Case Summary (G.R. No. L-41182-3)
Background of the Case
The present case arose from a Complaint for sum of money filed by TJ Lending against several parties, including Spouses Arthur and Lita Ylade. A loan from TJ Lending was obtained by the Spouses Nenita Generosa-Cubing and Egmedio Cubing, which Lita co-signed as a co-maker, making her solidarily liable for the debt. The RTC Branch 173 ruled in favor of TJ Lending but dismissed the claims against Arthur Ylade and other non-signatory defendants. Following the non-payment of the judgment debt, the property owned by Arthur, covered by TCT No. 170488, was levied to satisfy the debt.
Execution Sale and Initial Proceedings
TJ Lending was declared the highest bidder during the execution sale and subsequently obtained a Certificate of Sale and Final Deed of Sale for the property. However, Arthur Ylade filed a Motion to Nullify Levy and Execution Sale, asserting that the property belonged exclusively to him and that the execution sale was therefore void. The RTC denied his motion, citing his default in the underlying Collection Case.
RTC Decision on Title Surrender
In subsequent proceedings initiated by TJ Lending requesting the surrender of the Owner’s Duplicate of TCT No. 170488, RTC Branch 4 ruled in favor of TJ Lending, concluding that the property was presumed to belong to the conjugal partnership because it was acquired during the marriage of Arthur and Lita. The RTC ordered the surrender of the title, prompting Arthur to seek reconsideration of the decision.
Court of Appeals Ruling
The Court of Appeals (CA) reversed the RTC’s decision, citing insufficient evidence to prove that the property was acquired during the marriage. The CA noted the presumption of conjugal property under Article 160 of the Civil Code could not apply without adequate proof of the time of acquisition. It concluded that the execution sale was improper as the debt did not benefit the conjugal partnership.
Petitioners' Arguments
In its petition, TJ Lending contended that the CA erred by disregarding the evidence submitted. TJ Lending argued that the inclusion of Arthur’s marital status in TCT No. 170488 implied the property’s conjugal nature, despite the CA's position that the registration statement alone could not infer that the property was acquired during the marriage.
Supreme Court Ruling
The Supreme Court rejected the petition for lack of merit, affirming the CA's findings. It stressed that the presumption in favor of conjugal property under the Civil Code could only operate upon proving that the property was indeed acquired during the marriage. The Court found that TJ Lending had not esta
...continue readingCase Syllabus (G.R. No. L-41182-3)
Background and Procedural History
- The case involves a Petition for Review on Certiorari under Rule 45 of the Rules of Court submitted by TJ Lending Investors, Inc. (TJ Lending).
- The petition challenges the Court of Appeals’ (CA) Decision dated July 5, 2022, and Resolution dated February 14, 2023, which reversed decisions of the Regional Trial Court (RTC) Branch 4, Manila.
- The RTC Branch 4 had granted the petition for the surrender of Transfer Certificate of Title (TCT) No. 170488 filed by TJ Lending against Spouses Arthur Ylade and Lita Ylade.
- The dispute originated from a Collection Case where TJ Lending sued several parties including Lita Ylade as co-maker.
- A money judgment was obtained against the Spouses Cubing and Lita, but dismissed against Arthur Ylade.
- To satisfy the judgment, the sheriff levied a property registered under Arthur’s name, which resulted in an execution sale won by TJ Lending.
Factual Background
- The Spouses Cubing obtained a loan from TJ Lending, evidenced by a promissory note; Lita Ylade signed a co-maker statement making her solidarily liable.
- Spouses Cubing defaulted; TJ Lending filed the Collection Case to recover the debt.
- RTC Branch 173 held that Lita and the Cubings were jointly liable but dismissed the claims against Arthur Ylade due to lack of evidence.
- The property covered by TCT No. 170488 is in Arthur’s name, described as Arthur married to Lita.
- The property was levied and sold in execution to satisfy the judgment debt against Lita and the Cubings.
Legal Issues Presented
- Whether the subject property is conjugal property of the Spouses Ylade or exclusive property of Arthur.
- Whether the execution sale of the property to satisfy the judgment debt was valid given that Arthur was not a judgment debtor.
- Whether TJ Lending is entitled to the surrender of the Owner’s Duplicate of TCT No. 170488.
Findings and Rationale of RTC Branch 4
- RTC Branch 4 presumed, under Article 160 of the Civil Code, that all property acquired during marriage is conjugal unless proven otherwise.
- Based on the issuance date of TCT No. 170488 during the marriage and Arthur’s testimony, RTC held the property is conjugal.
- Thus, the property could be levied on to satisfy Lita’s debt, and the surrender of the Title to TJ Lending was ordered