SC explains law on family home in 2019 case

FIRST DIVISION [ G.R. No. 236001, March 18, 2019 ] FEE MITSUI MARINE INSURANCE CO., INC., NOW KNOWN AS BPI/MS INSURANCE CORPORATION V. BENJAMIN MANALASTAS, DOING BUSINESS UNDER THE NAME AND STYLE BMT TRUCKING SERVICES.

This appeal by certiorari[1] seeks to reverse and set aside the May 31, 2017 Decision[2] and December 7, 2017 Resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 133932, which set aside and nullified the February 8, 2013[4] and November 28, 2013[5] Orders of the Regional Trial Court of Makati City, Branch 66 (RTC). The RTC denied respondent Benjamin Manalastas' Motion to Quash/Nullify Levy on the Properties insofar as the levy on the property covered by Transfer Certificate of Title (TCT) No. T-180615 is concerned.

The Antecedents

SONY Philippines, Inc. (SONY) engaged the services of Torres-Madrid Brokerage, Inc. (TMBI) to facilitate, process, withdraw and deliver Sony Hi-Fi Component Systems and other products to its warehouse in BiƱan, Laguna. The component systems and other products were unloaded at the South Harbor, Manila. TMBI then subcontracted to Benjamin Manalastas (respondent), doing business under the name and style BMT Trucking Services (BMT), the delivery of the SONY shipment.[6]

On October 7, 2000, respondent's truck went to South Harbor to load the SONY shipment for delivery to its warehouse but since October 8, 2000 was a Sunday, and rest day of his employees, delivery was deferred to October 9, 2000.[7]

On October 9, 2000, respondent's six-wheeler truck with Plate No. NSF-391, driven by Rufo Reynaldo Lapesura (Lapesura), left respondent's garage at about 5:00 a.m. bound for SONY'S warehouse in Bifian, Laguna. At about 12:00 noon of the same day, the truck was found abandoned along Diversion Road, Filinvest, Alabang, Muntinlupa City, and Lapesura was nowhere to be found. TMBI and FEB Mitsui Marine Insurance Co, Inc. (MITSUI), were eventually informed of the incident.[8] TMBI reported the matter to the National Bureau of Investigation (NBI) and SONY.

Since the cargo was insured against all risks with MITSUI, SONY filed an insurance claim for the loss of the shipment. MITSUI paid SONY the amount of P7,293,386.23 but MITSUI subsequently demanded reimbursement from TMBI the amount it paid to SONY for the insurance claim. TMBI, however, refused to heed MITSUI's demand.[9]

On November 6, 2001, MITSUI initiated a subrogatory action against TMBI ascribing fault and negligence against the latter for the loss suffered by SONY. MITSUI sought payment of actual damages in the amount of P7,293,386.23 plus legal interest reckoned from the time of judicial demand until its full satisfaction. MITSUI likewise prayed for attorney's fees and cost of suit.[10]

In its Answer[11] dated December 27, 2001, TMBI averred that MITSUI had no cause of action against it. TMBI instead imputed fault to BMT since the shipment was lost while under BMT's care and custody. Further, TMBI claimed that Lapesura, respondent's driver, was the prime suspect in the theft of the shipment.[12]

On even date, TMBI filed its Third-Party Complaint against respondent praying that in the event that judgment be rendered against TMBI in the subrogatory action, respondent be ordered to pay MITSUI the amount adjudged plus attorney's fees in the amount of P50,000.00.[13]

On July 10, 2002, respondent filed his Answer to the third-party complaint averring that he exercised reasonable diligence to avoid the theft; and that the accusation against Lapesura had not been proven. He, thus, prayed for the dismissal of the third-party complaint. As counterclaim, respondent asked that he be awarded moral and exemplary damages as well as attorney's fees.[14]

