Unconvincing evidence

Debts contracted by the husband which redound to the benefit of the family are chargeable against the conjugal partnership. So even if the husband mortgages a conjugal property without the wife’s consent, said mortgage cannot be annulled. This is illustrated in this case of the spouses Lito and Lina.

Lito was a businessman engaged in the buy and sell of garlic and tobacco in his home province. On Jan. 16, 1954, Lito married Lina. During their marriage, they begot 10 children, and sometime in 1964, they acquired a parcel of residential land with a house erected thereon covered by TCT No. T-9646.

On Oct. 23, 1974, Lito obtained a loan of P115,000 from the bank supposedly for additional working capital of his buy and sell business. As security for the loan, Lito executed a real estate mortgage of the above-mentioned property. The said mortgage bore the signature of his wife and was duly notarized.

The loan, however, was not paid upon its maturity. So, the bank extra-judicially foreclosed the property where it emerged as the highest bidder in the foreclosure sale. After the lapse of one year from the issuance of the certificate of sale in its favor and without the property being redeemed, title on the property was consolidated and registered in bank’s name on Aug. 10, 1978. On Aug. 14, 1978, bank notified the spouses and their family to vacate the property and took over possession of the same.

Claiming that she had no knowledge of the loan obtained by Lito nor did she consent to the mortgage of their conjugal property, Lina filed a complaint before the Regional Trial Court (RTC) to declare the said mortgage and the subsequent proceedings void and to order the bank to vacate the subject property and turn over its possession back to them.

Lina’s husband Lito joined her in the suit and in the course of the proceedings, Lito admitted having forged the signature of his wife on the mortgage documents and in squandering the P115,000 loan, resulting in the foreclosure of the conjugal property and the eviction of his family.

Lina also testified and denied that she signed the documents but did not present any corroborating witness, such as a handwriting expert who could authoritatively declare that her signatures were really forged.

The bank, on the other hand, claimed that the documents disavowed by Lina are acknowledged before a notary public and hence they are public documents without need of further proof as to its authenticity and due execution. It claimed that the notarial acknowledgment is already prima facie evidence of their authenticity and must be rebutted with sufficient proof to the contrary. Bare allegations of denial by Lina will not suffice, bank claimed.

The RTC, however, ruled in favor of the spouses and declared that Lina did not sign the documents, did not appear before the notary public to acknowledge the execution thereof and did not receive the proceeds of the loan. So it declared the Deed of Real Estate Mortgage and the foreclosure proceedings null and void.

It likewise ordered bank to vacate and turn over possession of the property without prejudice to its right of action to recover the amount of the loan and its interest due from Lito. Was the RTC correct?

No. The documents are acknowledged before a notary public. A notarized document carries the evidentiary weight conferred upon it with respect to its due execution and it has in its favor the presumption of regularity, which may only be rebutted by evidence so clear, strong and convincing. Lina’s mere testimony denying her signatures is not enough. She should have presented any corroborating witness like a handwriting expert to prove the allegation of forgery.

But even assuming that Lina did not give her consent to the loan, the conjugal partnership is still liable. Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes to the support of the family cannot be deemed to be his exclusive and private debts.

If the husband himself is the principal obligor in the contract and directly received the money to be used in or for his own business or profession, the contract falls within the term “obligations for the benefit of the conjugal partnership.” Lito’s loan from the bank thus redounded to the benefit of the conjugal partnership. Hence the debt is chargeable to the conjugal partnership.

The RTC decision should be reversed and the complaint of Lito and Lina should be dismissed. This is the ruling in the case of Ros vs. PNB Laoag Branch, G.R. 170166, April 6, 2011, 647 SCRA 334.