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RIO L. CARLOS v. MANUEL T. ABELARDO

FACTS:

Honorio Carlos filed a complaint for a sum of money and damages against Manuel Abelardo and Maria Theresa Carlos-Abelardo. They approached Honorio in October 1989 and requested an advance of US$25,000 to purchase a house and lot. Honorio issued a check to the seller of the property. In July 1991, Honorio inquired about the loan but the spouses pleaded they were not yet able to settle it. On August 24, 1994, Honorio formally demanded payment of the amount but the spouses failed to comply. Honorio then filed a complaint for collection of a sum of money and damages. Maria admitted the loan but claimed it was payable on a staggered basis while Manuel claimed that the amount was his share in the profits of H.L. Carlos Construction. The trial court ruled in favor of Honorio, but the Court of Appeals reversed and dismissed the complaint for insufficiency of evidence.

The case involves a dispute over the nature of a check amounting to US$25,000. Honorio issued the check to Pura Vallejo as payment for a house and lot that became the conjugal dwelling of Manuel Abelardo and Maria Theresa Carlos-Abelardo. Maria Theresa executed an instrument acknowledging the loan, but Manuel did not sign the instrument. Honorio presented the check, the acknowledgment instrument, and a demand letter as evidence to prove that the amount was a loan. Manuel claimed that the check was his share in the profits of H.L. Carlos Construction, a corporation in which Honorio is involved. Manuel presented ten checks allegedly given to him by Honorio, arguing that if he and his wife were indebted to Honorio, the loan could have easily been deducted from his share of the profits. However, the checks presented by Manuel were from H.L. Carlos Construction's account, while Honorio's check was from his personal account. The court found that Manuel failed to substantiate his claim to the profits and income of the corporation.

ISSUES:

  1. Whether the respondent is entitled to the profits and income of the corporation.

  2. Whether the loan obtained by the defendant-husband is a liability of the conjugal partnership.

  3. Whether respondent is solidarily liable for the loan obtained by his wife without his consent.

  4. Whether petitioner is entitled to damages for the threats made by respondent.

  5. Whether there were sufficient circumstances to establish that threats were directed by the respondent against the petitioner.

  6. Whether the award of P500,000.00 as moral damages is excessive.

RULING:

  1. The respondent is not entitled to the profits and income of the corporation. The checks presented by the respondent, claiming to be his share in the profits, were all in the account of the corporation. Additionally, there was no evidence to show that the respondent was a stockholder or officer of the corporation. Therefore, he cannot be entitled to the profits or income of the corporation.

  2. The loan obtained by the defendant-husband is a liability of the conjugal partnership. The loan redounded to the benefit of the family as it was used to purchase the house and lot which became the conjugal home. Even though the respondent did not sign the acknowledgment of the loan, under Article 121 of the Family Code, he is solidarily liable for the loan as long as it benefited the family.

  3. Yes, respondent is solidarily liable for the loan obtained by his wife without his consent. Under Article 21 of the Family Code, if one spouse obtains a loan without the consent of the other, the spouse who did not give consent shall be solidarily liable for the loan. In this case, respondent did not give his consent to the loan obtained by his wife; hence, he is solidarily liable for such loan.

  4. Yes, petitioner is entitled to damages for the threats made by respondent. The testimonies of two witnesses, supported by documentary evidence and police reports, establish that respondent made verbal and written threats against petitioner. These threats were proven through positive, direct, and straightforward testimonies. Therefore, petitioner is entitled to damages for the threats made by respondent.

  5. Yes, there were sufficient circumstances to establish that threats were directed by the respondent against the petitioner, justifying the award of moral damages in favor of the petitioner.

  6. The award of P500,000.00 as moral damages is excessive. It is reduced to P50,000.00. The exemplary damages and attorney's fees are also reduced to P20,000.00 and P50,000.00, respectively.

PRINCIPLES:

  • Personal debts of the husband or wife before or during the marriage shall not be charged to the conjugal partnership, except insofar as they redounded to the benefit of the family.

  • A person who is not a stockholder, employee, or agent of the corporation cannot be entitled to participate in its profits or income.

  • Compensation can only take place when two persons are debtors and creditors of each other.

  • The conjugal partnership shall be liable for debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership or with the consent of both spouses.

  • Under Article 21 of the Family Code, if one spouse obtains a loan without the consent of the other, the spouse who did not give consent shall be solidarily liable for the loan.

  • Verbal and written threats can be grounds for the award of damages. The evidence presented should establish the existence of threats through positive, direct, and straightforward testimonies.

  • Threats made by one party against another can justify the award of moral damages.

  • The amount of moral damages awarded should be commensurate with the gravity of the offense committed.

  • A court has the authority to modify an award of damages if it finds the amount to be excessive or inadequate under the circumstances.