RTC Ruling

In its August 5, 2008 Decision,[15] the RTC ruled in favor of MITSUI. It ordered TMBI and respondent to, jointly and severally, pay MITSUI the amount of P7,293,386.23 representing actual damages, plus legal interest reckoned from the time of the filing of the complaint until full payment, attorney's fees equivalent to twenty five percent (25%) of the amount claimed, and costs of suit. The court a quo dismissed respondent's counterclaim.[16]

The RTC found that respondent was grossly negligent for his failure to assign a guard in order to secure the cargo and to monitor the delivery of the subject shipment. The negligence of respondent and TMBI was the proximate cause of the loss of the shipment.[17] Further, the RTC held that when the goods shipped are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe due diligence, and there need not be an express finding of negligence to hold it liable.[18]

On appeal, the CA denied the petition in a Decision dated October 14, 2010. It affirmed with modification the decision of the RTC as to the award of attorney's fees, fixing the amount at Two Hundred Thousand Pesos (P200,000.00).[19]

Respondent filed a motion for reconsideration but it was denied in a Resolution dated January 14, 2011.[20]

On February 10, 2011, the CA issued a partial entry of judgment stating that the October 14, 2010 Decision had attained finality insofar as respondent was concerned.[21]

On May 2, 2011, MITSUI moved for execution of the decision of the RTC, as modified by the CA. On August 2, 2011, the RTC granted the motion and directed its Branch Clerk of Court to issue the corresponding writ of execution.[22]

On August 16, 2011, respondent filed a Motion to Reconsider and/or Suspend Issuance of Writ of Execution contending that this Court in G.R. No. 194121,[23] issued a Resolution on June 13, 2011 directing it to submit its comment on the petition for review. Respondent claimed that this Court's directive constituted a supervening development in the case and was sufficient justification for the suspension of the issuance of a writ of execution.[24]

On December 19, 2011, respondent filed a Motion to Lift the Levy on Attachment by the Executive Sheriff on Real Properties Registered in the name of Benjamin Manalastas/BMT Trucking. He opposed the simultaneous levy on both his personal and real properties contending that under Section 9(b),[25] Rule 39 of the 1997 Rules of Civil Procedure, the levy must be made first on personal properties and only when the personal properties prove to be insufficient shall levy on real properties be made.

Subsequently, on January 10, 2012, respondent filed a Motion to Quash/Nullify Levy on Properties asserting that the property covered by TCT No. T-180615, which was one of the properties levied, was his family home. Respondent claimed that he, along with his common-law spouse and seven children, were occupying the said property. Also, respondent maintained that even if the said property was properly levied, the same forms part of the conjugal property of respondent and his legal wife who died on July 2, 2003. Hence, respondent's legitimate children have a claim on the property.[26]

On February 8, 2013, the RTC denied respondent's Motion to Lift Levy and Motion to Quash/Nullify Levy.[27] The RTC ratiocinated:
The Motion to Quash/Nullify Levy on Properties dated January 9, 2012 is also without merit. There is no showing that the value of the property covered by TCT No. T-180615 with an area of 10020 square meters and its improvements do not exceed P300,000.00. Moreover, TCT No. T-180615 shows that the Third-party defendant is single and it does not have any annotation of any other claims of any other person or heir. The levy made by the sheriff being the only annotation on TCT No. T-180615 is preferred pursuant to the Property Registration Decree and existing jurisprudence. Thus, the public-auction of the property covered by TCT No. T-180615 and its improvements having been levied by the sheriff is hereby authorized in accordance with the procedure set by law.

The Third-party claim filed by Augustin Cunanan on the property covered by TCT No. 218147 is duly noted. However, the Court cannot grant the prayer for the Third-party claimant to discharge the sheriffs levy on said property because it is and remains to be registered in the name of judgment-obligee Benjamin P. Manalastas. No other annotations appear on its TCT except the levy of the sheriff. Under the Property Registration Decree and existing jurisprudence, the levy of writ of execution duly annotated on the TCT is superior than an unregistered sale. The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned. This is without prejudice to the right of the Third-party claimant to vindicate his claim to the property in a separate action.[28]
Respondent moved for reconsideration but it was denied by the RTC in its Order[29] dated November 28, 2013.

