attachment and taken hold of property not

belonging to the plaintiff; The aggrieved third

party may also avail himself of the remedy of
“terceria” by executing an affidavit of his title
or right of possession over the property levied
on attachment and serving the same to the
office making the levy and the adverse party,
356 SUPREME COURT REPORTS
or file an action to nullify the levy with
ANNOTATED
damages resulting from the unlawful levy and
Ching vs. Court of Appeals seizure, which should be a totally separate and
distinct action from the former case.–In Ong v.
*
G.R. No. 124642. February 23, 2004. Tating, we held that the sheriff may attach
only those properties of the defendant against
ALFREDO CHING and whom a writ of attachment has been issued by
ENCARNACION CHING, petitioners, the court. When the sheriff erroneously levies
vs. THE HON. COURT OF APPEALS on attachment and seizes the property of a
and ALLIED BANKING third person in which the said defendant holds
CORPORATION, respondents. no right or interest, the superior authority of
the court which has authorized the execution
may be invoked by the aggrieved third person
Actions; Parties; Attachment; Remedies of in the same case. Upon application of the third
Third Parties Against Wrongful Attachments; person, the court shall order a summary
When the sheriff erroneously levies on hearing for the purpose of determining
attachment and seizes the property of a third whether the sheriff has acted rightly or
person in which the said defendant holds no wrongly in the performance of his duties in the
right or interest, the superior authority of the execution of the writ of attachment, more
court which has authorized the execution may specifically if he has indeed levied on
be invoked by the aggrieved third person in attachment and taken hold of property not
the same case, and upon application of the belonging to the plaintiff. If so, the court
third person, the court shall order a summary
hearing for the purpose of determining
whether the sheriff has acted rightly or _______________

