JOSE MODEQUILLO, PETITIONER, VS. HON. AUGUSTO V. BREVA, FRANCISCO SALINAS, FLORIPER ABELLAN-SALINAS, JUANITO CULAN-CULAN AND DEPUTY SHERIFF FERNANDO PLATA, RESPONDENTS.

Modequillo versus Breva

The Case

This is a petition for review on certiorari brought by Jose Modequillo against Judge Augusto Breva, the Salinas spouses, the Culan-Culan spouses, and the deputy sheriff, arising from a final judgment for damages in a vehicular accident case. The question is whether that money judgment may be enforced by levying on a residential house and lot that the petitioner claims is a family home under the Family Code. The case matters because it fixes the moment a family home is deemed constituted under the Family Code, and it settles that the exemption from execution does not reach debts incurred before that Code took effect.

Procedural History

The Court of Appeals, in an action for damages, rendered judgment against Jose Modequillo and Benito Malubay, holding them jointly and severally liable to the Salinas spouses and the Culan-Culan spouses for the death of Audie Salinas and the injuries to Renato Culan-Culan. That judgment became final and executory. The Regional Trial Court of Davao City then issued a writ of execution, and the sheriff levied on two parcels of land registered in the name of Jose Modequillo: a residential lot in Poblacion Malalag and an agricultural land in Dalagbong, Bulacan, Malalag, Davao del Sur.

Modequillo moved to quash and to set aside the levy, invoking the family home exemption. The trial court denied the motion, and denied his motion for reconsideration for lack of merit. He then came to the Supreme Court by petition for review on certiorari, insisting that only a question of law was involved.

Facts

On March 16, 1976, a vehicular accident gave rise to the claims that led to the damages case. On January 29, 1988, the Court of Appeals rendered its judgment, ordering Modequillo and Malubay to pay the Salinas spouses 30,000 pesos as compensation for the death of their son Audie, 10,000 pesos for loss of earnings, 5,000 pesos for burial expenses, and 5,000 pesos for moral damages; to pay the Culan-Culan spouses 5,000 pesos for hospitalization and 5,000 pesos for moral damages; and to pay both sets of plaintiffs 7,000 pesos for attorney's fees and litigation expenses.

The judgment became final, and a writ of execution issued. On July 7, 1988, the sheriff levied on the residential land in Poblacion Malalag, with an area of 600 square meters, and on the agricultural land in Dalagbong, Bulacan, Malalag, Davao del Sur, with an area of 3 hectares. Both were declared in the name of Jose Modequillo.

Modequillo moved to quash the levy. He claimed that the residential land had been the site of the family home since 1969, before the case began, and so was exempt from execution under the Family Code except for the liabilities listed in Article 155. He also claimed that the agricultural land, though declared in his name, remained part of the public land, because the transfer to him from the original possessor, a member of a cultural minority, was never approved by the proper government agency. The trial court denied the motion, and the matter reached the Supreme Court.

Issues

• Whether or not the residential house and lot of the petitioner is a family home that is exempt from execution of the final money judgment in the damages case.
• Whether or not the family home is deemed constituted from the time the family occupied the premises in 1969, or only upon the effectivity of the Family Code.
• Whether or not the levy on the agricultural land was proper.

Applicable Provisions

Article 152 of the Family Code provides:

Article 152. The family home, constituted jointly by the husband and the wife or by an unmarried head of a family, is the dwelling house where they and their family reside, and the land on which it is situated.

This defines the family home that the petitioner invokes.

Article 153 of the Family Code provides:

Article 153. The family home is deemed constituted on a house and lot from the time it is occupied as a family residence. From the time of its constitution and so long as any of its beneficiaries actually resides therein, the family home continues to be such and is exempt from execution, forced sale or attachment except as hereinafter provided and to the extent of the value allowed by law.

This is the provision that creates the exemption by operation of law, without any judicial or extrajudicial constitution.

Article 155 of the Family Code provides:

Article 155. The family home shall be exempt from execution, forced sale or attachment except: (1) For nonpayment of taxes; (2) For debts incurred prior to the constitution of the family home; (3) For debts secured by mortgages on the premises before or after such constitution; and (4) For debts due to laborers, mechanics, architects, builders, materialmen and others who have rendered service or furnished material for the construction of the building.

This lists the exceptions to the exemption, and the second exception is decisive here.

Article 162 of the Family Code provides:

Article 162. The provisions of this Chapter shall also govern existing family residences insofar as said provisions are applicable.

This is the transitional provision on which the petitioner relied for retroactive application.

Ruling

On the first issue, the Court held that the family home is not exempt from execution of the money judgment. The debt arose from the vehicular accident on March 16, 1976, and the money judgment was rendered on January 29, 1988. Both preceded the effectivity of the Family Code on August 3, 1988. The case therefore falls squarely under the second exception in Article 155, for debts incurred prior to the constitution of the family home.

On the second issue, the Court held that the residential house and lot was never constituted as a family home judicially or extrajudicially under the Civil Code. It became a family home by operation of law only under Article 153, and it is deemed constituted as such upon the effectivity of the Family Code on August 3, 1988, not August 4, one year after its publication in the Manila Chronicle on August 4, 1987, since 1988 was a leap year. The Court rejected the claim that it should be considered a family home from 1969. Article 162 does not give Articles 152 and 153 retroactive effect. It simply means that all existing family residences at the time of the effectivity of the Family Code are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code. The Court added that under the Family Code there is no need to constitute the family home judicially or extrajudicially, and that creditors should take the necessary precautions to protect their interest before extending credit to the spouses or head of the family who owns the home.

On the third issue, the Court held that the trial court correctly ruled that the levy to be made by the sheriff on the agricultural land shall be on whatever rights the petitioner may have on the land.

Doctrine

Under the Family Code, a family home is deemed constituted on a house and lot from the time it is occupied as a family residence, without need of judicial or extrajudicial constitution. The exemption from execution, forced sale, or attachment runs from the time of that constitution and lasts so long as any beneficiary actually resides therein.

Article 162 does not give the family home provisions retroactive effect. Existing family residences are considered family homes only upon the effectivity of the Family Code, and are entitled to its benefits only prospectively.

Accordingly, the family home may be levied upon for a debt incurred prior to its constitution, which is the second exception in Article 155. A debt incurred before the Family Code took effect, and the judgment arising from it, both precede the constitution of the family home by operation of law, so the exemption does not protect the home against that debt.

Disposition

The petition was dismissed for lack of merit, with no pronouncement as to costs, so the levy in favor of the judgment creditors stood.

Remember This

The one line to memorize: a family home under the Family Code is deemed constituted only upon the effectivity of that Code, and Article 162 does not make that constitution retroactive. Examiners use this case to test the second exception in Article 155, the debt incurred prior to the constitution of the family home, and the rule that the exemption does not reach obligations that predate the Family Code.