Rights and Obligations Cases

7/31/2019 Rights and Obligations Cases

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Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 139789 July 19, 2001

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF

POTENCIANO ILUSORIO, ERLINDA K. ILUSORIO, petitioner,

vs.

ERLINDA K. ILUSORIO-BILDNER, SYLVIA K. ILUSORIO-YAP, JOHN DOES

and JANE DOES, respondents.

x---------------------------------------------------------x

G.R. No. 139808 July 19, 2001

POTENCIANO ILUSORIO, MA. ERLINDA I. BILDNER and SYLVIA K.

ILUSORIO, petitioners,

vs.

HON. COURT OF APPEALS and ERLINDA K. ILUSORIO, respondents.

R E S O L U T I O N

PARDO,J.:

Once again we see the sad tale of a prominent family shattered by conflicts on expectancyin fabled fortune.

On March 11, 1999, Erlinda K. Ilusorio, the matriarch who was so lovingly inseparablefrom her husband some years ago, filed a petition with the Court of Appeals1 forhabeas

corpus to have custody of her husband in consortium.

On April 5, 1999, the Court of Appeals promulgated its decision dismissing the petition for

lack of unlawful restraint or detention of the subject, Potenciano Ilusorio.

Thus, on October 11, 1999, Erlinda K. Ilusorio filed with the Supreme Court an appeal via

certiorari pursuing her desire to have custody of her husband Potenciano Ilusorio.

2

Thiscase was consolidated with another case3 filed by Potenciano Ilusorio and his children,

Erlinda I. Bildner and Sylvia K. Ilusorio appealing from the order giving visitation rights tohis wife, asserting that he never refused to see her.

On May 12, 2000, we dismissed the petition for habeas corpus4 for lack of merit, and

granted the petition5 to nullify the Court of Appeals' ruling6 giving visitation rights to

Erlinda K. Ilusorio.7


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What is now before the Court is Erlinda's motion to reconsider the decision.8

On September 20, 2000, we set the case for preliminary conference on October 11, 2000, at

10:00 a. m., without requiring the mandatory presence of the parties.

In that conference, the Court laid down the issues to be resolved, to wit:

(a) To determine the propriety of a physical and medical examination of petitioner

Potenciano Ilusorio;

(b) Whether the same is relevant; and

(c) If relevant, how the Court will conduct the same.9

The parties extensively discussed the issues. The Court, in its resolution, enjoined theparties and their lawyers to initiate steps towards an amicable settlement of the case

through mediation and other means.

On November 29, 2000, the Court noted the manifestation and compliance of the parties

with the resolution of October 11, 2000.10

On January 31, 2001, the Court denied Erlinda Ilusorio's manifestation and motion prayingthat Potenciano Ilusorio be produced before the Court and be medically examined by a

team of medical experts appointed by the Court.11

On March 27, 2001, we denied with finality Erlinda's motion to reconsider the Court's

order of January 31 , 2001.12

The issues raised by Erlinda K. Ilusorio in her motion for reconsideration are mere

reiterations of her arguments that have been resolved in the decision.

Nevertheless, for emphasis, we shall discuss the issues thus:

First. Erlinda K. Ilusorio claimed that she was not compelling Potenciano to live with her

in consortium and that Potenciano's mental state was not an issue. However, the very rootcause of the entire petition is her desire to have her husband's custody.13 Clearly, Erlinda

cannot now deny that she wanted Potenciano Ilusorio to live with her.

Second. One reason why Erlinda K. Ilusorio sought custody of her husband was thatrespondents Lin and Sylvia were illegally restraining Potenciano Ilusorio to fraudulently

deprive her of property rights out of pure greed.14 She claimed that her two children were

using their sick and frail father to sign away Potenciano and Erlinda's property to

companies controlled by Lin and Sylvia. She also argued that since Potenciano retired asdirector and officer of Baguio Country Club and Philippine Oversees Telecommunications,

she would logically assume his position and control. Yet, Lin and Sylvia were the ones

controlling the corporations.15


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The fact of illegal restraint has not been proved during the hearing at the Court of Appeals

on March 23, 1999.16 Potenciano himself declared that he was not prevented by his children

from seeing anybody and that he had no objection to seeing his wife and other childrenwhom he loved.

Erlinda highlighted that her husband suffered from various ailments. Thus, PotencianoIlusorio did not have the mental capacity to decide for himself. Hence, Erlinda argued that

Potenciano be brought before the Supreme Court so that we could determine his mentalstate.

We were not convinced that Potenciano Ilusorio was mentally incapacitated to choose

whether to see his wife or not. Again, this is a question of fact that has been decided in theCourt of Appeals.

As to whether the children were in fact taking control of the corporation, these are matters

that may be threshed out in a separate proceeding, irrelevant in habeas corpus.

Third. Petitioner failed to sufficiently convince the Court why we should not rely on the

facts found by the Court of Appeals. Erlinda claimed that the facts mentioned in thedecision were erroneous and incomplete. We see no reason why the High Court of the land

need go to such length. The hornbook doctrine states that findings of fact of the lower

courts are conclusive on the Supreme Court.17 We emphasize, it is not for the Court toweigh evidence all over again.18 Although there are exceptions to the rule,19 Erlinda failed

to show that this is an exceptional instance.

