced. It is an elementary rule of procedure, which is too well settled to be ignored, that trial courts have no power to interfere by injunction and are enjoined from intervening with the proceedings of a co-equal, concurrent and coordinate court of the same jurisdiction.
[2]

On 5 July 1996, the trial court issued an order denying petitioners motion for reconsideration and dismissing the case on the ground of lack of jurisdiction.[3] The Court of Appeals upheld the trial courts decision to dismiss the case. In its decision promulgated on 18 November 1998, the appellate court explained that since petitioner is the spouse of the judgment debtor she cannot be considered a stranger to the case wherein the writ of execution was issued and thus, she should have presented her third-party claim therein. In the event that her claim is denied, only then should petitioner bring the matter before the appellate court.[4] Petitioner filed a motion for reconsideration, which was denied by the Court of Appeals on 9 February 1999. Hence, the present petition, wherein petitioner asks that the 18 November 1998 Decision and 9 February 1999 Resolution of the Court of Appeals be set aside and that the action for annulment of sale be tried on the merits.[5] The petition is imbued with merit. A third-party claimants right to bring an independent action to assert his claim of ownership over the properties seized is sanctioned by Section 17 of Rule 39 of the old Rules of Civil Procedure, which provides that

Proceedings where property claimed by third person. - If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. In case of disagreement as to the value, the same shall be determined by the court issuing the writ of execution. The officer is not liable for damages, for the taking or keeping of the property, to any third party claimant unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein contained shall prevent such claimant or any third person from vindicating his claims to the property by any proper action. [emphasis supplied]
[6]

xxx xxx

xxx

The proper action mentioned in Section 17 would have for its object the recovery of ownership or possession of the property seized by the sheriff, as well as damages resulting from the allegedly wrongful seizure and detention thereof despite the third party claim and it may be brought against the sheriff and such other parties as may be alleged to have colluded with him in the supposedly wrongful execution

proceedings, such as the judgment creditor himself. If instituted by a stranger to the suit in which execution has issued, such proper action should be a totally separate and distinct action from the former suit.[7] In addition to the filing of a proper action, the third-party claimant may also avail of the remedy known as terceria, by executing an affidavit of his title or right of possession over the property seized and serving the same upon the officer making the levy and the judgment creditor. Thereafter, the officer shall not be bound to keep the property, unless the judgment creditor or his agent indemnifies the officer against such claim by a bond in a sum not greater than the value of the property levied on. An action for damages may be brought against the officer within one hundred twenty (120) days from the date of the filing of the bond. These abovementioned remedies are cumulative and any one of them may be resorted to by a third-party claimant without availing of the others. Thus, the availment of the remedy of terceria is not a condition sine qua non to the filing of a proper action. An independent action may be resorted to even before or without need of filing a claim in the court which issued the writ.[8] In the case at bar, petitioner filed an independent action for the annulment of the certificate of sale issued in favor of private respondent, contending that the property levied upon and sold to private respondent by virtue of the writ of execution issued in Criminal Case No. 90-2645 was her exclusive property, not that of the judgment obligor. Pursuant to our ruling in Sy v. Discaya,[9] petitioner is

deemed a stranger to the action wherein the writ of execution was issued and is therefore justified in bringing an independent action to vindicate her right of ownership over the subject property. Contrary to the stand taken by the trial court, the filing of such an independent action cannot be considered an encroachment upon the jurisdiction of a co-equal and coordinate court. The court issuing the writ of execution may enforce its authority only over properties of the judgment debtor; thus, the sheriff acts properly only when he subjects to execution property undeniably belonging to the judgment debtor. If the sheriff levies upon the assets of a third person in which the judgment debtor has no interest, then he is acting beyond the limits of his authority and is amenable to control and correction by a court of competent jurisdiction in a separate and independent action.[10] This is in consonance with the well-established principle that no man shall be affected by any proceeding to which he is a stranger. Execution of a judgment can only be issued against a party to the action, and not against one who has not yet had his day in court.[11] WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of Appeals, promulgated on 18 November 1998 and 9 February 1999, respectively, are hereby SET ASIDE. This case is remanded to the trial court for further proceedings. SO ORDERED. Melo, (Chairman), Vitug, and Panganiban, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-28589 January 8, 1973 RAFAEL ZULUETA, ET AL., plaintiffs-appellees, vs. PAN AMERICAN WORLD AIRWAYS, INC., defendantappellant. Alfredo L. Benipayo for plaintiffs-appellee Rafael Zulueta and Carolina Zulueta. Justo L. Albert for plaintiff-appellee Telly Albert Zulueta. V.E. del Rosario and Associates and Salcedo, Del Rosario, Bito, Misa and Lozada for defendant-appellant. RESOLUTION

Subsequently to the filing of its motion for reconsideration, the defendant filed a "petition to annul proceedings and/or to order the dismissal of plaintiffs-appellees' complaint" upon the ground that "appellees' complaint actually seeks the recovery of only P5,502.85 as actual damages, because, for the purpose of determining the jurisdiction of the lower court, the unspecified sums representing items of alleged damages, may not be considered, under the settled doctrines of this Honorable Court," and "the jurisdiction of courts of first instance when the complaint in the present case was filed on Sept. 30, 1965" was limited to cases "in which the demand, exclusive of interest, or the value of the property in controversy amounts to more than ten thousand pesos" and "the mere fact that the complaint also prays for unspecified moral damages and attorney's fees, does not bring the action within the jurisdiction of the lower court." We find no merit in this contention. To begin with, it is not true that "the unspecified sums representing items or other alleged damages, may not be considered" for the purpose of determining the jurisdiction of the court "under the settled doctrines of this Honorable Court." In fact, not a single case has been cited in support of this allegation.

CONCEPCION, C.J.: Both parties in this case have moved for the reconsideration of the decision of this Court promulgated on February 29, 1972. Plaintiffs maintain that the decision appealed from should be affirmed in toto. The defendant, in turn, prays that the decision of this Court be "set aside ... with or without a new trial, ... and that the complaint be dismissed, with costs; or, in the alternative, that the amount of the award embodied therein be considerably reduced." .

Secondly, it has been held that a clam for moral damages is one not susceptible of pecuniary estimation. 1 In fact, Article 2217 of the Civil Code of the Philippines explicitly provides that "(t)hough incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission." Hence, "(n)o proof pecuniary loss necessary" pursuant to Article 2216 of the same Code "in order that moral ... damages may be adjudicated." And "(t)he assessment of such damages ... is left to the discretion of the court" - said article adds "according to the circumstances of each case." Appellees' complaint is, therefore, within the original jurisdiction of courts of first instance, which includes "all civil actions in

which the subject of the litigation is not capable of pecuniary estimation." 2 Thirdly, in its answer to plaintiffs' original and amended complainants, defendant had set up a counterclaim in the aggregate sum of P12,000, which is, also, within the original jurisdiction of said courts, thereby curing the alleged defect if any, in plaintiffs' complaint. 3
We need not consider the jurisdictional controversy as to the amount the appellant sues to recover because the counterclaim interposed establishes the jurisdiction of the District Court. Merchants' Heat & Light Co. v. James B. Clow & Sons, 204 U.S. 286, 27 S. Ct. 285, 51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner, 176 F. 343 (C.C.A. 2), certiorari denied 216 U.S. 620, 30 S Ct. 575, 4 54 L. Ed. 641. ... . ... courts have said that "when the jurisdictional amount is in question, the tendering of a counterclaim in an amount which in itself, or added to the amount claimed in the petition, makes up a sum equal to the amount necessary to the jurisdiction of this court, jurisdiction is established, whatever may be the state of the plaintiff's complaint." American Sheet & Tin Plate Co. v. Winzeler 5 (D.C.) 227 F. 321, 324.

said complaint "exceeds the jurisdictional amount." (Moore Federal Practice, 2nd ed. [1948], Vol. 3, p. 41; Ginsburg vs. Pacific Mutual Life Ins. Co. of California, 69 Fed. [2d] 97; Home Life Ins. Co. vs. Sipp., 11 Fed. [2d]474; American Sheet & Tin Plate Co. vs. Winzeler [D.C.], 227 Fed. 321, 324; Brix vs. People's Mutual Life Ins. Co., 41 P. 2d. 537, 2 Cal. 2d. 446; Emery vs. Pacific Employees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663).

