G.R. No. 109648 ; November 22, 2001
PH CREDIT CORPORATION, petitioner, vs. COURT OF APPEALS and CARLOS M. FARRALES, respondents.

FACTS

PH Credit Corporation filed a sum of money case against Pacific Lloyd Corp. and its officers, including Carlos Farrales. The defendants were declared in default, and the trial court rendered a decision on January 31, 1984. The dispositive portion ordered the defendants to pay the plaintiff specific sums for principal, interest, surcharge, penalty, and attorney’s fees. After the decision became final, a writ of execution was issued. The sheriff levied and sold Farrales’s personal and real properties at public auction, with PH Credit as the highest bidder. A writ of possession was subsequently issued.
Farrales challenged the execution, arguing his liability under the decision was merely joint, not solidary, with his co-defendants. The trial court, in an order dated January 31, 1991, nullified the auction sale and the writ of possession, agreeing that the obligation was only joint. PH Credit appealed to the Court of Appeals, which consolidated two related petitions. The CA dismissed one petition as moot and the other for lack of merit, affirming the trial court’s finding of a joint obligation.

ISSUE

Whether the Court of Appeals erred in ruling that the liability of respondent Carlos Farrales was merely joint, not solidary, based solely on the dispositive portion of the trial court’s decision.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The ruling is anchored on the fundamental principle that when there is a conflict between the dispositive portion (fallo) of a decision and the opinion expressed in the body of the text, the dispositive portion prevails. An order of execution must strictly conform to and be based on the fallo of the decision, not on the body. In this case, the dispositive portion of the January 31, 1984 decision did not state that the defendants’ obligation was solidary. Under Article 1208 of the Civil Code, there is a presumption that an obligation is joint when it does not expressly state solidarity. Therefore, the liability of Farrales was correctly interpreted as merely joint. Consequently, the execution against his separate properties to satisfy the entire obligation was improper, as a joint debtor is liable only for his proportionate share. The Court upheld the nullification of the auction sale and the writ of possession, as they were issued based on an incorrect interpretation of a solidary liability not decreed in the dispositive portion of the final judgment.