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Ba Finance Vs CA Digest Report

This case involves a loan obtained by Augusto Yulo from BA Finance using his wife Lily Yulo's business, A&L Industries, as collateral without her authorization. Lily claims the signature on the document authorizing the loan was forged. The court ruled that A&L Industries could not be held liable for the loan because Augusto abandoned his family months before obtaining the loan, and it did not benefit the conjugal partnership as he acted alone and without Lily's consent. Under the Civil Code, debts must either be authorized by both spouses or benefit the family to be considered part of the absolute community property for which both parties are liable. As neither condition was met here, the court found A&L Industries

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630 views2 pages

Ba Finance Vs CA Digest Report

This case involves a loan obtained by Augusto Yulo from BA Finance using his wife Lily Yulo's business, A&L Industries, as collateral without her authorization. Lily claims the signature on the document authorizing the loan was forged. The court ruled that A&L Industries could not be held liable for the loan because Augusto abandoned his family months before obtaining the loan, and it did not benefit the conjugal partnership as he acted alone and without Lily's consent. Under the Civil Code, debts must either be authorized by both spouses or benefit the family to be considered part of the absolute community property for which both parties are liable. As neither condition was met here, the court found A&L Industries

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neo paul
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BA FINANCE CORPORATION, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO YULO, LILY YULO (doing business under the
name and style of A & L INDUSTRIES), respondents.
G.R. No. L-61464 May 28, 1988
Facts:
Augusto Yulo secured a loan from the BA Finance (petitioner) in the amount of
P591,003.59 as evidenced by a promissory note he signed in his own behalf and as a
representative of A&L Industries. Augusto presented an alleged special power of attorney
executed by his wife, Lily Yulo, who managed the business and under whose name the said
business was registered. She allegedly authorized the husband to procure the loan and sign the
promissory note. When the obligation became due and demandable, Augusto failed to pay the
same.
The petitioner prayed for the issuance of a writ of attachment alleging that said spouses
were guilty of fraud and non-payment of their debt.
Private respondent Lily Yulo filed her answer with counterclaim, alleging that although
Augusto Yulo and she are husband and wife, first, the Augusto had abandoned her and their
children five (5) months before the filing of the complaint; second, that they were already
separated when the promissory note was executed; third, that her signature in the special
power of attorney was forged because she had never authorized Augusto Yulo in any capacity
to transact any business for and in behalf of A & L Industries, which is owned by her as a single
proprietor, fourth, that she never got a single centavo from the loan; and that as a result of the
illegal attachment of her properties, which constituted the assets of the A & L Industries, the
latter closed its business and was taken over by the new owner.

Issue:
Whether or not A&L Industries can be held liable for the obligations contracted by her
husband.
Ruling:
A&L Industries is a single proprietorship, whose registered owner is Lily Yulo. The said
proprietorship was established during the marriage and assets were also acquired during the
same. Hence, it is presumed that the property forms part of the conjugal partnership of the
spouses and be held liable for the obligations contracted by the husband. However, for the
property to be liable, the obligation contracted by the husband must have beneficial
consequences conjugal partnership.
The obligation contracted by Augusto was for his own benefit because at the time he
incurred such obligation, he had already abandoned his family and left their conjugal home. He
likewise made it appear that he was duly authorized by his wife in behalf of the company to
procure such loan from the petitioner. Clearly, there must be the requisite showing that some
advantage accrued to the welfare of the spouses.
Under Art. 94 (2 & 3) of the Civil code, the absolute community of property shall be
liable for:
(2) All debts and obligations contracted during the marriage by the designated
administrator-spouse for the benefit of the community, or by both spouses, or by one spouse
with the consent of the other;
(3) Debts and obligations contracted by either spouse without the consent of the other
to the extent that the family may have been benefited. (emphasis supplied)
Apparently, there was no consent from Lily since it was found out that her signatures
were forged. (Paragraph 2) and even without consent, it must benefit the family but no way
can it benefit when two months prior the procurement of the loan, Augusto left Lily and their
children which in turn abandoned their conjugal home. (Paragraph 3)

Submitted by:
Nubbin Paul C. Lagumbay

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