Fourth. Erlinda states that Article XII of the 1987 Constitution and Articles 68 and 69 of

the Family Code support her position that as spouses, they (Potenciano and Erlinda) are

duty bound to live together and care for each other. We agree.

The law provides that the husband and the wife are obliged to live together, observe mutual

love, respect and fidelity.20 The sanction therefor is the "spontaneous, mutual affection

between husband and wife and not any legal mandate or court order" to enforceconsortium.21

Obviously, there was absence of empathy between spouses Erlinda and Potenciano, having

separated from bed and board since 1972. We defined empathy as a shared feeling between

husband and wife experienced not only by having spontaneous sexual intimacy but a deepsense of spiritual communion. Marital union is a two-way process.

Marriage is definitely for two loving adults who view the relationship with "amor gignit

amorem" respect, sacrifice and a continuing commitment to togetherness, conscious of its

value as a sublime social institution.22

On June 28, 2001, Potenciano Ilusorio gave his soul to the Almighty, his Creator and

Supreme Judge. Let his soul rest in peace and his survivors continue the much prolonged

fracas ex aequo et bono.


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IN VIEW WHEREOF, we DENY Erlinda's motion for reconsideration. At any rate, the

case has been rendered moot by the death of subject.

SO ORDERED.

Davide, Jr., C .J ., Puno, Kapunan and Ynares-Santiago, JJ ., concur.


SUPREME COURTManila

SECOND DIVISION

G.R. No. 118305 February 12, 1998

AYALA INVESTMENT & DEVELOPMENT CORP. and ABELARDOMAGSAJO, petitioners,vs.COURT OF APPEALS and SPOUSES ALFREDO & ENCARNACION CHING,respondents.

MARTINEZ, J.:

Under Article 161 of the Civil Code, what debts and obligations contracted by thehusband alone are considered "for the benefit of the conjugal partnership" whichare chargeable against the conjugal partnership? Is a surety agreement or anaccommodation contract entered into by the husband in favor of his employerwithin 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 Courtof Appeals in "Spouses Alfredo and Encarnacion Ching vs.Ayala Investment andDevelopment Corporation, et. al.," docketed as CA-G.R. CV No. 29632, 1

upholding the decision of the Regional Trial Court of Pasig, Branch 168, whichruled that the conjugal partnership of gains of respondents-spouses Alfredo andEncarnacion Ching is not liable for the payment of the debts secured byrespondent-husband Alfredo Ching.

A chronology of the essential antecedent facts is necessary for a clearunderstanding of the case at bar.


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Philippine Blooming Mills (hereinafter referred to as PBM) obtained aP50,300,000.00 loan from petitioner Ayala Investment and DevelopmentCorporation (hereinafter referred to as AIDC). As added security for the creditline extended to PBM, respondent Alfredo Ching, Executive Vice President ofPBM, executed security agreements on December 10, 1980 and on March 20,

1981 making himself jointly and severally answerable with PBM's indebtednessto AIDC.

PBM failed to pay the loan. Thus, on July 30, 1981, AIDC filed a case for sum ofmoney against PBM and respondent-husband Alfredo Ching with the then Courtof First Instance of Rizal (Pasig), Branch VIII, entitled "Ayala Investment andDevelopment Corporation vs. Philippine Blooming Mills and Alfredo Ching,"docketed as Civil Case No. 42228.

After trial, the court rendered judgment ordering PBM and respondent-husbandAlfredo Ching to jointly and severally pay AIDC the principal amount of

P50,300,000.00 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 AIDC's puttingup of an P8,000,000.00 bond, a writ of execution dated May 12, 1982 wasissued. Thereafter, petitioner Abelardo Magsajo, Sr., Deputy Sheriff of Rizal andappointed sheriff in Civil Case No. 42228, caused the issuance and service uponrespondents-spouses of a notice of sheriff sale dated May 20, 1982 on three (3)of their conjugal properties. Petitioner Magsajo then scheduled the auction saleof the properties levied.

On June 9, 1982, private respondents filed a case of injunction againstpetitioners with the then Court of First Instance of Rizal (Pasig), Branch XIII, toenjoin the auction sale alleging that petitioners cannot enforce the judgmentagainst the conjugal partnership levied on the ground that, among others, thesubject loan did not redound to the benefit of the said conjugal partnership. 2

Upon application of private respondents, the lower court issued a temporaryrestraining order to prevent petitioner Magsajo from proceeding with theenforcement of the writ of execution and with the sale of the said properties atpublic auction.

AIDC filed a petition forcertioraribefore the Court of Appeals, 3questioning the

order of the lower court enjoining the sale. Respondent Court of Appeals issueda Temporary Restraining Order on June 25, 1982, enjoining the lower court 4fromenforcing its Order of June 14, 1982, thus paving the way for the scheduledauction sale of respondents-spouses conjugal properties.

