Sunga v. CA & Chua (2008)

Lilibeth Sunga-Chan and Cecilia Sunga vs. The Court of Apeals and Lamberto Chua

G.R. No. 154401

June 25, 2008

Ponente: Velasco, Jr. J.

Facts

·       Lamberto Chua (respondents) and Jacinto Sunga, husband of Cecilia Sunga (petitioner), formed a partnership to engage in the marketing of liquefied petroleum gas in 1977, which was named Shellite that was registered as a sole proprietorship in the name of Jacinto. Lilibeth Sunga-Chan and Cecilia Sunga continued the business when Jacinto Sunga died in 1989, without Chua’s consent. Subsequently, Chua repeatedly demanded for accounting but was ignored which prompted him to file a Complaint for Winding Up of a Partnership Affairs, Accounting, Appraisal, and Recovery of Shares and Damages with a Writ of Preliminary Attachment. The RTC ruled in favor of Chua and ordered Lilibeth Sunga-Chan and Cecilia Sunga to render an accounting and return all assets, income and profits, and to pay several sums of money. The same court issued a writ of execution while Chua asked the court to admit the accounting report prepared by CPA. The accounting report came up with P8,733,644.75 as Chua’s claim and was approved by the trial court as the final computation and the liability of petitioners. The petitioners elevated the case to the Court of Appeals but was denied for lack of merit. Due to the petitioner’s failure to appear the hearings, they were deemed to have waived the right to object the claim. The Sheriff of Manila levied the property of Lilibeth Sunga-Chan which was auctioned to Lamberto Chua for P8 million. However, petitioner Sunga-Chan argues that such property forms part of a conjugal partnership between his husband and cannot be held liable.

Issue:

·       W/N the absolute community of property of spouses Lilibeth Sunga-Chan and Norberto Chan may be lawfully made to answer Lilibeth Sunga-Chan’s liability

Held

“WHEREFORE, this petition is PARTLY GRANTED. Accordingly, the assailed decision and resolution of the CA in CA-G.R. SP No. 75688 are hereby AFFIRMED with the following MODIFICATIONS:

(1) The Resolutions dated November 6, 2002 and January 7, 2003 of the RTC, Branch 11 in Sindangan, Zamboanga Del Norte in Civil Case No. S-494, as effectively upheld by the CA, are AFFIRMED with the modification that the approved claim of respondent Chua is hereby corrected and adjusted to cover only the aggregate amount of PhP 5,529,392.52;

(2) Subject to the payment by respondent Chua of PhP 2,470,607.48 to petitioner Sunga-Chan, the Resolution dated April 11, 2005 of the RTC, confirming the sheriff’s final deed of sale of the levied property, ordering the Registry of Deeds of Manila to cancel TCT No. 208782, and issuing a writ of possession in favor of respondent Chua, is AFFIRMED; and The TRO issued by the Court on May 31, 2005 in the instant petition is LIFTED. No pronouncement as to costs. SO ORDERED.”

Ratio:

·       YES. The fact that the levied parcel of land is a conjugal property of the spouses Chan does not vitiate the levy an the sale of property, per se. The property is not among those exepted from execution under the rules of Court.  The property levied by the Sheriff may be held liable for the liabilities of Lilibeth Sunga-Chan as the same is a part of absolute community property. The use of the assets of Shellite may be reasonably considered to have been used for Lilibeth Sunga-Chan and Norberto Chan’s benefit. The property was auctioned for a price of P8 million by Chua but the claim of Chua only amounts to P5,529,392.52 which means that Lamberto Chua owes Lilibeth Sunga-Chan the excess amount of P2,470,607.48.