SECOND DIVISION
G.R. No. 212483, October 05, 2016
PHILIPPINE NATIONAL BANK, Petitioner, v. VENANCIO C. REYES, JR., Respondent.
D E C I S I O N
LEONEN, J.:
A spouse's consent is indispensable for the disposition or encumbrance of conjugal properties.
This resolves a dispute between petitioner Philippine National Bank and respondent Venancio C. Reyes, Jr. (Venancio). Philippine National Bank filed a Petition for Review on Certiorari1 assailing the Decision2 dated August 22, 2013 and the Resolution3 dated May 5, 2014 of the Court of Appeals. The assailed Court of Appeals Decision affirmed the Decision and Order of Branch 81 of the Regional Trial Court of Malolos, Bulacan, which annulled the real estate mortgage and the certificate of sale issued under the extrajudicial foreclosure conducted, and ordered Lilia Reyes (Lilia) to reimburse to Philippine National Bank the total loan amount she borrowed from the bank.4chanrobleslaw
Venancio is married to Lilia since 1973. During their union, they acquired three (3) parcels of land in Malolos, Bulacan. Transfer Certificates of Title (TCT) Nos. T-52812 and T-52813 were registered under "Felicidad Pascual and Lilia C. Reyes, married to Venancio Reyes[,]"5 while TCT No. 53994 was registered under "Lilia C. Reyes, married to Venancio Reyes."6chanrobleslaw
The properties were mortgaged to Philippine National Bank on August 25, 1994 to secure a loan worth P1,100,000.00,7 which on October 6, 1994 was increased to P3,000,000.00.8 According to Philippine National Bank, the Reyes Spouses contracted and duly consented to the loan.9chanrobleslaw
When the Reyes Spouses failed to pay the loan obligations, Philippine National Bank foreclosed the mortgaged real properties.10 The auction sale was held on September 19, 1997. Philippine National Bank emerged as the highest bidder, and a certificate of sale was issued in its favor.11chanrobleslaw
On September 22, 1998, Venancio filed before the Regional Trial Court a Complaint (or Annulment of Certificate of Sale and Real Estate Mortgage against Philippine National Bank.12 Upon order of the trial court, Venancio amended his Complaint to include Lilia and the Provincial Sheriff ofBulacan as defendants.13chanrobleslaw
In assailing the validity of the real estate mortgage, Venancio claimed that his wife undertook the loan and the mortgage without his consent and his signature was falsified on the promissory notes and the mortgage.14chanrobleslaw
Since the three (3) lots involved were conjugal properties, he argued that the mortgage constituted over them was void.15chanrobleslaw
On May 27, 2009, Branch 81 of the Regional Trial Court of Malolos, Bulacan ordered the annulment of the real estate mortgage and directed Lilia to reimburse Philippine National Bank the loan amount with interest.16 The dispositive portion reads:
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WHEREFORE, judgment is hereby rendered:
chanRoblesvirtualLawlibrary1. Annulling in its entirety the Real Estate Mortgage Contract and the Amendment thereto, the Certificate of Sale issued pursuant to the extra judicial foreclosure and the foreclosure proceedings on the subject properties covered by Transfer Certificates of Title Nos. T-53994, T-
52812 and T-52813 of the Registry of Deeds of Bulacan for want of consent on the part of the plaintiff;
2. Making the writ of preliminary injunction permanent and perpetual conditioned on plaintiffs posting within an inextendible period of five (5) days from receipt thereof of the injunctive bond in the amount Eight Hundred Thousand (P800,000.00) pesos as contained in the Order dated November 3, 1998;
3. Ordering defendant Lilia C. Reyes to reimburse the defendant Philippine National Bank the total loan account of P3,324,771.18 with interest at 6% per annum from the date of the foreclosure sale until finality of this decision. After this decision has attained finality interest at the rate of 12% per annum on the principal and interest (or any part thereof) shall be imposed until full payment.
SO ORDERED.17
WHEREFORE, premises considered, the present appeal is DENIED. The challenged Decision and Order of the Regional Trial Court of Malolos, Bulacan, Branch 81 dated May 27, 2009 and August 4, 2009, respectively, are hereby AFFIRMED.19 (Emphasis in the original)
Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors.
