G.R. No. 70082; August 19, 1991
SPOUSES RICKY WONG and ANITA CHAN, LEONARDO JOSON, JUANITO SANTOS, EMERITO SICAT and CONRADO LAGMAN, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT and ROMARICO HENSON, respondents.

FACTS

Private respondent Romarico Henson was married to Katrina Pineda. In 1972, Katrina, while in Hong Kong, obtained jewelry on consignment from petitioner Anita Chan but failed to pay for it. Anita Chan and her husband Ricky Wong subsequently filed a collection case against the conjugal partnership, impleading both Katrina and Romarico. Counsel filed an answer and appeared at hearings, but the record showed representation only for Katrina. Romarico was never declared in default. A decision was rendered against the spouses Henson, ordering them to pay jointly.
To satisfy the judgment, four parcels of land registered in Romarico’s name (with the annotation “married to Katrina Henson”) were levied upon and sold at public auction to petitioners Juanito Santos and Leonardo Joson. Romarico later filed an action to annul the collection case decision and the execution proceedings, claiming he was not given his day in court as he was never represented by counsel, was not declared in default, and had no involvement in his wife’s business.

ISSUE

Whether the execution of the decision in the collection case may be nullified on the ground that the levied properties were the husband’s alleged exclusive capital and that he was not properly served with process or represented in the suit.

RULING

The Supreme Court affirmed the appellate court’s decision nullifying the execution. The legal logic is twofold. First, on procedural grounds, Romarico was indeed denied due process. He was a party defendant but was never represented by counsel of record; the appearing lawyers represented only Katrina. He was not declared in default despite not filing an answer. Consequently, the judgment against him was void for lack of jurisdiction over his person, rendering all subsequent execution proceedings against him null and void.
Second, on substantive grounds, the levied properties could not be held liable for Katrina’s debt. The debt was incurred in a jewelry business, which is not among the enterprises listed under Article 161 of the Civil Code where the conjugal partnership assumes liability. Under Article 173, such a debt is solely the personal obligation of the spouse who incurred it. Therefore, even assuming the properties were conjugal, they could not answer for Katrina’s exclusive debt. The Court emphasized that properties registered in the husband’s name are presumed conjugal, but this presumption is irrelevant as the nature of the debt itself prohibits charging it to the conjugal assets. The auction sale was correctly annulled, and petitioners were ordered to return the purchase prices, subject to existing redemption rights.