Aggrieved, respondent filed a petition for certiorari before the CA.

CA Ruling

In its May 31, 2017 Decision,[30] the CA nullified and set aside the February 8, 2013 and November 28, 2013 Orders of the RTC insofar as the levy on the property covered by TCT No. T-180615 was concerned. It held that the property covered by TCT No. T-180615 was a family home exempt from execution.[31] Respondent was still residing in the property together with his common-law spouse and seven (7) illegitimate children, two (2) of whom were still minors. The CA averred that such assertion already establishes that the property sought to be executed was indeed respondent's family home and should be exempt from execution.[32] The dispositive portion of the decision reads:
WHEREFORE, the petition is GRANTED. The Orders dated February 8, 2013 and November 28, 2013 of Branch 66, Regional Trial Court of Makati City, denying petitioner's "Motion to Quash/Nullify Levy on Properties" are NULLIFIED and SET ASIDE insofar as the levy on the property covered by TCT No. [T-] 180615 is concerned. The levy on the property covered by TCT No. [T-] 180615 to satisfy the execution of the August 5, 2008 Decision of the court a quo, as modified by the October 14, 2010 Decision of the Second Division of this Court, is ordered LIFTED.

SO ORDERED.[33]
Hence, this petition.[34]

Issue
WHETHER THE CA ERRED IN RULING THAT THE SUBJECT PROPERTY IS A FAMILY HOME EXEMPT FROM EXECUTION.
Petitioner argues that the CA erred in rendering the decision as it was merely based on respondent's assertion that the property covered by TCT No. T-180615 is a family home.[35] It avers that the documents presented by respondent to support his claim reveals that he was not actually residing therein.[36] The respondent, being the registered owner of the subject property, must prove that he is actually residing in the property for it to be considered a family home.[37]

Petitioner claims that respondent could not legally constitute two family homes simultaneously; one with his legitimate wife and another with his illegitimate family because it would destroy the very purpose and definition of a family home. And even if respondent was able to constitute the subject property as a family home, petitioner maintains that respondent should prove that the same was constituted before he incurred his debt or obligation which is the subject of the execution.[38]

The Court's Ruling

The petition is meritorious.

At the outset, it must be emphasized that under Rule 45 of the Rules of Court, jurisdiction is generally limited to the review of errors of law committed by the appellate court. This Court is not obliged to review all over again the evidence which the parties adduced in the court a quo. Nonetheless, the general rule admits of exceptions, such as where the factual findings of the CA and the trial court are conflicting or contradictory,[39] as in this case. Thus, when there are conflicting findings of fact by the CA on one hand and by the trial court on the other, this Court may give due course to petitions raising factual issues by way of exception and only in the presence of extremely meritorious circumstances.[40]

This Court agrees with the RTC that the subject property is not a family home exempt from execution.

The family home is a real right which is gratuitous, inalienable and free from attachment, constituted over the dwelling place and the land on which it is situated. It confers upon a particular family the right to enjoy such property, which must remain with the person constituting it and his heirs. It cannot be seized by creditors except in certain special cases.[41]

In order for the property to be considered as a family home, the requisites must be established: (a) it must be the house where he and his family actually reside and the lot on which it is situated; (b) the family home must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latter's consent, or on the property of the unmarried head of the family; and (c) the actual value of the family home shall not exceed, at the time of its constitution, the amount of P300,000.00 in urban areas and P200,000.00 in rural areas.[42]

It must be emphasized that the law requires for purposes of determining a family home that the residence must be actual. It explicitly mandates that the occupancy of the family home, either by the owner or by any of its beneficiaries, must be actual. This occupancy must be real, or actually existing, as opposed to something merely possible, or that which is merely presumptive or constructive.[43]