On June 25, 1982, the auction sale took place. AIDC being the only bidder, wasissued a Certificate of Sale by petitioner Magsajo, which was registered on July


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2, 1982. Upon expiration of the redemption period, petitioner sheriff issued thefinal 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. SPNo. 14404, in this manner:

WHEREFORE, the petition forcertiorariin this case is granted and the challengedorder of the respondent Judge dated June 14, 1982 in Civil Case No. 46309 ishereby set aside and nullified. The same petition insofar as it seeks to enjoin therespondent Judge from proceeding with Civil Case No. 46309 is, however, denied.No pronouncement is here made as to costs. . . . 5

On September 3, 1983, AIDC filed a motion to dismiss the petition for injunctionfiled before Branch XIII of the CFI of Rizal (Pasig) on the ground that the samehad become moot and academic with the consummation of the sale.Respondents filed their opposition to the motion arguing, among others, thatwhere a third party who claim is ownership of the property attached or levied

upon, a different legal situation is presented; and that in this case, two (2) of thereal properties are actually in the name of Encarnacion Ching, a non-party toCivil Case No. 42228.

The lower court denied the motion to dismiss. Hence, trial on the meritsproceeded. 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 thesale 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:

The loan procured from respondent-appellant AIDC was for the advancement andbenefit of Philippine Blooming Mills and not for the benefit of the conjugalpartnership of petitioners-appellees.

xxx xxx xxx

As to the applicable law, whether it is Article 161 of the New Civil Code or Article1211 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 theapplicable law on the matter . . . . . . .

Article 121 of the Family Code provides that "The conjugal partnership shall beliable for: . . . (2) All debts and obligations contracted during the marriage by thedesignated Administrator-Spouse for the benefit of the conjugal partnership ofgains . . . ." The burden of proof that the debt was contracted for the benefit of theconjugal 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


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contracted by appellee-husband, for the benefit of the conjugal partnership ofgains.

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 intoto. 6

Petitioner filed a Motion for Reconsideration which was denied by the respondentcourt in a Resolution dated November 28, 1994. 7

Hence, this petition for review. Petitioner contends that the "respondent courterred in ruling that the conjugal partnership of private respondents is not liable forthe obligation by the respondent-husband."

Specifically, the errors allegedly committed by the respondent court are as

follows:

I. RESPONDENT COURT ERRED IN RULING THAT THEOBLIGATION INCURRED RESPONDENT HUSBAND DID NOTREDOUND TO THE BENEFIT OF THE CONJUGALPARTNERSHIP OF THE PRIVATE RESPONDENT.

II. RESPONDENT COURT ERRED IN RULING THAT THE ACTOF RESPONDENT HUSBAND IN SECURING THE SUBJECTLOAN IS NOT PART OF HIS INDUSTRY, BUSINESS ORCAREER FROM WHICH HE SUPPORTS HIS FAMILY.

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

The wordings of Article 161 of the Civil Code is very clear: for the partnership to beheld liable, the husband must have contracted the debt "for the benefit of thepartnership, thus:

Art. 161. The conjugal partnership shall be liable for:

1) all debts and obligations contracted by thehusband for the benefit of the conjugalpartnership . . . .

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). Theformer require that actual benefit must have been realized; the latter requires onlythat the transaction should be one which normally would produce benefit to thepartnership, regardless of whether or not actual benefit accrued.8


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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 thebenefit of" on the other. They mean one and the same thing. Article 161 (1) of theCivil Code and Article 121 (2) of the Family Code are similarly worded, i.e., bothuse 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 wifebefore or during the marriage shall not be charged to the conjugal partnershipexcept 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 tothe pronouncement of this Court in the case ofCobb-Perez vs. Lantin, 9 that thehusband as head of the family and as administrator of the conjugal partnership ispresumed to have contracted obligations for the benefit of the family or theconjugal partnership.

Contrary to the contention of the petitioners, the case of Cobb-Perez is notapplicable in the case at bar. This Court has, on several instances, interpretedthe term "for the benefit of the conjugal partnership."

In the cases ofJavier vs. Osmea, 10Abella de Diaz vs. Erlanger & Galinger, Inc.,11Cobb-Perez vs. Lantin12 and G-Tractors, Inc. vs. Court of Appeals, 13 cited bythe petitioners, we held that:

The debts contracted by the husband during the marriage relation, for and in theexercise of the industry or profession by which he contributes toward the supportof his family, are not his personal and private debts, and the products or incomefrom the wife's own property, which, like those of her husband's, are liable for the

payment of the marriage expenses, cannot be excepted from the payment of suchdebts. (Javier)

The husband, as the manager of the partnership (Article 1412, Civil Code), has aright to embark the partnership in an ordinary commercial enterprise for gain, andthe fact that the wife may not approve of a venture does not make it a private andpersonal one of the husband. (Abella de Diaz)

Debts contracted by the husband for and in the exercise of the industry orprofession by which he contributes to the support of the family, cannot be deemedto be his exclusive and private debts. (Cobb-Perez).

. . . 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 equallybear the indebtedness and the losses, unless he deliberately acted to the prejudiceof his family. (G-Tractors)

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


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The fruits of the paraphernal property which form part of the assets of the conjugalpartnership, 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 thehusband, unless it be proved that such obligations were productive of some benefitto the family." (Ansaldo; parenthetical phrase ours.)

