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PAN-AM (January 8, 1973) TOPIC: What constitutes CPG (what are included in CPG) FACTS: - Rafael Zulueta was off-loaded (asked to disembark) the plane at Wake Island due to an altercation with Capt. Zentner. Zulueta was late in boarding the plane because he had to answer the call of nature at a beach. Capt. Zentner used an intemperate and arrogant tone which prompted Zulueta to retort in the same manner. - The court did not believe the defenses contention that Zulueta was off-loaded due to a bombscare. The court said that he was off-loaded to punish him for the humiliation of Capt. Zentner. - Damages were awarded because Capt. Zentner, an agent of Pan-Am, obviously acted with bad faith and malice. - Pan-Am made a compromise agreement with Mrs. Zulueta, wherein she settled all her differences with Pan-Am upon the latters payment of P50,000 to her. She moved for the dismissal of the case insofar as she is concerned, which was DENIED. - Pan-Am assails the last part of the previous SC decision which provides that the wife cannot bind the conjugal partnership without the husbands consent, except in cases provided by law without prejudice to this sum (P50,000) being deducted from the award made in said decision. (NCC 172) ISSUE: - WoN this compromise agreement is effective. HELD: - YES... = the payment is effective since it is deductible from the aggregate award (P700,000), and because it is due from defendant WITH or WITHOUT the compromise agreement. - and NO. = the compromise agreement is ineffective insofar as the conjugal partnership is concerned. = Mrs. Zuluetas Motion for Dismissal was supported by the defense using NCC Art. 113: the husband must be joined in all suits by or against the wife. However, this refers to suits in which the wife is the principal or real party in interest. = In this case, it is the husband who is the main party in interest, both as the one principally aggrieved and as administrator of the conjugal partnership (entered into the contract of carriage with Pan-Am and paid the amount due under the contract with funds of the conjugal partnership. = Thus, the amounts recoverable for breach of the contract of carriage belongs to the conjugal partnership. = The award of damages was made in their (Zuluetas) favor collectively. The presumption is that the purpose of the trip was for the common benefit of the Zuluetas and that the money [for the trip] had come from the conjugal funds. = Pan-Am claims that the damages involved are not among those forming part of the conjugal partnership pursuant to NCC 153. However, the Court said the damages fall under 153 (1): that which is acquired by onerous title during the marriage at the

expense of the common fund... Moreover, the damages involved in this case is not included in NCC 148 (exclusive property) and Chap 3, Title VI, Book I (paraphernal property). = That which is acquired with money of the conjugal partnership belongs thereto or forms part thereof. = Article 160: presumption that all property of the marriage belong to the conjugal partnership. For this to apply, it must be shown that the property was acquired DURING the marriage. In this case, the contract of carriage was obviously entered into during the marriage. Also, the damages were incurred during the marriage. = Hence, the rights accruing from said contract, including those resulting from brech thereof by the defendant, are presumed to belong to the conjugal partnership of Mr. and Mrs. Zulueta.