Facts:

This case involves BA Finance Corporation as the petitioner and Augusto Yulo and Lily Yulo, doing business as A & L Industries, as respondents. The events leading to this case began on July 1, 1975, when Augusto Yulo secured a loan of P591,003.59 from BA Finance Corporation, evidenced by a promissory note he signed both personally and as a representative of A & L Industries. The loan was purportedly authorized by a special power of attorney from his wife, Lily Yulo, who managed A & L Industries. However, it was revealed that Augusto had abandoned Lily and their children two months prior to the loan agreement. When the loan became due, Augusto failed to repay it, prompting BA Finance Corporation to file an amended complaint on October 7, 1975, against both spouses, alleging fraud in the loan transaction. The petitioner claimed that the Yulos had induced them into the contract by executing a Deed of Assignment concerning a construction contract with A. Soriano Corpo...

Facts:

Loan Transaction and Documentary Evidence

• On July 1, 1975, private respondent Augusto Yulo secured a loan from BA Finance Corporation in the amount of P591,003.59 evidenced by a promissory note.
• Augusto Yulo executed the promissory note in his own name and as the representative of A & L Industries.
• A special power of attorney was presented by respondent Augusto Yulo, allegedly executed by his wife, Lily Yulo, authorizing him to contract the loan and sign the promissory note.
• Evidence of the special power of attorney was later questioned and became central to the claim of forgery.

Personal and Family Circumstances

• Approximately two months before contracting the loan, Augusto Yulo had already abandoned the conjugal home by leaving his wife and children.
• Lily Yulo, managing A & L Industries (registered in her name as a single proprietorship), later denied having executed or authorized the relevant documents, and asserted that her signature in the special power of attorney was forged.

Court Proceedings and Actions Taken by the Parties

• On October 7, 1975, BA Finance Corporation filed an amended complaint against both spouses (Augusto and Lily Yulo) on the basis of the promissory note, supplemented by a request for a writ of attachment.
• The writ of attachment was obtained by alleging that the spouses induced BA Finance Corporation into a contract by executing a Deed of Assignment over a construction contract with A. Soriano Corporation.
• The trial court issued the writ allowing the attachment of properties of A & L Industries.
• Following the attachment, BA Finance Corporation filed a supplementary motion for the examination of the attachment debtor, a motion which was likewise granted.

Evidence on Forgery and Counterclaims Raised

• Lily Yulo, in her answer with counterclaim, argued that:
• Augusto Yulo had abandoned her and the family months before the promissory note was executed.
• The special power of attorney purportedly executed by her was forged, as she never authorized Augusto Yulo to transact business for A & L Industries.
• She never received any proceeds from the said loan.
• At trial, the testimony of Notary Public Atty. Crispin Ordona admitted that the documents in question (Exhibits B and B-1) were presented for ratification already signed by the purported parties, without their personal appearance before him.
• The notary’s inability to affirm the voluntary acknowledgment of the signature, along with his failure to clearly identify the signatures, bolstered the claim that Lily Yulo’s signature was not genuine.

Trial Court and Appellate Decisions

• The trial court dismissed the petitioner’s complaint against Lily Yulo and A & L Industries; it ordered BA Finance Corporation to pay Lily Yulo damages amounting to:
• P660,000.00 as actual damages;
• P500,000.00 representing unrealized profits;
• P300,000.00 as exemplary damages;
• P30,000.00 as attorney’s fees;
• Additionally, BA Finance Corporation was directed to shoulder the costs.
• On appeal, the Court of Appeals affirmed most findings but reduced:
• Exemplary damages from P300,000.00 to P150,000.00.
• Attorney’s fees from P30,000.00 to P20,000.00.
• The appellate court clearly ruled in favor of the authenticity of the comparisons used in the handwriting analysis, noting twelve glaring differences between the alleged forged signature and the genuine specimens obtained from various government documents.

Additional Factual Determinations

• Evidence demonstrated that A & L Industries was registered solely under Lily Yulo’s name as a single proprietorship, supported by:
• The Certificate of Registration from the Bureau of Commerce.
• The Mayor’s Permit issued by the Caloocan City Mayor’s Office.
• The petitioner’s reliance on the special power of attorney and the alleged Deed of Assignment was scrutinized, particularly since no counter-evidence or cross-examination of the handwriting expert was pursued by the petitioner.
• The petitioner's subsequent actions, including pursuing additional attachment despite prior motions to suspend proceedings, contributed to the findings on the conduct of the parties.

Issue:

Authenticity of the Special Power of Attorney

• Whether the signatures of respondent Lily Yulo in the special power of attorney (Exhibits B and B-1) were genuine or forged.
• Whether the evidentiary standards for handwriting comparison – including reliance on specimen signatures from government documents – were correctly applied.

Liability of A & L Industries as Conjugal Property

• Whether A & L Industries, although a single proprietorship registered solely under Lily Yulo’s name, forms part of the conjugal partnership.
• Whether the loan contracted by Augusto Yulo can be enforced against the assets of A & L Industries, under the premise that obligations incurred during the marriage belong to the conjugal partnership.
• Whether the obligation contracted by Augusto Yulo, given his abandonment of the family, redounded to the benefit of the conjugal partnership.

Nature and Extent of Awarded Damages and Remedies

• Whether the attachment of the properties was wrongful and executed in bad faith, warranting more than just actual damages (i.e., exemplary damages and attorney’s fees).
• Whether, in case of a wrongful attachment, the remedy should include the return of attached properties rather than a monetary equivalent based on their value.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

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