G.R. No. 38052, December 23, 1933
CONCEPCION ABELLA DE DIAZ, plaintiff-appellee, vs. ERLANGER & GALINGER, INC., ET AL., defendants. ERLANGER & GALINGER, INC., appellant.

FACTS

Erlanger & Galinger, Inc. obtained a judgment against Domingo Diaz, the husband of plaintiff Concepcion Abella de Diaz. To enforce the judgment, the sheriff levied on certain properties. Plaintiff filed an action claiming the levied properties were her paraphernal property. The trial court declared the properties paraphernal, held the obligation was the husband’s personal debt, and, citing Article 1386 of the Civil Code, exempted the fruits of the paraphernal property from execution, making a preliminary injunction permanent. Defendant appealed.

ISSUE

1. Whether buildings erected on the wife’s paraphernal land using her private funds are exempt from execution for the husband’s debts.
2. Whether the obligation incurred by the husband was personal or a conjugal partnership debt.
3. Whether the fruits of the wife’s paraphernal property are liable for the husband’s obligations.

RULING

1. On the buildings: The Supreme Court affirmed the trial court’s finding that the commercial building, camarin, and granary were constructed on the wife’s paraphernal land using her personal money. Following Manresa’s Commentaries, the Court held that under Article 1404 of the Civil Code, if a building is constructed by the owner of the land with her private funds, the building belongs to her, not to the conjugal partnership. Thus, these buildings are not subject to levy.
2. On the other items (palay, lumber, automobile): The Court reversed the trial court, holding that the palay and lumber were part of the conjugal property under Article 1407. The Buick automobile, acquired through successive trade-ins of an originally paraphernal car, also became conjugal property and liable for partnership debts.
3. On the nature of the obligation and liability of paraphernal fruits: The Court ruled that the obligation was not personal to the husband. Domingo Diaz, as manager of the conjugal partnership under Article 1412, engaged in a commercial enterprise (purchasing machinery for an electric light plant) for the partnership’s gain. The wife’s disapproval did not make it a personal obligation. Therefore, Article 1386, which exempts paraphernal fruits from payment of the husband’s personal obligations, does not apply. The fruits of the paraphernal property, being conjugal partnership assets, are liable for the partnership’s debts. The injunction was thus too broad and must be modified.

DISPOSITIVE:
The judgment was affirmed regarding the ownership and exemption of the buildings. It was reversed regarding the other items (palay, lumber, automobile) and the fruits of the paraphernal property. The case was remanded to the trial court for action in accordance with the opinion. No costs.

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