ARTICLE 122. 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 insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.
However, the payment of personal debts contracted by either spouse before the marriage, that of fines and indemnities imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced against the partnership assets after the responsibilities enumerated in the preceding Article have been covered, if the spouse who is bound should have no exclusive property or if it should be insufficient; but at the time of the liquidation of the partnership, such spouse shall be charged for what has been paid for the purposes above-mentioned.
From the foregoing jurisprudential rulings of this Court, we can derive the following conclusions:
chanRoblesvirtualLawlibrary(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used in or for his own business or his own profession, that contract falls within the term "x x x obligations for the benefit of the conjugal partnership. " Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent at the time of the signing of the contract. From the very nature of the contract of loan or services, the family stands to benefit from the loan facility or services to be rendered to the business or profession of the husband. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership.
(B) On the other hand, 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.48 (Emphasis supplied)
Laches means the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. As the Court explained in the preceding paragraphs, the Torbela siblings instituted Civil Case No. U-4359 five years after Dr. Rosario's repudiation of the express trust, still within the 10-year prescriptive period for enforcement of such trusts. This does not constitute an unreasonable delay in asserting one's right. A delay within the prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief Laches apply only in the absence of a statutory prescriptive period.57 (Emphasis supplied)
Art. 121. The conjugal partnership shall be liable for:
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(1) The support of the spouse, their common children, and the legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support; (2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other; (3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have benefited; (4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership property; (5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse; (6) Expenses to enable either spouse to commence or complete a professional, vocational, or other activity for self-improvement; (7) Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family; (8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement; and (9) Expenses of litigation between the spouses unless the suit is found to groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separaie properties. (Emphasis supplied)
Endnotes:
* Designated acting member per Special Order No. 1910 dated January 12, 2014.
1Rollo, pp. 25-40, Petition for Review on Certiorari.
2 Id. at 10-19. The Decision was penned by Associate Justice Edwin D. Sorongon and concurred in by Associate Justices Marlene Gonzales-Sison and Hakim S. Abdulwahid of the Sixth Division, Court of Appeals, Manila.
3 Id. at 21-22.
4 Id. at 12-13.
5 Id. at 11.
6 Id.
7 Id.
8 Id.
9 Id. at 31.
10 Id.
11 Id.
12 Id.
13 Id.
14 Id.
15 Id.
16 Id. at 12.
17 Id. at 12-13.
18 Id. at 10--19.
19 Id. at 19.
20 Id. at 21-22.
21 Id. at 30.
22 Id. at 30.
23 Id. at 32.
24 Id. at 33.s
25cralawred Id. at 32-33.
26 Id. at 59-69.
27 Id. at 62-63.
28 Id. at 66.
29 Id. at 64.
30 FAMILY CODE, art. 124.
31Rollo, p. 26.
32 FAMILY CODE, art. 124.
33Rollo, p. 31.
34 Id. at 60.
35 Id. at 15.
36 Id.
37 Id.
38 Id. at 16.
39 Id.
40 Id.
41 Id. at 17.
42 512 Phil. 679 (2005) [Per J. Sandoval-Gutierrez, Third Division].
43 Id. at 706.
44Rollo, p. 19.
45 Id. at 13.
46 Id.
47 349 Phil. 942 (1998) [Per J. Martinez, Second Division].
48 Id. at 952-953.
49Rollo, p. 35.
50Ayala Investment & Development Corp. v. Court of Appeals, 349 Phil. 942, 952-953 (1998) [Per J. Martinez, Second Division].
51 602 Phil508 (2009) [Per J. Brion, Second Division].
52 Id. at 521.
53Rollo, p. 36.
54 Id. at 19.
55 Id.
56 678 Phil. 1 (2011) [Per J. Leonardo-De Castro, First Division].
57 Id. at 44-45.
58 FAMILY CODE, art. 121 provides:
chanRoblesvirtualLawlibraryIf the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties.
59 EDGARDO L. PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 577 (16th ed., 2008).