G.R. No. 177667. September 17, 2008.
Cleodia U. Francisco and Ceamantha U. Francisco, represented by Dra. Maida G. Uriarte vs. Spouses Jorge C. Gonzales and Purificacion W. Gonzales.

FACTS

Petitioners Cleodia and Ceamantha Francisco are the minor children of spouses Cleodualdo and Michele Francisco. In a Partial Decision dated November 29, 2000, the Regional Trial Court (RTC) of Makati approved a Compromise Agreement in the parents’ nullity of marriage case. The agreement stipulated that ownership of a conjugal house and lot in Ayala Alabang would be transferred to the petitioners via a deed of donation upon their reaching ages 19 and 18, respectively, with Cleodualdo retaining usufructuary rights.
Separately, in an unlawful detainer case, the Metropolitan Trial Court (MeTC) of Muntinlupa ordered Michele Francisco and George Zoltan Matrai to vacate a leased premises and pay back rentals and attorney’s fees. Pending appeal, the RTC granted execution. The sheriff levied the Ayala Alabang property, registered under “Cleodualdo M. Francisco, married to Michele U. Francisco.” The petitioners’ grandmother, as guardian, filed a third-party claim and a motion to stop the sale, which the RTC denied. The Court of Appeals affirmed the RTC’s denial.

ISSUE

Whether the subject conjugal property could be validly levied upon and sold on execution to satisfy the personal judgment obligation of the wife, Michele Francisco, arising from an unlawful detainer case.

RULING

No. The Supreme Court granted the petition and nullified the assailed CA Decision and RTC Orders. The Court held that the property could not be levied for Michele’s personal debt. First, the title was in the name of Cleodualdo, married to Michele, indicating conjugal ownership under the Civil Code regime. A conjugal asset cannot answer for the personal debt of a spouse unless it was incurred for the benefit of the family. The obligation from the unlawful detainer case, being a personal contractual liability of Michele and Matrai for unpaid rentals on a property not the family home, was not shown to have redounded to the benefit of the conjugal partnership.
Second, and decisively, the Partial Decision based on the Compromise Agreement had already become final and executory. This judicial approval transformed the parents’ agreement into a judgment, effectively constituting a waiver and transfer of their ownership rights over the property in favor of their children, the petitioners. Consequently, from the finality of that Partial Decision, the judgment debtors (Michele and Matrai) no longer had any leviable interest in the property. The power of execution extends only to properties belonging to the judgment debtor. Therefore, the levy and sale were void for lack of legal basis. The temporary restraining order was made permanent.