Ayala Investment v. CA, G.R. No. 118305, February 12, 1988

FACTS: Philippine Blooming Mills (PBM) obtained a P50,300,000 loan from petitioner Ayala Investment and Development Corporation (AIDC). Respondent Alfredo Ching made himself jointly answerable to the debt as added security. Upon PBM’s failure to pay the loan, AIDC filed a case for sum of money against PBM and respondent Ching in the CFI of Pasig.

After trial, the court rendered decision in favor of AIDC ordering PBM and Alfredo Ching to jointly and severally pay AIDC the principal amount of the loan with interests. Pending the appeal of the judgment, RTC issued a writ of execution and thereafter, the deputy sheriff caused the issuance and service upon respondent spouses of the notice of sheriff sale on three of their conjugal properties.

Respondent spouses then filed an injunction contending that subject loan did not redound to the benefit of the conjugal partnership. Nevertheless, a certificate of sale was issued to AIDC, being the only bidder for the property.

ISSUE: WON the debts and obligations contracted by the husband alone is considered “for the benefit of the conjugal partnership.”

HELD: No. Petition is DENIED.

RATIO: The loan obtained by the husband from AIDC was for the benefit of PBM and not for the benefit of the conjugal partnership of Ching.

PBM has a personality which is distinct from that of Ching’s family despite their being stockholders of the said company. The debt incurred by Ching is a corporate debt and the right of recourse to respondent as surety is only to the extent of his corporate stocks.

If the money or services are given to another person or entity, and the husband acted only as a surety or guarantor, that contract cannot, by itself, alone be categorized as falling within the context of “obligations for the benefit of the conjugal partnership.”

The contract of loan or services is clearly for the 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 of surety or accommodation agreement, it is “for the benefit of the conjugal partnership.”  Proof must be presented to establish benefit redounding to the conjugal partnership.