18 Home Savings vs. Dailo

11/14/2018 CentralBooks:Reader
VOL. 453, MARCH 283

11, 2005
Homeowners Savings &
Loan Bank vs. Dailo
*
G.R. No. 153802. March 11, 2005.
HOMEOWNERS SAVINGS & LOAN BANK, petitioner, vs. MIGUELA C.

DAILO, respondent.
Civil Law; Family Code; Property; The sale of a conjugal property requires the consent

of both the husband and wife; Applying Article 124 of the Family Code, the Supreme Court
declared that the absence of the consent of one renders the entire sale null and void,
including the portion of the conjugal property pertaining to the husband who contracted
the sale.—In Guiang v. Court of Appeals, it was held that the sale of a conjugal property
requires the consent of both the husband and wife. In applying Article 124 of the Family
Code, this Court declared that the absence of the consent of one renders the entire sale
null and void, including the portion of the conjugal property pertaining to the husband
who contracted the sale. The same principle in Guiang squarely applies to the instant
case. As shall be discussed next, there is no legal basis to construe Article 493 of the Civil
Code as an exception to Article 124 of the Family Code.
Same; Same; Same; Conjugal Partnership; Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory manner, the conjugal partnership
shall be governed by the rules on contract of partnership in all that is not in conflict with
what
_______________
* SECOND DIVISION.
284
284 SUPREME
COURT
REPORTS
ANNOTATED
Homeowners
http://central.com.ph/sfsreader/session/0000016710b580d0b5754494003600fb002c009e/t/?o=False 1/11
Savings & Loan Bank vs.

Dailo
is expressly determined in the chapter (on conjugal partnership of gains) or by the

spouses in their marriage settlements.—The regime of conjugal partnership of gains is a
special type of partnership, where the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate properties and those acquired
by either or both spouses through their efforts or by chance. Unlike the absolute
community of property wherein the rules on co-ownership apply in a suppletory manner,
the conjugal partnership shall be governed by the rules on contract of partnership in all
that is not in conflict with what is expressly determined in the chapter (on conjugal
partnership of gains) or by the spouses in their marriage settlements. Thus, the property
relations of respondent and her late husband shall be governed, foremost, by Chapter 4
on Conjugal Partnership of Gainsof the Family Code and, suppletorily, by the rules on
partnership under the Civil Code. In case of conflict, the former prevails because the Civil
Code provisions on partnership apply only when the Family Code is silent on the matter.
Same; Same; Same; Same; The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the creditor-party litigant claiming as
such; Other than petitioner’s bare allegation, there is nothing from the records of the case
to compel a finding that the loan obtained by the late Marcelino Dailo, Jr. redounded to
the benefit of the family; Conjugal partnership cannot be held liable for the payment of the
principal obligation.—The burden of proof that the debt was contracted for the benefit of
the conjugal partnership of gains lies with the creditor-party litigant claiming as such. Ei
incumbit probatio qui dicit, non qui negat(he who asserts, not he who denies, must prove).
Petitioner’s sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to
finance the construction of housing units without a doubt redounded to the benefit of his
family, without adducing adequate proof, does not persuade this Court. Other than
petitioner’s bare allegation, there is nothing from the records of the case to compel a
finding that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the
benefit of the family. Consequently, the conjugal partnership cannot be held liable for the
payment of the principal obligation.
PETITION for review on certiorari of a decision of the Court of Appeals.

285
VOL. 453, MARCH 285

11, 2005
Loan Bank vs. Dailo
The facts are stated in the opinion of the Court.

Edgardo R. Marilimfor respondent Miguela Dailo.
TINGA, J.:
This is a petition for review on1 certiorari under Rule 45 of the Revised Rules of
Court, assailing the Decision of the Court of Appeals in CA-G.R. CV No.
59986 rendered on2 June 3, 2002, which affirmed with modification the October
18, 1997 Decision of the Regional Trial Court, Branch 29, San Pablo City,
Laguna in Civil Case No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on
August 8, 1967. During their marriage, the spouses purchased a house and lot
situated at Barangay San Francisco, San Pablo City from a certain Sandra
Dalida. The subject property was declared for tax assessment purposes under
Assessment of Real Property No. 94-051-2802. The Deed of Absolute Sale,
however, was executed only in favor 3
of the late Marcelino Dailo, Jr. as vendee
thereof to the exclusion of his wife.
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of
Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the latter to
obtain a loan from petitioner Homeowners Savings and Loan Bank to be secured
by the spouses Dailo’s house and lot in San Pablo City. Pursuant to the SPA,
Gesmundo obtained a loan in the amount of P300,000.00 from petitioner. As
security therefor, Gesmundo executed on the same day a Real Estate Mortgage
constituted on the subject property in favor of petitioner. The abovemen-
_______________
1 Pennedby J. Juan Q. Enriquez and concurred in by JJ. Eugenio S. Labitoria, Chairman, and
Teodoro P. Regino; Rollo, p. 34.
2 Penned by Judge Bienvenido Reyes.
3 Decision of the Court of Appeals dated June 3, 2002, p. 3; Rollo, p. 36.
286
286 SUPREME COURT

