FACTS:
Philippine Blooming Mills obtained loan from Ayala Investment, and Husband-Ching, VP of PBM, executed acted as surety for loan.
PBM failed to pay loan; AIDC filed case against PBM and Alfredo-Ching to pay loan, with interest.
Court of First Instance, Pasig, held that accord. to Art. 121 of the Family Code: “Conjugal Partnership shall be liable for (2) all debts and obligations contracted during marriages by administrator spouse for benefit of the family.”
“for benefit of the family” does NOT include husband acting as surety for a corporate loan
AIDC may NOT enforce payment of loan against spouses-Ching’s CPG Court of Appeals: upheld CFI ruling
AIDC filed for appeal ISSUE:
W/N Husband-Ching, acting as surety for PBM, falls under the “for the benefit of the family” condition that makes CPG liable for the loan/debt to AIDC
HELD:
NO. Supreme Court upholds decision of the CA and CFI in ruling that the CPG is not liable for the PBM debt.
Art. 121 of Family Code:
CPG liable for …debts and obligations contracted during marriage by administrator spouse for benefit of the family.
Art. 122 of FC:
Payment of personal debts contracted by husband/wife before/during marriage shall NOT be charged to CPG except insofar as they redounded to the benefit of the family. In order for CPG to be liable, the debt incurred by husband as administrator of CPG must be incurred with the husband as the principal obligor (i.e. directly received money/services for his business or professions; no benefits need to be proven, so long as the family may stand to benefit from the loan that husband contracts on behalf of the family business)
In case at bar: husband, as VP of PBM, only acts as SURETY OR GUARANTOR, thus contract is not categorized as falling within the category of “benefit of the family”; the husband did NOT contract obligation for family business; he acted as SURETY for LOAN contracted by a THIRD PARTY of which he was an EMPLOYEE (i.e. PBM is third party, husband, as VP, is employee of PBM)
Debt was clearly a corporate debt; CPG should not be made liable for the surety agreement which was for the benefit of a third party (PBM) and not the Ching-Family
For the debt to be in benefit of the family and for CPG to be liable, the family must directly benefit from the use of the loan
In the case at bar: the corporate loan was extended to PBM and used by PBM, not by Husband-Ching or the
Ching-family, whose benefits are only incidental because the husband is an employee of PBM
Loan is CORPORATE, NOT personal: it is not an exercise of industry or profession or act of administration for the benefit of the family
Carlos v. Abelardo
G.R. No. 146504 ll Apr. 9, 2002
172 332 Bayona
Persons and Family Relations
TOPIC: Charges upon the CPG [FC Art. 121 (2)(3)]
Article 121. The conjugal partnership shall be liable for:
(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited;
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for th e unpaid balance with their separate properties.
QUICK GUIDE:
Petitioner issued US$25,000 as a loan to his daughter and son-in-law for the spouses’ conjugal home [house and lot]. The loan is liability of CPG even if the husband denies giving consent by not signing the acknowledgement executed by his wife to such because the loan redounded to the benefit of the family.
FACTS:
Honorio Carlos filed a petition against Manuel Abelardo, his son-in-law for recovery of the $25,000 loan used to purchase a house and lot located at Paranaque. It was in October 1989 when the petitioner issued a check worth as such to assist the spouses in conducting their married life independently. The seller of the property acknowledged receipt of the full payment. The petitioner tried to collect the money but was met w/ threats so he made a
formal demand but the spouses failed to comply with the obligation. . Abelardo contended that the amount was never intended as a loan but his share of income on contracts obtained by him in the construction firm and that the petitoner could have easily deducted the debt from his share in the profits. RTC decision was in favor of the petitioner, however CA reversed and set aside trial court’s decision for insufficiency of evidence. Evidently, there was a check issued worth $25,000 paid to the owner of the Paranaque property which became the conjugal dwelling of the spouses. The wife executed an instrument acknowledging the loan but Abelardo did not sign. [Spouses separated in fact for more than 1 year]
ISSUE:
WON the spouses CPG is liable for the said loan
HELD:
Yes, undisputed is the fact that they used the money to buy a house and lot which served as their conjugal home. Even though it was only the wife who executed the instrument of acknowledgment of accountability which the husband refused to sign, CPG is still liable for the loan since such redounded to the benefit of the family. Defendant-husband and defendant- wife are jointly [CPG] and severally [in case of insufficiency of CPG] liable in the payment of the loan.
MINOR ISSUE:
Abelardo’s contention that it is not a loan rather a profit share in the construction firm is untenable since there was no proof that he was part of the stockholders that will entitle him to the profits and income of the company.