wrongly in the performance of his duties, more

* SECOND DIV ISION.
specifically if he has indeed levied on
 resorted to by one third-party claimant
357
without availing of the other remedies.
Same; Certiorari; Words and Phrases; The
tribunal acts without jurisdiction if it does not
have the legal purpose to determine the case;
VOL. 423, FEBRUARY 23, 2004 357 There is excess of jurisdiction where the
Ching vs. Court of Appeals tribunal, being clothed with the power to
determine the case, oversteps its authority as
determined by law; There is grave abuse of
may then order the sheriff to release the discretion where the tribunal acts in a
property from the erroneous levy and to return capricious, whimsical, arbitrary or despotic
the same to the third person. In resolving the manner in the exercise of its judgment and is
motion of the third party, the court does not equivalent to lack of jurisdiction.–On the
and cannot pass upon the question of the title second issue, we find and so hold that the CA
to the property with any character of finality. erred in setting aside and reversing the orders
It can treat the matter only insofar as may be of the RTC. The private respondent, the
necessary to decide if the sheriff has acted petitioner in the CA, was burdened to prove
correctly or not. If the claimant’s proof does not that the RTC committed a grave abuse of its
persuade the court of the validity of the title, discretion amounting to excess or lack of
or right of possession thereto, the claim will be jurisdiction. The tribunal acts without
denied by the court. The aggrieved third party jurisdiction if it does not have the legal
may also avail himself of the remedy of purpose to determine the case; there is excess
“terceria” by executing an affidavit of his title of jurisdiction where the tribunal, being
or right of possession over the property levied clothed with the power to determine the case,
on attachment and serving the same to the oversteps its authority as determined by law.
office making the levy and the adverse party. There is grave abuse of discretion where the
Such party may also file an action to nullify tribunal acts in a capricious, whimsical,
the levy with damages resulting from the arbitrary or despotic manner in the exercise of
unlawful levy and seizure, which should be a its judgment and is equivalent to lack of
totally separate and distinct action from the jurisdiction.
former case. The above-mentioned remedies
are cumulative and any one of them may be Same; Same; When a court exercises its
jurisdiction, an error committed while so
engaged does not deprive it of its jurisdiction
being exercised when the error is committed.–It conjugal partnership, unless it be proved that
was incumbent upon the private respondent to it pertains exclusively to the husband, or to
adduce a sufficiently strong demonstration the wife. In Tan v. Court of Appeals, we held
that the RTC acted whimsically in total that it is not even necessary to prove that the
disregard of evidence material to, and even properties were acquired with funds of the
decide of, the controversy before certiorari will partnership. As long as the properties were
lie. A special civil action for certiorari is a acquired by the parties during the marriage,
remedy designed for the correction of errors of they are presumed to be conjugal in nature. In
jurisdiction and not errors of judgment. When fact, even when the manner in which the
a court exercises its jurisdiction, an error properties were acquired does not appear, the
committed while so engaged does not deprive it presumption will still apply, and the properties
of its jurisdiction being exercised when the will still be considered conjugal. The
error is committed. presumption of the conjugal nature of the
properties acquired during the marriage
358 subsists in the absence of clear, satisfactory
and convincing evidence to overcome the
same.
358 SUPREME COURT REPORTS
ANNOTATED Same; Same; The signing as surety is
certainly not an exercise of an industry or
Ching vs. Court of Appeals profession–no matter how often an executive
acted on or is persuaded to act as surety for his
Husband and Wife; Conjugal own employer, this should not be taken to
Partnerships; Art. 160 of the New Civil Code mean that he thereby embarked in the business
provides that all the properties acquired of suretyship or guaranty.– The petitioner-
during the marriage are presumed to belong to husband signed the continuing guaranty and
the conjugal partnership, unless it be proved suretyship agreement as security for the
that it pertains exclusively to the husband, or payment of the loan obtained by the PBMCI
to the wife–as long as the properties were from the private respondent in the amount of
acquired by the parties during the marriage, P38,000,000. In Ayala Investment and
they are presumed to be conjugal in nature.– Development Corp. v. Court of Appeals, this
Article 160 of the New Civil Code provides that Court ruled “that the signing as surety is
all the properties acquired during the certainly not an exercise of an industry or
marriage are presumed to belong to the profession. It is not embarking in a business.
No matter how often an executive acted on or VOL. 423, FEBRUARY 23, 2004 359
was persuaded to act as surety for his own
employer, this should not be taken to mean Ching vs. Court of Appeals
that he thereby embarked in the business of
suretyship or guaranty.” denied the power to assume unnecessary and
