G.R. No. 153802.

March 11, 2005 sedan, was razed because Brion allowed a boy to play with fire within the
premises.
HOMEOWNERS SAVINGS & LOAN BANK, Petitioner,
vs. Claiming that she had no knowledge of the mortgage constituted on the subject
MIGUELA C. DAILO, Respondents. property, which was conjugal in nature, respondent instituted with the Regional
Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222 (97) for Nullity of
DECISION Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of
Ownership, Deed of Sale, Reconveyance with Prayer for Preliminary Injunction
and Damages against petitioner. In the latter’s Answer with Counterclaim,
TINGA, J.:
petitioner prayed for the dismissal of the complaint on the ground that the
This is a petition for review on certiorari under Rule 45 of the Revised Rules of property in question was the exclusive property of the late Marcelino Dailo, Jr.
Court, assailing the Decision1 of the Court of Appeals in CA-G.R. CV No. 59986
rendered on June 3, 2002, which affirmed with modification the October 18, 1997 After trial on the merits, the trial court rendered a Decision on October 18, 1997.
Decision2 of the Regional Trial Court, Branch 29, San Pablo City, Laguna in Civil The dispositive portion thereof reads as follows:
Case No. SP-4748 (97). WHEREFORE, the plaintiff having proved by the preponderance of evidence the
The following factual antecedents are undisputed. allegations of the Complaint, the Court finds for the plaintiff and hereby orders:

Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, ON THE FIRST CAUSE OF ACTION:
1967. During their marriage, the spouses purchased a house and lot situated at 1. The declaration of the following documents as null and void:
Barangay San Francisco, San Pablo City from a certain Sandra Dalida. The
subject property was declared for tax assessment purposes under Assessment of (a) The Deed of Real Estate Mortgage dated December 1, 1993 executed before
Real Property No. 94-051-2802. The Deed of Absolute Sale, however, was Notary Public Romulo Urrea and his notarial register entered as Doc. No. 212;
executed only in favor of the late Marcelino Dailo, Jr. as vendee thereof to the Page No. 44, Book No. XXI, Series of 1993.
exclusion of his wife.3 (b) The Certificate of Sale executed by Notary Public Reynaldo Alcantara on
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of Attorney April 20, 1995.
(SPA) in favor of one Lilibeth Gesmundo, authorizing the latter to obtain a loan (c) The Affidavit of Consolidation of Ownership executed by the defendant
from petitioner Homeowners Savings and Loan Bank to be secured by the spouses
Dailo’s house and lot in San Pablo City. Pursuant to the SPA, Gesmundo obtained (c) The Affidavit of Consolidation of Ownership executed by the defendant over
a loan in the amount of ₱300,000.00 from petitioner. As security therefor, the residential lot located at Brgy. San Francisco, San Pablo City, covered by ARP
Gesmundo executed on the same day a Real Estate Mortgage constituted on the No. 95-091-1236 entered as Doc. No. 406; Page No. 83, Book No. III, Series of
subject property in favor of petitioner. The abovementioned transactions, 1996 of Notary Public Octavio M. Zayas.
including the execution of the SPA in favor of Gesmundo, took place without the (d) The assessment of real property No. 95-051-1236.
knowledge and consent of respondent.4
2. The defendant is ordered to reconvey the property subject of this complaint to
Upon maturity, the loan remained outstanding. As a result, petitioner instituted the plaintiff.
extrajudicial foreclosure proceedings on the mortgaged property. After the
extrajudicial sale thereof, a Certificate of Sale was issued in favor of petitioner as ON THE SECOND CAUSE OF ACTION
the highest bidder. After the lapse of one year without the property being
1. The defendant to pay the plaintiff the sum of ₱40,000.00 representing the value
redeemed, petitioner, through its vice-president, consolidated the ownership
of the car which was burned.
thereof by executing on June 6, 1996 an Affidavit of Consolidation of Ownership
and a Deed of Absolute Sale.5 ON BOTH CAUSES OF ACTION
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of her 1. The defendant to pay the plaintiff the sum of ₱25,000.00 as attorney’s fees;
visits to the subject property, respondent learned that petitioner had already
employed a certain Roldan Brion to clean its premises and that her car, a Ford 2. The defendant to pay plaintiff ₱25,000.00 as moral damages;
3. The defendant to pay the plaintiff the sum of ₱10,000.00 as exemplary In the event that one spouse is incapacitated or otherwise unable to participate in
damages; the administration of the conjugal properties, the other spouse may assume sole
powers of administration. These powers do not include the powers of disposition
4. To pay the cost of the suit. or encumbrance which must have the authority of the court or the written consent
The counterclaim is dismissed. of the other spouse. In the absence of such authority or consent, the disposition or
encumbrance shall be void. . . .
SO ORDERED.6
Petitioner argues that although Article 124 of the Family Code requires the
Upon elevation of the case to the Court of Appeals, the appellate court affirmed consent of the other spouse to the mortgage of conjugal properties, the framers of
the trial court’s finding that the subject property was conjugal in nature, in the the law could not have intended to curtail the right of a spouse from exercising
absence of clear and convincing evidence to rebut the presumption that the subject full ownership over the portion of the conjugal property pertaining to him under
property acquired during the marriage of spouses Dailo belongs to their conjugal the concept of co-ownership.12 Thus, petitioner would have this Court uphold the
partnership.7 The appellate court declared as void the mortgage on the subject validity of the mortgage to the extent of the late Marcelino Dailo, Jr.’s share in the
property because it was constituted without the knowledge and consent of conjugal partnership.
respondent, in accordance with Article 124 of the Family Code. Thus, it upheld
the trial court’s order to reconvey the subject property to respondent.8 With In Guiang v. Court of Appeals,13 it was held that the sale of a conjugal property
respect to the damage to respondent’s car, the appellate court found petitioner to requires the consent of both the husband and wife.14 In applying Article 124 of the
be liable therefor because it is responsible for the consequences of the acts or Family Code, this Court declared that the absence of the consent of one renders
omissions of the person it hired to accomplish the assigned task.9 All told, the the entire sale null and void, including the portion of the conjugal property
appellate court affirmed the trial court’s Decision, but deleted the award for pertaining to the husband who contracted the sale. The same principle in Guiang
damages and attorney’s fees for lack of basis.10 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 exception to Article 124 of
Hence, this petition, raising the following issues for this Court’s consideration: the Family Code.