Needless to say, having not only failed to question the jurisdiction of the trial court either in that court or in this Court, before the rendition of the latter's decision, and even subsequently thereto, by filing the aforementioned motion for reconsideration and seeking the reliefs therein prayed for but, also, urged both courts to exercise jurisdiction over the merits of the case, defendant is now estopped from impugning said jurisdiction. 7
Before taking up the specific questions raised in defendant's motion for reconsideration, it should be noted that the same is mainly predicated upon the premise that plaintiffs' version is inherently incredible, and that this Court should accept the theory of the defense to the effect that petitioner was off-loaded because of a bomb-scare allegedly arising from his delay in boarding the aircraft and subsequent refusal to open his bags for inspection. We need not repeat here the reasons given in Our decision for rejecting defendant's contention and not disturbing the findings of fact of His Honor, the Trial Judge, who had the decided advantage denied to Us of observing the behaviour of the witnesses in the course of the trial and found those of the plaintiffs worthy of credence, not the evidence for the defense. It may not be amiss however, to stress the fact that, in his written report, made in transit from Wake to Manila

Thus, in Ago v. Buslon, 6 We held:

... . Then, too, petitioner's counterclaim for P37,000.00 was, also, within the exclusive original jurisdiction of the latter courts, and there are ample precedents to the effect that "although the original claim involves less than the jurisdictional amount, ... jurisdiction can be sustained if the counterclaim (of the compulsory type)" such as the one set up by petitioner herein, based upon the damages allegedly suffered by him in consequence of the filing of

or immediately after the occurrence and before the legal implications or consequences thereof could have been the object of mature deliberation, so that it could, in a way, be considered as part of the res gestae Capt. Zentner stated that Zulueta had been off-loaded "due to drinking" and "belligerent attitude," thereby belying the story of the defense about said alleged bomb-scare, and confirming the view that said agent of the defendant had acted out of resentment because his ego had been hurt by Mr. Zulueta's adamant refusal to be bullied by him. Indeed, had there been an iota of truth in said story of the defense, Capt. Zentner would have caused every one of the passengers to be frisked or searched and the luggage of all of them examined as it is done now before resuming the flight from Wake Island. His failure to do so merely makes the artificious nature of defendant's version more manifest. Indeed, the fact that Mrs. Zulueta and Miss Zulueta were on board the plane shows beyond doubt that Mr. Zulueta could not possibly have intended to blow it up. The defense tries to explain its failure to introduce any evidence to contradict the testimony of Mr. Zulueta as to why he had gone to the beach and what he did there, alleging that, in the very nature of things, nobody else could have witnessed it. Moreover, the defense insists, inter alia, that the testimony of Mr. Zulueta is inherently incredible because he had no idea as to how many toilets the plane had; it could not have taken him an hour to relieve himself in the beach; there were eight (8) commodes at the terminal toilet for men ; if he felt the need of relieving himself, he would have seen to it that the soldiers did not beat him to the terminal toilets; he did not tell anybody about the reason for going to the beach, until after the plane had taken off from Wake. We find this pretense devoid of merit. Although Mr. Zulueta had to look for a secluded place in the beach to relieve himself, beyond the view of others, defendant's airport manager, whom Mr. Zulueta informed about it,soon after the departure of the

plane, could have forthwith checked the veracity of Mr. Zulueta's statement by asking him to indicate the specific place where he had been in the beach and then proceeding thereto for purposes of verification. Then, again, the passenger of a plane seldom knows how many toilets it has. As a general rule, his knowledge is limited to the toilets for the class first class or tourist class in which he is. Then, too, it takes several minutes for the passengers of big aircrafts, like those flying from the U.S. to the Philippines, to deplane. Besides, the speed with which a given passenger may do so depends, largely, upon the location of his seat in relation to the exit door. He cannot go over the heads of those nearer than he thereto. Again, Mr. Zulueta may have stayed in the toilet terminal for some time, expecting one of the commodes therein to be vacated soon enough, before deciding to go elsewhere to look for a place suitable to his purpose. But he had to walk, first, from the plane to the terminal building and, then, after vainly waiting therein for a while, cover a distance of about 400 yards therefrom to the beach, and seek there a place not visible by the people in the plane and in the terminal, inasmuch as the terrain at Wake Island is flat. What is more, he must have had to takeoff part, at least, of his clothing, because, without the facilities of a toilet, he had to wash himself and, then, dry himself up before he could be properly attired and walk back the 400 yards that separated him from the terminal building and/or the plane. Considering, in addition to the foregoing, the fact that he was not feeling well, at that time, We are not prepared to hold that it could not have taken him around an hour to perform the acts narrated by him. But, why asks the defendant did he not reveal the same before the plane took off? The record shows that, even before Mr. Zulueta had reached the ramp leading to the plane, Capt. Zentner was already demonstrating at him in an intemperate and arrogant tone and attitude ("What do you think you are?), thereby impelling Mr. Zulueta to answer back in the same vein.

As a consequence, there immediately ensued an altercation in the course of which each apparently tried to show that he could not be cowed by the other. Then came the order of Capt. Zentner to off-load all of the Zuluetas, including Mrs. Zulueta and the minor Miss Zulueta, as well as their luggage, their overcoats and other effects handcarried by them; but, Mr. Zulueta requested that the ladies be allowed to continue the trip. Meanwhile, it had taken time to locate his four (4) pieces of luggage. As a matter of fact, only three (3) of them were found, and the fourth eventually remained in the plane. In short, the issue between Capt. Zentner and Mr. Zulueta had been limited to determining whether the latter would allow himself to be browbeaten by the former. In the heat of the altercation, nobody had inquired about the cause of Mr. Zulueta's delay in returning to the plane, apart from the fact that it was rather embarrassing for him to explain, in the presence and within the hearing of the passengers and the crew, then assembled around them, why he had gone to the beach and why it had taken him some time to answer there a call of nature, instead of doing so in the terminal building. Defendant's motion for reconsideration assails: (1) the amount of damages awarded as excessive; (2) the propriety of accepting as credible plaintiffs' theory; (3) plaintiffs' right to recover either moral or exemplary damages; (4) plaintiffs' right to recover attorney's fees; and (5) the non-enforcement of the compromise agreement between the defendant and plaintiff's wife, Mrs. Zulueta. Upon the other hand, plaintiffs' motion for reconsideration contests the decision of this Court reducing the amount of damages awarded by the trial court to approximately one-half thereof, upon the ground, not only that, contrary to the findings of this Court, in said decision, plaintiff had not contributed to the aggravation of his altercation or incident with Capt. Zentner by reacting to his provocation with extreme belligerency thereby allowing himself to be dragged down to the level on which said agent of the defendant had placed himself, but, also, because the purchasing power of our local currency is now much lower than when the trial court rendered

its appealed decision, over five (5) years ago, on July 5, 1967, which is an undeniable and undisputed fact. Precisely, for this reason, defendant's characterization as exorbitant of the aggregate award of over P700,000 by way of damages, apart from attorney's fees in the sum of P75,000, is untenable. Indeed, said award is now barely equivalent to around 100,000 U. S. dollars.

It further support of its contention, defendant cites the damages awarded in previous cases to passengers of airlines, 8 as well as in several criminal cases, and some cases for libel and slander. None of these cases is, however, in point. Said cases against airlines referred to passengers who were merely constrained to take atourist class accommodation, despite the fact that they had first class tickets, and that although, in one of such cases, there was proof that the airline involved had acted as it did to give preference to a "white" passenger, this motive was not disclosed until the trial in court. In the case at bar, plaintiff Rafael Zulueta was "off-loaded" at Wake Island, for having dared to retort to defendant's agent in a tone and manner matching, if not befitting his intemperate language and arrogant attitude. As a consequence, Capt. Zentner's attempt to humiliate Rafael Zulueta had boomeranged against him (Zentner), in the presence of the other passengers and the crew. It was, also, in their presence that defendant's agent had referred to the plaintiffs as "monkeys," a racial insult not made openly and publicly in the abovementioned previous cases against airlines.
In other words, Mr. Zulueta was off-loaded, not to protect the safety of the aircraft and its passengers, but to retaliate and punish him for the embarrassment and loss of face thus suffered by defendant's agent. This vindictive motive is made more manifest by the note delivered to Mr. Zulueta by defendant's airport manager at Wake Island, Mr. Sitton, stating that the former's stay therein would be "for a minimum of one

week," during which he would be charged $13.30 per day. This reference to a "minimum of one week" revealed the intention to keep him there stranded that long, for no other plane, headed for Manila, was expected within said period of time, although Mr. Zulueta managed to board, days later, a plane that brought him to Hawaii, whence he flew back to the Philippines, via Japan.