Here, respondent failed to adduce substantial evidence to support his claim that the levied property is a family home exempt from execution. On the contrary, the documents submitted by respondent reveals that the property located at No. 1917 Balintawak St., Tondo Manila, covered by TCT No. T-180615 is not his actual family residence. As correctly pointed out by petitioner, the Barangay Certification,[44] and Identification Card[45] issued by the Office for Senior Citizens Affairs, which respondent appended in his petition, indicates that he is a resident of No. 1169-A Balintawak Ext., Tayuman, Tondo. On the other hand, the Tax Declaration[46] presented by respondent reveals that his address is at No. 159 Kawit St., Tondo, Manila. These documents belie respondent's contention that he actually resides in the subject property, covered by TCT No. T-180615, located at No. 1917 Balintawak St., Tondo, Manila, which he claims to be the family home.

To note further, respondent even disclosed that he was married to a certain Teodora Enriquez Manalastas (Teodora) with whom he has four legitimate children. His wife died on July 2, 2003. The Death Certificate[47] of Teodora indicates that she was a resident of No. 159 Kawit St., Balut, Tondo Manila. It then follows that respondent also resides in the said address, with his wife and legitimate children. The same is consistent with the information stated in respondent's Tax Declaration indicating the same address.

Consequently, prior to July 2, 2003, respondent cannot validly assert that he has established another family home with his illegitimate family, particularly with his common-law wife Rose Marlene G. Rosal (Rose)[48] and seven illegitimate children. Respondent's family home remains to be at No. 159 Kawit St., Balut, Tondo, Manila, his residence with his legitimate wife and family. He cannot establish two family homes at or about the same time for two different families. The same would be contrary to the very purpose of a family home. A family home, being the dwelling place of a person and his family, is a sacred symbol of family love and repository of cherished memories that last during one's lifetime.[49] It is the sanctuary of that union which the law declares and protects as a sacred institution; and likewise a shelter for the fruits of that union. It is where both can seek refuge and strengthen the tie that binds them together and which ultimately forms the moral fabric of our nation.[50] The protection of the family home is just as necessary in the preservation of the family as a basic social institution and since no custom, practice or agreement destructive of the family shall be recognized or given effect.[51]

Moreover, Article 152 of the Family Code provides that the family home must be constituted jointly by the husband and wife or by an unmarried head of a family.[52] It must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latter's consent, or on the property of the unmarried head of the family. As ruled by the Court in Cabang v. Basay,[53] to wit:
There can be no question that a family home is generally exempt from execution, provided it was duly constituted as such. It is likewise a given that the family home must be constituted on property owned by the persons constituting it. Indeed as pointed out in Kelley, Jr. v. Planters Products, Inc.[54] "[T]he family home must be part of the properties of the absolute community or the conjugal partnership, or of the exclusive properties of either spouse with the latter's consent, or on the property of the unmarried head of the family." In other words:
The family home must be established on the properties of (a) the absolute community, or (b) the conjugal partnership, or (c) the exclusive property of either spouse with the consent of the other. It cannot be established on property held in co-ownership with third persons. However, it can be established partly on community property, or conjugal property and partly on the exclusive property of either spouse with the consent of the latter.

If constituted by an unmarried head of a family, where there is no communal or conjugal property existing, it can be constituted only on his or her own property.[55] (emphases supplied; citations omitted)
To reiterate, respondent was married to Teodora. Their marriage was still subsisting prior to Teodora's death on July 2, 2003. Before said date, it cannot be said that respondent and Rose have a common-law relationship. Verily, the constitution of the subject property as a family home by the respondent and Rose is contrary to the mandate of the Family Code. The right and privilege of establishing a family home is for the married couple. Hence, respondent can only have one family home at any given time.

