Dad, you are on your own

Tim and Yong were convicted of violating Batas Pambansa 22 for having issued dishonored checks. Both of them were held jointly and solidarily liable for the amounts representing the value of the bounced checks, attorney’s fees and other litigation expenses. The MeTC ruled that Tim and Yong drew checks using the account of their company, WTC, in order to obtain cash from Te.

A writ of execution was thereafter was issued by the court. The following properties were levied to be sold in a public auction: (a) a parcel of land registered in the name of Tim’s wife, Sita, and (b) a condominium unit registered in the name of Tim, married to Sita.

Sita and their daughter, Jen, moved to have the properties excluded from the auction sale. They argued that the B.P. 22 case was a corporate obligation and for this reason, Tim should not be held personally liable. Sita claims that the parcel of land is her paraphernal property which she purchased using funds donated to her by her father; while the condominium unit was the Cordova family home and presently, utilized by Jen as her own family home.

Q: Is the parcel of land the paraphernal property of Sita?

A: No. Since Tim and Sita were married prior to the effectivity of the Family Code and did not execute any pre-nuptial agreement; thus, their property relations is governed by conjugal partnership of gains.

Further, under Article 160 of the Civil Code, “all 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.”

Following the above principles, the land is the conjugal property of the spouses as the same was acquired during the marriage of Tim and Sita. The fact that Sita was identified as the sole vendee and registered owner in the Deed of Absolute Sale and a copy of the title respectively, did not destroy its conjugal nature as the registration of the property is not conclusive evidence of the exclusive ownership of the husband or the wife.

Even if the property appears to be registered solely in the name of either spouse, it has the inherent character of conjugal property if it was acquired for valuable consideration during marriage.

Q: Is the condominium unit a family home that will freeze the court’s hand and forestall the execution of a final and executory ruling?

A: No. In order for the property to be considered as a family home, the requisites must be established: (a) it must be the house where he and his family actually reside and the lot on which it is situated; (b) the family home must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latter’s consent, or on the property of the unmarried head of the family; and (c) the actual value of the family home shall not exceed, at the time of its constitution, the amount of P300,000.00 in urban areas and P200,000.00 in rural areas.

Jen fell short in establishing that the condominium unit was indeed constituted as a family home. It must be emphasized that the law requires for purposes of determining a family home that the residence must be actual.

It explicitly mandates that the occupancy of the family home, either by the owner or by any of its beneficiaries, must be actual. This occupancy must be real, or actually existing, as opposed to something merely possible, or that which is mere y presumptive or constructive. None of these requisites were met by the mother and daughter.

Q: May the conjugal properties be sold in public auction to satisfy Tim’s civil liability?

A: No. Notwithstanding Te’s right to enforce the MeTC’s Decision, he cannot obtain satisfaction by executing upon the conjugal properties of Tim and Sita. Settled is the rule that conjugal property cannot be held liable for the personal obligation contracted by one spouse, unless some advantage or benefit is shown to have accrued to the conjugal partnership.

Article 122 of the Family Code clearly provides that (t)he 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. x x x

Q: When can the conjugal partnership be held liable for a debt or obligation obtained by one spouse without the consent of the other spouse?

A: The Supreme Court discussed two scenarios that would best explain the answer to the above query.

First, 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 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.

Second, 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. (Source: Cordova vs Ty, G.R. No. 246255, February 03, 2021)

The author is Dean of Lyceum of the Philippines University; Chairman of Philippine Association of Law Schools; and founder of Mawis Law Office