Neither may criminal cases, nor the cases for libel and slander cited in the defendant's motion for reconsideration, be equated with the present case. Indeed, in ordinary criminal cases, the award for damages is, in actual practice, of purely academic value, for the convicts generally belong to the poorest class of society. There is, moreover, a fundamental difference between said cases and the one at bar. The Zuluetas had a contract of carriage with the defendant, as a common carrier, pursuant to which the latter was bound, for a substantial monetary consideration paid by the former, not merely to transport them to Manila, but, also, to do so with "extraordinary diligence" or "utmost diligence." 9 The responsibility of the common carrier, under said contract, as regards the passenger's safety, is of such a nature, affecting as it does public interest, that it "cannot be dispensed with" or even "lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise." 10 In the present case, the defendant did not only fail to comply with its obligation to transport Mr. Zulueta to Manila, but, also, acted in a manner calculated to humiliate him, to chastise him, to make him suffer, to cause to him the greatest possible inconvenience, by leaving him in a desolate island, in the expectation that he would be stranded there for a "minimum of one week" and, in addition thereto, charged therefor $13.30 a day. It is urged by the defendant that exemplary damages are not recoverable in quasi-delicts, pursuant to Article 2231 of our

Civil Code, except when the defendant has acted with "gross negligence," and that there is no specific finding that it had so acted. It is obvious, however, that in off-loading plaintiff at Wake Island, under the circumstances heretofore adverted to, defendant's agents had acted with malice aforethought and evident bad faith. If "gross negligence" warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. Thus, in Lopez v. PANAM, 11 We held:
The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages (Articles 2229, 2232, New Civil Code.)

Similarly, in NWA v. Cuenca, 12 this Court declared that an award for exemplary damages was justified by the fact that the airline's "agent had acted in a wanton, reckless and oppressive manner" in compelling Cuenca, upon arrival at Okinawa, to transfer, over his objection, from the first class, where he was accommodated from Manila to Okinawa, to the tourist class, in his trip to Japan, "under threat of otherwise leaving him in Okinawa," despite the fact that he had paid in full the first class fare and was issued in Manila a first class ticket. Defendant cites Rotea v. Halili, 13 in support of the proposition that a principal is not liable for exemplary damages owing to acts of his agent unless the former has participated in said acts or ratified the same. Said case involved, however, the subsidiary civil liability of an employer arising from criminal acts of his employee, and "exemplary

damages ... may be imposed when the crime was committed with one or more aggravating circumstances." 14 Accordingly, the Rotea case is not in point, for the case at bar involves a breach of contract, as well as a quasi-delict. Neither may the case of Palisoc v. Brillantes, 15 invoked by the defendant, be equated with the case at bar. The Palisoc case dealt with the liability of school officials for damages arising from the death of a student (Palisoc) due to fist blows given by another student (Daffon), in the course of a quarrel between them, while in a laboratory room of the Manila Technical Institute. In an action for damages, the head thereof and the teacher in charge of said laboratory were held jointly and severally liable with the student who caused said death, for failure of the school to provide "adequate supervision over the activities of the students in the school premises," to protect them "from harm, whether at the hands of fellow students or other parties." Such liability was predicated upon Article 2180 of our Civil Code, the pertinent part of which reads:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. xxx xxx xxx

Obviously, the amount of damages warded in the Palisoc case is not and cannot serve as the measure of the damages recoverable in the present case, the latter having been caused directly and intentionally by an employee or agent of the defendant, whereas the student who killed the young Palisoc was in no wise an agent of the school. Moreover, upon her arrival in the Philippines, Mrs. Zulueta reported her husband's predicament to defendant's local manager and asked him to forthwith have him (Mr. Zulueta) brought to Manila, which defendant's aforementioned manager refused to do, thereby impliedly ratifying the off-loading of Mr. Zulueta at Wake Island. It is next urged that, under the contract of carriage with the defendant, Mr. Zulueta was bound to be present at the time scheduled for the departure of defendant's plane and that he had, consequently, violated said contract when he did not show up at such time. This argument might have had some weight had defendant's plane taken off before Mr. Zulueta had shown up. But the fact is that he was ready, willing and able to board the plane about two hours before it actually took off, and that he was deliberately and maliciously off-loaded on account of his altercation with Capt. Zentner. It should, also, be noted that, although Mr. Zulueta was delayed some 20 to 30 minutes, the arrival or departure of planes is often delayed for much longer periods of time. Followed to its logical conclusion, the argument adduced by the defense suggests that airlines should be held liable for damages due to the inconvenience and anxiety, aside from actual damages, suffered by many passengers either in their haste to arrive at the airport on scheduled time just to find that their plane will not take off until later, or by reason of the late arrival of the aircraft at its destination. PANAM impugns the award of attorney's fees upon the ground that no penalty should be imposed upon the right to litigate; that, by law, it may be awarded only in exceptional cases; that the claim for attorney's fees has not been proven; and that said

defendant was justified in resisting plaintiff's claim "because it was patently exorbitant." Nothing, however, can be farther from the truth. Indeed apart from plaintiff's claim for actual damages, the amount of which is not contested, plaintiffs did not ask any specific sum by way of exemplary and moral damages, as well as attorney's fees, and left the amount thereof to the "sound discretion" of the lower court. This, precisely, is the reason why PANAM, now, alleges without justification that the lower court had no jurisdiction over the subject matter of the present case. Moreover, Article 2208 of our Civil Code expressly authorizes the award of attorney's fees "when exemplary damages are awarded," as they are in this case as well as "in any other case where the court deems it just and equitable that attorney's fees ... be recovered," and We so deem it just and equitable in the present case, considering the "exceptional" circumstances obtaining therein, particularly the bad faith with which defendant's agent had acted, the place where and the conditions under which Rafael Zulueta was left at Wake Island, the absolute refusal of defendant's manager in Manila to take any step whatsoever to alleviate Mr. Zulueta's predicament at Wake and have him brought to Manila which, under their contract of carriage, was defendant's obligation to discharge with "extra-ordinary" or "utmost" diligence and, the "racial" factor that had, likewise, tainted the decision of defendant's agent, Capt. Zentner, to off-load him at Wake Island.

a little over 10% of the damages (P700,000) collectible by plaintiffs herein. Indeed, the attorney's fees in this case is proportionally much less than that adjudged in Lopez v. PANAM 16 in which the judgment rendered for attorney's fees (P50,000) was almost 20% of the damages (P275,000) recovered by the plaintiffs therein.
The defense assails the last part of the decision sought to be reconsidered, in which relying upon Article 172 of our Civil Code, which provides that "(t)he wife cannot bind the conjugal partnership without the husband's consent, except in cases provided by law," and it is not claimed that this is one of such cases We denied a motion, filed by Mrs. Zulueta, for the dismissal of this case, insofar as she is concerned - she having settled all her differences with the defendant, which appears to have paid her the sum of P50,000 therefor - "without prejudice to this sum being deducted from the award made in said decision." Defendant now alleges that this is tantamount to holding that said compromise agreement is both effective and ineffective. This, of course, is not true. The payment is effective, insofar as it is deductible from the award, and, because it is due (or part of the amount due) from the defendant, with or without its compromise agreement with Mrs. Zulueta. What is ineffective is the compromise agreement, insofar as the conjugal partnership is concerned. Mrs. Zulueta's motion was for the dismissal of the case insofar as she was concerned, and the defense cited in support thereof Article 113 of said Code, pursuant to which "(t)he husband must be joined in all suits by or against the wife except: ... (2) If they have in fact been separated for at least one year." This provision, We held, however, refers to suits in which the wife is the principal or real party in interest, not to the case at bar, "in which the husband is the main party in interest, both as the person principally aggrieved and as administrator of the conjugal partnership ... he having acted in this capacity in entering into the contract of carriage with PANAM and paid the

As regards the evidence necessary to justify the sum of P75,000 awarded as attorney's fees in this case, suffice it to say that the quantity and quality of the services rendered by plaintiffs' counsel appearing on record, apart from the nature of the case and the amount involved therein, as well as his prestige as one of the most distinguished members of the legal profession in the Philippines, of which judicial cognizance may be taken, amply justify said award, which is

amount due to the latter, under the contract, with funds of the conjugal partnership," to which the amounts recoverable for breach of said contract, accordingly, belong. The damages suffered by Mrs. Zulueta were mainly an in accident of the humiliation to which her husband had been subjected. The Court ordered that said sum of P50,00 paid by PANAM to Mrs. Zulueta be deducted from the aggregate award in favor of the plaintiffs herein for the simple reason that upon liquidation of the conjugal partnership, as provided by law, said amount would have to be reckoned with, either as part of her share in the partnership, or as part of the support which might have been or may be due to her as wife of Rafael Zulueta. It would surely be inane to sentence the defendant to pay the P700,000 due to the plaintiffs and to direct Mrs. Zulueta to return said P50,000 to the defendant.