When there is no showing that the execution of an indemnity agreement by thehusband redounded to the benefit of his family, the undertaking is not a conjugaldebt but an obligation personal to him. (Liberty Insurance)

In the most categorical language, a conjugal partnership under Article 161 of thenew Civil Code is liable only for such "debts and obligations contracted by thehusband for the benefit of the conjugal partnership." There must be the requisiteshowing then of some advantage which clearly accrued to the welfare of thespouses. Certainly, to make a conjugal partnership respond for a liability thatshould appertain to the husband alone is to defeat and frustrate the avowedobjective of the new Civil Code to show the utmost concern for the solidarity andwell-being of the family as a unit. The husband, therefore, is denied the power toassume 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 thefollowing conclusions:

(A) If the husband himself is the principal obligor in the contract, i.e., he directlyreceived the money and services to be used in or for his own business or his ownprofession, that contract falls within the term . . . . obligations for the benefit of theconjugal partnership." Here, no actual benefit may be proved. It is enough thatthe 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 orprofession of the husband. It is immaterial, if in the end, his business orprofession fails or does not succeed. Simply stated, where the husband contractsobligations 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 orentity, and the husband acted only as a suretyorguarantor, that contract cannot,by itself, alone be categorized as falling within the context of "obligations for thebenefit of the conjugal partnership." The contract of loan or services is clearly forthe 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 ofsurety or accommodation agreement, it is "for the benefit of the conjugalpartnership." Proof must be presented to establish benefit redounding to theconjugal partnership.

Thus, the distinction between the Cobb-Perez case, and we add, that of the threeother companion cases, on the one hand, and that of Ansaldo, Liberty Insuranceand Luzon Surety, is that in the former, the husband contracted the obligation for


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his own business; while in the latter, the husband merely acted as a surety forthe loan contracted by another for the latter's business.

The evidence of petitioner indubitably show that co-respondent Alfredo Chingsigned as surety for the P50M loan contracted on behalf of PBM. petitioner

should have adduced evidence to prove that Alfredo Ching's acting as suretyredounded to the benefit of the conjugal partnership. The reason for this is aslucidly explained by the respondent court:

The loan procured from respondent-appellant AIDC was for the advancement andbenefit of Philippine Blooming Mills and not for the benefit of the conjugalpartnership of petitioners-appellees. Philippine Blooming Mills has a personalitydistinct and separate from the family of petitioners-appellees this despite thefact that the members of the said family happened to be stockholders of saidcorporate entity.

xxx xxx xxx

. . . . The burden of proof that the debt was contracted for the benefit of theconjugal 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 wascontracted by appellee-husband, for the benefit of the conjugal partnership ofgains. What is apparent from the facts of the case is that the judgment debt wascontracted by or in the name of the Corporation Philippine Blooming Mills andappellee-husband only signed as surety thereof. The debt is clearly a corporatedebt and respondent-appellant's right of recourse against appellee-husband assurety is only to the extent of his corporate stockholdings. It does not extend to theconjugal partnership of gains of the family of petitioners-appellees. . . . . . .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, thewords "all debts and obligations contracted by the husband for the benefit of theconjugal partnership" used in Article 161 of the Civil Code of the Philippines indescribing the charges and obligations for which the conjugal partnership is liabledo not require that actual profit or benefit must accrue to the conjugal partnershipfrom the husband's transaction; but it suffices that the transaction should be onethat normally would produce such benefit for the partnership. This is the ratiobehind our ruling in Javier vs. Osmea, 34 Phil. 336, that obligations incurred bythe husband in the practice of his profession are collectible from the conjugalpartnership.

The aforequoted concurring opinion agreed with the majority decision that theconjugal partnership should not be made liable for the surety agreement whichwas clearly for the benefit of a third party. Such opinion merely registered anexception to what may be construed as a sweeping statement that in all casesactual profit or benefit must accrue to the conjugal partnership. The opinionmerely made it clear that no actual benefits to the family need be proved in somecases such as in the Javier case. There, the husband was the principal obligor


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himself. Thus, said transaction was found to be "one that would normally produce. . . benefit for the partnership." In the later case of G-Tractors, Inc., the husbandwas also the principal obligor not merely the surety. This latter case, therefore,did not create any precedent. It did not also supersede the Luzon SuretyCompany 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 ofcontract of accommodation, a benefit for the family may also result, when theguarantee is in favor of the husband's employer.

In the case at bar, petitioner claims that the benefits the respondent family wouldreasonably anticipate were the following:

(a) The employment of co-respondent Alfredo Ching would beprolonged and he would be entitled to his monthly salary ofP20,000.00 for an extended length of time because of the loan he

guaranteed;

(b) The shares of stock of the members of his family wouldappreciate if the PBM could be rehabilitated through the loanobtained;

(c) His prestige in the corporation would be enhanced and hiscareer would be boosted should PBM survive because of the loan.

However, these are not the benefits contemplated by Article 161 of the CivilCode. The benefits must be one directly resulting from the loan. It cannot merelybe a by-product or a spin-off of the loan itself.

In all our decisions involving accommodation contracts of the husband, 18weunderscored the requirement that: "there must be the requisite showing . . . ofsome advantage which clearly accrued to the welfare of the spouses" or "benefitsto his family" or "that such obligations are productive of some benefit to thefamily." Unfortunately, the petition did not present any proof to show: (a) Whetheror not the corporate existence of PBM was prolonged and for how many monthsor years; and/or (b) Whether or not the PBM was saved by the loan and itsshares of stock appreciated, if so, how much and how substantial was theholdings of the Ching family.

