SECONDDIVISION

[G.R.No.153802.March11,2005]

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

DAILO,respondent.
DECISION
TINGA,J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court,
[1]
assailingtheDecision oftheCourtofAppealsinCAG.R.CVNo.59986renderedonJune
[2]
3, 2002, which affirmed with modification the October 18, 1997 Decision of the Regional
TrialCourt,Branch29,SanPabloCity,LagunainCivilCaseNo.SP4748(97).
Thefollowingfactualantecedentsareundisputed.
RespondentMiguelaC.DailoandMarcelinoDailo,Jr.weremarriedonAugust8,1967.
During their marriage, the spouses purchased a house and lot situated at Barangay San
Francisco,SanPabloCityfromacertainSandraDalida.Thesubjectpropertywasdeclared
for tax assessment purposes under Assessment of Real Property No. 940512802. The
DeedofAbsoluteSale,however,wasexecutedonlyinfavorofthelateMarcelinoDailo,Jr.
[3]
asvendeethereoftotheexclusionofhiswife.
OnDecember1,1993,MarcelinoDailo,Jr.executedaSpecialPowerofAttorney(SPA)
in favor of one Lilibeth Gesmundo, authorizing the latter to obtain a loan from petitioner
HomeownersSavingsandLoanBanktobesecuredbythespousesDailoshouseandlotin
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
abovementioned transactions, including the execution of the SPA in favor of Gesmundo,
[4]
tookplacewithouttheknowledgeandconsentofrespondent.
Upon maturity, the loan remained outstanding. As a result, petitioner instituted
extrajudicialforeclosureproceedingsonthemortgagedproperty.Aftertheextrajudicialsale
thereof,aCertificateofSalewasissuedinfavorofpetitionerasthehighestbidder.Afterthe
lapseofoneyearwithoutthepropertybeingredeemed,petitioner,throughitsvicepresident,
consolidated the ownership thereof by executing on June 6, 1996 an Affidavit of
[5]
ConsolidationofOwnershipandaDeedofAbsoluteSale.
Inthemeantime,MarcelinoDailo,Jr.diedonDecember20,1995.Inoneofhervisitsto
the subject property, respondent learned that petitioner had already employed a certain
RoldanBriontocleanitspremisesandthathercar,aFordsedan,wasrazedbecauseBrion
allowedaboytoplaywithfirewithinthepremises.
Claimingthatshehadnoknowledgeofthemortgageconstitutedonthesubjectproperty,
whichwasconjugalinnature,respondentinstitutedwiththeRegionalTrialCourt,Branch29,
San Pablo City, Civil Case No. SP2222 (97) for Nullity of Real Estate Mortgage and
Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale, Reconveyance
withPrayerforPreliminaryInjunctionandDamagesagainstpetitioner.InthelattersAnswer

withCounterclaim,petitionerprayedforthedismissalofthecomplaintonthegroundthatthe
propertyinquestionwastheexclusivepropertyofthelateMarcelinoDailo,Jr.
After trial on the merits, the trial court rendered a Decision on October 18, 1997. The
dispositiveportionthereofreadsasfollows:
WHEREFORE,theplaintiffhavingprovedbythepreponderanceofevidencetheallegationsofthe
Complaint,theCourtfindsfortheplaintiffandherebyorders:
ONTHEFIRSTCAUSEOFACTION:
1.Thedeclarationofthefollowingdocumentsasnullandvoid:
(a)TheDeedofRealEstateMortgagedatedDecember1,1993executedbeforeNotary
PublicRomuloUrreaandhisnotarialregisterenteredasDoc.No.212PageNo.
44,BookNo.XXI,Seriesof1993.
(b)TheCertificateofSaleexecutedbyNotaryPublicReynaldoAlcantaraonApril20,
1995.
(c)TheAffidavitofConsolidationofOwnershipexecutedbythedefendant
(c)TheAffidavitofConsolidationofOwnershipexecutedbythedefendantoverthe
residentiallotlocatedatBrgy.SanFrancisco,SanPabloCity,coveredbyARPNo.
950911236enteredasDoc.No.406PageNo.83,BookNo.III,Seriesof1996
ofNotaryPublicOctavioM.Zayas.
(d)TheassessmentofrealpropertyNo.950511236.
2.Thedefendantisorderedtoreconveythepropertysubjectofthiscomplainttotheplaintiff.
ONTHESECONDCAUSEOFACTION
1.ThedefendanttopaytheplaintiffthesumofP40,000.00representingthevalueofthecar
whichwasburned.
ONBOTHCAUSESOFACTION
1.ThedefendanttopaytheplaintiffthesumofP25,000.00asattorneysfees
2.ThedefendanttopayplaintiffP25,000.00asmoraldamages
3.ThedefendanttopaytheplaintiffthesumofP10,000.00asexemplarydamages
4.Topaythecostofthesuit.
Thecounterclaimisdismissed.
[6]

SOORDERED.