In this connection, it is noteworthy that, for obvious reasons of public policy, she is not allowed by law to waive her share in the conjugal partnership, before the dissolution thereof. 17 She cannot even acquire any property by gratuitous title, without the husband's consent, except from her ascendants, descendants, parents-in-law, and collateral relatives within the fourth degree. 18 It is true that the law favors and encourages the settlement of litigations by compromise agreement between the contending parties, but, it certainly does not favor a settlement with one of the spouses, both of whom are plaintiffs or defendants in a common cause, such as the defense of the rights of the conjugal partnership, when the effect, even if indirect, of the compromise is to jeopardize "the solidarity of the family" which the law 19 seeks to protect by creating an additional cause for the misunderstanding that had arisen between such spouses during the litigation, and thus rendering more difficult a reconciliation between them.

It is urged that there is no proof as to the purpose of the trip of the plaintiffs, that neither is there any evidence that the money used to pay the plane tickets came from the conjugal funds and that the award to Mrs. Zulueta was for her personal suffering or injuries. There was, however, no individual or specific award in favor of Mrs. Zulueta or any of the plaintiffs. The award was made in their favor collectively. Again, in the absence of said proof, the presumption is that the purpose of the trip was for the common benefit of the plaintiffs and that the money had come from the conjugal funds, for, unless there is proof to the contrary, it is presumed "(t)hat things have happened according to the ordinary course of nature and the ordinary habits of life." 20 In fact Manresa maintains 21 that they are deemed conjugal, when the source of the money used therefor is not established, even if the purchase had been made by the wife. 22 And this is the rule obtaining in the Philippines. Even property registered, under the Torrens system, in the name of one of the spouses, or in that of the wife only, if acquired during the marriage, is presumed to belong to the conjugal partnership, unless there is competent proof to the contrary. 23
PANAM maintains that the damages involved in the case at bar are not among those forming part of the conjugal partnership pursuant to Article 153 of the Civil Code, reading: ART. 153. The following are conjugal partnership property: (1) That which is 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;

(2) That which is obtained by the industry, or work, or as salary of the spouses, or of either of them; (3) The fruits, rents or interests received or due during the marriage, coming from the common property or from the exclusive property of each spouse. Considering that the damages in question have arisen from, inter alia, a breach of plaintiffs' contract of carriage with the defendant, for which plaintiffs paid their fare with funds presumably belonging to the conjugal partnership, We hold that said damages fall under paragraph (1) of said Article 153, the right thereto having been "acquired by onerous title during the marriage ... ." This conclusion is bolstered up by Article 148 of our Civil Code, according to which: ART. 148. The following shall be the exclusive property of each spouse: (1) That which is brought to the marriage as his or her own; (2) That which each acquires, during the marriage, by lucrative title; (3) That which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses; (4) That which is purchased with exclusive money of the wife or of the husband.

chapter is entitled "Paraphernal Property." What is more, if "(t)hat which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses," and "(t)hat which is purchased with exclusive money of the wife or of the husband," 24belong exclusively to such wife or husband, it follows necessarily that that which is acquired with money of the conjugal partnership belongs thereto or forms part thereof. The rulings in Maramba v. Lozano 25 and Perez v. Lantin, 26 cited in defendant's motion for reconsideration, are, in effect, adverse thereto. In both cases, it was merely held that the presumption under Article 160 of our Civil Code to the effect that all property of the marriage belong to the conjugal partnership does not apply unless it is shown that it was acquired during marriage. In the present case, the contract of carriage was concededly entered into, and the damages claimed by the plaintiffs were incurred, during marriage. Hence, the rights accruing from said contract, including those resulting from breach thereof by the defendant, are presumed to belong to the conjugal partnership of Mr. and Mrs. Zulueta. The fact that such breach of contract was coupled, also, with a quasi-delict constitutes an aggravating circumstance and can not possibly have the effect of depriving the conjugal partnership of such property rights.
Defendant insists that the use of conjugal funds to redeem property does not make the property redeemed conjugal if the right of redemption pertained to the wife. In the absence, however, of proof that such right of redemption pertains to the wife and there is no proof that the contract of carriage with PANAM or the money paid therefor belongs to Mrs. Zulueta the property involved, or the rights arising therefrom, must be presumed, therefore, to form part of the conjugal partnership.

The damages involved in the case at bar do not come under any of these provisions or of the other provisions forming part of Chapter 3, Title VI, of Book I of the Civil Code, which

It is true that in Lilius v. Manila Railroad Co., 27 it was held that the "patrimonial and moral damages" awarded to a

young and beautiful woman by reason of a scar in consequence of an injury resulting from an automobile accident which disfigured her face and fractured her left leg, as well as caused a permanent deformity, are her paraphernal property. Defendant cites, also, in support of its contention the following passage from Colin y Capitant:
No esta resuelta expresamente en la legislacion espaola la cuestion de si las indemnizaciones debidas por accidentes del trabaho tienen la consideracion de gananciales, o son bienes particulares de los conyuges.
Inclinan a la solucion de que estas indemnizaciones deben ser consideradas como gananciales, el hecho de que la sociedad pierde la capacidad de trabajocon el accidente, que a ella le pertenece, puesto que de la sociedad son losfrutos de ese trabajo; en cambio, la consideracion de que igual manera que losbienes que sustituyen a los que cada conyuge lleva al matrimonio como propiostienen el caracter de propios, hace pensar que las indemnizaciones que vengana suplir la capacidad de trabajo aportada por cada conyuge a la sociedad, debenser juridicamente reputadas como bienes propios del conyuge que haya sufrido elaccidente. Asi se llega a la misma solucion aportada por la 28 jurisprudencia francesca.

of Planiol and Ripert, likewise, refer are inapposite to the question under consideration, because they differ basically from the Spanish law in the treatment of the property relations between husband and wife. Indeed, our Civil Code, like the Spanish Civil Code, favors the system of conjugal partnership of gains. Accordingly, the former provides that, "(i)n the absence of marriage settlements, or when the same are void, the system of relative community or conjugal partnership of gains ... shall govern the property relations between" the spouses. 30 Hence, "(a)ll 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." 31
No similar rules are found in the French Civil Code. What is more, under the provisions thereof, the conjugal partnership exists only when so stipulated in the "capitulaciones matrimoniales" or by way of exception. In the language of Manresa
Prescindimos de los preceptos de los Condigos de Francia, Italia, Holanda, Portugal, Alemania y Suiza, porsue solo excepcionalmente, o cuando asi se pacta en 32 las capitulaciones, admiten el sistema de gananciales.

This opinion is, however, undecisive, to say the least. It should be noted that Colin y Capitant were commenting on the French Civil Code; that their comment referred to indemnities due in consequence of "accidentes del trabajo "resulting in physical injuries sustained by one of the spouses (which Mrs. Zulueta has not suffered); and that said commentators admit that the question whether or not said damages are paraphernal property or belong to the conjugal partnership is not settled under the Spanish law. 29 Besides, the French law and jurisprudence to which the comments

Again, Colin y Capitant, as well as the Lilius case, refer to damages recovered for physical injuries suffered by the wife. In the case at bar, the party mainly injured, although not physically, is the husband.

Accordingly, the other Philippine cases 33 and those from Louisiana whose civil law is based upon the French Civil Code cited by the defendant, which similarly refer to moral damages due to physical injuries suffered by the wife, are, likewise, inapplicable to the case at bar.

We find, therefore, no plausible reason to disturb the views expressed in Our decision promulgated on February 29, 1972. WHEREFORE, the motions for reconsideration above-referred to should be, as they are hereby denied. Makalintal, Zaldivar, Fernando, Makasiar, Antonio and Esguerra, JJ., concur.

Castro and Teehankee, JJ., took no part. Barredo, J., voted to modify the judgment by reducing the amount of the awarded damages and individualizing the same, and now reserves the filing of a separate concurring and dissenting opinion in support of his vote.

