3. Ching vs. Court of Appeals,G.R. No.

124642, February 23, 2004

Facts:

 On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of
P9,000,000.00 from the Allied Banking Corporation (ABC). By virtue of this loan, the PBMCI, through its
Executive Vice-President Alfredo Ching, executed a promissory note for the said amount promising to pay
on December 22, 1978 at an interest rate of 14% per annum. As added security for the said loan, on
September 28, 1978, Alfredo Ching executed a continuing guaranty with the ABC binding themselves to
jointly and severally guarantee the payment of all the PBMCI obligations owing the ABC. The loan was
subsequently renewed on various dates.

 The PBMCI defaulted in the payment of all its loans. Hence, the ABC filed a complaint for sum of money
with prayer for a writ of preliminary attachment against the PBMCI. Impleaded as co-defendants in the
complaint was Alfredo Ching in his capacity as surety.

 Upon the ABC’s posting of the requisite bond, the trial court issued a writ of preliminary attachment.

 Encarnacion T. Ching, assisted by her husband Alfredo Ching, filed a Motion to Set Aside the levy on
attachment. She alleged inter alia that the 100,000 shares of stocks levied on by the sheriff were acquired
by her and her husband during their marriage out of conjugal funds after the Citycorp Investment
Philippines was established in 1974. Furthermore, the indebtedness covered by the continuing
guaranty/comprehensive suretyship contract executed by petitioner Alfredo Ching for the account of
PBMCI did not redound to the benefit of the conjugal partnership. She attached therewith a copy of her
marriage contract with Alfredo Ching.

Issue: Won the shares of stock issued to and registered in the name of Ching presumed conjugal properties.

Ruling: YES

 Article 160 of the New Civil Code provides that all the properties acquired during the marriage are
presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the
husband, or to the wife.

 As long as the properties were acquired by the parties during the marriage, they are presumed to be
conjugal in nature. In fact, even when the manner in which the properties were acquired does not appear,
the presumption will still apply, and the properties will still be considered conjugal. The presumption of
the conjugal nature of the properties acquired during the marriage subsists in the absence of clear,
satisfactory and convincing evidence to overcome the same.

 In this case, the evidence adduced by the petitioners in the RTC is that the 100,000 shares of stocks in the
Citycorp Investment Philippines were issued to and registered in its corporate books in the name of the
petitioner-husband when the said corporation was incorporated on May 14, 1979. This was done during
the subsistence of the marriage of the petitioner-spouses. The shares of stocks are, thus, presumed to be
the conjugal partnership property of the petitioners. The private respondent failed to adduce evidence
that the petitioner-husband acquired the stocks with his exclusive money.

 The barefaced fact that the shares of stocks were registered in the corporate books of Citycorp
Investment Philippines solely in the name of the petitioner-husband does not constitute proof that the
petitioner-husband, not the conjugal partnership, owned the same.

Charges to the ACP Topic

ISSUE: WON the conjugal property (shares of stock) of spouses Ching liable under his continuing guaranty and
suretyship agreement with the PBMCI.

Ruling: NO

 In Ayala Investment and Development Corp. v. Court of Appeals, this Court ruled “that the signing as
surety is certainly not an exercise of an industry or profession. It is not embarking in a business. No matter
how often an executive acted on or was persuaded to act as surety for his own employer, this should not
be taken to mean that he thereby embarked in the business of suretyship or guaranty.”

 For the conjugal partnership to be liable for a liability that should appertain to the husband alone, there
must be a showing that some advantages accrued to the spouses. Certainly, to make a conjugal
partnership responsible for a liability that should appertain alone to one of the spouses is to frustrate the
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.

 In this case, the private respondent failed to prove that the conjugal partnership of the petitioners was
benefited by the petitioner-husband’s act of executing a continuing guaranty and suretyship agreement
with the private respondent for and in behalf of PBMCI. The contract of loan was between the private
respondent and the PBMCI, solely for the benefit of the latter.