Such benefits (prospects of longer employment and probable increase in thevalue of stocks) might have been already apparent or could be anticipated at thetime the accommodation agreement was entered into. But would those "benefits"qualify the transaction as one of the "obligations . . . for the benefit of theconjugal partnership"? Are indirect and remote probable benefits, the onesreferred to in Article 161 of the Civil Code? The Court of Appeals in denying themotion for reconsideration, disposed of these questions in the following manner:


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No matter how one looks at it, the debt/credit respondents-appellants is purely acorporate debt granted to PBM, with petitioner-appellee-husband merely signingas surety. While such petitioner-appellee-husband, as such surety, is solidarilyliable with the principal debtor AIDC, such liability under the Civil Code provisionsis specifically restricted by Article 122 (par. 1) of the Family Code, so that debts forwhich the husband is liable may not be charged against conjugal partnershipproperties. Article 122 of the Family Code is explicit "The payment of personaldebts contracted by the husband or the wife before or during the marriage shall notbe charged to the conjugal partnership except insofar as they redounded to thebenefit of the family.

Respondents-appellants insist that the corporate debt in question falls under theexception laid down in said Article 122 (par. one). We do not agree. The loanprocured from respondent-appellant AIDC was for the sole advancement andbenefit of Philippine Blooming Mills and not for the benefit of the conjugalpartnership of petitioners-appellees.

. . . appellee-husband derives salaries, dividends benefits from PhilippineBlooming 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 deriveddirectly from the use of the loan. In the case at bar, the loan is a corporate loanextended to PBM and used by PBM itself, not by petitioner-appellee-husband orhis family. The alleged benefit, if any, continuously harped by respondents-appellants, are not only incidental but also speculative. 19

We agree with the respondent court. Indeed, considering the odds involved inguaranteeing a large amount (P50,000,000.00) of loan, the probable prolongationof employment in PBM and increase in value of its stocks, would be too small toqualify the transaction as one "for the benefit" of the surety's 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 bythe petitioners) that the provisions of the Family Code is applicable in this case.These provisions highlight the underlying concern of the law for the conservationof the conjugal partnership; for the husband's duty to protect and safeguard, if notaugment, not to dissipate it.

This is the underlying reason why the Family Code clarifies that the obligationsentered into by one of the spouses must be those that redounded to the benefit

of the family and that the measure of the partnership's liability is to "the extentthat the family is benefited." 20

These are all in keeping with the spirit and intent of the other provisions of theCivil Code which prohibits any of the spouses to donate or convey gratuitouslyany part of the conjugal property. 21Thus, when co-respondent Alfredo Chingentered into a surety agreement he, from then on, definitely put in peril the


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conjugal property (in this case, including the family home) and placed it in dangerof being taken gratuitously as in cases of donation.

In the second assignment of error, the petitioner advances the view that acting assurety 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, hencethe cited cases ofCobb-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 notembarking in a business.22

We are likewise of the view that no matter how often an executive acted or waspersuaded 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 askedto stand as surety for their company's loan obligations. This is especially true ifthe corporate officials have sufficient property of their own; otherwise, theirspouses' signatures are required in order to bind the conjugal partnerships.

The fact that on several occasions the lending institutions did not require thesignature of the wife and the husband signed alone does not mean that being asurety became part of his profession. Neither could he be presumed to haveacted for the conjugal partnership.

Article 121, paragraph 3, of the Family Code is emphatic that the payment ofpersonal debts contracted by the husband or the wife before or during themarriage shall not be charged to the conjugal partnership except to the extentthat they redounded to the benefit of the family.

Here, the property in dispute also involves the family home. The loan is acorporate loan not a personal one. Signing as a surety is certainly not anexercise of an industry or profession nor an act of administration for the benefit ofthe family.

On the basis of the facts, the rules, the law and equity, the assailed decisionshould be upheld as we now uphold it. This is, of course, without prejudice topetitioner's right to enforce the obligation in its favor against the PBM receiver inaccordance with the rehabilitation program and payment schedule approved or tobe approved by the Securities & Exchange Commission.

WHEREFORE, the petition for review should be, as it is hereby, DENIED for lackof merit.


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SO ORDERED.

Regalado, Melo, Puno and Mendoza, JJ., concur.


SUPREME COURTManila

SECOND DIVISION

[G.R. No. 127406. November 27, 2000]

OFELIA P. TY,Petitioner, vs. THE COURT OF APPEALS, and EDGARDO M.

REYES,Respondents.

D E C I S I O N

QUISUMBING,J.:

This appeal seeks the reversal of the decision dated July 24, 1996, ofthe Court of Appeals in C.A. G.R. CV 37897, which affirmed the decision

of the Regional Trial Court of Pasig, Branch 160, declaring the marriagecontract between private respondent Edgardo M. Reyes and petitioner

Ofelia P. Ty null and voidab initio. It also ordered private respondent to

pay P15,000.00 as monthly support for their children Faye Eloise Reyesand Rachel Anne Reyes.

As shown in the records of the case, private respondent married AnnaMaria Regina Villanueva in a civil ceremony on March 29, 1977, in

Manila. Then they had a church wedding on August 27, 1977. However,

on August 4, 1980, the Juvenile and Domestic Relations Court ofQuezon City declared their marriage null and voidab initio for lack of a

valid marriage license. The church wedding on August 27, 1977, was

also declared null and void ab initio for lack of consent of the parties.