SECOND DIVISION

Ching is not liable for the payment of the debts secured by respondent-husband Alfredo Ching. A chronology of the essential antecedent facts is necessary for a clear understanding of the case at bar. Philippine Blooming Mills (hereinafter referred to as PBM) obtained a P50,300,000.00 loan from petitioner Ayala Investment and Development Corporation (hereinafter referred to as AIDC). As added security for the credit line extended to PBM, respondent Alfredo Ching, Executive Vice President of PBM, executed security agreements on December 10, 1980 and on March 20, 1981 making himself jointly and severally answerable with PBMs indebtedness to AIDC. PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a case for sum of money against PBM and respondent-husband Alfredo Ching with the then Court of First Instance of Rizal (Pasig), Branch VIII, entitled Ayala Investment and Development Corporation vs. Philippine Blooming Mills and Alfredo Ching, docketed as Civil Case No. 42228. After trial, the court rendered judgment ordering PBM and respondent-husband Alfredo Ching to jointly and severally pay AIDC the principal amount ofP50,300,000.00 with interests. Pending appeal of the judgment in Civil Case No. 42228, upon motion of AIDC, the lower court issued a writ of execution pending appeal. Upon AIDCs putting up of an P8,000,000.00 bond, a writ of execution dated May 12, 1982 was issued. Thereafter, petitioner Abelardo Magsajo, Sr., Deputy Sheriff of Rizal and appointed sheriff in Civil Case No. 42228, caused the issuance and service upon respondents-spouses of a notice of sheriff sale dated May 20, 1982 on three (3) of their conjugal properties. Petitioner

[G.R. No. 118305. February 12, 1998]

AYALA INVESTMENT & DEVELOPMENT CORP. and ABELARDO MAGSAJO, petitioners, vs. COURT OF APPEALS and SPOUSES ALFREDO & ENCARNACION CHING, respondents. DECISION
MARTINEZ, J.:

Under Article 161 of the Civil Code, what debts and obligations contracted by the husband alone are considered for the benefit of the conjugal partnership which are chargeable against the conjugal partnership? Is a surety agreement or an accommodation contract entered into by the husband in favor of his employer within the contemplation of the said provision? These are the issues which we will resolve in this petition for review. The petitioner assails the decision dated April 14, 1994 of the respondent Court of Appeals in Spouses Alfredo and Encarnacion Ching vs. Ayala Investment and Development Corporation, et. al., docketed as CA-G.R. CV No. 29632,[1] upholding the decision of the Regional Trial Court of Pasig, Branch 168, which ruled that the conjugal partnership of gains of respondents-spouses Alfredo and Encarnacion

Magsajo then scheduled the auction sale of the properties levied. On June 9, 1982, private respondents filed a case of injunction against petitioners with the then Court of First Instance of Rizal (Pasig), Branch XIII, to enjoin the auction sale alleging that petitioners cannot enforce the judgment against the conjugal partnership levied on the ground that, among others, the subject loan did not redound to the benefit of the said conjugal partnership.[2] Upon application of private respondents, the lower court issued a temporary restraining order to prevent petitioner Magsajo from proceeding with the enforcement of the writ of execution and with the sale of the said properties at public auction. AIDC filed a petition for certiorari before the Court of Appeals,[3] questioning the order of the lower court enjoining the sale. Respondent Court of Appeals issued a Temporary Restraining Order on June 25, 1982, enjoining the lower court[4] from enforcing its Order of June 14, 1982, thus paving the way for the scheduled auction sale of respondentsspouses conjugal properties. On June 25, 1982, the auction sale took place. AIDC being the only bidder, was issued a Certificate of Sale by petitioner Magsajo, which was registered on July 2, 1982. Upon expiration of the redemption period, petitioner sheriff issued the final deed of sale on August 4, 1982 which was registered on August 9, 1983. In the meantime, the respondent court, on August 4, 1982, decided CA-G.R. SP No. 14404, in this manner:

as it seeks to enjoin the respondent Judge from proceeding with Civil Case No. 46309 is, however, denied. No pronouncement is here made as to costs. x x x x.
[5]

On September 3, 1983, AIDC filed a motion to dismiss the petition for injunction filed before Branch XIII of the CFI of Rizal (Pasig) on the ground that the same had become moot and academic with the consummation of the sale. Respondents filed their opposition to the motion arguing, among others, that where a third party who claims ownership of the property attached or levied upon, a different legal situation is presented; and that in this case, two (2) of the real properties are actually in the name of Encarnacion Ching, a non-party to Civil Case No. 42228. The lower court denied the motion to dismiss. Hence, trial on the merits proceeded. Private respondents presented several witnesses. On the other hand, petitioners did not present any evidence. On September 18, 1991, the trial court promulgated its decision declaring the sale on execution null and void. Petitioners appealed to the respondent court, which was docketed as CA-G.R. CV No. 29632. On April 14, 1994, the respondent court promulgated the assailed decision, affirming the decision of the regional trial court. It held that:

WHEREFORE, the petition for certiorari in this case is granted and the challenged order of the respondent Judge dated June 14, 1982 in Civil Case No. 46309 is hereby set aside and nullified. The same petition insofar

The loan procured from respondentappellant AIDC was for the advancement and benefit of Philippine Blooming Mills and not for the benefit of the conjugal partnership of petitioners-appellees.
xxx x xx xxx

As to the applicable law, whether it is Article 161 of the New Civil Code or Article 1211 of the Family Code-suffice it to say that the two provisions are substantially the same. Nevertheless, We agree with the trial court that the Family Code is the applicable law on the matter x x x x x x. Article 121 of the Family Code provides that The conjugal partnership shall be liable for: x x x (2) All debts and obligations contracted during the marriage by the designated Administrator-Spouse for the benefit of the conjugal partnership of gains x x x. The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains, lies with the creditor-party litigant claiming as such. In the case at bar, respondent-appellant AIDC failed to prove that the debt was contracted by appelleehusband, for the benefit of the conjugal partnership of gains.
The dispositive portion of the decision reads: WHEREFORE, in view of all the foregoing, judgment is hereby rendered DISMISSING the appeal. The decision of the Regional Trial Court is AFFIRMED in toto.[6] Petitioner filed a Motion for Reconsideration which was denied by the respondent court in a Resolution dated November 28, 1994.[7] Hence, this petition for review. Petitioner contends that the respondent court erred in ruling that the conjugal

partnership of private respondents is not liable for the obligation by the respondent-husband. Specifically, the errors allegedly committed by the respondent court are as follows:
I. RESPONDENT COURT ERRED IN RULING THAT THE OBLIGATION INCURRED BY RESPONDENT HUSBAND DID NOT REDOUND TO THE BENEFIT OF THE CONJUGAL PARTNERSHIP OF THE PRIVATE RESPONDENT. II RESPONDENT COURT ERRED IN RULING THAT THE ACT OF RESPONDENT HUSBAND IN SECURING THE SUBJECT LOAN IS NOT PART OF HIS INDUSTRY, BUSINESS OR CAREER FROM WHICH HE SUPPORTS HIS FAMILY.

Petitioners in their appeal point out that there is no need to prove that actual benefit redounded to the benefit of the partnership; all that is necessary, they say, is that the transaction was entered into for the benefit of the conjugal partnership. Thus, petitioners aver that:

The wordings of Article 161 of the Civil Code is very clear: for the partnership to be held liable, the husband must have contracted the debt for the benefit of the partnership, thus: Art. 161. The conjugal partnership shall be liable for: 1) all debts and obligations contracted by the husband for the benefit of the conjugal partnership x x x.

There is a difference between the phrases: redounded to the benefit of or benefited from (on the one hand) and for the benefit of (on the other). The former require that actual benefit must have been realized; the latter requires only that the transaction should be one which normally would produce benefit to the partnership, regardless of whether or not actual benefit accrued.
[8]

In the cases of Javier vs. Osmea,[10] Abella de Diaz vs. Erlanger & Galinger, Inc.,[11] Cobb-Perez vs. Lantin[12] and GTractors, Inc. vs. Court of Appeals,[13] cited by the petitioners, we held that:

We do not agree with petitioners that there is a difference between the terms redounded to the benefit of or benefited from on the one hand; and for the benefit of on the other. They mean one and the same thing. Article 161 (1) of the Civil Code and Article 121 (2) of the Family Code are similarly worded, i.e., both use the term for the benefit of. On the other hand, Article 122 of the Family Code provides that The payment of personal debts 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. As can be seen, the terms are used interchangeably. Petitioners further contend that the ruling of the respondent court runs counter to the pronouncement of this Court in the case of Cobb-Perez vs. Lantin,[9] that the husband as head of the family and as administrator of the conjugal partnership is presumed to have contracted obligations for the benefit of the family or the conjugal partnership. Contrary to the contention of the petitioners, the case of Cobb-Perez is not applicable in the case at bar. This Court has, on several instances, interpreted the term for the benefit of the conjugal partnership.