 It could be argued that the petitioner-husband was a member of the Board of Directors of PBMCI and was
one of its top twenty stockholders, and that the shares of stocks of the petitioner-husband and his family
would appreciate if the PBMCI could be rehabilitated through the loans obtained; that the petitioner-
husband’s career would be enhanced should PBMCI survive because of the infusion of fresh capital.
However, these are not the benefits contemplated by Article 161 of the New Civil Code. The benefits must
be those directly resulting from the loan. They cannot merely be a byproduct or a spin-off of the loan
itself.

Administration/Disposition of ACP

Matthews vs Taylor, G.R. No. 164584, June 22, 2009

Facts:

 On June 30, 1988, respondent Benjamin A. Taylor (Benjamin), a British subject, married Joselyn C. Taylor
(Joselyn), a Filipina. On June 9, 1989, while their marriage was subsisting, Joselyn bought a 1,294 square-
meter lot (Boracay property) situated at Manoc-Manoc, Boracay Island, Malay, Aklan. The sale was
allegedly financed by Benjamin. Joselyn and Benjamin, constructed improvements thereon and eventually
converted the property to a vacation and tourist resort known as the Admiral Ben Bow Inn.

 However, Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen. On June 8,
1992, Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin, authorizing the latter to
maintain, sell, lease, and sub-lease and otherwise enter into contract with third parties with respect to
their Boracay property.

 On July 20, 1992, Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an Agreement of
Lease (Agreement) involving the Boracay property for a period of 25 years Claiming that the Agreement
was null and void since it was entered into by Joselyn without his (Benjamin’s) consent, Benjamin
instituted an action for Declaration of Nullity of Agreement of Lease with Damages against Joselyn and the
 petitioner. Benjamin claimed that his funds were used in the acquisition and improvement of the Boracay
property, and coupled with the fact that he was Joselyn’s husband, any transaction involving said property
required his consent.

Issue: WON an Agreement of Lease of a parcel of land entered into by a Filipino wife without the consent of her
British husband is valid.

Ruling: YES

 We find and so hold that Benjamin has no right to nullify the Agreement of Lease between Joselyn and
petitioner. Benjamin, being an alien, is absolutely prohibited from acquiring private and public lands in the
Philippines. Considering that Joselyn appeared to be the designated “vendee” in the Deed of Sale of said
property, she acquired sole ownership thereto. This is true even if we sustain Benjamin’s claim that he
provided the funds for such acquisition. By entering into such contract knowing that it was illegal, no
implied trust was created in his favor; no reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of the conjugal/community property of the
spouses. In any event, he had and has no capacity or personality to question the subsequent lease of the
Boracay property by his wife on the theory that in so doing, he was merely exercising the prerogative of a
husband in respect of conjugal property. To sustain such a theory would countenance indirect
controversion of the constitutional prohibition. If the property were to be declared conjugal, this would
accord the alien husband a substantial interest and right over the land, as he would then have a decisive
vote as to its transfer or disposition. This is a right that the Constitution does not permit him to have.

Article 147 Property Relations

Dino vs Dino, G.R. No. 178044, Jan 19, 2011

Facts:

 Alain M. Diño (petitioner) and Ma. Caridad L. Diño (respondent) were childhood friends and sweethearts.
They started living together in 1984 until they decided to separate in 1994. In 1996, petitioner and
respondent decided to live together again. On 14 January 1998, they were married before Mayor Vergel
Aguilar of Las Piñas City.

 On 30 May 2001, petitioner filed an action for Declaration of Nullity of Marriage against respondent, citing
psychological incapacity under Article 36 of the Family Code. Petitioner alleged that respondent failed in
her marital obligation to give love and support to him, and had abandoned her responsibility to the
family, choosing instead to go on shopping sprees and gallivanting with her friends that depleted the
family assets. Petitioner further alleged that respondent was not faithful, and would at times become
violent and hurt him.

 The trial court ruled that based on the evidence presented, petitioner was able to establish respondent's
psychological incapacity. The dispositive portion of the trial court's decision reads: 2. Dissolving the
regime of absolute community of property.

Issue: WON a decree of absolute nullity of marriage shall only be issued after liquidation, partition, and distribution
of the parties' properties under Article 147 of the Family Code.

Ruling: No
  The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void marriage, regardless of its
cause, the property relations of the parties during the period of cohabitation is governed either by Article
147 or Article 148 of the Family Code.