Same; Same; To make a conjugal unwarranted risks to the financial stability of
partnership responsible for a liability that the conjugal partnership. In this case, the
should appertain alone to one of the spouses is private respondent failed to prove that the
to frustrate the objective of the New Civil Code conjugal partnership of the petitioners was
to show the utmost concern for the solidarity benefited by the petitioner-husband’s act of
and well-being of the family as a unit–the executing a continuing guaranty and
husband is denied the power to assume suretyship agreement with the private
unnecessary and unwarranted risks to the respondent for and in behalf of PBMCI. The
financial stability of the conjugal partnership; contract of loan was between the private
No presumption can be inferred from the fact respondent and the PBMCI, solely for the
that when the husband enters into an benefit of the latter. No presumption can be
accommodation agreement or a contract of inferred from the fact that when the
surety, the conjugal partnership would thereby petitioner-husband entered into an
be benefited.–For the conjugal partnership to accommodation agreement or a contract of
be liable for a liability that should appertain to surety, the conjugal partnership would
the husband alone, there must be a showing thereby be benefited. The private respondent
that some advantages accrued to the spouses. was burdened to establish that such benefit
Certainly, to make a conjugal partnership redounded to the conjugal partnership.
responsible for a liability that should appertain Same; Same; Loans; The benefits
alone to one of the spouses is to frustrate the contemplated by Art. 161 of the New Civil
objective of the New Civil Code to show the Code must be those directly resulting from a
utmost concern for the solidarity and well- loan, not merely a byproduct or a spin-off of
being of the family as a unit. The husband, the loan itself; Where the husband contracts
therefore, is obligations on behalf of the family business,
the law presumes, and rightly so, that such
359
obligation will redound to the benefit of the
conjugal partnership.–It could be argued that
the petitioner-husband was a member of the
Board of Directors of PBMCI and was one of business or profession fails or does not succeed.
its top twenty stockholders, and that the Simply stated, where the husband contracts
shares of stocks of the petitioner-husband and obligations on behalf of the family business,
his family would appreciate if the PBMCI the law presumes, and rightly so, that such
could be rehabilitated through the loans obligation will redound to the benefit of the
obtained; that the petitioner-husband’s career conjugal partnership.
would be enhanced should PBMCI survive
because of the infusion of fresh capital. PETITION for review on certiorari of the
However, these are not the benefits decision and resolution of the Court of
contemplated by Article 161 of the New Civil Appeals.
Code. The benefits must be those directly
360
resulting from the loan. They cannot merely
be a byproduct or a spin-off of the loan itself.
This is different from the situation where the 360 SUPREME COURT REPORTS
husband borrows money or receives services to ANNOTATED
be used for his own business or profession. In
Ching vs. Court of Appeals
the Ayala case, we ruled that it is such a
contract that is one within the term “obligation
for the benefit of the conjugal partnership.” The facts are stated in the opinion of the
Thus: (A) If the husband himself is the Court.
principal obligor in the contract, i.e., he      Sison, Labitag, Avena, Sereno and
directly received the money and services to be Muyot for petitioners.
used in or for his own business or his own           Gonzales, Batiller, Bilog &
profession, that contract falls within the term Associates for private respondents.
“. . . obligations for the benefit of the conjugal
CALLEJO, SR., J.:
partnership.” Here, no actual benefit may be
proved. It is enough that the benefit to the This petition for review, under Rule 45 of
family is apparent at the time of the signing of the Revised Rules of Court, assails the
1
the contract. From the very nature of the Decision of the Court of Appeals (CA)
contract of loan or services, the family stands dated November 27, 1995 in CA-G.R.2 SP
to benefit from the loan facility or services to No. 33585, as well as the Resolution on
be rendered to the business or profession of the April 2, 1996 denying the petitioners’
husband. It is immaterial, if in the end, his motion for reconsideration. The
impugned decision granted the private PBMCI in the amount of P13,000,000.00
respondent’s petition for certiorari and payable in eighteen
set aside the Orders of 3the trial court
dated December
4
15, 1993 and February _______________
17, 1994 nullifying the attachment of
100,000 shares of stocks of the Citycorp. 1 Penned by Associate Justice Ramon Mabutas,
Investment Philippines under the name Jr. with Associate Justices Jesus M. Elbinias and
of petitioner Alfredo Ching. Salvador J. Valdez, Jr. concurring.
The following facts are undisputed: 2 Rollo, p. 39.
On September 26, 1978, the 3 Records, p. 467.
Philippine Blooming Mills Company, Inc. 4 Id., at p. 494.
(PBMCI) obtained a loan of 5 Annex “A,” Records, p. 11.
P9,000,000.00 from the Allied Banking 6 Annex “C,” Id., at pp. 15-16.
Corporation (ABC). By virtue of this 7 Records, p. 12.
loan, the PBMCI, through its Executive
361
Vice-President Alfredo Ching, executed a