The debts contracted by the husband during the marriage relation, for and in the exercise of the industry or profession by which he contributes toward the support of his family, are not his personal and private debts, and the products or income from the wifes own property, which, like those of her husbands, are liable for the payment of the marriage expenses, cannot be excepted from the payment of such debts. (Javier) The husband, as the manager of the partnership (Article 1412, Civil Code), has a right to embark the partnership in an ordinary commercial enterprise for gain, and the fact that the wife may not approve of a venture does not make it a private and personal one of the husband. (Abella de Diaz) Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes to the support of the family, cannot be deemed to be his exclusive and private debts. (Cobb-Perez) x x x if he incurs an indebtedness in the legitimate pursuit of his career or profession or suffers losses in a legitimate business, the conjugal partnership must equally bear the indebtedness and the losses, unless he

deliberately acted to the prejudice of his family. (G-Tractors)

However, in the cases of Ansaldo vs. Sheriff of Manila, Fidelity Insurance & Luzon Insurance Co.,[14] Liberty Insurance Corporation vs. Banuelos,[15] and Luzon Surety Inc. vs. De Garcia,[16] cited by the respondents, we ruled that:

The fruits of the paraphernal property which form part of the assets of the conjugal partnership, are subject to the payment of the debts and expenses of the spouses, but not to the payment of the personal obligations (guaranty agreements) of the husband, unless it be proved that such obligations were productive of some benefit to the family. (Ansaldo; parenthetical phrase ours.) When there is no showing that the execution of an indemnity agreement by the husband redounded to the benefit of his family, the undertaking is not a conjugal debt but an obligation personal to him. (Liberty Insurance) In the most categorical language, a conjugal partnership under Article 161 of the new Civil Code is liable only for such debts and obligations contracted by the husband for the benefit of the conjugal partnership. There must be the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. Certainly, to make a conjugal partnership respond for a liability that should appertain to the husband alone is

to defeat and frustrate the avowed objective of the new Civil Code to show the utmost concern for the solidarity and well-being of the family as a unit. The husband, therefore, is denied the power to assume unnecessary and unwarranted risks to the financial stability of the conjugal partnership. (Luzon Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we can derive the following conclusions:

(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used in or for his own business or his own profession, that contract falls within the term x x x x obligations for the benefit of the conjugal partnership. Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent at the time of 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. (B) 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, 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. No presumption can be inferred that, when a husband enters into a contract of surety or accommodation agreement, it is for the benefit of the conjugal partnership. Proof must be presented to establish benefit redounding to the conjugal partnership.
Thus, the distinction between the Cobb-Perez case, and we add, that of the three other companion cases, on the one hand, and that of Ansaldo, Liberty Insurance and Luzon Surety, is that in the former, the husband contracted the obligation for his own business; while in the latter, the husband merely acted as a surety for the loan contracted by another for the latters business. The evidence of petitioner indubitably show that corespondent Alfredo Ching signed as surety for the P50M loan contracted on behalf of PBM. Petitioner should have adduced evidence to prove that Alfredo Chings acting as surety redounded to the benefit of the conjugal partnership. The reason for this is as lucidly explained by the respondent court:

the fact that the members of the said family happened to be stockholders of said corporate entity.
xxx x xx xxx

The loan procured from respondentappellant AIDC was for the advancement and benefit of Philippine Blooming Mills and not for the benefit of the conjugal partnership of petitionersappellees. Philippine Blooming Mills has a personality distinct and separate from the family of petitioners-appellees - this despite

x x x. The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains, lies with the creditorparty litigant claiming as such. In the case at bar, respondent-appellant AIDC failed to prove that the debt was contracted by appellee-husband, for the benefit of the conjugal partnership of gains. What is apparent from the facts of the case is that the judgment debt was contracted by or in the name of the Corporation Philippine Blooming Mills and appellee-husband only signed as surety thereof. The debt is clearly a corporate debt and respondent-appellants right of recourse against appellee-husband as surety is only to the extent of his corporate stockholdings. It does not extend to the conjugal partnership of gains of the family of petitioners-appellees. x x x x x x.
[17]

Petitioners contend that no actual benefit need accrue to the conjugal partnership. To support this contention, they cite Justice J.B.L. Reyes authoritative opinion in the Luzon Surety Company case:

I concur in the result, but would like to make of record that, in my opinion, the words all debts and obligations contracted by the

husband for the benefit of the conjugal partnership used in Article 161 of the Civil Code of the Philippines in describing the charges and obligations for which the conjugal partnership is liable do not require that actual profit or benefit must accrue to the conjugal partnership from the husbands transaction; but it suffices that the transaction should be one that normally would produce such benefit for the partnership. This is the ratio behind our ruling in Javier vs. Osmea, 34 Phil. 336, that obligations incurred by the husband in the practice of his profession are collectible from the conjugal partnership.
The aforequoted concurring opinion agreed with the majority decision that the conjugal partnership should not be made liable for the surety agreement which was clearly for the benefit of a third party. Such opinion merely registered an exception to what may be construed as a sweeping statement that in all cases actual profit or benefit must accrue to the conjugal partnership. The opinion merely made it clear that no actual benefits to the family need be proved in some cases such as in the Javier case. There, the husband was the principal obligor himself. Thus, said transaction was found to be one that would normally produce x x x benefit for the partnership. In the later case of G-Tractors, Inc., the husband was also the principal obligor - not merely the surety. This latter case, therefore, did not create any precedent. It did not also supersede the Luzon Surety Company case, nor any of the previous accommodation contract cases, where this Court ruled that they were for the benefit of third parties.

But it could be argued, as the petitioner suggests, that even in such kind of contract of accommodation, a benefit for the family may also result, when the guarantee is in favor of the husbands employer. In the case at bar, petitioner claims that the benefits the respondent family would reasonably anticipate were the following:

(a) The employment of co-respondent Alfredo Ching would be prolonged and he would be entitled to his monthly salary of P20,000.00 for an extended length of time because of the loan he guaranteed; (b) The shares of stock of the members of his family would appreciate if the PBM could be rehabilitated through the loan obtained; (c) His prestige in the corporation would be enhanced and his career would be boosted should PBM survive because of the loan.
However, these are not the benefits contemplated by Article 161 of the Civil Code. The benefits must be one directly resulting from the loan. It cannot merely be a byproduct or a spin-off of the loan itself. In all our decisions involving accommodation contracts of the husband,[18] we underscored the requirement that: there must be the requisite showing x x x of some advantage which clearly accrued to the welfare of the spouses or benefits to his family or that such obligations are productive of some benefit to the family. Unfortunately, the petition did not present any proof to show: (a) Whether or not the corporate existence of PBM was prolonged and for

how many months or years; and/or (b) Whether or not the PBM was saved by the loan and its shares of stock appreciated, if so, how much and how substantial was the holdings of the Ching family. Such benefits (prospects of longer employment and probable increase in the value of stocks) might have been already apparent or could be anticipated at the time the accommodation agreement was entered into. But would those benefits qualify the transaction as one of the obligations x x x for the benefit of the conjugal partnership? Are indirect and remote probable benefits, the ones referred to in Article 161 of the Civil Code? The Court of Appeals in denying the motion for reconsideration, disposed of these questions in the following manner:

Respondents-appellants insist that the corporate debt in question falls under the exception laid down in said Article 122 (par. one). We do not agree. The loan procured from respondent-appellant AIDC was for the sole advancement and benefit of Philippine Blooming Mills and not for the benefit of the conjugal partnership of petitioners-appellees. x x x appellee-husband derives salaries, dividends benefits from Philippine Blooming Mills (the debtor corporation), only because said husband is an employee of said PBM. These salaries and benefits, are not the benefits contemplated by Articles 121 and 122 of the Family Code. The benefits contemplated by the exception in Article 122 (Family Code) is that benefit derived directly from the use of the loan. In the case at bar, the loan is a corporate loan extended to PBM and used by PBM itself, not by petitioner-appellee-husband or his family. The alleged benefit, if any, continuously harped by respondentsappellants, are not only incidental but also speculative.
[19]

No matter how one looks at it, the debt/credit extended by respondentsappellants is purely a corporate debt granted to PBM, with petitioner-appellee-husband merely signing as surety. While such petitioner-appellee-husband, as such surety, is solidarily liable with the principal debtor AIDC, such liability under the Civil Code provisions is specifically restricted by Article 122 (par. 1) of the Family Code, so that debts for which the husband is liable may not be charged against conjugal partnership properties. Article 122 of the Family Code is explicit The 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.