UponelevationofthecasetotheCourtofAppeals,theappellatecourtaffirmedthetrial
courtsfindingthatthesubjectpropertywasconjugalinnature,intheabsenceofclearand
convincingevidencetorebutthepresumptionthatthesubjectpropertyacquiredduringthe
[7]

marriage of spouses Dailo belongs to their conjugal partnership. The appellate court
declaredasvoidthemortgageonthesubjectpropertybecauseitwasconstitutedwithoutthe
knowledge and consent of respondent, in accordance with Article 124 of the Family Code.

[8]

Thus,itupheldthetrialcourtsordertoreconveythesubjectpropertytorespondent. With
respect to the damage to respondents car, the appellate court found petitioner to be liable
therefor because it is responsible for the consequences of the acts or omissions of the
[9]

person it hired to accomplish the assigned task. All told, the appellate court affirmed the
trialcourtsDecision,butdeletedtheawardfordamagesandattorneysfeesforlackofbasis.
[10]

Hence,thispetition,raisingthefollowingissuesforthisCourtsconsideration:
1.WHETHERORNOTTHEMORTGAGECONSTITUTEDBYTHELATEMARCELINO
DAILO,JR.ONTHESUBJECTPROPERTYASCOOWNERTHEREOFISVALIDASTOHIS
UNDIVIDEDSHARE.
2.WHETHERORNOTTHECONJUGALPARTNERSHIPISLIABLEFORTHEPAYMENTOF
THELOANOBTAINEDBYTHELATEMARCELINODAILO,JR.THESAMEHAVING
[11]

REDOUNDEDTOTHEBENEFITOFTHEFAMILY.

First,petitionertakesissuewiththelegalprovisionapplicabletothefactualmilieuofthis
case. It contends that Article 124 of the Family Code should be construed in relation to
Article493oftheCivilCode,whichstates:
ART.493.Eachcoownershallhavethefullownershipofhispartandofthefruitsandbenefits
pertainingthereto,andhemaythereforealienate,assignormortgageit,andevensubstituteanother
personinitsenjoyment,exceptwhenpersonalrightsareinvolved.Buttheeffectofthealienationor
themortgage,withrespecttothecoowners,shallbelimitedtotheportionwhichmaybeallottedto
himinthedivisionupontheterminationofthecoownership.
Article124oftheFamilyCodeprovidesinpart:
ART.124.Theadministrationandenjoymentoftheconjugalpartnershippropertyshallbelongtoboth
spousesjointly....
Intheeventthatonespouseisincapacitatedorotherwiseunabletoparticipateintheadministrationof
theconjugalproperties,theotherspousemayassumesolepowersofadministration.Thesepowersdo
notincludethepowersofdispositionorencumbrancewhichmusthavetheauthorityofthecourtor
thewrittenconsentoftheotherspouse.Intheabsenceofsuchauthorityorconsent,thedispositionor
encumbranceshallbevoid....
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
haveintendedtocurtailtherightofaspousefromexercisingfullownershipovertheportion
[12]
of the conjugal property pertaining to him under the concept of coownership. Thus,
petitionerwouldhavethisCourtupholdthevalidityofthemortgagetotheextentofthelate
MarcelinoDailo,Jr.sshareintheconjugalpartnership.
[13]

InGuiangv.CourtofAppeals,

itwasheldthatthesaleofaconjugalpropertyrequires
[14]

theconsentofboththehusbandandwife. InapplyingArticle124oftheFamilyCode,this
Courtdeclaredthattheabsenceoftheconsentofonerenderstheentiresalenullandvoid,
includingtheportionoftheconjugalpropertypertainingtothehusbandwhocontractedthe
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
exceptiontoArticle124oftheFamilyCode.
Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the

absenceofamarriagesettlement,thesystemofrelativecommunityorconjugalpartnership
[15]
ofgainsgovernedthepropertyrelationsbetweenrespondentandherlatehusband. With
theeffectivityoftheFamilyCodeonAugust3,1988,Chapter4onConjugalPartnershipof
Gains in the Family Code was made applicable to conjugal partnership of gains already
establishedbeforeitseffectivityunlessvestedrightshavealreadybeenacquiredunderthe
[16]

CivilCodeorotherlaws.

Therulesoncoownershipdonotevenapplytothepropertyrelationsofrespondentand
thelateMarcelinoDailo,Jr.eveninasuppletorymanner.Theregimeofconjugalpartnership
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
[17]
acquiredbyeitherorbothspousesthroughtheireffortsorbychance. Unliketheabsolute
[18]

communityofpropertywhereintherulesoncoownershipapplyinasuppletorymanner,
theconjugalpartnershipshallbegovernedbytherulesoncontractofpartnershipinallthat
isnotinconflictwithwhatisexpresslydeterminedinthechapter(onconjugalpartnershipof
[19]