REPORTS
ANNOTATED
Loan Bank vs. Dailo
tioned transactions, including the execution of the SPA in 4favor of Gesmundo,

took place without the knowledge and consent of respondent.
Upon maturity, the loan remained outstanding. As a result, petitioner
instituted extrajudicial foreclosure proceedings on the mortgaged property. After
the extrajudicial sale thereof, a Certificate of Sale was issued in favor of

petitioner as the highest bidder. After the lapse of one year without the property
being redeemed, petitioner, through its vice-president, consolidated the
ownership thereof by executing on June5 6, 1996 an Affidavit of Consolidation of
Ownership and a Deed of Absolute Sale.
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of
her visits to the subject property, respondent learned that petitioner had already
employed a certain Roldan Brion to clean its premises and that her car, a Ford
sedan, was razed because Brion allowed a boy to play with fire within the
premises.
Claiming that she had no knowledge of the mortgage constituted on the
subject property, which was conjugal in nature, respondent instituted with the
Regional Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222 (97)
for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of
Consolidation of Ownership, Deed of Sale, Reconveyance with Prayer for
Preliminary Injunction and Damages against petitioner. In the latter’s Answer
with Counterclaim,petitioner prayed for the dismissal of the complaint on the
ground that the property in question was the exclusive property of the late
Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision on October 18,
1997. The dispositive portion thereof reads as follows:
_______________
4 Ibid.
5 Ibid.
287
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11, 2005
Loan Bank vs. Dailo
“WHEREFORE, the plaintiff having proved by the preponderance of evidence the

allegations of the Complaint, the Court finds for the plaintiff and hereby orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and void:
(a) The Deed of Real Estate Mortgage dated December 1, 1993 executed before
Notary Public Romulo Urrea and his notarial register entered as Doc. No. 212;
Page No. 44, Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public Reynaldo Alcantara on April 20,
1995.
(c) The Affidavit of Consolidation of Ownership executed by the defendant
(c) The Affidavit of Consolidation of Ownership executed by the defendant over the
residential lot located at Brgy. San Francisco, San Pablo City, covered by ARP No.
95-091-1236 entered as Doc. No. 406; Page No. 83, Book No. III, Series of 1996 of
Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property subject of this complaint to the
plaintiff.
ON THE SECOND CAUSE OF ACTION:
1. The defendant to pay the plaintiff the sum of P40,000.00 representing the value of
the car which was burned.
ON BOTH CAUSES OF ACTION:
1. The defendant to pay the plaintiff the sum of P25,000.00 as attorney’s fees;
2. The defendant to pay plaintiff P25,000.00 as moral damages;
3. The defendant to pay the plaintiff the sum of P10,000.00 as exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
288
288 SUPREME COURT

REPORTS
ANNOTATED
Loan Bank vs. Dailo
6
SO ORDERED.”
Upon elevation of the case to the Court of Appeals, the appellate court affirmed
the trial court’s finding that the subject property was conjugal in nature, in the
absence of clear and convincing evidence to rebut the presumption that the
subject property acquired
7
during the marriage of spouses Dailo belongs to their
conjugal partnership. The appellate court declared as void the mortgage on the
subject property because it was constituted without the knowledge and consent
of respondent, in accordance with Article 124 of the Family Code. Thus, it upheld
8
8
the trial court’s order to reconvey the subject property to respondent. With
respect to the damage to respondent’s car, the appellate court found petitioner to
be liable therefor because it is responsible for the consequences of
9
the acts or
omissions of the person it hired to accomplish the assigned task. All told, the
appellate court affirmed the trial court’s Decision,
10
but deleted the award for
damages and attorney’s fees for lack of basis.
Hence, this petition, raising the following issues for this Court’s
consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE

MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-
OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE
FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE
MARCELINO DAILO, JR. THE
11
SAME HAVING REDOUNDED TO THE
BENEFIT OF THE FAMILY.
_______________
6 As quoted in the Decision of the Court of Appeals, pp. 1-2; Rollo, pp. 34-35.
7 Decision of the Court of Appeals, p. 5; Rollo, p. 38.
8 Id., at p. 6; Rollo, p. 39.
9 Ibid.
10 Id., at p. 7; Rollo, p. 40.
11 Rollo, p. 24.
289
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11, 2005
Loan Bank vs. Dailo
First, petitioner takes issue with the legal provision applicable to the factual
milieu of this case. It contends that Article 124 of the Family Code should be
construed in relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership.
Article 124 of the Family Code provides in part:

ART. 124. The administration and enjoyment of the conjugal partnership property shall
belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of disposition or encumbrance
which must have the authority of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition or encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family Code requires the
consent of the other spouse to the mortgage of conjugal properties, the framers of
the law could not have intended to curtail the right of a spouse from exercising
full ownership over the portion
12
of the conjugal property pertaining to him under
the concept of co-ownership. Thus, petitioner would have this Court uphold the
validity of the mortgage to the extent of the late Marcelino Dailo, Jr.’s share in
the conjugal partnership. 13
In Guiang v. Court of Appeals, it was held that the sale of a conjugal
property requires the consent of both the husband
_______________
12 Rollo, p. 26.
13 353 Phil. 578; 291 SCRA 372(1998).
290
290 SUPREME COURT

REPORTS
ANNOTATED
Loan Bank vs. Dailo
14
and wife. In applying Article 124 of the Family Code, this Court declared that
the absence of the consent of one renders the entire sale null and void, including
the portion of the conjugal property pertaining to the husband who contracted
the sale. The same principle in Guiangsquarely applies to the instant case. As
shall be discussed next, there is no legal basis to construe Article 493 of the Civil
Code as an exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967.
In the absence of a marriage settlement, the system of relative community or
conjugal partnership of gains 15governed the property relations between
respondent and her late husband. With the effectivity of the Family Code on
August 3, 1988, Chapter 4 on Conjugal Partnership of Gains in the Family Code

was made applicable to conjugal partnership of gains already established before
its effectivity unless
16
vested rights have already been acquired under the Civil
Code or other laws.
The rules on co-ownership do not even apply to the property relations of
respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The
regime of conjugal partnership of gains is a special type of partnership, where
the husband and wife place in a common fund the proceeds, products, fruits and
income from their separate properties and 17
those acquired by either or both
spouses through their efforts or by chance. Unlike the absolute community 18
of
property wherein the rules on co-ownership apply in a suppletory manner, the
conjugal partnership shall be governed by the rules on contract of partnership in
all that is not in conflict with what is expressly determined in the chapter (on
conjugal partnership
_______________
14 Id.,at p. 374.
15 Article 119, The New Civil Code.
16 Article 105, Family Code.
291
VOL. 453, MARCH 291

11, 2005
Loan Bank vs. Dailo
19
of gains) or by the spouses in their marriage settlements. Thus, the property
relations of respondent and her late husband shall be governed, foremost, by
Chapter 4 on Conjugal Partnership of Gains of the Family Code and,
suppletorily, by the rules on partnership under the Civil Code. In case of conflict,
the former prevails because the Civil Code provisions on partnership apply only
when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without the
knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a real estate
mortgage on the subject property, which formed part of their conjugal
partnership. By express provision of Article 124 of the Family Code, in the
absence of (court) authority or written consent of the other spouse, any
disposition or encumbrance of the conjugal property shall be void.
The aforequoted provision does not qualify with respect to the share of the
spouse who makes the disposition or encumbrance in the same manner that the
rule on co-ownership under Article 493 of the Civil20 Code does. Where the law
does not distinguish, courts should not distinguish. Thus, both the trial court
and the appellate court are correct in declaring the nullity of the real estate
mortgage on the subject property for lack of respondent’s consent.
Second, petitioner imposes the liability for the payment of the principal
obligation obtained by the late Marcelino Dailo, Jr. on the21 conjugal partnership
to the extent that it redounded to the benefit of the family.
Under Article 121 of the Family Code, “[T]he conjugal partnership shall be
liable for: . . . (3) Debts and obligations contracted by either spouse without the
consent of the other
_______________
20 Recaña, Jr. v. Court of Appeals, G.R. No. 123850, January 5, 2001, 349 SCRA 24, 33.
21 Rollo, p. 27.
292
292 SUPREME COURT

