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Ayala Investment Corp v. Ca

The case involves a loan default by Philippine Blooming Mills, with Alfredo Ching acting as a surety, leading to a legal dispute over the liability of the conjugal partnership for the debt. The court ruled that the debt did not benefit the conjugal partnership, and thus it was not liable for Ching's surety obligations. Additionally, Ching's act of suretyship was not part of his profession, further exempting the conjugal properties from covering personal obligations.

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Shaleeca Myrah Sali
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7 views2 pages

Ayala Investment Corp v. Ca

The case involves a loan default by Philippine Blooming Mills, with Alfredo Ching acting as a surety, leading to a legal dispute over the liability of the conjugal partnership for the debt. The court ruled that the debt did not benefit the conjugal partnership, and thus it was not liable for Ching's surety obligations. Additionally, Ching's act of suretyship was not part of his profession, further exempting the conjugal properties from covering personal obligations.

Uploaded by

Shaleeca Myrah Sali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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NAME: SALI, Shaleeca Myrah V.

Student No. : 201593621


Subject: Persons and Family Relations

CASE DIGEST IN PFR

268. AYALA INVESTMENT DEVELOPMENT CORP V. CA (2016

TOPIC: PROPERTY RELATIONS

IMPORTANT FACTS:

1. The case arises from a loan of P50,300,000 granted by the Petitioner Ayala Investment
and Development Corporation (AIDC) to Philippine Blooming Mills (PBM), with Alfredo
Ching, PBM’s Executive Vice President, acting as an added surety on December 10,
1980 and March 20, 1981, thereby making himself jointly and severally liable with
PBM.

2. PBM defaulted on the loan, leading the Petitioner AIDC to file a case for a sum of
money against PBM and Alfredo Ching in the Court of First Instance of Rizal (Pasig),
Branch VIII, docketed as Civil Case No. 42228.

3. The court ruled in favor of AIDC, ordering PBM and respondent-husband Alfredo Ching
to jointly and severally pay the debt. AIDC secured a writ of execution and levied three
conjugal properties of the Ching spouses.

4. Respondents filed for an injunction to prevent the auction of their properties, alleging
that petitioners cannot enforce the judgment against the conjugal partnership levied
on the ground that, among others, the subject loan did not redound to the benefit of
the said conjugal partnership.

5. Upon AIDC’s certiorari petition, the Court of Appeals issued a temporary restraining
order that was eventually lifted, leading to an auction sale favoring AIDC.

6. The Ching spouses continued to contest liability, arguing the debt was PBM’s, not for
the conjugal partnership’s benefit. The Regional Trial Court and later the Court of
Appeals ruled in their favor.

7. AIDC petitioned the Supreme Court, asserting errors in considering the liability and
benefits to the conjugal partnership.
ISSUES:

1. Whether the debt incurred by Alfredo Ching as a surety for PBM can be considered for
the benefit of the conjugal partnership under Article 161 of the Civil Code.

RULINGS:

Jurisprudence provides that, if the husband acts as a surety, the conjugal partnership
is not liable unless the debt benefited the partnership.

The Court concluded that the debt contracted by Alfredo Ching in his capacity as surety
for PBM was not for the benefit of the conjugal partnership. The loan benefitted PBM,
and proof that it substantially benefitted the conjugal partnership was lacking. Thus,
the conjugal partnership was not liable for Alfredo Ching’s surety obligations.

2. Whether Alfredo Ching’s act of suretyship falls within his industry or profession,
thereby making the conjugal partnership liable.

RULINGS:

Acting as a surety was not part of Alfredo Ching’s profession or industry. Conjugal
properties should not cover personal obligations for acting as a surety unless direct
benefits to the conjugal partnership from such actions are proven.

The Court upheld that Alfredo Ching’s signing as a surety did not form part of his
industry or profession that supports his family. Consequently, such obligation did not
fall under the liabilities of the conjugal partnership properties.

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