promissory note for the said amount
promising to pay on December 22, 1978 5
VOL. 423, FEBRUARY 23, 2004 361
at an interest rate of 14% per annum. As
Ching vs. Court of Appeals
added security for the said loan, on
September 28, 1978, Alfredo Ching,
together with Emilio Tañedo and Chung months at 16% interest per annum. As in
Kiat Hua, executed a continuing the previous loan, the PBMCI, through
guaranty with the ABC binding Alfredo Ching, executed a promissory
themselves to jointly and severally note to evidence 8
the loan maturing on
guarantee the payment of all the PBMCI June 29, 1981. This was 9
renewed once
obligations owing the ABC to the extent for a period of one month.
of P38,000,000.00.
6
The loan was The PBMCI defaulted in the payment
subsequently renewed on various dates, of all its loans. Hence, on August 21,
the last renewal having been made on 1981, the ABC filed a complaint for sum
December 4, 1980.
7
of money with prayer for a writ of
Earlier, on December 28, 1979, the preliminary attachment against the
ABC extended another loan to the PBMCI to collect the P12,612,972.88
exclusive of interests, penalties and other
bank charges. Impleaded as co- of preliminary attachment on a bond of
defendants in the complaint were Alfredo P12,700,000. The order, in relevant part,
Ching, Emilio Tañedo and Chung Kiat stated:
Hua in their capacity as sureties of the
PBMCI. _______________
The case was docketed as Civil Case
No. 142729 in the Regional Trial 10
Court 8 Annex “B,” Records, p. 13.
of Manila, Branch XVIII. In its 9 Records, p. 14.
application for a writ of preliminary 10 Id., at pp. 1-10.
attachment, the ABC averred that the 11 Section 1, paragraph (d), Rule 57 of the Rules
“defendants are guilty of fraud in of Court.
incurring the obligations upon
11
which the 12 Id., at p. 4.
present action is brought in that they 13 Section 1, paragraph (e), Rule 57 of the Rules
falsely represented themselves to be in a of Court, p. 9.
financial position to pay12their obligation 14 Section 1, paragraph (d), Rule 57 of the Rules
upon maturity thereof.” Its supporting of Court, p. 17.
affidavit stated, inter alia, that the
362
“[defendants have removed or disposed of
their properties, or [are] ABOUT to do13so,
with intent to defraud their creditors.” 362 SUPREME COURT REPORTS
On August 26, 1981, after an ex-parte ANNOTATED
hearing, the trial court issued an Order Ching vs. Court of Appeals
denying the ABC’s application for a writ
of preliminary attachment. The trial
“With respect to the second ground relied upon
court decreed that the grounds alleged in
for the grant of the writ of preliminary
the application and that of its supporting
attachment ex-parte, which is the alleged
affidavit “are all conclusions of fact and of
disposal of properties by the defendants with
law” which do not warrant the issuance of
14
intent to defraud creditors as provided in Sec.
the writ prayed for. On motion for
1(e) of Rule 57 of the Rules of Court, the
reconsideration, however, the trial court,
affidavits can only barely justify the issuance
in an Order dated September 14, 1981,
of said writ as against the defendant Alfredo
reconsidered its previous order and
Ching who has allegedly bound himself jointly
granted the ABC’s application for a writ
and severally to pay plaintiff the defendant
corporation’s obligation to the plaintiff as a On July 9, 1982, the SEC issued an
surety thereof. Order placing the PBMCI’s business,
“WHEREFORE, let a writ of preliminary including its assets and liabilities, under
attachment issue as against the defendant rehabilitation receivership, and ordered
Alfredo Ching requiring the sheriff of this that “all actions for claims listed in
Court to attach all the properties of said Schedule ‘A’ of the petition pending
Alfredo Ching not exceeding P12,612,972.82 before any court or tribunal are hereby
in value, which are within the jurisdiction of suspended in whatever stage the same
this Court and not exempt from execution may be until18 further orders from the
upon, the filing by plaintiff of a bond duly Commission.” The ABC was among the
approved by this Court in the sum of Twelve PBMCI’s creditors named in the said
Million Seven Hundred Thousand Pesos schedule.
(P12,700,000.00) executed in favor of the Subsequently, on January 31, 1983,
defendant Alfredo Ching to secure the the PBMCI and Alfredo Ching jointly
payment by plaintiff to him of all the costs filed a Motion to Dismiss and/or motion to
which may be adjudged in his favor and all suspend
damages he may sustain by reason of the
attachment if the court shall finally adjudge _______________
that the plaintiff was
15
not entitled thereto.
“SO ORDERED.” 15 Records, pp. 29-30.
16 Id., at p. 37.
Upon the ABC’s posting of the requisite 17 Id., at p. 310.
bond, the trial court issued a writ of 18 Id., at p. 44.
preliminary attachment. Subsequently,
summonses16 were served on the 363
defendants, save Chung Kiat Hua who
could not be found. VOL. 423, FEBRUARY 23, 2004 363
Meanwhile, on April 1, 1982, the
PBMCI and Alfredo Ching jointly filed a Ching vs. Court of Appeals
petition for suspension of payments with
the Securities and Exchange the proceedings in Civil Case No. 142729
Commission (SEC), docketed as SEC invoking the PBMCI’s pending
Case No. 2250, at the same 17time seeking application for suspension of payments
the PBMCI’s rehabilitation. (which Ching cosigned) and over which
the SEC 19 had already assumed On October 25, 1984, long after
jurisdiction. On February 4, 1983, 20
