Spouses Wong & Chan vs. Henson & Intermediate Appellate Court
**Facts:**
– Romarico Henson and Katrina Pineda were married on January 6, 1964, and had been largely living separately.
– On January 6, 1971, Romarico bought a parcel of land in Angeles City.
– June 1972: Katrina entered into an agreement with Anita Chan in Hong Kong for the consignment of jewelry valued at HK$199,895.
– Katrina failed to return the jewelry and issued a dishonored check of P55,000 to Anita Chan.
– Katrina was charged with estafa but the court ruled the liability was civil, not criminal.
– Spouses Wong and Chan filed a civil action for collection against the Henons. Only Katrina appeared and was represented in court by Atty. Albino.
– The court ruled in favor of Wong, ordering the Henons to pay the amount due with interest, attorney’s fees, and costs. A writ of execution was issued.
– Four lots in Angeles City registered in Romarico’s name were levied and sold at auction. The auction sale was contested later.
– Romarico filed an action to annul the decision, writ of execution, and public auction sale, claiming he was not represented in court and the properties were his exclusive capital properties.
– Lower court ruled in favor of Romarico, declaring the decision void as it pertained to him.
– Defendants appealed, and the Intermediate Appellate Court upheld the lower court’s decision.
– Spouses Wong and Chan filed a petition for review.
**Issues:**
1. Whether the execution of a decision in an action for collection of a sum of money can be nullified due to the real properties being the exclusive properties of the husband.
2. Whether Romarico Henson was given his day in court in the previous case.
3. Whether the conjugal properties could be levied to satisfy Katrina’s obligation.
4. Whether the buyers at the public auction could be prejudiced or should be protected as innocent purchasers for value.
**Court’s Decision:**
1. **Representation and Due Process:**
– The Supreme Court affirmed that Romarico was not given his day in court. He was not properly represented by counsel in Civil Case No. 2224 and was never personally served a copy of the decision. Therefore, the prior decision was void concerning Romarico.
2. **Conjugal Property:**
– Although the properties were presumed to be conjugal as they were acquired during the marriage, Katrina’s obligation could not be satisfied by these properties. The Supreme Court ruled that conjugal properties could not answer for Katrina’s personal obligations as Romarico’s consent, or an authority from the court, was not provided.
3. **Auction Nullity:**
– The auction sale of the properties was nullified, as the judgment debtor’s proprietary rights were not properly levied. Execution buyers Santos and Joson could not acquire more interest than Katrina’s inchoate rights. The petitioners (Spouses Wong and Chan) must return the purchase prices to the auction buyers.
4. **Restitution:**
– While respecting the auction and foreclosure process, Santos’s redemption should stand unless Romarico redeems the property per law. The case instructions included that the Spouses Wong and Chan should return the auction prices to Santos and Joson unless they pursue the case solely against Katrina personally.
**Doctrine:**
– Notice and due process are essential elements for a valid decision and its execution. The lack of proper notification and representation renders a decision void as to an affected party.
– The conjugal partnership of gains cannot be bound by the personal obligations of one spouse without the consent or authority of the other spouse.
– Execution purchasers obtain only the interest held by the judgment debtor at the time of the sale; they do not acquire a better title than the debtor’s.
**Class Notes:**
– **Due Process:** The importance of proper notification and representation in court proceedings (Sec. 4, Rule 3 of the Rules of Court).
– **Conjugal Partnership:** The distinction of conjugal properties and personal obligations of spouses (Art. 160, Civil Code).
– **Execution Sales:** Limits of titles acquired through execution sales (Laureano vs. Stevenson, Pacheco vs. Court of Appeals).
**Historical Background:**
– This case is set in the context of the Philippine judicial system’s adherence to due process and property laws governing the conjugal partnership during the pre-Family Code era.
– Reflects the legal practices around managing assets within marriage and the repercussions of separations, particularly focusing on cases of financial disputes and powers of execution sales.
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