Luzon Surety Co vs de Garcia Facts: 1) Ladislao Chavez, principal, and petitioner Luzon Surety Co Inc, executed a surety bo nd in favor of PNB Victorias Branch to guaranty a cr op loan granted by the latter to Chavez in the th e sum of PhP9,000. 2) Vicente Garcia, together with Ladislao Chavez an d Ramon Lacson, as guarantors, g uarantors, signed an indemnity agreement binding themselves th emselves solidarily liable to indemnify Luzon Surety Co Inc against any a nd all damages, costs and and other expenses which the petitioner may sustain or incur in consequence of having become guarantor upon said bond, to pay interest at the rate of 12% per annum, computed and compounded quarterly until fully paid; and to pay 15% of the amount involved in any litigation or other matters growing out of or connected therewith for attorney's fees. 3) On April 27, 1956, PNB filed a complaint against Ladislao Chavez and Luzon Surety Co. to recover reco ver the amount of PhP4,577.95, in interest, attorney¶s fees and other costs. 4) On August 8, 1957, Luzon Surety Co. instituted a third party complaint against Chavez, Lacson and Garcia. 5) On September 17, 1958, a judgment was rendered ordering Chavez and Luzon Surety Co. to pay PNB in solidarity. The same decision likewise ordered the third party defendants Chavez, Garcia and L acson to pay Luzon Surety Co. the amount to be paid to PNB. 6) On July 30, 1960, a writ of execution was issued against Garcia to satisfy the claim of the petitioner. A writ of garnishment was soon issued levying and garnishing the sugar quedans of the Garcia spouses from their sugar plantation. 7) Spouses Garcia filed a suit for injunction an d the trial court ruled in favor of them. Issue: WON the CPG could be b e liable on an indemnity agreement executed by the husband to acc ommodate a third party in favor of a surety agreement Held: No. Decision appealed appe aled from was affirmed. Costs against petitioner. Ratio Decidendi: Art. 161. The conjugal partnership p artnership shall be liable for: (1) All debts and obligations contracted by the husband hu sband for the th e benefit of the conjugal conjug al partnership, and those contracted by the wife, also for the same purpose, in the cases where she may legally bind the partnership; (2) Arrears or income due, during the marriage, from obligations which constitute a charge upon property of either spouse or of the partnership; (3) Minor repairs or for mere preservation made during the marriage upon the separate property of either the husband or the wife; major repairs shall not be charged to the partnership; (4) Major or minor repairs upon the conjugal partnership property; (5) The maintenance of the family and the education of the children of both husband and wife, and of legitimate children of one of the spouses; (6) Expenses to permit the spouses to complete a professional, vocational vocational or other course. (1408a)
Petitioner contends that Garcia¶s transaction as a guarantor through which he acquires the capacity of being trusted, adds to his reputation and enhances his standing in the community. He can thus secure money with which to carry on the purposes of their conjugal partnership. While not entirely without basis, such argument arg ument cannot prosper pro sper for it would negate what is expressly provided for in Article 161. In the most categorical language, a conjugal partnership under that provision is liable only for such "debts and obligations contracted by the husband for the benefit of the conjugal partnership." There must be the requisite showing then of some advantage which clearly accrued to the wel fare fare of the spouses. There is none in this case. While Garcia by thus signing the agreement may be said to enhance his reputation, such benefit, even if hypothetically accepted, is too remote and fanciful to come within the express terms of the provision. Its language is clear; it does not admit of doubt. No process of interpretation or construction need be resorted to. It peremptorily calls for application. Where a requirement is made in explicit and unambiguous terms, no discretion is left to the judiciary. It must see to it that its mandate is obeyed. So it is in this case. That is how the Court of Appeals acted, and what it did cannot be impugned for being contrary to law.