the submitting their answers,
26
Ching filed an
ABC filed its Opposition thereto. Omnibus Motion, again praying for the
In the meantime, on July 26, 1983, dismissal of the complaint or suspension
the deputy sheriff of the trial court levied of the proceedings on the ground of the
on attachment the 100,000 common July 9, 1982 Injunctive Order issued in
shares of Citycorp.
21
stocks in the name of SEC Case No. 2250. He averred that as a
Alfredo Ching. surety of the PBMCI, he must also
Thereafter, in an Order dated necessarily benefit from the defenses of
September 16, 1983, the trial court his principal. The ABC opposed Ching’s
partially granted the aforementioned omnibus motion.
motion by suspending the proceedings
only with respect to the PBMCI. It _______________
denied Ching’s motion to dismiss the
complaint/or suspend the proceedings 19 Id., at p. 39.
and pointed out that P.D. No. 1758 only 20 Id., at p. 56.
concerns the activities of corporations, 21 Id., at p. 416.
partnerships and associations and was 22 Id., at pp. 87-89.
never intended to regulate and/or control 23 Id., at p. 124.
activities of individuals. Thus, it directed 24 Id., at p. 107.
the individual
22
defendants to file their 25 Id., at p. 142.
answers. 26 Id., at p. 173.
Instead of filing an answer, Ching
364
filed on January 14, 1984 a Motion to
Suspend Proceedings on the same
ground of the pendency of SEC Case No. 364 SUPREME COURT REPORTS
2250. This motion met the opposition ANNOTATED
23
from the ABC. Ching vs. Court of Appeals
On January 20, 1984, Tañedo filed his
Answer with counterclaim and cross-
24
Emilio Y. Tañedo, thereafter, filed his
claim. Ching eventually filed his 27
25
own Omnibus Motion praying for the
Answer on July 12, 1984.
dismissal of the complaint, arguing that
the ABC had “abandoned and waived” its
right to proceed against the continuing partnership. She, likewise, alleged that
guaranty by its act of resorting to being the wife of Alfredo Ching, she was a
preliminary attachment. third-party claimant entitled to file a32
On December 17, 1986, the ABC filed motion for the release of the properties.
a Motion to Reduce the amount of his She attached therewith a copy of her 33
preliminary attachment bond 28
from marriage contract with Alfredo Ching.
P12,700,000 to P6,350,000. 29
Alfredo The ABC filed a comment on the
Ching opposed the motion, but on April motion to quash preliminary attachment
2, 1987, the court issued an Order setting and/or motion to expunge records,
the incident for further hearing on May contending that:
28, 1987 at 8:30 a.m. for the parties to
adduce evidence on the actual value of _______________
the properties30of Alfredo Ching levied on
by the sheriff. 27 Id., at p. 244.
On March 2, 1988, the trial court 28 Id., at pp. 340-341.
issued an Order granting the motion of 29 Id., at p. 347.
the ABC and rendered 31
the attachment 30 Id., at p. 351.
bond of P6,350,000. 31 Id., at p. 413.
On November 16, 1993, Encarnacion 32 Citing the rulings of the Court in Ong v.
T. Ching, assisted by her husband Tating, 149 SCRA 265 (1987); Rejuso v. Estipona,
Alfredo Ching, filed a Motion to Set Aside 72 SCRA 509 (1976); Polaris Marketing
the levy on attachment. She alleged inter Corporation v. Plan, 69 SCRA 93 (1976).
alia that the 100,000 shares of stocks 33 Records, pp. 416-420.
levied on by the sheriff were acquired by
365
her and her husband during their
marriage out of conjugal funds after the
Citycorp Investment Philippines was 365 VOL. 423, FEBRUARY 23, 2004
established in 1974. Furthermore, the
Ching vs. Court of Appeals
indebtedness covered by the continuing
guaranty/comprehensive suretyship
2.1 The supposed movant, Encarnacion T.
contract executed by petitioner Alfredo
Ching, is not a party to this present
Ching for the account of PBMCI did not
case; thus, she has no personality to
redound to the benefit of the conjugal
 file any motion before this Honorable Board of Directors of the said corporation
Court; and was one of its top twenty
2.2 Said supposed movant did not file any stockholders.
Motion for Intervention pursuant to On December 10, 1993, the Spouses
Section 2, Rule 12 of the Rules of Ching filed their Reply/ Opposition to the
Court; motion to expunge records.
2.3 Said Motion cannot even be construed Acting on the aforementioned motion,
to be in the nature of a Third-Party the trial court issued
37
on December 15,
Claim conformably with Sec. 14, Rule 1993 an Order lifting the writ of
57 of the Rules of Court. preliminary attachment on the shares of
stocks and ordering the sheriff to return
3. Furthermore, assuming in gracia argumenti the said stocks to the petitioners. The
that the supposed movant has the required dispositive portion reads:
personality, her Motion cannot be acted upon
“WHEREFORE, the instant Motion to Quash
by this Honorable Court as the above-entitled
Preliminary Attachment, dated November 9,
case is still in the archives and the proceedings
1993, is hereby granted. Let the writ of
thereon still remains suspended. And 34there is
preliminary attachment subject matter of said
no previous Motion to revive the same.
motion, be quashed and lifted with respect to
The ABC also alleged that the motion the attached 100,000 common shares of stock
was barred by prescription or by laches of Citycorp Investment Philippines in the
because the shares of stocks were in name of the defendant Alfredo Ching, the said
custodia legis.
During the hearing of the motion, _______________