Even assuming that the subject property was indeed constituted as a family home, the same can only be treated as such from the time respondent's legal wife died on July 2, 2003. Considering, however, that the obligation was incurred on October 9, 2000, prior to the constitution of the family home, the subject property can still be levied.The nature and character of the property that debtors may claim to be exempt, are determined by the exemption statute. The exemption is limited to the particular kind of property or the specific articles prescribed by the statute; the exemption cannot exceed the statutory limit.[56] Articles 155 and 160 of the Family Code specify the exceptions mentioned in Article 153, viz.:
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.
ARTICLE 160. When a creditor whose claims is not among those mentioned in Article 155 obtains a judgment in his favor, and he has reasonable grounds to believe that the family home is actually worth more than the maximum amount fixed in Article 157, he may apply to the court which rendered the judgment for an order directing the sale of the property under execution. The court shall so order if it finds that the actual value of the family home exceeds the maximum amount allowed by law as of the time of its constitution. If the increased actual value exceeds the maximum allowed in Article 157 and results from subsequent voluntary improvements introduced by the person or persons constituting the family home, by the owner or owners of the property, or by any of the beneficiaries, the same rule and procedure shall apply.

At the execution sale, no bid below the value allowed for a family home shall be considered. The proceeds shall be applied first to the amount mentioned in Article 157, and then to the liabilities under the judgment and the costs. The excess, if any, shall be delivered to the judgment debtor.[57] (emphasis supplied)
In this case, the debts were incurred prior to the purported constitution of the family home. The debt or liability which was the basis of the judgment arose or was incurred[58] at the time the cargoes of SONY were lost on October 9, 2000. Clearly, it is one of those instances enumerated in the aforecited provisions of the Family Code when the family home may be levied and sold on execution.[59]

Respondent's debt was incurred when he lost the cargoes of SONY and not when the judgment was rendered against him. The same is consistent with the ruling in People v. Chaves,[60]viz.:
Appellant takes the position that the indemnity due to the complainant became a "debt" within the purview of this Article only from the date of the judgment ordering indemnification, years after the family home in question was established.

We see no merit in the appeal. The word "debt," as used in subdivision (2) of Article 243, "is not qualified, and must, therefore, be taken in its generic sense" (Montoya v. Ignacio, 54 Off. Gaz., 978-979) i.e., of "obligations" in general. The duty of Chaves to reimburse the amount of the veteran's benefits improperly retained by him certainly arose and came into existence from date of his misappropriation (January, 1948), and the judgment of 1961 merely established the fact of the misappropriation beyond controversy and reasonable doubt. The judgment sentencing Chaves to indemnify was not the source of his duty to return, any more than a judgment on a promissory note would be the origin of the promisor's duty to pay.

That a judgment is not necessary to clothe a preexisting debt with the privileged character of being enforceable against the family home extrajudicially established at a later date is apparent by comparison with Article 247 of the Civil Code.[61]

Likewise, in Montoya v. Ignacio,[62] this Court held:

It is also contended that even supposing the judgment in question to be also a debt, still it is not a debt incurred before the family home was, in the present case, recorded in the Registry of Property, because the said judgment, though promulgated on December 29, 1953, did not become final until it was entered on February 4, 1954, about half a month after the said family home was recorded in the Registry of Property on January 19. Again, we find no merit in this contention. To exempt from execution a family home that is constituted only after a money judgment has been rendered against its owner is to sanction evasions of execution and defeat the clear intent of subdivision (2) of Article 243. Moreover, note must be taken of the fact that in the present case the judgment debtor's liability for damages arose or was incurred when he breached his contract of transportation by not carrying a passenger safely to destination. That was in January, 1949, or several years before the judgment.[63] (emphasis supplied)
Respondent's liability, which was the basis of the judgment, arose long before the levied property was constituted as a family home. Under the circumstances, it is clear that the liability incurred by respondent falls under one of the instances when a family home may be the subject of execution, forced sale, or attachment, as provided for by Art. 155 of the Family Code, particularly, to answer for debts incurred prior to the constitution of the family home.[64]

WHEREFORE, the petition is GRANTED. The May 31, 2017 Decision and December 7, 2017 Resolution of the Court of Appeals in CA-G.R. SP No. 133932 are REVERSED and SET ASIDE. The February 8, 2013 and November 28, 2013 Orders of the Regional Trial Court of Makati City, Branch 66 are REINSTATED.

