LA CORPORACION DE PADRES AGUSTINOS DEL SANTISIMO ROSARIO AND EDWIN H. WARNER, APPLICANTS; FIDELITY AND SURETY CO. OF THE PHILIPPINE ISLANDS, PETITIONER AND APPELLEE, VS. ANGEL A…

In civil case No. 33923, Court of First Instance of Manila, entitled “Fidelity & Surety Company of the Philippine Islands vs.
Romurico Agcaoili and Angel A. Ansaldo”, judgment was rendered against
the defendants to pay, jointly and severally, to the complainant the
sum of P19,065.17 with interest at 10 per cent per annum from June 17,
1928 until paid, plus P1,000 for attorney’s fees, plus the further sum
of P1,608 as premium, and costs. To satisfy said judgment, the Fidelity
& Surety Company of the Philippine Islands secured an order from
the court below for the levy and attachment of real properties of Angel
A. Ansaldo and described in transfer certificates of title Nos. 10669,
10670 and 7976. On December 11, 1933, these properties were awarded at
public auction to the Fidelity and Surety Company of the Philippine
Islands as the highest bidder for the sum of P12,300. Angel Ansaldo did
not redeem the properties within the legal period, and the provincial
sheriff of Rizal, on January 3, 1935, executed a final deed of sale in
favor of the creditor-vendee. Subsequently, on February 11, 1935, the
Fidelity and Surety Company of the Philippine Islands filed a petition
for the issuance in its favor, upon payment of the corresponding fees,
of new certificates of title covering the properties sold and
adjudicated to it. This petition was filed under the provisions of
section 78 of Act No. 496. The motion was granted by the lower court in
its order of February 19, 1935.

Sometime later, or on March
8, 1935, Angel A. Ansaldo, in his own behalf and in behalf of the
conjugal partnership formed between him and his wife, Margarita Quintos
de Ansaldo, filed a motion with the lower court to reconsider its order
of February 19, 1935, on the grounds that the conjugal partnership
between him and his wife since 1914 was the owner of the real
properties described in transfer certificates of title Nos. 10669,
10670 and 7976, said properties having been acquired during their
marriage with the paraphernal properties of the wife or with the fruits
thereof, a fact said to be known to the Fidelity and Surety Company of
the Philippine Islands; and that the defendant Angel A. Ansaldo was not
able to appear at the hearing of the petition of the Fidelity and
Surety Company of the Philippine Islands set for February 16, 1935,
because he received notice thereof only after the hearing, or on
February 18, 1935. The lower court accepted the reasons, and
accordingly vacated its order of February 19, 193d and reset for
hearing the original petition of February 11, 1935.

On March
20, 1935, Angel A. Ansaldo submitted his written opposition to the
petition of the Fidelity and Surety Company of the Philippine Islands,
alleging, among other things, that the provincial sheriff of Rizal had
not sold to the Fidelity and Surety Company of the Philippine Islands
the absolute dominium over the properties in question but
only the interest or rights which he had or might have in them, and
that said properties belonged to the conjugal partnership between him
and his wife. On June 22, 1935, Attorney Mariano Melendres, now
representing Angel A. Ansaldo and Margarita Quintos, presented a
supplementary opposition, adding that the obligation contracted by
Angel A. Ansaldo with the Fidelity and Surety Company of the Philippine
Islands was a personal one and did not redound to the benefit of the
conjugal partnership. A subsequent petition by the oppositors was filed
on July 2, 1935, praying for the cancellation of transfer certificates
of title Nos. 27525-527 issued in favor of the petitioner and the
corresponding restoration of oppositor’s certificates of title.

On July 15, 1935, the petitioner Fidelity and Surety Company of the
Philippine Islands asked the court to strike out from the records the
oppositor’s motion for reconsideration of March 8, 1935, the original
opposition of March 30, 1935 and the supplementary opposition of June
22, 1935 because of the alleged irrelevancy of the issues therein
raised. Hearing was however continued upon motion of the oppositors and
set for August 10, 1935. At the hearing, the oppositors offered to
present evidence, documentary and testimonial, to substantiate their
allegations but, upon the objection of the petitioner, the evidence was
ruled out and rejected as immaterial and irrelevant. Finally, on August
31, 1935, the lower court rendered its decision the dispositive part of
which is of the following tenor:

“Por
tanto, el Juzgado deniega la mocion de reconsideracion, de fecha 8 de
marzo de 1935, presentada por los esposos Angel A. Ansaldo y Margarita
Quintos de Ansaldo; deniega la mocion suplementaria de ambos esposos,
de fecha 22 de junio de 1935; deniega tambien la peticion de los mismos
de fecha 2 de Julio de 1935, y, como se pide por la Fidelity &
Surety Co. of the Philippine Islands en su peticion de fecha 11 de
febrero de 1935, se ordena al Registrador de Titulos de la Provincia de
Rizal para que expida nuevos certificados de titulo a favor de la
Fidelity & Surety Co. of the Philippine Islands, previo pago de los
derechos correspondientes, en lugar de los certificados de
Transferencia de Titulo Nos. 10669, 10670 y 7976 a nombre de Angel A.
Ansaldo.”

