Saturday, March 10, 2012

Johnson and Johnson vs. CA [GR No. 102692, September 23, 1996]

Facts: Delilah Vinluan purchased products from petitioner for her retail business under the name of “Vinluan Enterprises” incurring an obligation of P235,880.89 for which she issued seven checks of varying amounts and due dates that bounced and were dishonored for having been drawn against insufficient funds. Partial payments were made after several demands. When no further payments were made to settle the obligation, J&J filed a complaint against the spouses for collection of the principal obligation plus interest with damages. RTC rendered decision in favor of J&J and found that there was no “privity of contract between J&J and defendant husband Alejo Vinluan regarding the obligations incurred by the wife”. Husband was made a co-owner of the enterprise afer the obligation involved in this action has been incurred. The court then issued a writ of execution directing the sheriff to execute judgment on the properties of the wife. However, the 2 notices of levy on execution covered not only her exclusive paraphernal properties but also the properties of the conjugal partnership of the spouses. This led the husband to file a third-party claim seeking the lifting of the levy on the conjugal properties. Trial court denied the third-party claim since Alejo’s consent became evident when he did not seek the intervention of the Court to air his objections in his wife’s engaging business coupled by the fact that he made several representations for the settlement of his wife’s account. Thus, even his own capital may be liable aside from the conjugal and paraphernal property. Private respondent elevated the matter to CA, charging the trial court with grave abuse of discretion for effectively reversing its own final judgment. CA upheld private respondent. Hence this petition by J&J. 

Issue: Whether or not a husband may be held liable for the debts incurred by his wife without his consent and did not benefit the conjugal partnership

HeldSC held that respondent court correctly ruled that the trial court cannot, in the guise of deciding the third-party claim, reverse its final decision. Only the wife and her paraphernal property can be held liable. And since the power of the execution of judgment extends only to properties belonging to the judgment debtor alone, the conjugal property and the capital of the husband cannot be levied upon. In any event that Delilah’s paraphernal properties are insufficient, in order to bind the conjugal partnership properties, the debts and obligations contracted by either the husband or the wife must be for the benefit of the conjugal partnership and that the husband must consent to his wife’s engaging in business. The respondent court already found that the husband did not give his consent neither did the obligation incurred by the wife redound to the benefit of the family. 

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