Even before the decree was issued nullifying his marriage to Anna

Maria, private respondent wed Ofelia P. Ty, herein petitioner, on April 4,

1979, in ceremonies officiated by the judge of the City Court of Pasay.On April 4, 1982, they also had a church wedding in Makati, Metro

Manila.

On January 3, 1991, private respondent filed a Civil Case 1853-J with

the RTC of Pasig, Branch 160, praying that his marriage to petitioner be

declared null and void. He alleged that they had no marriage licensewhen they got married. He also averred that at the time he married


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petitioner, he was still married to Anna Maria. He stated that at the timehe married petitioner the decree of nullity of his marriage to Anna Maria

had not been issued. The decree of nullity of his marriage to Anna Mariawas rendered only on August 4, 1980, while his civil marriage to

petitioner took place on April 4, 1979.

Petitioner, in defending her marriage to private respondent, pointed outthat his claim that their marriage was contracted without a valid license

is untrue. She submitted their Marriage License No. 5739990 issued at

Rosario, Cavite on April 3, 1979, as Exh. 11, 12 and 12-A. He did notquestion this document when it was submitted in evidence. Petitioner

also submitted the decision of the Juvenile and Domestic Relations Courtof Quezon City dated August 4, 1980, which declared null and voidhis

civil marriage to Anna Maria Regina Villanueva celebrated on March 29,1977, and his church marriage to said Anna Maria on August 27, 1977.

These documents were submitted as evidence during trial and,

according to petitioner, are therefore deemed sufficient proof of thefacts therein. The fact that the civil marriage of private respondent and

petitioner took place on April 4, 1979, before the judgment declaring hisprior marriage as null and voidis undisputed. It also appears

indisputable that private respondent and petitioner had a church

wedding ceremony on April 4, 1982.[1]

The Pasig RTC sustained private respondents civil suit and declared his

marriage to herein petitioner null and void ab initio in its decision dated

November 4, 1991. Both parties appealed to respondent Court of

Appeals. On July 24, 1996, the appellate court affirmed the trial courtsdecision. It ruled that a judicial declaration of nullity of the first

marriage (to Anna Maria) must first be secured before a subsequent

marriage could be validly contracted. Said the appellate court:

We can accept, without difficulty, the doctrine cited by defendants counsel that no judicial

decree is necessary to establish the invalidity of void marriages. It does not say, however,

that a second marriage may proceed even without a judicial decree. While it is true that if amarriage is null and void, ab initio, there is in fact no subsisting marriage, we are unwilling

to rule that the matter of whether a marriage is valid or not is for each married spouse to

determine for himself for this would be the consequence of allowing a spouse to proceed to

a second marriage even before a competent court issues a judicial decree of nullity of hisfirst marriage. The results would be disquieting, to say the least, and could not have been

the intendment of even the now-repealed provisions of the Civil Code on marriage.

x x x

WHEREFORE, upon the foregoing ratiocination, We modify the appealed Decision in this

wise:
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1. The marriage contracted by plaintiff-appellant [herein private respondent] Eduardo M.

Reyes and defendant-appellant [herein petitioner] Ofelia P. Ty is declared null and void ab

initio;

2. Plaintiff-appellant Eduardo M. Reyes is ordered to give monthly support in the amount

of P15,000.00 to his children Faye Eloise Reyes and Rachel Anne Reyes from November4, 1991; and

3. Cost against plaintiff-appellant Eduardo M. Reyes.

SO ORDERED.[2]

Petitioners motion for reconsideration was denied. Hence, this instantpetition asserting that the Court of Appeals erred:

I.

BOTH IN THE DECISION AND THE RESOLUTION, IN REQUIRING FOR THEVALIDITY OF PETITIONERS MARRIAGE TO RESPONDENT, A JUDICIAL

DECREE NOT REQUIRED BY LAW.

II

IN THE RESOLUTION, IN APPLYING THE RULING INDOMINGO VS. COURT OFAPPEALS.

III

IN BOTH THE DECISION AND RESOLUTION IN NOT CONSIDERING THE CIVIL

EFFECTS OF THE RELIGIOUS RATIFICATION WHICH USED THE SAME

MARRIAGE LICENSE.

IV

IN THE DECISION NOT GRANTING MORAL AND EXEMPLARY DAMAGES TO

THE DEFENDANT-APPELLANT.

The principal issue in this case is whether the decree of nullity of the

first marriage is required before a subsequent marriage can be enteredinto validly? To resolve this question, we shall go over applicable laws

and pertinent cases to shed light on the assigned errors, particularly the

first and the second which we shall discuss jointly.

In sustaining the trial court, the Court of Appeals declared the marriage

of petitioner to private respondent null and voidfor lack of a prior

judicial decree of nullity of the marriage between private respondent
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and Villanueva. The appellate court rejected petitioners claim thatPeople v. Mendoza[3]and People v. Aragon[4]are applicable in this case.

For these cases held that where a marriage is voidfrom itsperformance, no judicial decree is necessary to establish its invalidity.

