Labaya, Paolo Bernabe E.
G-Tractors v. CA exporting mahogany logs and operating a logging
Month, date, year | Cuevas, J. | Charges upon CPG; with
consent
PETITIONER: G-Tractors, Inc.
RESPONDENTS: Honorable Court of Appeals and Luis R.
Narciso and Josefina Salak Narciso
DOCTRINE:
1. All debts and obligations contracted by the husband
for the benefit of the conjugal partnership do not
require that actual profit or benefit must accrue to the
conjugal partnership from the husband’s transaction.
It suffices that the transaction should be one that
normally would produce such benefit for the
partnership.
2. There is no need of including the other spouse as a
party for the purpose of binding the conjugal
partnership properties for the satisfaction of the
judgment that could be rendered thereon.
3. 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.
4. The husband is the administrator of the conjugal
partnership and if he believes he is doing right to his
family; he should not be made to suffer and answer
alone. If he incurs an indebtedness in the legitimate
pursuit of career or suffers losses in a legitimate
business, the conjugal partnership must equally bear
indebtedness unless the husband deliberately acted to
prejudice the family.
FACTS:
1. Luis Narciso is a businessman engaged in producing and
concession in del Gallego, Camarines Sur. He is married
to Josefina Narciso.
2. G-Tractors, Inc. is a domestic corporation engaged
primarily in the business of leasing heavy equipment
such as tractors and bulldozers.
3. February 26, 1973, Narciso and G-Tractors entered a
contract of lease for the use of several heavy equipment
to construct switchroads and hauling of felled trees at
Narciso’s business.
4. Narciso defaulted in his obligations resulting to G-
Tractors filing an action for collection (1st case). To which
Narciso was declared in default and G-Tractors won the
case. However, Narciso offered a compromise agreement
offering to pay the obligation in installments which G-
Tractors agreed. Once again, Narciso defaulted. To
which, G-tractors filed for a motion for execution.
Narciso opposed the execution alleging that he has an
outstanding loan obligation with a banking institution.
The Court eventually denied the opposition and granted
the motion for execution.
5. Initially, levy was made on several personal properties,
but these were not enough to settle the debt. Thereafter,
on February 12, 1975, the sheriff made levy on “all
rights, interest, title, participation the defendant Luis
Narciso” may have over a parcel of land in QC.
Allegedly a conjugal property of Sps Narciso.
6. G-Tractors was able to acquire the property via a public
auction evidenced by a certificate of sale executed by the
sheriff issued March 25, 1975.
7. Soon after the issuance of the certificate of sale, Narciso
and G-Tractors entered a contract of lease over the
property whereby Narciso would pay a monthly lease of
P1000.
8. March 31, 1976, Sps Narciso filed a complaint for

declaration of nullity of levy on execution and auction
sale of plaintiff’s conjugal property with injunction and
damages. (2nd case)
9. The complaint alleged essentially that whatever
transpired in the 1st case, could be binding only to Luis
Narciso hence the conjugal property of the spouses
cannot be made answerable to whatever obligations
Luis may have incurred on the course of his business.
Furthermore, the subject matter of the 1st case never
benefitted the conjugal partnership. Consequently, the
levy on the wife’s share in the conjugal property to
satisfy the money judgement is null and void.
10. Upon the sheriff’s issuance of the final deed of sale, G-
Tractors moved to consolidate their title over the
property. To which, Luis opposed calling attention to the
fact of the 2nd case.
11. The judge ordered the cancellation of the title under the
Sps’ name and directed the Register of Deeds to issue a
new title in the name of G-Tractors.
12. Luis filed a motion for reconsideration with preliminary
injuction. The trial court initially enjoined G-Tractors
from alienating the property pending the motion for
reconsideration.
13. Eventually, the trial court denied the motion for
reconsideration and dismissed the preliminary
injunction.
14. Aggrieved, the Sps elevated the matter to the CA via a
petition for certiorari with preliminary injunction.
a. to annul and declare void the:
i. Levy on execution
ii. Sheriff’s certificate of sale
iii. Sheriff’s final deed of sale
iv. Orders of the lower courts
b. to restrain and enjoin G-Tractors from further
giving force and effect to the levy and sale; to
Labaya, Paolo Bernabe E.
alienate the subject property.
c. to direct the Register of Deeds to cancel title under
the name of G-Tractors and issue another in the
name of Sps.
15. The CA held in favor of Sps Narciso and granted the
prayer of the spouses.
16. Hence, this petition by G-Tractors
ISSUE/s:
1. Whether the judgement debt of Luis Narciso is a conjugal
debt for which the conjugal partnership property can be
held answerable – YES
RULING: WHEREFORE, the Decision of the then Court of
Appeals sought to be reviewed is hereby REVERSED and SET
ASIDE.
RATIO:
5. Article 161 of the NCC provides that the conjugal
partnership shall be liable for all the debts and
obligations contracted by the husband for the benefit of
the conjugal partnership, and those contracted by the
wife, also for the same purpose, in the cases where she
may legally bind the partnership.
6. No question that private respondent Luis Narciso is
engaged in producing and exporting mahogany logs and
operating a logging concession in del Gallego, Camarines
Sur and holds office right in the conjugal dwelling.
7. The account with G-Tractors was brought about in order
to enhance the productivity of the logging business, a
commercial enterprise for gain which he had the right to
embark the conjugal partnership.
8. The Court upheld the trial court’s finding that, citing
Luzon Surety v Garcia, all debts and obligations
contracted by the husband for the benefit of the conjugal
 Labaya, Paolo Bernabe E.
partnership do not require that actual profit or benefit
must accrue to the conjugal partnership from the
husband’s transaction. It suffices that the transaction
should be one that normally would produce such benefit
for the partnership.
9. In the case of Cobb-Perez v Lantin citing de Diaz v
Erlanger and Javier v Osmena, the SC held that 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.
10. The husband is the administrator of the conjugal
partnership and if he believes he is doing right to his
family; he should not be made to suffer and answer
alone. If he incurs an indebtedness in the legitimate
pursuit of career or suffers losses in a legitimate business,
the conjugal partnership must equally bear indebtedness
unless the husband deliberately acted to prejudice the
family.
11. Consequently, the CPG of Sps Narcisos must answer for
the judgement debt.
12. Finally, in the case of Vda de Sta Romana v PCIB, the SC
held therein that the non-inclusion of the other spouse as
a party is immaterial. There is no rule or law requiring
that in a suit against a spouse to enforce an obligation,
either in him alone or one chargeable against the CP, that
said spouse must be joined by the other spouse.
13. There is no need of including the other spouse as a party
for the purpose of binding the conjugal partnership
properties for the satisfaction of the judgment that could
be rendered thereon.

SEPARATE OPINION:
1. If required under the syllabus, add the gist. Otherwise,
remove this section.