Ching vs CA Allied bank

Feb 23 2004
Facts:
PBMCI loaned 9M from Allied Bank Corporation (ABC) on Sept 26, 1978 and promised to pay on
December 22, 1978 through its VP Alfredo Ching issuing a promissory note. Loaned amount increased up
to 38M and in addition PBMCI still loaned another 13M on ABC and still through its VP.
PBMCI Defaulted ABC filed in RTC to collect 12M against Alfredo Ching and other two persons
whom he included as sureties of PBMCI.

RTC:
RTC attached all of Alfredo Chings properties not exceeding the amount asked by ABC. Alfredo
together with PBMCI filed a petition on suspension of payments under SEC. SEC afterwards granted such
motion and ordered to put PBMCI under receivership and all actions to pend until further orders. The
RTC granted the orders of the SEC.
On November 16, 1993 Encarnacion T. Ching, wife of the Alfredo Ching filed a petition to set
aside levying their stocks since it was their conjugal property and the indebtedness of PBMCI covered by
Alfredo Ching who executed the surety contract did not in any way redound to the benefit of their
conjugal partnership .
ABC filed a motion against the wife of Alfredo Ching.
Therefore, RTC ruled in favor of the Chings and granted the motion to quash writ of preliminary
attachment and thereby be lifted. Also to return said shares levied upon the bond to Alfredo Ching.
ABC filed a motion of Recon but was denied, so they appealed in the CA.
CA:
CA after its own investigation of the decision of RTC reversed its decision. Stating that it erred
for depriving ABC of its right to file a bond and also that the wife is a total stranger to the case, does not
have locus standi.

Issues:
WON the wife has locus standi in the case and WON RTC erred in their decision favoring
Encarnacion Ching.

Held: The civil code states that all properties acquired during the marriage are presumed to belong to
the conjugal partnership unless it be proved that it belongs exclusively to the husband or wife. In this
case, the evidence shows that the 100,000 in share stocks of the husband were purchased by the
husband during the subsistence of their marriage.
Thus, the wife has locus Standi since the properties levied upon are their conjugal properties
and that were acquired during their marriage. Furthermore the court held that all debts and obligations
contracted by the husband may legally bind the partnership only if they redound towards the benefit of
the family. The court cited Ayala Investment and Dev Corp v. CA where it stated that a signing of a
surety is not an exercise of an industry or profession and thus should not be taken into account to affect
the conjugal partnership.
The respondents in this case failed to establish that such there a benefit to the conjugal partnership was
acquired from the acts of the petitioner-husband. Thus the petition is granted, the RTC decision is
affirmed.