But the appellate court said these cases, decided before the enactment

of the Family Code (E.O. No. 209 as amended by E.O No. 227), nolonger control. A binding decree is now needed and must be read into

the provisions of law previously obtaining.[5]

In refusing to consider petitioners appeal favorably, the appellate courtalso said:

Terre v. Attorney Terre, Adm. Case No. 2349, 3 July 1992 is mandatory precedent for this

case. Although decided by the High Court in 1992, the facts situate it within the regime of

the now-repealed provisions of the Civil Code, as in the instant case.

x x x

For purposes of determining whether a person is legally free to contract a second marriage,

a judicial declaration that the first marriage was null and void ab initio is essential. . . .[6]

At the outset, we must note that private respondents first and second

marriages contracted in 1977 and 1979, respectively, are governed by

the provisions of the Civil Code. The present case differs significantlyfrom the recent cases ofBobis v. Bobis[7]and Mercado v. Tan,[8] both

involving a criminal case for bigamy where the bigamous marriage was

contracted during the effectivity of the Family Code,[9]

under which ajudicial declaration of nullity of marriage is clearly required.

Pertinent to the present controversy, Article 83 of the Civil Codeprovides that:

Art. 83. Any marriage subsequently contracted by any person during the lifetime of the firstspouse of such person with any person other than such first spouse shall be illegal and void

from its performance, unless:

(1) The first marriage was annulled or dissolved; or

(2) The first spouse had been absent for seven consecutive years at the time of the second

marriage without the spouse present having news of the absentee being alive, or if theabsentee, though he has been absent for less than seven years, is generally considered as

dead and before any person believed to be so by the spouse present at the time of

contracting such subsequent marriage, or if the absentee is presumed dead according toarticles 390 and 391. The marriage so contracted shall be valid in any of the three cases

until declared null and void by a competent court.
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As to whether a judicial declaration of nullity of a void marriage isnecessary, the Civil Code contains no express provision to that effect.

Jurisprudence on the matter, however, appears to be conflicting.

Originally, in People v. Mendoza,[10] and People v. Aragon,[11] this Court

held that no judicial decree is necessary to establish the nullity of a voidmarriage. Both cases involved the same factual milieu. Accusedcontracted a second marriage during the subsistence of his first

marriage. After the death of his first wife, accused contracted a third

marriage during the subsistence of the second marriage. The secondwife initiated a complaint for bigamy. The Court acquitted accused on

the ground that the second marriage is void, having been contractedduring the existence of the first marriage. There is no need for a judicial

declaration that said second marriage is void. Since the secondmarriage is void, and the first one terminated by the death of his wife,

there are no two subsisting valid marriages. Hence, there can be no

bigamy. Justice Alex Reyes dissented in both cases, saying that it is notfor the spouses but the court to judge whether a marriage is void or

not.

In Gomez v. Lipana,[12] and Consuegra v. Consuegra,[13] however, werecognized the right of the second wife who entered into the marriage in

good faith, to share in their acquired estate and in proceeds of theretirement insurance of the husband. The Court observed that although

the second marriage can be presumed to be void ab initio as it was

celebrated while the first marriage was still subsisting, still there was a

need for judicial declaration of such nullity (of the second marriage).And since the death of the husband supervened before such declaration,

we upheld the right of the second wife to share in the estate they

acquired, on grounds of justice and equity.[14]

But in Odayat v. Amante (1977),[15] the Court adverted toAragon andMendoza as precedents. We exonerated a clerk of court of the charge of

immorality on the ground that his marriage to Filomena Abella inOctober of 1948 was void, since she was already previously married to

one Eliseo Portales in February of the same year. The Court held that no

judicial decree is necessary to establish the invalidity of void marriages.This ruling was affirmed in Tolentino v. Paras.[16]

Yet again in Wiegel v. Sempio-Diy(1986),[17] the Court held that there

is a need for a judicial declaration of nullity of a void marriage. InWiegel, Lilia married Maxion in 1972. In 1978, she married another

man, Wiegel. Wiegel filed a petition with the Juvenile Domestic RelationsCourt to declare his marriage to Lilia as void on the ground of her
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previous valid marriage. The Court, expressly relying on Consuegra,concluded that:[18]

There is likewise no need of introducing evidence about the existing

prior marriage of her first husband at the time they married each other,

for then such a marriage though void still needs according to this Courta judicial declaration (citing Consuegra) of such fact and for all legal

intents and purposes she would still be regarded as a married woman at

the time she contracted her marriage with respondent Karl Heinz

Wiegel; accordingly, the marriage of petitioner and respondent would beregarded VOID under the law. (Emphasis supplied).

In Yap v. Court of Appeals,[19] however, the Court found the secondmarriage void without need of judicial declaration, thus reverting to the

Odayat, Mendoza andAragon rulings.

At any rate, the confusion under the Civil Code was put to rest underthe Family Code. Our rulings in Gomez, Consuegra, and Wiegelwere

eventually embodied in Article 40 of the Family Code.[20] Article 40 of

said Code expressly required a judicial declaration of nullity of marriage

Art. 40. The absolute nullity of a previous marriage may be invoked for purposes of

remarriage on the basis solely of a final judgment declaring such previous marriage void.

In Terre v. Terre (1992)[21] the Court, applying Gomez, Consuegra andWiegel, categorically stated that a judicial declaration of nullity of a void

marriage is necessary. Thus, we disbarred a lawyer for contracting abigamous marriage during the subsistence of his first marriage. He

claimed that his first marriage in 1977 was void since his first wife was

already married in 1968. We held that Atty. Terre should have knownthat the prevailing case law is that for purposes of determining whether

a person is legally free to contract a second marriage, a judicial

declaration that the first marriage was null and void ab initio isessential.