 We agree with petitioner that the trial court erred in ordering that a decree of absolute nullity of marriage
shall be issued only after liquidation, partition and distribution of the parties' properties under Article 147
of the Family Code. The ruling has no basis because Section 19(1) of the Rule does not apply to cases
governed under Articles 147 and 148 of the Family Code. Section 19(1) of the Rule provides:

Sec. 19. Decision. - (1) If the court renders a decision granting the petition, it shall declare therein
that the decree of absolute nullity or decree of annulment shall be issued by the court only after
compliance with Articles 50 and 51 of the Family Code as implemented under the Rule on
Liquidation, Partition and Distribution of Properties.

 It is clear from Article 50 of the Family Code that Section 19(1) of the Rule applies only to marriages which
are declared void ab initio or annulled by final judgment under Articles 40 and 45 of the Family Code. In
short, Article 50 of the Family Code does not apply to marriages which are declared void ab initio under
Article 36 of the Family Code, which should be declared void without waiting for the liquidation of the
properties of the parties.

 In this case, petitioner's marriage to respondent was declared void under Article 36 of the Family Code
and not under Article 40 or 45. Thus, what governs the liquidation of properties owned in common by
petitioner and respondent are the rules on co-ownership. The rules on co-ownership apply and the
properties of the spouses should be liquidated in accordance with the Civil Code provisions on co-
ownership. Under Article 496 of the Civil Code, "[p]artition may be made by agreement between the
parties or by judicial proceedings. x x x." It is not necessary to liquidate the properties of the spouses in
the same proceeding for declaration of nullity of marriage.

Article 148

Joaquino vs Reyes, G.R. No. 154645, July 13, 2004

Facts:

 Lourdes P. Reyes is the widow of Rodolfo A. Reyes who died on September 12, 1981. that for years before
his death, Rodolfo A. Reyes had illicit relations with [petitioner] Milagros B. Joaquino. The complaint
further alleges that on July 12, 1979, a [D]eed of [S]ale of a property consisting of a house and lot at BF
Homes, Parañaque, Metro Manila was executed by the spouses Ramiro Golez and Corazon Golez in favor
of [petitioner] Milagros B. Joaquino. that the funds used to purchase this property were conjugal funds
and earnings of the deceased Rodolfo A. Reyes as [petitioner] Joaquino was without the means to pay for
the same. ‘The complaint finally alleges that the deceased had two cars in [petitioner’s] possession and
that the real and personal properties in [petitioner’s] possession are conjugal partnership propert[ies].

Issue: Whether the property is conjugal (owned by Rodolfo and Lourdes) or exclusive (owned by Milagros) or co-
owned by Rodolfo and Milagros.

Ruling: Conjugal

 When a common-law couple have a legal impediment to marriage, only the property acquired by them—
through their actual joint contribution of money, property or industry—shall be owned by them in
common and in proportion to their respective contributions.
 Indeed, a preponderance of evidence has duly established that the disputed house and lot was paid by
Rodolfo Reyes, using his salaries and earnings. By substantial evidence, respondents showed the following
facts: 1) that Rodolfo was gainfully employed as comptroller at Warner, Barnes and Co., Inc. until his
retirement on September 30, 1980, upon which he received a sizeable retirement package; 2) that at
exactly the same time the property was allegedly purchased, he applied for a mortgage loan intended for
“housing” from the Commonwealth Insurance Company; 3) that he secured the loan with a real estate
mortgage over the same property; 4) that he paid the monthly amortizations for the loan as well as the
semi-annual premiums for a Philam Life insurance policy, which he was required to take as additional
security; and 5) that with the proceeds of his life insurance policy, the balance of the loan was paid to
Commonwealth by Philam Life Insurance Company.

 All told, respondents have shown that the property was bought during the marriage of Rodolfo and
Lourdes, a fact that gives rise to the presumption that it is conjugal. More important, they have
established that the proceeds of the loan obtained by Rodolfo were used to pay for the property; and that
the loan was, in turn, paid from his salaries and earnings, which were conjugal funds under the Civil Code.

 In contrast, petitioner has failed to substantiate either of her claims—that she was financially capable of
buying the house and lot, or that she actually contributed to the payments therefor.