SECURITY BANK AND TRUST COMPANY v.

MAR TIERRA CORP, WILFRIDO MARTINEZ, MIGUEL LACSON, and

RICARDO LOPA
November 29, 2006 (508 SCRA 419)

FACTS:
Respondent Mar Tierra Corporation, through its president, Wilfrido C. Martinez, applied for a P12,000,000 credit
accommodation with petitioner Security Bank and Trust Company. Petitioner approved the application and
entered into a credit line agreement with respondent corporation. It was secured by an indemnity agreement
executed by individual respondents Wilfrido C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound
themselves jointly and severally with respondent corporation for the payment of the loan.

Respondent corporation was not able to pay all its debt balance as it suffered business reversals, eventually
ceasing operations. Petitioner filed a complaint against respondent corp and individual respondents.

RTC issued a writ of attachment on all real and personal properties of respondent corporation and individual
respondent Martinez including the conjugal house and lot of the spouses but it found that it did not redound to
the benefit of his family, hence, it ordered the lifting of the attachment on the conjugal house and lot of the
spouses Martinez.

Petitioner appealed to CA. It affirmed RTC decision. Petitioned to SC.

ISSUE: WON the conjugal partnership may be held liable for an indemnity agreement entered into by the husband
to accommodate a third party

HELD:
No. SC upheld the CA. Under Article 161(1) of the Civil Code, the conjugal partnership is liable for “all debts and
obligations contracted by the husband for the benefit of the conjugal partnership.”

The court ruled in Luzon Surety Co., Inc. v. de Garcia that, in acting as a guarantor or surety for another, the
husband does not act for the benefit of the conjugal partnership as the benefit is clearly intended for a third
party.

In Ayala Investment and Development Corporation v. Court of Appeals, we ruled that, if the husband himself is
the principal obligor in the contract, i.e., the direct recipient of the money and services to be used in or for his
own business or profession, the transaction falls within the term “obligations for the benefit of the conjugal
partnership.” In other words, where the husband contracts an obligation on behalf of the family business, there
is a legal presumption that such obligation redounds to the benefit of the conjugal partnership.

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, the transaction cannot by itself be deemed an obligation for the benefit of the conjugal
partnership. It is for the benefit of the principal debtor and not for the surety or his family.

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In the case at bar, the principal contract, the credit line agreement between petitioner and respondent
corporation, was solely for the benefit of the latter. The accessory contract (the indemnity agreement) under
which individual respondent Martinez assumed the obligation of a surety for respondent corporation was
similarly for the latter’s benefit. Petitioner had the burden of proving that the conjugal partnership of the
spouses Martinez benefited from the transaction. It failed to discharge that burden.

LILIUS, ET AL. vs. THE MANILA

RAILROAD COMPANY
MARCH 26, 2011 ~ VBDIAZ

LILIUS, ET AL. vs. THE MANILA RAILROAD COMPANY

G.R. No. L-39587
March 24, 1934
FACTS: Lilius was driving with his wife and daughter for sightseeing in
Pagsanjan Laguna. It was his first time in the area and he was entirely
unacquainted with the conditions of the road and had no knowledge of the
existence of a railroad crossing. Before reaching the crossing in question,
there was nothing to indicate its existence and, it was impossible to see an
approaching train. At about seven or eight meters from the crossing the
plaintiff saw an autotruck parked on the left side of the road. Several people,
who seemed to have alighted from the said truck, were walking on the
opposite side. He slowed down and sounded his horn for the people to get out
of the way. With his attention thus occupied, he did not see the crossing but
he heard two short whistles. Immediately afterwards, he saw a huge black
mass fling itself upon him, which turned out to be locomotive No. 713 of the
MRC’s train. The locomotive struck the plaintiff’s car right in the center. The
3 victims were injured and were hospitalized.
Lilus filed a case against MRC in the CFI. Answering the complaint, it denies
each and every allegation thereof and, by way of special defense, alleges that
the Lilius, with the cooperation of his wife and coplaintiff, negligently and
recklessly drove his car, and prays that it be absolved from the complaint.

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The CFI decided in favor of Lilius. The 2 parties appealed said decision, each
assigning errors on said judgement.

ISSUE:
1. WON Manila Railroad Company is liable for damages
2. WON the sums of money fixed by the court a quo as indemnities for
damages proper

1. Injuries sutained by Lilius

2. for injuries sustained by wife and child
3. for loss of domestic service of wife to husband
HELD: The judgment appealed from is affirmed in toto, with the sole
modification on interest to be added on the indemnity in favor of Lilius.