Encarnacion T. Ching adduced in 34 Id., at pp. 423-424.

evidence her marriage contract to 35 Exhibit “I.”
Alfredo Ching to prove that they were
35 36 Exhibit “J.”
married on January 8, 1960; the articles 37 Records, p. 467.
of incorporation of Citycorp Investment
36
Philippines dated May 14, 1979; and, 366
the General Information Sheet of the
corporation showing that petitioner
366 SUPREME COURT REPORTS
Alfredo Ching was a member of the
ANNOTATED
 Ching vs. Court of Appeals setting aside the assailed orders of the
trial court, thus:
shares of stock to be returned to him and his
movant-spouse by Deputy Sheriff Apolonio A. “WHEREFORE, premises considered, the
Golfo who effected the levy thereon on July petition is GRANTED, hereby setting aside the
26, 1983, or by whoever may be presently in questioned orders (dated December 15, 1993
possession thereof. 38 and February 17, 1994) for being null and
“SO ORDERED.” void. 40
“SO ORDERED.”
The plaintiff Allied Banking Corporation
filed a motion for the reconsideration of The CA sustained the contention of the
the order but denied the same on private respondent and set aside the
February 17, 1994. The petitioner bank assailed orders. According to the CA, the
forthwith filed a petition for certiorari RTC deprived the private respondent of
with the CA, docketed as CA-G.R. SP No. its right to file a bond under Section 14,
33585, for the nullification of the said Rule 57 of the Rules of Court. The
order of the court, contending that: petitioner Encarnacion T. Ching was not
a party in the trial court; hence, she had
1. The respondent Judge exceeded no right of action to have the levy
his authority thereby acted annulled with a motion for that purpose.
without jurisdiction in taking Her remedy in such case was to file a
cognizance of, and granting a separate action against the private
“Motion” filed by a complete respondent to nullify the levy on the
stranger to the case. 100,000 Citycorp shares of stocks. The
2. The respondent Judge committed court stated that even assuming that
a grave abuse of discretion in Encarnacion T. Ching had the right to
lifting the writ of preliminary file the said motion, the same was barred
attachment without any basis in by laches.
fact and in law, and contrary to
established
39
jurisprudence on the _______________
matter.
38 Id., at p. 469.
39 CA Rollo, pp. 7-8.
On November 27, 1995, the CA rendered
40 Rollo, p. 38.
judgment granting the petition and
 367 acquisition of the levied shares of stocks
is not the controlling factor when
invoking the presumption of the conjugal
VOL. 423, FEBRUARY 23, 2004 367 42
nature of stocks under Art. 160, and
Ching vs. Court of Appeals that such presumption subsists even if
the property is registered only in the
Citing41 Wong v. Intermediate Appellate name of one of the spouses, 43
in this case,
Court, the CA ruled that the petitioner Alfredo Ching. According to
presumption in Article 160 of the New the petitioners, the suretyship obligation
Civil Code shall not apply where, as in was not contracted in the pursuit of the
this case, the petitioner-spouses failed to petitioner-husband’s
44
profession or
prove the source of the money used to business. And, contrary to the ruling of
acquire the shares of stock. It held that the CA, where conjugal assets are
the levied shares of stocks belonged to attached in a collection suit on an
Alfredo Ching, as evidenced by the fact obligation contracted by the husband,
that the said shares were registered in the wife should exhaust her motion to
the corporate books of Citycorp solely quash in the main 45
case and not file a
under his name. Thus, according to the separate suit. Furthermore, the
appellate court, the RTC committed a petitioners contend that under Art. 125
grave abuse of its discretion amounting of the Family Code, the petitioner-
to excess or lack of jurisdiction in issuing husband’s gratuitous 46
suretyship is null
the assailed orders. The petitioners’ and void ab initio, and that the share of
motion for reconsideration was denied by one of the spouses in the conjugal
the CA in a Resolution dated April 2, partnership remains inchoate until the
1996. dissolution 47and liquidation of the
The petitioner-spouses filed the partnership.
instant petition for review on certiorari, In its comment on the petition, the
asserting that the RTC did not commit private respondent asserts that the CA
any grave abuse of discretion amounting correctly granted its petition for
to excess or lack of jurisdiction in issuing certiorari nullifying
the assailed orders in their favor; hence,
the CA erred in reversing the same. They _______________
aver that the source of funds in the
 41 200 SCRA 792 (1991). has the right to file the motion to quash
42 Rollo, p. 17. the levy on attachment on the 100,000
43 Id., at p. 19. shares of stocks in the Citycorp
44 Id., at p. 20. Investment Philippines; (b) whether or
45 Id., at p. 23. not the RTC committed a grave abuse of
46 Id., at p. 24. its discretion amounting to excess or lack
47 Id., at p. 27. of jurisdiction in issuing the assailed
orders.
368
On the first issue, we agree with the
petitioners that the petitioner-wife had
368 SUPREME COURT REPORTS the right to file the said motion, although
ANNOTATED she was48 not a party in Civil Case No.
142729.
Ching vs. Court of Appeals 49
In Ong v. Tating, we held that the
sheriff may attach only those properties
the assailed order. It contends that the of the defendant against whom a writ of
CA correctly relied on the ruling of this attachment has been issued by the court.
Court in Wong v. Intermediate Appellate When the sheriff erroneously levies on
Court. Citing Cobb-Perez v. Lantin and attachment and seizes the property of a
G-Tractors, Inc. v. Court of Appeals, the third person in which the said defendant
private respondent alleges that the holds no right or interest, the superior