We agree with the respondent court. Indeed, considering the odds involved in guaranteeing a large amount (P50,000,000.00) of loan, the probable prolongation of employment in PBM and increase in value of its stocks, would be too small to qualify the transaction as one for the benefit of the suretys family. Verily, no one could say, with

a degree of certainty, that the said contract is even productive of some benefits to the conjugal partnership. We likewise agree with the respondent court (and this view is not contested by the petitioners) that the provisions of the Family Code is applicable in this case. These provisions highlight the underlying concern of the law for the conservation of the conjugal partnership; for the husbands duty to protect and safeguard, if not augment, not to dissipate it. This is the underlying reason why the Family Code clarifies that the obligations entered into by one of the spouses must be those that redounded to the benefit of the family and that the measure of the partnerships liability is to the extent that the family is benefited.[20] These are all in keeping with the spirit and intent of the other provisions of the Civil Code which prohibits any of the spouses to donate or convey gratuitously any part of the conjugal property.[21] Thus, when co-respondent Alfredo Ching entered into a surety agreement he, from then on, definitely put in peril the conjugal property (in this case, including the family home) and placed it in danger of being taken gratuitously as in cases of donation. In the second assignment of error, the petitioner advances the view that acting as surety is part of the business or profession of the respondent-husband. This theory is new as it is novel. The respondent court correctly observed that: Signing as a surety is certainly not an exercise of an industry or profession, hence the cited cases of Cobb-Perez vs. Lantin; Abella de Diaz vs. Erlanger & Galinger; G-Tractors, Inc. vs. CA do not

apply in the instant case. Signing as a surety is not embarking in a business.[22]

We are likewise of the view that no matter how often an executive acted or was persuaded to act, as a surety for his own employer, this should not be taken to mean that he had thereby embarked in the business of suretyship or guaranty.
This is not to say, however, that we are unaware that executives are often asked to stand as surety for their companys loan obligations. This is especially true if the corporate officials have sufficient property of their own; otherwise, their spouses signatures are required in order to bind the conjugal partnerships. The fact that on several occasions the lending institutions did not require the signature of the wife and the husband signed alone does not mean that being a surety became part of his profession. Neither could he be presumed to have acted for the conjugal partnership. Article 121, paragraph 3, of the Family Code is emphatic that the 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 to the extent that they redounded to the benefit of the family. Here, the property in dispute also involves the family home. The loan is a corporate loan not a personal one. Signing as a surety is certainly not an exercise of an industry or profession nor an act of administration for the benefit of the family. On the basis of the facts, the rules, the law and equity, the assailed decision should be upheld as we now uphold it. This is, of course, without prejudice to petitioners right to enforce the obligation in its favor against the PBM receiver in

accordance with the rehabilitation program and payment schedule approved or to be approved by the Securities & Exchange Commission. WHEREFORE, the petition for review should be, as it is hereby, DENIED for lack of merit.

SO ORDERED. Regalado, JJ., concur. (Chairman), Melo, Puno, and Mendoza,

FIRST DIVISION

[G.R. No. 109557. November 29, 2000]

JOSE UY and his Spouse GLENDA J. UY and GILDA L. JARDELEZA, petitioners, vs. COURT OF APPEALS and TEODORO L. JARDELEZA, respondents. DECISION
PARDO, J.: The case is an appeal via certiorari from the decision[1] of the Court of Appeals and its resolution denying reconsideration[2] reversing that of the Regional Trial Court, Iloilo, Branch 32[3] and declaring void the special proceedings instituted therein by petitioners to authorize petitioner Gilda L. Jardeleza, in view of the comatose condition of her husband, Ernesto Jardeleza, Sr., with the approval of the court, to dispose of their conjugal property in favor of co-petitioners, their daughter and son in law, for the ostensible purpose of financial need in the personal, business and medical expenses of her incapacitated husband. The facts, as found by the Court of Appeals, are as follows:

law, the spouses Jose Uy and Glenda Jardeleza (herein petitioners) on the other hand. The controversy came about as a result of Dr. Ernesto Jardeleza, Sr.s suffering of a stroke on March 25, 1991, which left him comatose and bereft of any motor or mental faculties. Said Ernesto Jardeleza, Sr. is the father of herein respondent Teodoro Jardeleza and husband of herein private respondent Gilda Jardeleza. Upon learning that one piece of real property belonging to the senior Jardeleza spouses was about to be sold, petitioner Teodoro Jardeleza, on June 6, 1991, filed a petition (Annex A) before the R.T.C. of Iloilo City, Branch 25, where it was docketed as Special Proceeding No. 4689, in the matter of the guardianship of Dr. Ernesto Jardeleza, Sr. The petitioner averred therein that the present physical and mental incapacity of Dr. Ernesto Jardeleza, Sr. prevent him from competently administering his properties, and in order to prevent the loss and dissipation of the Jardelezas real and personal assets, there was a need for a court-appointed guardian to administer said properties. It was prayed therein that Letters of Guardianship be issued in favor of herein private respondent Gilda Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It was further prayed that in the meantime, no property of Dr. Ernesto Jardeleza, Sr. be negotiated, mortgaged or otherwise alienated to third persons, particularly Lot No. 4291 and all the improvements thereon, located

This case is a dispute between Teodoro L. Jardeleza (herein respondent) on the one hand, against his mother Gilda L. Jardeleza, and sister and brother-in-

along Bonifacio Drive, Iloilo City, and covered by T.C.T. No. 47337. A few days later, or on June 13, 1991, respondent Gilda L. Jardeleza herself filed a petition docketed as Special Proceeding NO. 4691, before Branch 32 of the R.T.C. of Iloilo City, regarding the declaration of incapacity of Ernesto Jardeleza, Sr., assumption of sole powers of administration of conjugal properties, and authorization to sell the same (Annex B). Therein, the petitioner Gilda L. Jardeleza averred the physical and mental incapacity of her husband, who was then confined for intensive medical care and treatment at the Iloilo Doctors Hospital. She signified to the court her desire to assume sole powers of administration of their conjugal properties. She also alleged that her husbands medical treatment and hospitalization expenses were piling up, accumulating to several hundred thousands of pesos already. For this, she urgently needed to sell one piece of real property, specifically Lot No. 4291 and its improvements. Thus, she prayed for authorization from the court to sell said property. The following day, June 14, 1991, Branch 32 of the R.T.C. of Iloilo City issued an Order (Annex C) finding the petition in Spec. Proc. No. 4691 to be sufficient in form and substance, and setting the hearing thereof for June 20, 1991. The scheduled hearing of the petition proceeded, attended by therein petitioner Gilda Jardeleza, her counsel, her two children, namely Ernesto Jardeleza, Jr., and Glenda

Jardeleza Uy, and Dr. Rolando Padilla, one of Ernesto Jardeleza, Sr.s attending physicians. On that same day, June 20, 1991, Branch 32 of the RTC of Iloilo City rendered its Decision (Annex D), finding that it was convinced that Ernesto Jardeleza, Sr. was truly incapacitated to participate in the administration of the conjugal properties, and that the sale of Lot No. 4291 and the improvements thereon was necessary to defray the mounting expenses for treatment and Hospitalization. The said court also made the pronouncement that the petition filed by Gilda L. Jardeleza was pursuant to Article 124 of the Family Code, and that the proceedings thereon are governed by the rules on summary proceedings sanctioned under Article 253 of the same Code x x x. The said court then disposed as follows: WHEREFORE, there being factual and legal bases to the petition dated June 13, 1991, the Court hereby renders judgment as follows: 1) declaring Ernesto Jardeleza, Sr., petitioners husband, to be incapacitated and unable to participate in the administration of conjugal properties; 2) authorizing petitioner Gilda L. Jardeleza to assume sole powers of administration of their conjugal properties; and 3) authorizing aforesaid petitioner to sell Lot No. 4291 of the Cadastral Survey of Iloilo, situated in Iloilo

City and covered by TCT No. 47337 issued in the names of Ernesto Jardeleza, Sr. and Gilda L. Jardeleza and the buildings standing thereof. SO ORDERED. On June 24, 1991, herein petitioner Teodoro Jardeleza filed his Opposition to the proceedings before Branch 32 in Spec. Proc. Case No. 4691, said petitioner being unaware and not knowing that a decision has already been rendered on the case by public respondent. On July 3, 1991, herein petitioner Teodoro Jardeleza filed a motion for reconsideration of the judgment in Spec. Proc. No. 4691 and a motion for consolidation of the two cases (Annex F). He propounded the argument that the petition for declaration of incapacity, assumption of sole powers of administration, and authority to sell the conjugal properties was essentially a petition for guardianship of the person and properties of Ernesto Jardeleza, Sr. As such, it cannot be prosecuted in accordance with the provisions on summary proceedings set out in Article 253 of the Family Code. It should follow the rules governing special proceedings in the Revised Rules of Court which require procedural due process, particularly the need for notice and a hearing on the merits. On the other hand, even if Gilda Jardelezas petition can be prosecuted by summary proceedings, there was still a failure to comply with the basic requirements thereof, making the decision in Spec.