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In
MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-OWNER the absence of a marriage settlement, the system of relative community or
THEREOF IS VALID AS TO HIS UNDIVIDED SHARE. conjugal partnership of gains governed the property relations between respondent
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR and her late husband.15 With the effectivity of the Family Code on August 3, 1988,
THE PAYMENT OF THE LOAN OBTAINED BY THE LATE MARCELINO Chapter 4 on Conjugal Partnership of Gains in the Family Code was made
DAILO, JR. THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE applicable to conjugal partnership of gains already established before its
FAMILY.11 effectivity unless vested rights have already been acquired under the Civil Code or
other laws.16
First, petitioner takes issue with the legal provision applicable to the factual
milieu of this case. It contends that Article 124 of the Family Code should be The rules on co-ownership do not even apply to the property relations of
construed in relation to Article 493 of the Civil Code, which states: respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The
regime of conjugal partnership of gains is a special type of partnership, where the
ART. 493. Each co-owner shall have the full ownership of his part and of the husband and wife place in a common fund the proceeds, products, fruits and
fruits and benefits pertaining thereto, and he may therefore alienate, assign or income from their separate properties and those acquired by either or both spouses
mortgage it, and even substitute another person in its enjoyment, except when through their efforts or by chance.17 Unlike the absolute community of property
personal rights are involved. But the effect of the alienation or the mortgage, with wherein the rules on co-ownership apply in a suppletory manner,18 the conjugal
respect to the co-owners, shall be limited to the portion which may be allotted to partnership shall be governed by the rules on contract of partnership in all that is
him in the division upon the termination of the co-ownership. not in conflict with what is expressly determined in the chapter (on conjugal
Article 124 of the Family Code provides in part: partnership of gains) or by the spouses in their marriage settlements.19 Thus, the
property relations of respondent and her late husband shall be governed, foremost,
ART. 124. The administration and enjoyment of the conjugal partnership property by Chapter 4 on Conjugal Partnership of Gains of the Family Code and,
shall belong to both spouses jointly. . . . suppletorily, by the rules on partnership under the Civil Code. In case of conflict,
the former prevails because the Civil Code provisions on partnership apply only was it alleged that the proceeds of the loan redounded to the benefit of the family.
when the Family Code is silent on the matter. Even on appeal, petitioner never claimed that the family benefited from the
proceeds of the loan. When a party adopts a certain theory in the court below, he
The basic and established fact is that during his lifetime, without the knowledge will not be permitted to change his theory on appeal, for to permit him to do so
and consent of his wife, Marcelino Dailo, Jr. constituted a real estate mortgage on would not only be unfair to the other party but it would also be offensive to the
the subject property, which formed part of their conjugal partnership. By express basic rules of fair play, justice and due process.25 A party may change his legal
provision of Article 124 of the Family Code, in the absence of (court) authority or theory on appeal only when the factual bases thereof would not require
written consent of the other spouse, any disposition or encumbrance of the presentation of any further evidence by the adverse party in order to enable it to
conjugal property shall be void. properly meet the issue raised in the new theory.26
The aforequoted provision does not qualify with respect to the share of the spouse WHEREFORE, the petition is DENIED. Costs against petitioner.
who makes the disposition or encumbrance in the same manner that the rule on
co-ownership under Article 493 of the Civil Code does. Where the law does not SO ORDERED.
distinguish, courts should not distinguish.20 Thus, both the trial court and the
appellate court are correct in declaring the nullity of the real estate mortgage on
the subject property for lack of respondent’s 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 redounded to the benefit of the family.21
Under Article 121 of the Family Code, "[T]he conjugal partnership shall be liable
for: . . . (3) Debts and obligations contracted by either spouse without the consent
of the other to the extent that the family may have been benefited; . . . ." For the
subject property to be held liable, the obligation contracted by the late Marcelino
Dailo, Jr. must have redounded to the benefit of the conjugal partnership. There
must be the requisite showing then of some advantage which clearly accrued to
the welfare of the spouses. Certainly, to make a conjugal partnership respond for a
liability that should appertain to the husband alone is to defeat and frustrate the
avowed objective of the new Civil Code to show the utmost concern for the
solidarity and well-being of the family as a unit.22
The burden of proof that the debt was contracted for the benefit of the conjugal
partnership of gains lies with the creditor-party litigant claiming as such.23 Ei
incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies,
must prove).24 Petitioner’s 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 petitioner’s bare allegation, there is nothing from
the records of the case to compel a finding that, indeed, the loan obtained by the
late Marcelino Dailo, Jr. redounded to the benefit of the family. Consequently, the
conjugal partnership cannot be held liable for the payment of the principal
obligation.
In addition, a perusal of the records of the case reveals that during the trial,
petitioner vigorously asserted that the subject property was the exclusive property
of the late Marcelino Dailo, Jr. Nowhere in the answer filed with the trial court