1. YES
Upon examination of the oral as well as of the documentary evidence, this
court is of the opinion that the accident was due to negligence on the part of
the defendant-appellant company alone, for not having had on that occasion
any semaphore at the crossing to serve as a warning to passers-by of its
existence in order that they might take the necessary precautions before
crossing the railroad; and, on the part of its employees — the flagman and
switchman, for not having remained at his post at the crossing in question to
warn passers-by of the approaching train

Although it is probable that the defendant-appellant entity employed the

diligence of a good father of a family in selecting its aforesaid employees,
however, it did not employ such diligence in supervising their work and the
discharge of their duties. The diligence of a good father of a family, which
the law requires in order to avoid damage, is not confined to the careful and

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prudent selection of subordinates or employees but includes inspection of
their work and supervision of the discharge of their duties.

2.

a. With respect to the plaintiffs’ appeal, the first question to be decided is that
raised by Lilius relative to the insufficiency of the sum of P5,000 which the
trial court adjudicated to him by way of indemnity for damages consisting in
the loss of his income as journalist and author as a result of his illness. As to
the amount of P10,000 claimed by Lilius as damages for the loss of his wife’s
services in his business, which services consisted in going over his writings,
translating them into foreign languages and acting as his secretary, in
addition to the fact that such services formed part of the work whereby he
realized a net monthly income of P1,500, there is no sufficient evidence of
the true value of said services nor to the effect that he needed them during her
illness and had to employ a translator to act in her stead.

b. Taking into consideration the fact that the wife — in the language of the
court, which saw her at the trial — “young and beautiful and the big scar,
which she has on her forehead caused by the lacerated wound received by her
from the accident, disfigures her face and that the fracture of her left leg has
caused a permanent deformity which renders it very difficult for her to walk”,
and taking into further consideration her social standing, neither is the sum
adjudicated to her for patrimonial and moral damages, excessive.

As to the indemnity in favor of the child neither is the same excessive, taking
into consideration the fact that the lacerations received by her have left deep
scars that permanently disfigure her face and that the fractures of both her
legs permanently render it difficult for her to walk freely, continuous extreme
care being necessary in order to keep her balance in addition to the fact that
all of this unfavorably and to a great extent affect her matrimonial future.
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c. Lilius also seeks to recover the sum of P2,500 for the loss of what is called
Anglo-Saxon common law “consortium” of his wife, that is, “her services,
society and conjugal companionship”, as a result of personal injuries which
she had received from the accident now under consideration.

Under the law and the doctrine of this court, one of the husband’s rights is to
count on his wife’s assistance. This assistance comprises the management of
the home and the performance of household duties. However, nowadays
when women, in their desire to be more useful to society and to the nation,
are demanding greater civil rights and are aspiring to become man’s equal in
all the activities of life, marriage has ceased to create the presumption that a
woman complies with the duties to her husband and children, which the law
imposes upon her, and he who seeks to collect indemnity for damages
resulting from deprivation of her domestic services must prove such services.
In the case under consideration, apart from the services of his wife as
translator and secretary, the value of which has not been proven, Lilius has
not presented any evidence showing the existence of domestic services and
their nature, rendered by her prior to the accident, in order that it may serve
as a basis in estimating their value.

Furthermore, inasmuch as a wife’s domestic assistance and conjugal

companionship are purely personal and voluntary acts which neither of the
spouses may be compelled to render, it is necessary for the party claiming
indemnity for the loss of such services to prove that the person obliged to
render them had done so before he was injured and that he would be willing
to continue rendering them had he not been prevented from so doing

NOTES:
However, in order that a victim of an accident may recover indemnity for
damages from the person liable therefor, it is not enough that the latter has

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been guilty of negligence, but it is also necessary that the said victim has not,
through his own negligence, , contributed to the accident.

It appears that Lilius took all precautions which his skill and the presence of
his wife and child, driving his car at a speed which prudence demanded
according to the circumstances and conditions of the road, slackening his
speed in the face of an obstacle and blowing his horn upon seeing persons on
the road. If he failed to stop, look and listen before going over the crossing, in
spite of the fact that he was driving at 12 miles per hour after having been
free from obstacles, it was because, his attention having been occupied in
attempting to go ahead, he did not see the crossing in question, nor anything,
nor anybody indicating its existence, as he knew nothing about it beforehand.
The first and only warning, which he received of the impending danger, was
two short blows from the whistle of the locomotive immediately preceding
the collision and when the accident had already become inevitable.