To this decision oppositors
excepted and moved for a new trial. The motion for new trial having
been denied on September 16, 1935, the oppositors gave notice of their
intention to appeal on September 23, 1935, and submitted their bill of
exceptions, which was later amended. On November 4, 1935, the lower
court approved and certified to this court the oppositors’ bill of
exceptions.

The appellant assigns 17 errors in a
comprehensive and well-written brief. Considering, however, the nature
of the controversy and the legal corollaries involved, only the errors
which have reference to the interpretation of article 1386 of the Civil
Code in relation to the procedural issue raised in appellee’s brief as
to the applicability of section 78 of the Land Registration Act, need
be considered.

Article 1386 of the Civil Code provides that
the personal obligations of the husband may not be paid out of the
fruits of the paraphernal property, unless it be proved that such
obligations redounded to the benefit of the family. If, as contended by
the appellant, the properties levied upon in Civil Case No. 33923 of
the Court of First Instance of Manila, entitled “Fidelity & Surety
Company of the Philippine Islands vs. Romarico Agcaoili and
Angel A. Ansaldo” were acquired with the fruits of the paraphernal
properties belonging to Margarita Quintos, said properties, although
conjugal (art. 1385, par. 1 and art. 1408, Civil Code; Mirasol vs.
Lim, 59 Phil., 701, 709) are not liable for the personal obligations of
the husband, unless said obligations redounded to the benefit of the
family. Paragraph 1 of article 1408 of the Civil Code makes all debts
and obligations contracted during the, marriage by the husband
chargeable against the conjugal partnership, as a general rule. Article
1386, however, lays down an exception to the general rule, that is to
say, although the fruits of the paraphernal property of the wife are
conjugal, they do not respond for the personal obligations of the
latter unless said obligations have redounded to the benefit of the
family. Manresa commenting on article 1386 (Vol. 9, 2nd ed., p. 507),
says: “Resulta de aqui que el marido es el administrador de la
sociedad conyugal, que la obliga con sus actos; y por ello los bienes
gananciales en general responden, con arreglo al articulo 1408, de
todas las deudas y obligaciones contraidas por el marido durante el
matrimonio, presumiendose hechas en interes de la sociedad, hasta el
punto de que, en virtud de lo dispuesto en el articulo 1403, sus actos
o contratos sobre los mismos son desde luego validos, a no probarse que
se han celebrado en contravencion al Codigo o en fraude de la mujer. Y
sin embargo, si los gananciales de que se trata son los frutos o
productos de los bienes parafernales, en caso de duda sobre su
verdadera inversion, no es la mujer quien ha de probar el fraude o la
ilegalidad del acto; es el marido o el acreedor quien tiene que
justificar, que las obligaciones contraidas redundaron en beneficio de
la familia. * * * El espiritu del precepto es que el marido no puede
aprovecharse en interes propio o para atenciones privativas o
personales suyas, de los frutos de los bienes parafernales; que estos
se destinen a las verdaderas necesidades y cargas de la sociedad
conyugal, y, por tanto, se empleen, como deben, en beneficio de la
familia.” (Vide, also, Mucius Scaevola Codigo Civil Concordado y Comentado, Vol. XXII, pp. 242, 243.)

The fact, however, that the oppositor-appellant Angel A. Ansaldo was
entitled as a matter of right to prove the origin of the properties
levied upon does not mean that the issue could be ventilated in the
summary proceeding provided in section 78 of Act No. 496. Undoubtedly,
the motion of the fidelity & Surety Company of the Philippine
Islands for the cancellation of certificates of title Nos. 10669, 10670
and 7976 and for the issuance of new certificates in lieu thereof was
properly filed and entitled in the original case in which the decree of
registration was entered (Cavan vs. Wislizenus, 48 Phil., 632).
Where, however, as in the present case, the oppositor has filed his
opposition to the motion on the ground that the levy on the properties
by the petitioner and the consequent cancellation of the certificates
were illegal because the properties were conjugal, the same having been
acquired with the fruits of the paraphernal properties of the wife and
that therefore said conjugal properties are not liable unless these had
redounded to the benefit of the family under the provisions of article
1386 of the Civil Code, this question cannot be raised and determined
in the registration case as an incident of the motion to cancel and
obtain the issuance of new certificates of title. The proviso contained
in the last part of section 78 of the Land Registration Act No. 496
“that at any time prior to the entry of a new certificate the
registered owner may pursue all his lawful remedies to impeach or annul
proceedings under executions or to enforce liens of any description”,
should not be interpreted as authorizing the determination of a
litigation of this nature in a summary proceeding contemplated in
section 78 of the Land Registration Act.

We are of the
opinion, and so hold, that the oppositor-appellant should be afforded
an opportunity to prove his claim regarding the origin of the
properties involved in this controversy with a view to proving his
legal contention in the premises. For this purpose, he is given 30 days
from the date this decision becomes final within which to institute the
appropriate action in a court of competent jurisdiction. In the
meantime and pending the final determination of the case instituted by
him, the order of the lower court of August 31, 1935, directing the
issuance of new certificates of title in favor of the Fidelity and
Surety Company of the Philippine Islands in lieu of transfer
certificates of title Nos. 10669, 10670 and 7976, shall be suspended.
The order appealed from is thus modified without pronouncement
regarding costs. So ordered.

Avanceña, C. J., Villa-Real, Abad Santos, Imperial, and Diaz, JJ., concur.