SO ORDERED. Bersamin, C.J., on official leave; Del Castillo, J., designated as Acting Chairperson of the First Division per Special Order No. 2645 dated March 15, 2019.


[1] Rollo, pp. 9-26.

[2] Id. at 33-45; penned by Associate Justice Maria Elisa Sempio Diy, with Associate Justices Mariflor P. Punzalan Castillo and Florito S. Macalino, concurring.

[3] Id. at 48-51; penned by Associate Justice Maria Elisa Sempio Diy, with Associate Justices Mariflor P. Punzalan Castillo and Rafael Antonio M. Santos, concurring.

[4] Id. at 75-76.

[5] Id. at 77-78.

[6] Id. at 34.

[7] Id.

[8] Id.

[9] Id. at 34-35.

[10] Id. at 35.

[11] Id. at 83-88.

[12] Id. at 35.

[13] Id.

[14] Id.

[15] Id. at 102-111; penned by Presiding Judge Joselito C. Villarosa.

[16] Id. at 110-111.

[17] Id. at 110.

[18] Id.

[19] Id. at 36.

[20] Id. at 138-139.

[21] Id. at 36.

[22] Id.

[23] Entitled Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co., Inc. and Benjamin P. Manalastas, doing business under the name of BMT Trucking Services, 789 Phil. 413 (2016).

[24] Rollo, p. 36.

[25] (b) Satisfaction by levy. - If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option, the officer shall first levy on the personal properties, if any, and then on the real properties if the personal properties are insufficient to answer for the judgment.

[26] Rollo, p. 37.

[27] Supra note 4.

[28] Id. at 76.

[29] Supra note 5.

[30] Supra note 2.

[31] Id. at 40.

[32] Id. at 42.

[33] Id. at 44-45.

[34] Supra note 1.

[35] Id. at 17.

[36] Id. at 20.

[37] Id.

[38] Id. at 22-23.

[39] Miro v. Vda. de Erederos, et al., 721 Phil. 772, 787 (2013).

[40] Cang, et al. v. Cullen, 620 Phil. 403, 413 (2009).

[41] Josef v. Santos, 592 Phil. 438, 445 (2008).

[42] Spouses Kelley, Jr. v. Planters Products, Inc., et al., 579 Phil. 763, 766 (2008).

[43] Salazar v. Felias, G.R. No. 213972, February 5, 2018.

[44] Rollo, p. 171.

[45] Id. at 74.

[46] Id. at 210.

[47] Id. at 189.

[48] Id. at 214.

[49] Josef v. Santos, supra note 41, at 447; citation omitted.

[50] Id. at 447-448.

[51] Id. at 448.

[52] Patrieio v. Dario III, et al., 537 Phil. 595, 602 (2006).

[53] Cabang, et al. v. Spouses Basay, 601 Phil, 167 (2009).

[54] Supra note 42.

[55] Cabang v. Basay, supra note 53, at 179.

[56] Eulogio, et al. v. Bell, Sr., et al., 763 Phil. 266, 283 (2015).

[57] Id. at 283-284.

[58] See Modequillo, v. Hon. Breva, et al., 264 Phil. 381, 387 (1990).

[59] Id.

[60] People v. Chaves, 120 Phil. 1019 (1964).

[61] Id. at 1021-1022.

[62] Montoya, et al. v. Ignacio, et al., 102 Phil. 546 (1957).

[63] Id. at 549.

[64] Gomez, et al. v. Sta. Ines, et al., 509 Phil. 602, 618-619 (2005).

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