Primary Holding

Paraphernal property of the wife is not liable for the debts of the husband, even if a conjugal house is built on it, if the land was exclusively owned by the wife prior to the construction and debt incurrence.

Background

Caltex sought to enforce a judgment against Felisa Felias's husband, Simeon Sawamoto, by levying and selling a land parcel (Lot No. 107) originally owned by Felisa Felias's parents and later donated to her. Caltex claimed the land became conjugal property due to the construction of a conjugal house on it during the marriage and was thus subject to levy for the husband’s debt.

Facts

• 1. Spouses Juliano Felias and Eulalia Felion originally owned Lot No. 107.
• 2. March 31, 1928: Spouses donated Lot No. 107 to their daughter, Felisa Felias, making it her paraphernal property.
• 3. A conjugal house was built on Lot No. 107 during Felisa Felias's marriage to Simeon Sawamoto. The building was assessed as early as September 1927, before the donation.
• 4. Simeon Sawamoto incurred a debt to Texas Company (later Caltex).
• 5. Judgment was rendered against Sawamoto, and a writ of execution was issued.
• 6. Lot No. 107 was levied upon and sold at public auction to satisfy Sawamoto's debt.
• 7. Caltex purchased Lot No. 107 at the auction.
• 8. Felisa Felias claimed ownership of Lot No. 107, arguing it was her paraphernal property.
• 9. The conjugal house on Lot No. 107 was destroyed during the war.

Arguments of the Petitioners

• 1. Even if Lot No. 107 was initially paraphernal, it became conjugal property upon the construction of the conjugal house thereon.
• 2. Even if Lot No. 107 remained paraphernal, it was still subject to levy for the just obligations of Felisa Felias's husband.
• 3. Felisa Felias is estopped by negligence and actions from claiming ownership of Lot No. 107.

Arguments of the Respondents

• 1. Lot No. 107 was her paraphernal property because it was donated to her by her parents before the conjugal house was constructed and before her husband incurred the debt.
• 2. As paraphernal property, Lot No. 107 was not liable for her husband's debts.

Issues

• 1. Was Lot No. 107 conjugal or paraphernal property at the time of levy and sale?
• 2. If paraphernal, was Lot No. 107 liable for the debts of Felisa Felias's husband?
• 3. Was Felisa Felias estopped from claiming ownership of Lot No. 107?

Ruling

• 1. The Supreme Court ruled that Lot No. 107 remained paraphernal property of Felisa Felias.
• 2. The Court reasoned that the building was constructed before the donation of the land to Felisa Felias, meaning at the time of construction, the land belonged to her parents, not her or the conjugal partnership.
• 3. Applying the principle of "accessory follows the principal," the donation of the land to Felisa Felias included the existing building, and the entire property became her paraphernal property.
• 4. Since Lot No. 107 was paraphernal, it was not liable for the husband's separate debts.
• 5. The Court did not explicitly address estoppel but implicitly rejected it by affirming the Court of Appeals' decision in favor of Felisa Felias.

Doctrines

• 1. Accessory Follows the Principal: This doctrine dictates that ownership of accessory items follows the ownership of the principal item. In this case, the building (accessory) followed the land (principal). When the land was donated, it carried with it the ownership of the existing building, making the entire property paraphernal.

Key Excerpts

• 1. "Buildings constructed during the marriage on land belonging to one of the spouse shall also belong to the partnership, but the value of the land shall be paid to the spouse owning the same." (Article 1404, Old Civil Code and Article 158, New Civil Code cited but deemed inapplicable).
• 2. "While it is true that the building was constructed by the spouses Felisa and Simeon Sawamoto on Lot No. 107 at a time when they were already married, nevertheless, it is equally true that then Lot No. 107 did not yet belong to Felisa Felias, one of the spouses – that land was still the property of the parents of Felisa Felias. It would seem therefore, that Article 1404 of the Spanish Civil Code would not apply." (Court of Appeals quoted by the Supreme Court).
• 3. "Rather, we would say that the familiar rule of accessory following the principal should apply." (Court of Appeals quoted by the Supreme Court, adopted by the Supreme Court).

Precedents Cited

• 1. Laperal et al., vs. Katigbak, 104 Phil, 999; 66 Off. Gaz., (18) 3894: Cited as footnote [1] to support the principle that paraphernal property is not answerable for the obligations of the husband, but the specific relevance within the body of the decision is not explicitly elaborated upon beyond this general principle.

Statutory and Constitutional Provisions

• 1. Article 1404, paragraph 2, of the Old Civil Code: Discussed as the initial basis for Caltex's claim that the land became conjugal property but ultimately deemed inapplicable because the building predated the wife's ownership of the land.
• 2. Article 158, paragraph 2, of the New Civil Code: Similar to Article 1404, discussed as the counterpart provision in the New Civil Code but also deemed inapplicable for the same reason.