People v. Lagrimas, G.R. No. L-25355, August 28, 1969

FACTS: Froilan Lagrimas was charged for the murder of Pelagio Cagro. Thereafter, the heirs of Cagro
filed a motion for the issuance of a writ of preliminary attachment on the property of the accused, which
was granted. Lagrimas was convicted and sentenced to suffer the penalty of reclusion perpetua and to
indemnify the appellants. The judgment became final. The lower court issued a writ of execution to
cover the civil indemnity. A levy was had on 11 parcels of land declared for tax purposes in the name of
the accused and the sale thereof at public auction was scheduled. However, the wife of the accused,
Mercedes Lagrimas, filed a petition to quash the said attachment contending that the property belonged
to the conjugal partnership and could not be held liable for pecuniary indemnity the husband was
required to pay. Her petition was granted. Another judge set aside the said order. But upon Mercedes’
filing a motion for reconsideration, a third judge revived the original order, declaring such attachment
and the writ of execution thereafter issued null and void.

ISSUE: WON properties from the conjugal properties of Mercedes and Froilan can be held liable for the
pecuniary indemnity incurred by the latter.

HELD: Yes. Fines and indemnities imposed upon either husband or wife “may be enforced against the
partnership assets after the responsibilities enumerated in article 161 have been covered, if the spouse
who is bound should have no exclusive property or if it should be insufficient; xxx.”

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It is quite plain, therefore, that the period during which such a liability may be enforced presupposes
that the conjugal partnership is still existing for the law speaks of “partnership assets.” That upon
complying with the responsibilities enumerated in article 161, the fines and indemnities imposed upon a
party of the conjugal partnership will be satisfied

If the appealed order were to be upheld, Froilan would be in effect exempt therefrom and the heirs of
the offended party being made to suffer still further; that for a transgression of the law by either
husband or wife, the rest of the family may be made to bear burdens of an extremely onerous character.

Tan vs. CA

Chiao Long Tan claims to be the owner of a 1976 Isuzu Elf van. As owner thereof, petitioner says he
has been in possession, enjoyment, and utilization of the van until his older brother, Tan Ban Yong,
unlawfully took it away from him.

Petitioner relies on the fact:

1. That the van is registered under his name.
2. He claims to have bought the vehicle from isuzu balintawak;
3. That he sent his brother to pay for the van and the receipt was issued in his name because it
was his money that was used to pay for the vehicle;
4. That he allowed his brother to use the vehicle because the latter was working for the company;
5. And that his brother later refused to return the vehicle and appropriated the same for himself.

Private respondent on the other hand testifies:

1. CLT Industries is the family business and it was under the name of petitioner since at the that
time, he was leaving for the US and petitioner is the only Filipino left in the Philippines
2. When the family business needed a vehicle, he asked petitioner to look for a vehicle and gave
him money as downpayment for an Isuzu Elf van
3. After a month, he paid for the van by getting a loan from a friend
4. As much as the receipt was placed in the name of petitioner, private respondent allowed the
registration under the name of petitioner
5. There was also agreement that he would use the vehicle as he paid for the same

All the abovementioned allegations of private respondent has been corroborated by witnesses.
The trial court hence ruled in favor of the private respondent and the CA affirmed this decision.

Issue: WON the motor vehicle is owned by the plaintiff-appellant

Held: GinaLu, who testified at the instance of petitioner, declared that the downpayment
of P5,000.00 was paid by petitioner and so the receipt for the same was issued in his
name but the balance of P133,000.00 was paid by private respondent and to make the
record consistent, she issued the receipt in the name of petitioner again. In contrast to the
clear and categorical averments of private respondent and the witnesses in this case negating petitioner's
ownership of the motor vehicle in question, petitioner's averments before the trial court and this Court are
not only disparate but conflicting. In his testimony below, petitioner averred that he used his own money

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to purchase the motor vehicle by paying the sum of P100,000.00, 5 which testimony is negated by his
admission on page 5 of his petition 6 before this Court that private respondent borrowed money from Tan
Pit Sin with which to purchase the subject motor vehicle. Then, in his pleading before the court below,
particularly in his reply to the answer of private respondent, petitioner alleged that the motor vehicle was
intended for his exclusive use and not to service the family business. 7 And yet , in his petition before this
Court, he claimed that the subject motor vehicle was purchased for CLT Industries, which he solely
owned and accordingly, registered in the latter's name. 8 On top of these entangled averments, petitioner
did not have in his possession the Certificate of Registration of the motor vehicle and the official receipt of
payment for the same, thereby lending credence to the claim of private respondent who has possession
thereof, that he owns the subject motor vehicle.