REPORTS
ANNOTATED
Loan Bank vs. Dailo
to the extent that the family may have been benefited; . . . .” For the subject
property to be held liable, the obligation contracted by the late Marcelino Dailo,
Jr. must have redounded to the benefit of the conjugal partnership. There must
be the requisite showing then of some advantage which clearly accrued to the
welfare of the spouses. Certainly, to make a conjugal partnership respond for a
liability that should appertain to the husband alone is to defeat and frustrate
the avowed objective of the new Civil Code to show22
the utmost concern for the
solidarity and well-being of the family as a unit.
The burden of proof that the debt was contracted for the benefit of the
conjugal
23
partnership of gains lies with the creditor-party litigant claiming as
such. Ei incumbit probatio
24
qui dicit, non qui negat (he who asserts, not he who
denies, must prove). Petitioner’s sweeping conclusion that the loan obtained by
the late Marcelino Dailo, Jr. to finance the construction of housing units without
a doubt redounded to the benefit of his family, without adducing adequate proof,
does not persuade this Court. Other than petitioner’s bare allegation, there is
nothing from the records of the case to compel a finding that, indeed, the loan
obtained by the late Marcelino Dailo, Jr. redounded to the benefit of the family.
Consequently, the conjugal partnership cannot be held liable for the payment of
the principal obligation.
In addition, a perusal of the records of the case reveals that during the trial,
petitioner vigorously asserted that the subject property was the exclusive
property of the late Marcelino Dailo, Jr. Nowhere in the answer filed with the
trial court was it alleged that the proceeds of the loan redounded to the benefit of
the family. Even on appeal, petitioner never
_______________
22 Ayala Investment & Development Corp. v. Court of Appeals, 349 Phil. 942, 952; 286 SCRA 272,
282 (1998), citing Luzon Surety Co., Inc. v. De Garcia, 30 SCRA 111 (1969).
23 Id., at p. 954, 286 SCRA 272, 283 (1998).
24 Castilex Industrial Corporation v. Vasquez, Jr., 378 Phil. 1009; 321 SCRA 393 (1999).
293
VOL. 453, MARCH 293

11, 2005
Loan Bank vs. Dailo
claimed that the family benefited from the proceeds of the loan. When a party
adopts a certain theory in the court below, he will not be permitted to change his
theory on appeal, for to permit him to do so would not only be unfair to the other
party but
25
it would also be offensive to the basic rules of fair play, justice and due
process. A party may change his legal theory on appeal only when the factual
bases thereof would not require presentation of any further evidence by the
adverse26 party in order to enable it to properly meet the issue raised in the new
theory.
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
Puno (Chairman), Austria-Martinez, Callejo, Sr. and Chico-Nazario,

JJ.,concur.
Petition denied.
Note.—Under the Spanish Civil Code, the wife’s consent to the sale of
conjugal property is not required. Fact that Nieves Tolentino’s signature in the
deed of sale is a forgery does not render the deed of sale void. (Isabela Colleges,
Inc. vs. Heirs of Nieves Tolentino-Rivera, 344 SCRA 95 [2000])
——o0o——
_______________
25 Drilon v. Court of Appeals, 336 Phil. 949; 270 SCRA 211 (1997).
26 Heirs of Enrique Zambales v. Court of Appeals, 205 Phil. 789; 120 SCRA 897 (1983).
294

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11/14/2018 CentralBooks:Reader

VOL. 453, MARCH 283

HOMEOWNERS SAVINGS & LOAN BANK, petitioner, vs. MIGUELA C.

Civil Law; Family Code; Property; The sale of a conjugal property requires the consent

Savings & Loan Bank vs.

is expressly determined in the chapter (on conjugal partnership of gains) or by the

PETITION for review on certiorari of a decision of the Court of Appeals.

VOL. 453, MARCH 285

The facts are stated in the opinion of the Court.

286 SUPREME COURT

tioned transactions, including the execution of the SPA in 4favor of Gesmundo,

the extrajudicial sale thereof, a Certificate of Sale was issued in favor of

VOL. 453, MARCH 287

“WHEREFORE, the plaintiff having proved by the preponderance of evidence the

1. The declaration of the following documents as null and void:

ON THE SECOND CAUSE OF ACTION:

ON BOTH CAUSES OF ACTION:

The counterclaim is dismissed.

288 SUPREME COURT

1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE

VOL. 453, MARCH 289

Article 124 of the Family Code provides in part:

290 SUPREME COURT

August 3, 1988, Chapter 4 on Conjugal Partnership of Gains in the Family Code

VOL. 453, MARCH 291

292 SUPREME COURT

VOL. 453, MARCH 293

Puno (Chairman), Austria-Martinez, Callejo, Sr. and Chico-Nazario,

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