The Court applied this ruling in subsequent cases. In Domingo v. Court

of Appeals (1993),[22] the Court held:

Came the Family Code which settled once and for all the conflicting jurisprudence on the

matter. A declaration of absolute nullity of marriage is now explicitly required either as acause of action or a ground for defense. (Art. 39 of the Family Code). Where the absolute

nullity of a previous marriage is sought to be invoked for purposes of contracting a second

marriage, the sole basis acceptable in law for said projected marriage to be free from legalinfirmity is a final judgment declaring the previous marriage void. (Family Code, Art. 40;

See also arts. 11, 13, 42, 44, 48, 50, 52, 54, 86, 99, 147, 148) .[23]
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However, a recent case applied the old rule because of the peculiarcircumstances of the case. InApiag v. Cantero, (1997)[24] the first wife

charged a municipal trial judge of immorality for entering into a secondmarriage. The judge claimed that his first marriage was void since he

was merely forced into marrying his first wife whom he got pregnant.

On the issue of nullity of the first marriage, we applied Odayat,Mendoza andAragon. We held that since the second marriage took

place and all the children thereunder were born before the promulgationofWiegeland the effectivity of the Family Code, there is no need for a

judicial declaration of nullity of the first marriage pursuant to prevailing

jurisprudence at that time.

Similarly, in the present case, the second marriage of private

respondent was entered into in 1979, before Wiegel. At that time, theprevailing rule was found in Odayat, Mendoza andAragon. The first

marriage of private respondent being void for lack of license and

consent, there was no need for judicial declaration of its nullity beforehe could contract a second marriage. In this case, therefore, we

conclude that private respondents second marriage to petitioner is valid.

Moreover, we find that the provisions of the Family Code cannot beretroactively applied to the present case, for to do so would prejudice

the vested rights of petitioner and of her children. As held inJison v.Court of Appeals,[25]the Family Code has retroactive effect unless there

be impairment of vested rights. In the present case, that impairment of

vested rights of petitioner and the children is patent. Additionally, we

are not quite prepared to give assent to the appellate courts finding thatdespite private respondents deceit and perfidy in contracting marriagewith petitioner, he could benefit from her silence on the issue. Thus,

coming now to the civil effects of the church ceremony wherein

petitioner married private respondent using the marriage license usedthree years earlier in the civil ceremony, we find that petitioner now has

raised this matter properly. Earlier petitioner claimed as untruthfulprivate respondents allegation that he wed petitioner but they lacked a

marriage license. Indeed we find there was a marriage license, though itwas the same license issued on April 3, 1979 and used in both the civil

and the church rites. Obviously, the church ceremony was confirmatory

of their civil marriage. As petitioner contends, the appellate court erredwhen it refused to recognize the validity and salutary effects of said

canonical marriage on a technicality, i.e. that petitioner had failed toraise this matter as affirmative defense during trial. She argues that

such failure does not prevent the appellate court from giving her

defense due consideration and weight. She adds that the interest of theState in protecting the inviolability of marriage, as a legal and social
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institution, outweighs such technicality. In our view, petitioner andprivate respondent had complied with all the essential and formal

requisites for a valid marriage, including the requirement of a validlicense in the first of the two ceremonies. That this license was used

legally in the celebration of the civil ceremony does not detract from the

ceremonial use thereof in the church wedding of the same parties to themarriage, for we hold that the latter rites served not only to ratify but

also to fortify the first. The appellate court might have its reasons forbrushing aside this possible defense of the defendant below which

undoubtedly could have tendered a valid issue, but which was not

timely interposed by her before the trial court. But we are nowpersuaded we cannot play blind to the absurdity, if not inequity, of

letting the wrongdoer profit from what the CA calls his own deceit andperfidy.

On the matter of petitioners counterclaim for damages and attorneys

fees. Although the appellate court admitted that they found privaterespondent acted duplicitously and craftily in marrying petitioner, it did

not award moral damages because the latter did not adduce evidence tosupport her claim.[26]

Like the lower courts, we are also of the view that no damages should

be awarded in the present case, but for another reason. Petitionerwants her marriage to private respondent held valid and subsisting. She

is suing to maintain her status as legitimate wife. In the same breath,

she asks for damages from her husband for filing a baseless complaint

for annulment of their marriage which caused her mental anguish,anxiety, besmirched reputation, social humiliation and alienation fromher parents. Should we grant her prayer, we would have a situation

where the husband pays the wife damages from conjugal or common

funds. To do so, would make the application of the law absurd. Logic, ifnot common sense, militates against such incongruity. Moreover, our

laws do not comprehend an action for damages between husband andwife merely because of breach of a marital obligation.[27] There are

other remedies.[28]

WHEREFORE, the petition is GRANTED. The assailed Decision of theCourt of Appeals dated July 24, 1996 and its Resolution dated

November 7, 1996, are reversed partially, so that the marriage ofpetitioner Ofelia P. Ty and private respondent Edgardo M. Reyes is

hereby DECLARED VALID AND SUBSISTING; and the award of the

amount of P15,000.00 is RATIFIED and MAINTAINED as monthlysupport to their two children, Faye Eloise Reyes and Rachel Anne Reyes,
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for as long as they are of minor age or otherwise legally entitledthereto. Costs against private respondent.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ.,concur.

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