Proc. No. 4691 a defective one. He further alleged that under the New Civil Code, Ernesto Jardeleza, Sr. had acquired vested rights as a conjugal partner, and that these rights cannot be impaired or prejudiced without his consent. Neither can he be deprived of his share in the conjugal properties through mere summary proceedings. He then restated his position that Spec. Proc. No. 4691 should be consolidated with Spec. Proc. No. 4689 which was filed earlier and pending before Branch 25. Teodoro Jardeleza also questioned the propriety of the sale of Lot No. 4291 and the improvements thereon supposedly to pay the accumulated financial obligations arising from Ernesto Jardeleza, Sr.s hospitalization. He alleged that the market value of the property would be around Twelve to Fifteen Million Pesos, but that he had been informed that it would be sold for much less. He also pointed out that the building thereon which houses the Jardeleza Clinic is a monument to Ernesto Jardeleza Sr.s industry, labor and service to his fellowmen. Hence, the said property has a lot of sentimental value to his family. Besides, argued Teodoro Jardeleza, then conjugal partnership had other liquid assets to pay off all financial obligations. He mentioned that apart from sufficient cash, Jardeleza, Sr. owned stocks of Iloilo Doctors Hospital which can be off-set against the cost of medical and hospital bills. Furthermore, Ernesto Jardeleza, Sr. enjoys certain privileges at the said hospital which allows him to pay on installment basis. Moreover, two of Ernesto Jardeleza Sr.s

attending physicians are his own sons who do not charge anything for their professional services. On July 4, 1991, Teodoro Jardeleza filed in Spec. Proc. No. 4691 a supplement to his motion for reconsideration (Annex G). He reiterated his contention that summary proceedings was irregularly applied. He also noted that the provisions on summary proceedings found in Chapter 2 of the Family Code comes under the heading on Separation in Fact Between Husband and Wife which contemplates of a situation where both spouses are of disposing mind. Thus, he argued that were one spouse is comatose without motor and mental faculties, the said provisions cannot be made to apply. While the motion for reconsideration was pending, Gilda Jardeleza disposed by absolute sale Lot No. 4291 and all its improvements to her daughter, Ma. Glenda Jardeleza Uy, for Eight Million Pesos (P8,000,000.00), as evidenced by a Deed Absolute Sale dated July 8, 1991 executed between them (p. 111, Rollo). Under date of July 23, 1991, Gilda Jardeleza filed an urgent ex-parte motion for approval of the deed of absolute sale. On August 12, 1991 Teodoro Jardeleza filed his Opposition to the motion for approval of the deed of sale on the grounds that: (1) the motion was prematurely filed and should be held in abeyance until the final resolution of the petition; (2) the motion does

not allege nor prove the justifications for the sale; and (3) the motion does not allege that had Ernesto Jardeleza, Sr. been competent, he would have given his consent to the sale. Judge Amelita K. del Rosario-Benedicto of Branch 32 of the respondent Court, who had penned the decision in Spec. Proc. No. 4691 had in the meantime formally inhibited herself from further acting in this case (Annex I). The case was then reraffled to Branch 28 of the said court. On December 19, 1991, the said court issued an Order (Annex M) denying herein petitioners motion for reconsideration and approving respondent Jardelezas motion for approval of the deed of absolute sale. The said court ruled that: After a careful and thorough perusal of the decision, dated June 20, 1991, the Motion for Reconsideration, as well as its supplements filed by oppositor, Teodoro L. Jardeleza, through counsel, and the opposition to the Motion for Reconsideration, including its supplements, filed by petitioner, through counsel, this Court is of the opinion and so holds, that her Honor, Amelita K. del Rosario-Benedicto, Presiding Judge of Branch 32, of this Court, has properly observed the procedure embodied under Article 253, in relation to Article 124, of the Family Code, in rendering her decision dated June 20, 1991.

Also, as correctly stated by petitioner, through counsel, that oppositor Teodor L. Jardeleza does not have the personality to oppose the instant petition considering that the property or properties, subject of the petition, belongs to the conjugal partnership of the spouses Ernesto and Gilda Jardeleza, who are both still alive. In view thereof, the Motion for Reconsideration of oppositor Teodoro L. Jardeleza, is hereby denied for lack of merit. Considering the validity of the decision dated June 20, 1991, which among others, authorized Gilda L. Jardeleza to sell Lot No. 4291 of the Cadastral Survey of Iloilo, covered by Transfer Certificate of Title No. 47337 issued in the names of Ernesto Jardeleza, Sr., and Gilda L. Jardeleza and the building standing thereon, the Urgent Ex-Parte Motion for Approval of Deed of Absolute Sale dated July 23, 1991, filed by petitioner, through counsel, is hereby granted and the deed of absolute sale, executed and notarized on July 8, 1991, by and between Gilda L. Jardeleza, as vendor, and Ma. Glenda Jardeleza, as vendee, is hereby approved, and the Register of Deeds of Iloilo City, is directed to register the sale and issue the corresponding transfer certificate of title to the vendee. SO ORDERED.
[4]

and ordering the trial court to dismiss the special proceedings to approve the deed of sale, which was also declared void.[5] On December 29, 1992, petitioners filed a motion for reconsideration,[6] however, on March 29, 1993, the Court of Appeals denied the motion, finding no cogent and compelling reason to disturb the decision.[7] Hence, this appeal.[8] The issue raised is whether petitioner Gilda L. Jardeleza as the wife of Ernesto Jardeleza, Sr. who suffered a stroke, a cerebrovascular accident, rendering him comatose, without motor and mental faculties, and could not manage their conjugal partnership property may assume sole powers of administration of the conjugal property under Article 124 of the Family Code and dispose of a parcel of land with its improvements, worth more than twelve million pesos, with the approval of the court in a summary proceedings, to her co-petitioners, her own daughter and son-in-law, for the amount of eight million pesos. The Court of Appeals ruled that in the condition of Dr. Ernesto Jardeleza, Sr., the procedural rules on summary proceedings in relation to Article 124 of the Family Code are not applicable. Because Dr. Jardeleza, Sr. was unable to take care of himself and manage the conjugal property due to illness that had rendered him comatose, the proper remedy was the appointment of a judicial guardian of the person or estate or both of such incompetent, under Rule 93, Section 1, 1964 Revised Rules of Court. Indeed, petitioner earlier had filed such a petition for judicial guardianship. Article 124 of the Family Code provides as follows:

On December 9, 1992, the Court of Appeals promulgated its decision reversing the appealed decision

ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both

spouses jointly. In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for a 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. (165a).
In regular manner, the rules on summary judicial proceedings under the Family Code govern the proceedings under Article 124 of the Family Code. The situation contemplated is one where the spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or incompetent to give consent. In this case, the trial court found that the subject spouse "is an incompetent" who was in comatose or semi-comatose condition, a victim of stroke, cerebrovascular accident, without motor and mental

faculties, and with a diagnosis of brain stem infarct.[9] In such case, the proper remedy is a judicial guardianship proceedings under Rule 93 of the 1964 Revised Rules of Court. Even assuming that the rules of summary judicial proceedings under the Family Code may apply to the wife's administration of the conjugal property, the law provides that the wife who assumes sole powers of administration has the same powers and duties as a guardian under the Rules of Court.[10] Consequently, a spouse who desires to sell real property as such administrator of the conjugal property must observe the procedure for the sale of the wards estate required of judicial guardians under Rule 95, 1964 Revised Rules of Court, not the summary judicial proceedings under the Family Code. In the case at bar, the trial court did not comply with the procedure under the Revised Rules of Court. Indeed, the trial court did not even observe the requirements of the summary judicial proceedings under the Family Code. Thus, the trial court did not serve notice of the petition to the incapacitated spouse; it did not require him to show cause why the petition should not be granted. Hence, we agree with the Court of Appeals that absent an opportunity to be heard, the decision rendered by the trial court is void for lack of due process. The doctrine consistently adhered to by this Court is that a denial of due process suffices to cast on the official act taken by whatever branch of the government the impress of nullity.[11] A decision rendered without due process is void ab initio and may be attacked directly or collaterally.[12] A decision is void for lack of due process if, as a result, a party is deprived of the opportunity of being heard.[13] A void decision may be assailed or impugned at any time either directly or

collaterally, by means of a separate action, or by resisting such decision in any action or proceeding where it is invoked.[14] WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals in CA-G. R. SP No. 26936, in toto. Costs against petitioners. SO ORDERED. Davide, Jr., C.J., (Chairman), Kapunan, and Ynares-Santiago, JJ., concur. Puno,