continuing guaranty and suretyship authority of the court which has
executed by petitioner Alfredo Ching in authorized the execution may be invoked
pursuit of his profession or business. by the aggrieved third person in the
Furthermore, according to the private same case. Upon application of the third
respondent, the right of the petitioner- person, the court shall order a summary
wife to a share in the conjugal hearing for the purpose of determining
partnership property is merely inchoate whether the sheriff has acted rightly or
before the dissolution of the partnership; wrongly in the performance of his duties
as such, she had no right to file the said in the execution of the writ of
motion to quash the levy on attachment attachment, more specifically if he has
of the shares of stocks. indeed levied on attachment and taken
The issues for resolution are as hold of property not belonging to the
follows: (a) whether the petitioner-wife
plaintiff. If so, the court may then order levy and the adverse party. Such party
the sheriff to release the property from may also file an action to nullify the levy
the erroneous levy and to return the with damages resulting from the
same to the third person. In resolving the unlawful levy and seizure, which should
motion of the third party, the court does be a totally separate and distinct action
not and cannot pass upon the question of from the former case. The above-
the title to the property with any mentioned remedies are cumulative and
character of finality. It can treat the any one of them may be resorted to by
matter only insofar as may be necessary one third-party claimant50 without
to decide if the sheriff has availing of the other remedies.
In this case, the petitioner-wife filed
_______________ her motion to set aside the levy on
attachment of the 100,000 shares of
48 Naguit v. Court of Appeals, 347 SCRA 60 stocks in the name of petitioner-husband
(2000). claiming that the said shares of stocks
49 Supra, cited in Sy v. Discaya, 181 SCRA 378 were conjugal in nature; hence, not liable
(1990). for the account of her husband under his
continuing guaranty and suretyship
369
agreement with the PBMCI. The
petitioner-wife had the right to file the
VOL. 423, FEBRUARY 23, 2004 369 motion for said relief.
On the second issue, we find and so
Ching vs. Court of Appeals
hold that the CA erred in setting aside
and reversing the orders of the RTC. The
acted correctly or not. If the claimant’s private respondent, the petitioner in the
proof does not persuade the court of the CA, was burdened to prove that the RTC
validity of the title, or right of possession committed a grave abuse of its discretion
thereto, the claim will be denied by the amounting to excess or lack of
court. The aggrieved third party may jurisdiction. The tribunal acts without
also avail himself of the remedy of jurisdiction if it does not have the legal
“terceria” by executing an affidavit of his purpose to determine the case; there is
title or right of possession over the excess of jurisdiction where the tribunal,
property levied on attachment and being clothed with the power to
serving the same to the office making the
determine the case, oversteps its diction, an error committed while so
authority as determined by law. There is engaged does not deprive it of its
grave abuse of discretion where the jurisdiction being 52 exercised when the
tribunal acts in a capricious, whimsical, error is committed.
arbitrary or despotic manner in the After a comprehensive review of the
exercise of its judgment51
and is equivalent records of the RTC and of the CA, we find
to lack of jurisdiction. and so hold that the RTC did not commit
It was incumbent upon the private any grave abuse of its discretion
respondent to adduce a sufficiently amounting to excess or lack of
strong demonstration that the RTC acted jurisdiction in issuing the assailed
whimsically in total disregard of evidence orders.
material to, and even decide of, the Article 160 of the New Civil Code
controversy before certiorari will lie. A provides that all the properties acquired
special civil action for certiorari is a during the marriage are presumed to
remedy designed for the correction of belong to the conjugal partnership,
errors of jurisdiction and not errors of unless it be proved that it pertains
judgment. When a court exercises its exclusively to the husband,53or to the wife.
juris- In Tan v. Court of Appeals, we held that
it is not even necessary to prove that the
_______________ properties were acquired with funds of
the partnership. As long as the properties
50 Naguit v. Court of Appeals, supra. were acquired by the parties during the
51 Condo Suit Club Travel, Inc. v. National marriage, they are presumed to be
Labor Relations Commission, 323 SCRA 679 conjugal in nature. In fact, even when
(2000). the manner in which the properties were
acquired does not appear, the
370
presumption will still apply, and the
properties will still be considered
370 SUPREME COURT REPORTS conjugal. The presumption of the
ANNOTATED conjugal nature of the properties
acquired during the marriage subsists in
Ching vs. Court of Appeals
the absence of clear, satisfactory and
convincing
54
evidence to overcome the 54 Wong v. Intermediate Appellate Court,
same. supra.
In this case, the evidence adduced by 55 Salvador v. Court of Appeals, 243 SCRA 239
the petitioners in the RTC is that the (1995).
100,000 shares of stocks in the Citycorp 56 Bucoy v. Paulino, 23 SCRA 248 (1968).
Investment Philippines were issued to
371
and registered in its corporate books in
the name of the petitioner-husband when
the said corporation was incorporated on VOL. 423, FEBRUARY 23, 2004 371
May 14, 1979. This was done during the
Ching vs. Court of Appeals
subsistence of the marriage of the
petitioner-spouses. The shares of stocks 57