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
PartnershipofGainsoftheFamilyCodeand,suppletorily,bytherulesonpartnershipunder
theCivilCode.Incaseofconflict,theformerprevailsbecausetheCivilCodeprovisionson
partnershipapplyonlywhentheFamilyCodeissilentonthematter.
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,whichformedpartoftheirconjugalpartnership.ByexpressprovisionofArticle124
of the Family Code, in the absence of (court) authority or written consent of the other
spouse,anydispositionorencumbranceoftheconjugalpropertyshallbevoid.
Theaforequotedprovisiondoesnotqualifywithrespecttotheshareofthespousewho
makes the disposition or encumbrance in the same manner that the rule on coownership
underArticle493oftheCivilCodedoes.Wherethelawdoesnotdistinguish,courtsshould
[20]
notdistinguish. Thus,boththetrialcourtandtheappellatecourtarecorrectindeclaring
the nullity of the real estate mortgage on the subject property for lack of respondents
consent.
Second, petitioner imposes the liability for the payment of the principal obligation
obtained by the late Marcelino Dailo, Jr. on the conjugal partnership to the extent that it
[21]
redoundedtothebenefitofthefamily.
UnderArticle121oftheFamilyCode,[T]heconjugalpartnershipshallbeliablefor:...
(3)Debtsandobligationscontractedbyeitherspousewithouttheconsentoftheothertothe
extent that the family may have been benefited . . . . For the subject property to be held
liable,theobligationcontractedbythelateMarcelinoDailo,Jr.musthaveredoundedtothe
benefit of the conjugal partnership. There must be the requisite showing then of some
advantagewhichclearlyaccruedtothewelfareofthespouses.Certainly,tomakeaconjugal
partnershiprespondforaliabilitythatshouldappertaintothehusbandaloneistodefeatand
frustrate the avowed objective of the new Civil Code to show the utmost concern for the
[22]
solidarityandwellbeingofthefamilyasaunit.
The burden of proof that the debt was contracted for the benefit of the conjugal
[23]
partnership of gains lies with the creditorparty litigant claiming as such. Ei incumbit
[24]

probatio qui dicit, non qui negat (he who asserts, not he who denies, must prove).
Petitioners 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
petitionersbareallegation,thereisnothingfromtherecordsofthecasetocompelafinding
that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the benefit of
thefamily.Consequently,theconjugalpartnershipcannotbeheldliableforthepaymentof
theprincipalobligation.
In addition, a perusal of the records of the case reveals that during the trial, petitioner
vigorouslyassertedthatthesubjectpropertywastheexclusivepropertyofthelateMarcelino
Dailo,Jr.Nowhereintheanswerfiledwiththetrialcourtwasitallegedthattheproceedsof
theloanredoundedtothebenefitofthefamily.Evenonappeal,petitionerneverclaimedthat
thefamilybenefitedfromtheproceedsoftheloan.Whenapartyadoptsacertaintheoryin
thecourtbelow,hewillnotbepermittedtochangehistheoryonappeal,fortopermithimto
dosowouldnotonlybeunfairtotheotherpartybutitwouldalsobeoffensivetothebasic
[25]

rulesoffairplay,justiceanddueprocess. Apartymaychangehislegaltheoryonappeal
onlywhenthefactualbasesthereofwouldnotrequirepresentationofanyfurtherevidence
bytheadversepartyinordertoenableittoproperlymeettheissueraisedinthenewtheory.
[26]

WHEREFORE,thepetitionisDENIED.Costsagainstpetitioner.
SOORDERED.
Puno,(Chairman),AustriaMartinez,Callejo,Sr.,andChicoNazario,JJ.,concur.
[1]

[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]

Penned by J. Juan Q. Enriquez and concurred in by JJ. Eugenio S. Labitoria, Chairman, and Teodoro P.
ReginoRollo,p.34.
PennedbyJudgeBienvenidoReyes.
DecisionoftheCourtofAppealsdatedJune3,2002,p.3Rollo,p.36,
Ibid.
Ibid.
AsquotedintheDecisionoftheCourtofAppeals,pp.12Rollo,pp.3435.
DecisionoftheCourtofAppeals,p.5Rollo,p.38.
Id.at6Rollo,p.39.
Ibid.

[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]

Id.at7Rollo,p.40.
Rollo,p.24.
Rollo,p.26.
353Phil.578(1998).
Id.at374.
Article119,TheNewCivilCode.
Article105,FamilyCode.
Article106,FamilyCode.

[18]
[19]
[20]
[21]
[22]

[23]
[24]
[25]
[26]

Article90,FamilyCode.
Article108,FamilyCode.
Recaa,Jr.v.CourtofAppeals,G.R.No.123850,January5,2001,349SCRA24,33.
Rollo,p.27.
AyalaInvestment&DevelopmentCorp.v.CourtofAppeals,349Phil.942,952(1998),citingLuzonSurety
Co.,Inc.v.DeGarcia,30SCRA111(1969).
Id.at954,286SCRA272,283(1998).
CastilexIndustrialCorporationv.Vasquez,Jr.,378Phi.1009(1999).
Drilonv.CourtofAppeals,336Phil.949(1997).
HeirsofEnriqueZambalesv.CourtofAppeals,205Phil.789(1983).