Ayala V. CA, 289 SCRA 272

FACTS:  Philippine Blooming Mills (hereinafter referred to as PBM) obtained a P50,300,000.00 loan from petitioner Ayala Investment and Development Corporation (hereinafter referred to as AIDC).  As added security for the credit line extended to PBM, respondent Alfredo Ching, Executive Vice President of PBM, executed security agreements on December 10, 1980 and on March 20, 1981 making himself jointly and severally answerable with PBM's indebtedness to AIDC. PBM failed to pay the loan.  Thereafter, AIDC filed a case for sum of money against PBM and respondent-husband Alfredo Ching with the CFI. The CFI rendered judgment ordering PBM and respondent-husband Alfredo Ching to jointly and severally pay AIDC the principal amount of P50,300,000.00 with interests. Pending appeal to the judgment, a writ of execution granting upon respondents-spouses of a notice of sheriff sale on three (3) of their conjugal properties. Petitioner Magsajo then scheduled the auction sale of the properties levied. Private respondents filed a case of injunction against petitioners alleging that petitioners cannot enforce the judgment against the conjugal partnership levied on the ground that, among others, the subject loan did not redound to the benefit of the said conjugal partnership. The case was lifted to the Court of Appeals by the petitioner but rendered judgment in favour of the respondent granting the auction sale. Hence, the appeal before the Supreme Court.

ISSUE: WON a surety agreement or an accommodation contract entered into by the husband in favor of his employer are considered "for the benefit of the conjugal partnership" which are chargeable against the conjugal partnership

HELD: NO

Article 121, paragraph 3, of the Family Code is emphatic that the payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership except to the extent that they redounded to the benefit of the family. Here, the property in dispute also involves the family home. The loan is a corporate loan not a personal one. Signing as a surety is certainly not an exercise of an industry or profession nor an act of administration for the benefit of the family.