A certificate of registration of a motor vehicle in one's name indeed creates a strong presumption of
ownership. For all practical purposes, the person in whose favor it has been issued is virtually the owner
thereof unless proved otherwise. In other words, such presumption is rebuttable by competent proof.

The New Civil Code recognizes cases of implied trust other than those enumerated therein. 9 Thus,
although no specific provision could be cited to apply to the parties herein, it is undeniable that an implied
trust was created when the certificate of registration of the motor vehicle was placed in the name of the
petitioner although the price thereof was not paid by him but by private respondent. The principle that a
trustee who puts a certificate of registration in his name cannot repudiate the trust by relying on the
registration is one of the well-known limitations upon a title. A trust, which derives its strength from the
confidence one reposes on another especially between brothers, does not lose that character simply
because of what appears in a legal document.

Even under the Torrens System of land registration, this Court in some instances did away with the
irrevocability or indefeasibility of a certificate of title to prevent injustice against the rightful owner of the
property. 10

Villanueva vs. IAC

GR No. 67582, October 29, 1987

FACTS:

Modesto Aranas, husband of Victoria, inherited a land from his father. Dorothea and Teodoro, Modesto’s
illegitimate children, borrowed money from private respondent Jesus Bernas, mortgaging as collateral
their father’s property. In the loan agreement, Aranas described themselves as the absolute co-owners.
Dorothea and Teodoro failed to pay the loan resulting to extrajudicial foreclosure of mortgage in 1977 and
thereafter Bernas acquired the land as the highest bidder. Aftewards, the Aranases executed a deed of
extrajudicial partition in 1978, in which they adjudicated the same land unto themselves in equal share
pro-indiviso. Bernas then consolidated his ownership over the lot when the mortgagors failed to redeem it
withn the reglementary period, and had the title in the name of Modesto cancelled and another TCT
issued in his name.

In 1978, petitioner Consolacion Villanueva and Raymundo Aranas filed a complaint against respondents
spouses Jesus and Remedios Bernas, for the cancellation of the TCT under the name of the Bernases,
and they be declared co-owners of the land. Petitioner alleged that spouses Modesto and Victoria in
1987 and 1958 executed 2 separate wills: first bequeathing to Consolacion and Raymundo and to
Dorothea and Teodoro, in equal shares pro diviso, all of said Victoria’s shares from the conjugal
partnership property; and second Modesto’s interests in his conjugal partnership with Victoria as well as
his separate properties bequeathed to Dorothea and Teodoro. Trial court dismissed the complaint,
declaring herein respondents as the legal owners of the disputed property. IAC likewise affirmed the
lower court’s decision.

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ISSUE: WON Villanueva had a right over the land and the improvements thereon made by Victoria who
rendered the lot as conjugal property.

HELD:

The land was not a conjugal partnership property of Victoria and Modesto. It was Modesto’s exclusive
property since he inherited it from his parents. Moreover, since Victoria died ahead of Modesto, Victoria
did not inherit said lot from him and therefore had nothing of the land to bequeath by will of otherwise to
Consolacion.

Article 158 of the Civil Code says that improvements, whether for utility or adornment made on the
separate property of the spouses through advancements from the partnership or through the industry of
either spouse belong to the conjugal partnership, and buildings constructed at the expense of the
partnership during the marriage on land belonging to one of the spouses also pertain to the partnership,
but the value of the land shall be reimbursed to the spouse who owns the same.

There was no proof presented by Villanueva. Such proof is needed at the time of the making or
construction of the improvements and the source of the funds used thereof in order to determine the
character of the improvements as belonging to the conjugal partnership or to one spouse separately.
What is certain is that the land on which the improvements stand was the exclusive property of Modesto
and that where the property is registered in the name of one spouse only and there is no showing of when
precisely the property was acquired, the presumption is that is belongs exclusively to said spouse. It is
not therefore possible to declare the improvements to be conjugal in character.

Furthermore, Bernas’ mode of acquisition of ownership over the property appears in all respect to be
regular, untainted by any defect whatsoever. Bernas must therefore be deemed to have acquired
indefeasible and clear title to the lot which cannot be defeated or negated by claims subsequently arising
and of which he had no knowledge or means of knowing prior to their assertion and ventilation.