are, thus, presumed to be the conjugal of this Court in Maramba v. Lozano and
partnership property of the petitioners. Associated58 Insurance & Surety Co., Inc.
The private respondent failed to adduce v. Banzon is misplaced. In the Maramba
evidence that the petitioner-husband case, we held that where there is no
acquired the stocks with his exclusive showing as to when the property was
acquired, the fact that the title is in the
55
money. The barefaced fact that the
shares of stocks were registered in the wife’s name alone is determinative of the
corporate books of Citycorp Investment ownership of the property. The principle
Philippines solely in the name of the was reiterated in the Associated
petitioner-husband does not constitute Insurance case where the uncontroverted
proof that the petitioner-husband, not evidence showed that the shares of stocks
the conjugal partnership, owned the were acquired during the marriage of the
petitioners.
56
same. The private respondent’s reliance
on the rulings Instead of fortifying the contention of
the respondents, the ruling of this Court 59
in Wong v. Intermediate Appellate Court
_______________
buttresses the case for the petitioners. In
52 Pure Foods Corporation v. National Labor that case, we ruled that he who claims
Relations Commission, 171 SCRA 415 (1989). that property acquired by the spouses
53 273 SCRA 229 (1997). during their marriage is not conjugal
partnership property but belongs to one
of them as his personal property is
burdened to prove the source of the 58 26 SCRA 268 (1968).
money utilized to purchase the same. In 59 Supra.
this case, the private respondent claimed 60 Art. 121. The conjugal partnership shall be
that the petitioner-husband acquired the liable for:
shares of stocks from the Citycorp ...
Investment Philippines in his own name (2) All debts and obligations contracted during
as the owner thereof. It was, thus, the the marriage by the designated administrator-
burden of the private respondent to prove spouse for the benefit of the conjugal partnership
that the source of the money utilized in of gains, or by both spouses or by one of them with
the acquisition of the shares of stocks was the consent of the other;
that of the petitionerhusband alone. As
372
held by the trial court, the private
respondent failed to adduce evidence to
prove this assertion. 372 SUPREME COURT REPORTS
The CA, likewise, erred in holding ANNOTATED
that by executing a continuing guaranty
Ching vs. Court of Appeals
and suretyship agreement with the
private respondent for the payment of
the PBMCI loans, the petitioner- Art. 161. The conjugal partnership shall be
husband was in the exercise of his liable for:
profession, pursuing a legitimate (1) All debts and obligations contracted by
business. The appellate court erred in the husband for the benefit of the conjugal
concluding that the conjugal partnership partnership, and those contracted by the wife,
is liable for the said account of PBMCI also for the same purpose, in the cases where
under Article 161(1) of the New Civil she may legally bind the partnership.
Code. The petitioner-husband signed the
Article 161(1) of the New
60
Civil Code continuing guaranty and suretyship
(now Article 121[2 and 3] of the Family agreement as security for the payment of
Code of the Philippines) provides: the loan obtained by the PBMCI from
the private respondent in the amount of
_______________ P38,000,000. In Ayala Investment and61
Development Corp. v. Court of Appeals,
57 20 SCRA 474 (1967).
this Court ruled “that the signing as
surety is certainly not an exercise of an presumption can be inferred from the fact
industry or profession. It is not that when the petitioner-husband
embarking in a business. No matter how entered into an accommodation
often an executive acted on or was agreement or a contract of surety, the
persuaded to act as surety for his own conjugal partnership would thereby be
employer, this should not be taken to benefited. The private
mean that he thereby embarked in the
business of suretyship or guaranty.” _______________
For the conjugal partnership to be
liable for a liability that should appertain (3) Debts and obligations contracted by either spouse
to the husband alone, there must be a without the consent of the other to the extent that the
showing that some advantages accrued to family may have been benefited;
the spouses. Certainly, to make a 61 286 SCRA 272 (1998).
conjugal partnership responsible for a 62 Luzon Surety Co., Inc. v. De Garcia, 30
liability that should appertain alone to
SCRA 111 (1969).
one of the spouses is to frustrate the
objective of the New Civil Code to show 373
the utmost concern for the solidarity and
well being of the family as a unit. The
VOL. 423, FEBRUARY 23, 2004 373
husband, therefore, is denied the power
to assume unnecessary and unwarranted Ching vs. Court of Appeals
risks to the financial 62
stability of the
conjugal partnership. respondent was burdened to establish
In this case, the private respondent that such benefit 63redounded to the
failed to prove that the conjugal conjugal partnership.
partnership of the petitioners was It could be argued that the petitioner-
benefited by the petitioner-husband’s act husband was a member of the Board of
of executing a continuing guaranty and Directors of PBMCI and was one of its top
suretyship agreement with the private twenty stockholders, and that the shares
respondent for and in behalf of PBMCI. of stocks of the petitioner-husband and
The contract of loan was between the his family would appreciate if the PBMCI
private respondent and the PBMCI, could be rehabilitated through the loans
solely for the benefit of the latter. No obtained; that the petitioner-husband’s
career would be enhanced should PBMCI the law presumes, and rightly so, that such
survive because of the infusion of fresh obligation will redound
65
to the benefit of the
capital. However, these are not the conjugal partnership.
benefits contemplated by Article 161 of
the New Civil Code. The benefits must be The Court held in the same case that the
those directly resulting from the loan. rulings of the Court in Cobb-Perez and G-
They cannot merely be 64a byproduct or a Tractors, Inc. are not controlling because
spin-off of the loan itself. the husband, in those cases, contracted
This is different from the situation the obligation for his own business. In
where the husband borrows money or this case, the petitioner-husband acted
receives services to be used for his own merely as a surety for the loan contracted
business or profession. In the Ayala case, by the PBMCI from the private
we ruled that it is such a contract that is respondent.
one within the term “obligation for the
benefit of the conjugal partnership.” _______________
Thus:
63 Ayala Investment & Development Corp. v.
(A) If the husband himself is the principal Court of Appeals, supra.
obligor in the contract, i.e., he directly received 64 See note 61.
the money and services to be used in or for his 65 Id., at pp. 281-282.
own business or his own profession, that
374
contract falls within the term “. . . obligations
for the benefit of the conjugal partnership.”
Here, no actual benefit may be proved. It is 374 SUPREME COURT REPORTS
enough that the benefit to the family is ANNOTATED
apparent at the time of the signing of the
People vs. Ulit
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 IN LIGHT OF ALL THE FOREGOING,
to the business or profession of the husband. It the petition is GRANTED. The Decision
is immaterial, if in the end, his business or and Resolution of the Court of Appeals
profession fails or does not succeed. Simply are SET ASIDE AND REVERSED. The
stated, where the husband contracts assailed orders of the RTC are
obligations on behalf of the family business, AFFIRMED.
 SO ORDERED.

          Puno (Chairman), Quisumbing,

Austria-Martinez and Tinga, JJ., concur.

Petition granted, assailed decision and

resolution reversed and set aside.

Notes.–All property of the marriage is

presumed to belong to the conjugal
partnership, unless it be proved that it
pertains exclusively to the husband or to
the wife. (Salvador vs. Court of Appeals,
243 SCRA 239 [1995])
Where a woman who cohabited with a
married man fails to prove that she
contributed money to the purchase price
of a riceland, there is no basis to justify
her co-ownership over the same– the
riceland should revert to the conjugal
partnership property of the man and his
lawful wife. (Agapay vs. Palang, 276
SCRA 340 [1997])

––o0o––

© Copyright 2021 Central Book Supply, Inc. All rights reserved.